Price v. Hartford Acc. & Indem. Co.
| Decision Date | 24 October 1972 |
| Docket Number | No. 10868--PR,10868--PR |
| Citation | 502 P.2d 522,108 Ariz. 485 |
| Parties | Elsie A. PRICE and Charles Gattman Price, a minor, Appellants, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, a Connecticut corporation, and Gary Ronald Gardner, Appellees. |
| Court | Arizona Supreme Court |
Beer & Kalyna by Olgerd W. Kalyna, Phoenix, for appellants.
Renaud, Cook, Miller & Cordova, by J. Gordon Cook, Phoenix, for appellee Hartford.
Kenneth Rosengren, Phoenix, for appellee Gardner.
This case is before us on a petition for review of a Court of Appeals opinion reported at 16 Ariz.App. 511, 494 P.2d 711 (1972). The opinion of the Court of Appeals is vacated; the judgment of the Superior Court is reversed; and the case is remanded for further proceedings consistent with this opinion.
Elsie Price, the plaintiff in this case, carried over $1,000,000.00 of automobile liability insurance with Hartford Accident and Indemnity Company, which insured her and her 17-year-old son, Charles, for 'all sums' for which either of them might become liable to pay as damages 'arising out of the ownership, maintenance or use' of the automobile which gave rise to this action.
Gary Gardner was injured as a result of a drag race between Charles Price and another boy who is not involved in the instant case. Gardner sued both drivers and Mrs. Price. He charged Charles with gross negligence, wantonness, and recklessness. He charged Mrs. Price with negligent entrustment to a known careless driver and also based his action against her on allegations that she was liable for Charles' acts because he was her agent, because she agreed to the liability when she signed the papers to get her son's driving license, and because of the family purpose doctrine. He asked for $100,000.00 compensatory damages and $25,000.00 punitive damages.
Hartford provided counsel to defend the action, but informed Mrs. Price that no coverage would be afforded to her or her son for any punitive damages that might be awarded. For this reason, the Prices brought this action to obtain a judgment declaring that Hartford owes a duty under its contract, to defend both Prices, and to pay all damages, both compensatory and punitive, that might be awarded, up to the policy limits. The Prices also ask that Hartford be declared liable to reimburse them for money which they have had to pay to hire their own defense counsel. Since there were no material facts in dispute, the trial court quite properly undertook to rule on the case in a summary proceeding. It decided that: (1) Hartford owed no duty to defend Charles Price or to pay any judgment against him with regard to punitive damages, (2) Hartford owed no duty to defend Mrs. Price or pay any judgment against her, with regard to punitive damages based upon conduct in which she participated, and (3) Hartford owed Mrs. Price both the duty to defend and the duty to pay with regard to punitive damages 'based on conduct in which she did not participate and which damages are based upon indirect responsibility such as any vicarious liability.' The ground of the trial court's decision was stated to be:
'Public policy of the State of Arizona precludes coverage for (punitive) damages whether it be to pay or defend, arising out of conduct participated in by an insured of such policy.'
The Court of Appeals agreed with the trial court that public policy prevents payment by an insurance company of punitive damages, but disagreed with the trial court on the question of the company's duty to defend, and held that such duty extended to both compensatory and punitive damages.
The clear, unequivocal language of the policy requires the insurance company to defend the action and pay the judgment. The only issue, therefore, is whether the policy policy of the state makes the insurance contract illegal insofar as it relates to punitive damages. On this issue there is a conflict of opinion among the several states, and the matter has never been determined by this court.
The arguments favoring the view that it is against public policy to allow a defendant to insure his liability for punitive damages are well expressed in Northwestern National Casualty Co. v. McNulty, 307 F.2d 432, in which the court used the following language:
...
To continue reading
Request your trial
-
Harris v. County of Racine
...prohibiting coverage, with Harrell v. Travelers Indemnity Co., 279 Or. 199, 567 P.2d 1013 (1977), and Price v. Hartford Accident & Indemnity Co., 108 Ariz. 485, 502 P.2d 522 (1972). See also the cases cited in footnote 1 of the article at 62 Marquette Law Review 1, Those cases which deny co......
-
First Nat. Bank of St. Mary's v. Fidelity & Deposit Co.
...policy include: Hartford Life Insurance Co. v. Title Guarantee Co., 520 F.2d 1170 (D.C.Cir.1975); Price v. Hartford Accident and Indemnity Company, 108 Ariz. 485, 502 P.2d 522 (1972); Southern Farm Bur. Cas. Ins. Co. v. Daniel, 246 Ark. 849, 852, 440 S.W.2d 582 (1969); Greenwood Cemetery v.......
-
Hensley v. Erie Ins. Co.
...policy, the insurance company is only liable to its policy limits as to both types of damages. Price v. Hartford Accident & Indemnity Company, 108 Ariz. 485, 502 P.2d 522 (1972); Harrell v. Travelers Indemnity Company, 279 Or. 199, 567 P.2d 1013 (1977); State v. Glens Falls Insurance Compan......
-
St. Paul Mercury Ins. Co. v. Duke University
...75 F.2d 58 (applying Missouri Law); Employers Ins. Co. v. Brock, 233 Ala. 551, 172 So. 671 (1937); Price v. Hartford Accident & Indem. Co., 108 Ariz. 485, 502 P.2d 522 (1972); California Union, 572 S.W.2d 393; Whalen v. On-Deck, Inc., 514 A.2d 1072 (Del.1986); Greenwood Cemetery, 238 Ga. 31......
-
Chapter 6
...Harris v. County of Racine, 512 F. Supp. 1273 (E.D. Wis.1981). State Courts: Arizona: Price v. Hartford Accident and Indemnity Co., 108 Ariz. 485, 502 P.2d 522 (1972); Irvin v. Lexington Insurance Co., 2010 WL 3450986 (Ariz. App. Sept. 2, 2010). Washington: Fluke Corp. v. Hartford Accident ......
-
Punitive damages: when, where and how they are covered.
...exclusion of punitive damages does not conflict with Arizona Safety Responsibility Act.) Price v. Hartford Accident and Indemnity Co., 502 P.2d 522 (1972) (en banc) (punitive damages covered under policy; public policy did not prevent coverage). Arkansas Southern Farm Bureau Casualty Insura......
-
CHAPTER 7 Comprehensive General Liability Exclusions for Coverage A
...Harris v. County of Racine, 512 F. Supp. 1273 (E.D. Wis.1981). State Courts: Arizona: Price v. Hartford Accident and Indemnity Co., 108 Ariz. 485, 502 P.2d 522 (1972); Irvin v. Lexington Insurance Co., 2010 WL 3450986 (Ariz. App. Sept. 2, 2010). Washington: Fluke Corp. v. Hartford Accident ......
-
The Insurability of Punitive Damages in Washington: Should Insureds Who Engage in Intentional Misconduct Reap the Benefit of Their "bargains?"
...23. See, e.g., Lazenby v. Universal Underwriters Ins. Co., 383 S.W.2d 1 (Tenn. 1964); Price v. Hartford Accident and Indem. Co., 502 P.2d 522 (Ariz. 1972); Concord Gen. Mut. Ins. Co. v. Hills, 345 F. Supp. 1090 (D. Me. 1972); Abbie Uriguen Olds. Buick, Inc. v. United States Fire Ins. Co., 5......