Harris v. AMERICAN GEN. LIFE INS. CO. OF DEL.

No. 82-219 IN THE SUPREME COURT OF THE STATE OF MONTANA 1982 ALTON P. HARRIS, Plaintiff and Respondent, AMERICAN GENERAL LIFE INSURANCE COMPANY OF DELAWARE, Defendant and Appellant. Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin Honorable Joseph B. Gary, Judge presiding. Counsel of Record: For Appellant: Berg, Coil, Stokes & Tollefsen, Bozeman, Montana Gig A. Tollefsen argued, Bozeman, Montana For Respondent: Nash & Nash, Bozeman, Montana Donald Nash and Mike Nash argued, Bozeman, Montana Submitted: November 10, 1982 Decided: February 9, 1983 FEB Filed. 9 - 1983 Mr. Chief Justice Prank I. Haswell delivered the Opinion of the Court. Defendant insurance company appeals from a judgment entered in the District Court of the Eighteenth Judicial District assessing $30,000 in punitive damages against defendant. We affirm. On September 8, 1970, defendant issued a $10,000 life insurance policy with a $10,000 accidental death benefit rider to plaintiff's son, Tom Harris. The policy number was B 697,465. Plaintiff, Tom's father, was the beneficiary. The accidental death rider provided: "The Accidental Death Benefit provided by this supplementary agreement will not be payable if the Insured's death: "2. Results directly or indirectly from any of the following causes: "(c) Suicide or any attempt thereat, while sane or insane; "(f) Voluntary or involuntary "(i) Asphyxiation from or inhalation of gas except in the course of the Insured's occupation, or "(ii) Taking of any poison, drug, or sedative . . ." Tom Harris checked into the Rainbow Motel in Bozeman about 11:30 p.m. on October 10, 1979. He appeared dazed and had difficulty writing his name. The next morning (October 11) Harris paid for another day at the check-in desk and appeared normal to the hotel manager. Harris was found dead, slumped in the shower of his room with the shower water pouring on him, at about 8:15 a.m. on G c t o b e r 1 2 , 1979. T h e r e was abour: two inches of standing water i n t h e room, and w a t e r was r u n n i n g o u t u n d e r t h e door t o t h e o u t s i d e . On March 24, 1980, plaintiff filed a claim with d e f e n d a n t f o r b e n e f i t s under t h e p o l i c y which was r e c e i v e d by d e f e n d a n t on A p r i l 7 , 1980. The d e a t h c e r t i f i c a t e accom- panying the policy listed t h e c a u s e of death a s "pending r e s u l t s of s t u d i e s of s t a t e l a b " b e c a u s e an a u t o p s y had been performed and no conclusive results received. Defendant called a local ex-agent, requesting a certificate showing t h e cause of d e a t h . By t h i s t i m e r e s u l t s had b e e n o b t a i n e d showing t h e c a u s e o f d e a t h t o b e a n o v e r d o s e o f chloroform througn i n h a l a t i o n . On J u n e 11, 1 9 8 0 , d e f e n d a n t s e n t t o plaintiff a check for the benefits due on the basic life insurance policy ($10,775.28, which included a premium refund, post-mortem dividend and paid up additions) with the restrictive e n d o r s e m e n t on t h e back of t h e check s t a t i n g , "Accepted i n full and final settlement of all claims against American General Life Insurance Company on Policy B 697465." The e n d o r s e m e n t a p p e a r s t o be s t a m p e d on t h e back of t h e check with a blank following the word "Policy" and the policy number was h a n d w r i t t e n i n t h e b l a n k . Defendant denied a c c i d e n t a l d e a t h b e n e f i t s because of t h e p o l i c y l a n g u a g e s e t o u t above and t h e f a c t t h a t c h o l o r o - f o r m i s b o t h a g a s and a d r u g a n d t h a t t h e fiozeman P o l i c e Department concluded that the death was an accidental overdose or suicide. On A u g u s t 2 2 p l a i n t i f f (through h i s attorney) returned t h e c h e c k and demanded t h a t d e f e n d a n t remove t h e r e s t r i c t i v e sndorsement. 'The f o l l o w i n g p a r a g r a p h was included in the August 22, 1980, l e t t e r : "We h e r e b y demana t h a t you r e t u r n t o t h i s o f f i c e t h e f a c e v a l u e of p r o c e e d s of t h e policy without r e s t r i c t i o n s a s t o r i g h t of H a r r i s t o s e e k b a l a n c e o f d o u b l e indemnity b e n e f i t s , together with any a c c u m u l a t i o n of d i v i d e n d and i n t e r e s t t o d a t e of your payment." On S e p t e m b e r 5 , 1 9 8 0 , p l a i n t i f f f i l e d s u i t s e e k i n g t h e $10,i)1)0 basic benefits, $10,000 accidental death benefits and $ 5 0 , 0 0 0 i n p u n i t i v e damages. I n a l e t t e r d a t e d S e p t e m b e r 9, defendant mailed t h e same c h e c k back to plaintiff with t h e r e s t r i c t i v e e n d o r s e m e n t c r o s s e d o u t a n d i n i t i a l e d by a respresentative of defendant. Plaintiff then cashed the c h e c k on S e p t e m b e r 1 6 , 1 9 8 0 . Interrogatories were exchanged and in response to d e f e n d a n t ' s i n t e r r o g a t o r y r e q u e s t i n g t h e names o f w i t n e s s e s plaintiff i n t e n d e d t o c a l l a n d w h a t e a c h would t e s t i f y t o , plaintiff listed Kent Lewis ( a former a g e n t of defendant) a n a s t a t e d t h a t Lewis would t e s t i f y r e g a r d i n g t h e d i f f i c u l t y experienced in obtaining the i n i t i a l tender of money f r o m defendant. Lewis l a t e r t e s t i f l e d a t t r i a l a b o u t d e f e n d a n t ' s financial condition. Eight days p r i o r to trial plaintiff furnished defen- dant with an exhibit showing defendant's assets and lia- b i l i t i e s which p l a i n t i f f had n o t l i s t e d a s a n e x h i b i t on t h e pretrial order. 'The e x h i b i t was l a t e r admitted a t t r i a l , o v e r d e f e n d a n t ' s o b j e c t i o n , a s p l a i n t i f f ' s e x h i b i t no. 1 2 . After a jury trial and i n s t r u c t i o n on p u n i t i v e dam- a g e s , t h e j u r y r e t u r n e d a v e r d i c t on s p e c i a l i n t e r r o g a t o r i e s denying the accidental death benefits but finding that d e f e n d a n t had acted i n bad f a i t h and awarding $30,000 in purl1 t i v e darnayes. D e f e n d a n t ' s m o t i o n s f o r judgment n o t w i t h - standing the verdict ( o n e of the g r o u n d s was plaintiff's f a i l u r e t o p r o v e a c t u a l d a m a g e s ) and f o r a new t r i a l were d e n i e d i n a memorandum o r d e r w h e r e t h e D i s t r i c t C o u r t f o u n d plaintiff's a c t u a l damages t o b e (1) t h e i n t e r e s t f r o m t h e date the c l a i m should have been p a i d and (2) plaintiff's being forced to pay an attorney to collect the basic benefits. D e f e n d a n t a p p e a l s from t h e judgment e n t e r e d and from t h e d e n i a l o f h i s m o t i o n s f o r a new t r i a l a n d j u d g m e n t n o t - w i t h s t a n d i n g t h e v e r d i c t and p r e s e n t s t h e s e i s s u e s f o r o u r consideration: 1. Was the evidence insufficient to entitle the p l a i n t i f f t o p u n i t i v e damages? 2. Did t h e D i s t r i c t C o u r t p r o p e r l y i n s t r u c t t h e j u r y on p u n i t i v e damages? 3. Did t h e D i s t r i c t C o u r t i m p r o p e r l y a l l o w t h e a d m i s - s i o n of e v i d e n c e n o t l i s t e d i n t h e p r e t r i a l o r d e r ? Regarding t h e f i r s t i s s u e d e f e n d a n t a r g u e s t h a t p l a i n - tiff failea to prove two things which are required for p u n i t i v e damages: (1) a v i o l a t i o n o f t h e Montana I n s u r a n c e Code for which a penalty is prescribed, and (2) actual damages. Defendant contends that the first element is r e q u i r e d by t h e f o l l o w i n g l i n e o f c a s e s : W e s t f a l l v . Motors Insurance Corporation ( 1 9 6 2 ) , 140 Mont. 564, 374 P.2d 96; State ex rel. L a r s o n v. D i s t r i c t Court ( 1 9 6 7 ) , 1 4 9 Mont. 131, 423 P.2d 598; S t a t e ex r e l . Cashen v. D i s t r i c t Court ( 1 9 7 1 ) , 1 5 7 Mont. 4 0 , 482 P.2d 5 6 7 ; a n d , F i r s t S e c u r i t y Bank o r Bozeman v. Goddard ( 1 9 7 9 ) , 1 8 1 Mont. 4 0 7 , 5 9 3 P.2d 1040. D e f e n d a n t c o n c l u d e s t h i s a s p e c t o f i t s a r g u m e n t by c l a i m i n g t h a t t h e r e were no i n s u r a n c e c o d e v i o l a t i o n s . With regard to the second element, a c t u a l damages, defendant argues that there must be a finding of actual damages b e f o r e p u n i t i v e damages may be a w a r d e d . Defendant contends there was no evidence of actual damages here b e c a u s e t h e j u r y d e t e r m i n e d t h a t p l a i n t i f f was n o t e n t i t l e d t o the accidental death benefits. Appellant's arguments a r e n o t w e l l taken. F i r s t of all, plaintiff showed a v i o l a t i o n o f t h e Montana I n s u r a n c e Code f o r which a p e n a l t y i s p r e s c r i b e d . I t is uncontroverted h e r e t h a t p l a i n t i f f was c l e a r l y e n t i t l e d t o t h e b a s i c l i f e benefits of the policy and that defendant contested lia- b i l i t y under t n e a c c i d e n t a l d e a t h r i d e r . Plaintiff filed a c l a i m f o r b e n e f i t s on March 24, 1 9 8 0 , a n d i t was n o t u n t i l J u n e 11, 1 9 8 0 , t h a t defendant tendered t h e check w i t h t h e r e s t r i c t i v e endorsement a s noted. Even t h o u g h p l a i n t i f f was a layman, he w i s e l y r e f u s e d t o n e g o t i a t e t h e check and i t was n o t u n t i l S e p t e m b e r 9 , 1980, t h a t d e f e n d a n t t e n d e r e d a check that plaintiff could cash without forfeiting his rights under the accidental death portion of the policy. The check was introduced into evidence as plaintiff's e x h i b i t no. 7. S e c t i o n 33-18-201(13), MCA, of t h e Montana Insurance Code p r o v i d e s : "Unfair claim s e t t l e m e n t p r a c t i c e s p r o - hibited. No p e r s o n may, w i t h s u c h f r e - quency a s t o i n d i c a t e a g e n e r a l b u s i n e s s p r a c t i c e , do any of t h e f o l l o w i n g : " ( 1 3 ) f a i l t o promptly s e t t l e claims, i f l i a b i l i t y h a s become r e a s o n a b l y c l e a r , under one p o r t i o n of t h e i n s u r a n c e p o l i c y coverage i n order t o i n f l u e n c e s e t t l e - ments under o t h e r p o r t i o n s of t h e i n s u r - ance policy coverage; " As indicated by the facts above, appellant violated this statute. The assistant vice-president and manager of life and disability claims testified regarding defendant's general business practice under questioning by plaintiff's attorney as follows: "Q. When you sent your check, you indi- cated that you had stamped on the back a restrictive endorsement that, in effect, says it is payment in full of all claims against the company attributable to the death of Thomas Harris, isn't that correct? A. As is our custom, Mr. Nash. . And it is your custom when there's liability under one portion, liability to pay, that is liability, for the company to pay on the one portion and a disputed liability under the other portion, to tender the part you agree you have to pay, in full settlement? A. I'm not sure I understand what you're driving at. "Q. That is your general practice, if there's an agreed portion and a disputed portion to a claim, you tender the agreed portion in full settlement? A. Yes." ,That it is the defendant's practice to so endorse settlement checks is underscored by the fact that an examination of the check itself reveals that the endorsement has been stamped thereon with a blank after the word "Policy" with plain- tiff's number inserted in handwritten form. This leads one to conclude that other policies are handled in similar fashion. Moreover, there is a general penalty prescribed for a violation of section 33-18-201(13), MCA. Section 33-1-104, MCA, gives a penalty for each violation of "this code," i.e., the Montana Insurance Code, Title 33 (section 33-1-101, MCA) and section 33-18-201(13), MCA, is clearly in Title 33. This general penalty statute was correctly a d d r e s s e d a n d a p p l i e a by J u s t i c e S h e e h y i n G o d d a r d , s u p r a . A p p e l l a n t ' s n e x t c o n t e n t i o n on t h e f i r s t i s s u e is t h a t t h e e v i d e n c e f a i l e d t o show a c t u a l d a m a g e s . Here a g a i n , w e disagree. I t is u n d i s p u t e d t h a t t h e $10,775.28 check w i t h t h e r e s t r i c t i v e e n d o r s e m e n t was d a t e d J u n e 11, 1 9 8 0 ( p l a i n - t i f f ' s e x h i b i t no. 7). D i v i d e n d s , a premium r e f u n d a n d p a i d up additions w e r e c a l c u l a t e d t o J u n e 11, 1 9 8 0 , by d e f e n d a n t and included in t h e check. Defendant returned t h e check w l t h o u t t h e e n d o r s e m e n t a c c o m p a n y i n g a l e t t e r d a t e d Septem- ber 9, 1980, w i t h t h e s t u b s t a p l e d t o t h e l e t t e r showing t h e c a l c u l a t i o n s t o J u n e 11, 1 9 8 0 ( p l a i n t i f f ' s e x h i b i t n o . 11). Defendant did not issue a new check or recalculate the amount d u e p l a i n t i f f t o September 9 , a s demanded by p l a i n - tnff and as d i c t a t e d by sound business practice. Thus, plaintiff l o s t approximately t h r e e months o f interest that he would have gained had the insurance company initially tendered the check without the endorsement. It is also uncontroverted that plaintiff hired an attorney t o recover benefits under the policy. P l a i n t i f f 's counsel on ora1 a r g u m e n t s t a t e d t h a t t h e premium r e f u n d shown by e x h i b i t no. 11 s h o r t e d p l a i n t i f f $ 1 4 . 1 1 . W f i n d t h e r e was s u f f i c i e n t e v i d e n c e o f e a c t u a l dam- ages before the Court. To s u p p o r t an award of punitive damages, t h e a c t u a l damages need o n l y be nominal. Butcher v. Fetranek ( 1 9 7 9 ) 1 1 8 1 Mont. 358, 5 9 3 P.2d 743 ($925 i n actual damages--$20,000 in punitive damages upheld on appeal). I n P a u v e r v . W i l k o s k i e ( 1 9 4 9 ) , 1 2 3 Mont. 228, 211 P . 2d 4 2 0 , t h e j u r y g a v e t h e p l a i n t i f f no a c t u a l damages b u t awarded $2,500 in punitive d a m a g e s w h i c h was affirmed on appeal. 'I'he Cour t n o t e d t h a t t h e plaintiff ' s o u t - o f - p o c k e t e x p e n s e s shown on t h e r e c o r d , i n c l u d i n g a t t o r n e y f e e s , were s u f f i c i e n t t o u p h o l d t h e p u n i t i v e damage award. See a l s o , Lauman v. Lee (1981), Pion t . 626 P.2d 830, 38 St.Rep. 499 ( t h e f a i l u r e of the jury to f i x t h e monetary value as damages does not preclude an award of punitive d a m a g e s ) and M i l l e r v . Fox ( 1 9 7 7 ) , 1 7 4 Mont. 5 0 4 , 5 7 1 P.2d 804 ( a n award of p u n i t i v e damages was affirmed where the t r i a l j u d g e f a i l e d t o p u t a v a l u e on a c t u a l d a m a g e s ) . The s e c o n d i s s u e r a i s e d by appellant focuses on the District Court's Instruction 0 1 4 which addresses the issue of punitive damages. The pertinent part of the i n s t r u c t i o n a s g i v e n a p p e a r s below: " P l a i n t i f f h a s a s k e d f o r p u n i t i v e exem- p l a r y damages which may be a l l o w e d by you. One who h a s s u s t a i n e d damage by t h e o p p r e s s i o n , f r a u d , o r m a l i c e of a n o t h e r may r e c o v e r i n a d d i t i o n t o h i s a c t u a l damages, damages f o r t h e s a k e o f e x a m p l e a n d by way o f p u n i s h i n g s u c h o t h e r party." Appellant correctly points out that t h e above para- g r a p h i s n e a r l y i d e n t i c a l t o t h e f i r s t p a r a g r a p h o f Montana J u r y I n s t r u c t i o n G u i d e No. 35, with t h e exception t h a t t h e p h r a s e " p r o v i d e d you f i r s t f i n d t h a t t h e p l a i n t i f f h a s s u f - f e r e d a c t u a l damage," which a p p e a r s a t t h e end o f the f i r s t s e n t e n c e of MJIG No. 3 5 , was o m i t t e d . Appellant argues t h a t I n s t r u c t i o n No. 14 i s improper because it does not state t h a t t h e j u r y must f i n d t h a t d e f e n d a n t v i o l a t e d a p r o v i s i o n of the Montana Insurance Code for which a penalty is prescribed b e f o r e a w a r d i n g p u n i t i v e damages and b e c a u s e it fails to require the jury to find actual damages before a w a r d i n g p u n i t i v e damages. A p p e l l a n t ' s c o n t e n t i o n regarding t h e i n s u f f i c i e n c y of t h e i n s t r u c t i o n o n a c t u a l damages is d i s p o s e d o f t h e by t h e Fauver case, supra. In Fauver, t h e Court noted that the t r i a l c o u r t i n s t r u c t i o n s d i d n o t d e f i n e damages o r i n s t r u c t the jury a s t o t h e e l e m e n t s of damage t o be c o n s i d e r e d by t h e j u r y o r e x p l a i n a c t u a l damages o r c o m p e n s a t o r y damages or inform t h e j u r y how s u c h damages d i f f e r from e x e m p l a r y damages or punitive damages. Yet t h e Court affirmed the award o f p u n i t i v e d a m a g e s , r e a s o n i n g t h a t t h e r e c o r d showed t h a t t h e p l a i n t i f f had s u f f e r e d a c t u a l damages. Similarly, here we have found that plaintiff has suffered actual damages and a c c o r d i n g l y , w e w i l l n o t r e v e r s e t h e judgment for the f a i l u r e t o include the phrase " p r o v i d e d you f i r s t f i n d t h a t t h e p l a i n t i f f h a s s u f f e r e d a c t u a l damage." More- o v e r , we n o t e t h a t t h e g i v e n i n s t r u c t i o n s t a t e s t h a t p l a i n - t i f f may r e c o v e r p u n i t i v e damages i n a d d i t i o n t o h i s a c t u a l damages i f he c a n show o p p r e s s i o n , fraud or malice. The r e a s o n a b l e c o n c l u s i o n t h e r e f r o m i s t h a t a c t u a l damages m u s t f i r s t be shown. W r e a s o n similarly w i t h r e g a r d t o t h e f a i l u r e o f e the D i s t r i c t C o u r t t o i n s t r u c t t h e j u r y t h a t p l a i n t i f f m u s t show a violation of the Montana Insurance Code for which a p e n a l t y i s p r e s c r i b e d b e f o r e b e i n g a w a r d e d p u n i t i v e damages. I n I n s t r u c t i o n No. 1 3 t h e c o u r t r e a d t o t h e j u r y t h e s t a t u t e which d e f e n d a n t v i o l a t e d ( s e c t i o n 33-18-201(13), MCA). As dlscusseu earlier, the uncontroverted evidence showed a v i o l a t i o n of this statute. W f a i l t o s e e how t h e f a i l u r e e t o i n s t r u c t a s p l a i n t i f f contends w a r r a n t s a r e v e r s a l of t h e judgment. The t h i r d i s s u e r e l a t e s t o t h e a u m i s s i o n o f evidence not listed in the pretrial order. Appellant here argues that the plaintiff's exhibit no. 12, indicating the Jetendant's assets and liabilities, should not have been admitted because it was not listed in the pretrial order. Also, plaintiff did not indicate in answers to interroga- tories that Lewis, a former agent of defendant, would tsstify about defendant's financial condition. Appellant was furnished with the exhibit eight days prlor to trial and eight days is a sufficient time to prepare rebuttal evidence for the exhibit. Moreover, from tne time defendant was served witn plaintiff's complaint, defendant was aware of the fact that plaintiff was seeking punitive damages. It requires no recitation of authority that a jury nay take into account a defendant's wealth when punitive damages are sought. Defendant did not request a continuance to prepare for the exhibit, submitted its case to the jury, and after an adverse verdict seeks a retrial on the punitive damages Issue. Defendant has had its day in court. We fail to see how defendant's rights were prejudiced by the admission of the exhibit or the testimony regarding defendant's financial condition. Affirmed. . , - 7 - Chief Justice We concur: /1 P r Justice prank l. 8. Morrison, Jr., specially concurring. I concur in the result but dissent from that portion of the opinion which relies upon a violation of the insurance code as the basis for an award of punitive damages. The jury in this case was permitted to award punitive damages by making a finding that defendant insurance company failed to negotiate in good faith. It is true that the jury was instructed regardinq the provisions of section 33-18-201(13), MCA, and that this statute could have formed the basis for their finding in favor of plaintiff and their resulting award of $30,000 in punitive damages. However, the jury was not instructed that a violation of the statute was required for their verdict and in fact they were given the option of simply returning a verdict in favor of plaintiff based upon the "bad faith" case law which has developed. The majority opinion fails to deal with the question of whether a plaintiff can recover punitive damages in Montana in an action premised upon "bad faith" negotiation without a violation of the insurance code. Instead the majority relies upon the fact that, in this case, there was a violation of the insurance code as a matter of law and, therefore, any error in allowing the jury to return a verdict for plaintiff absent a finding of violation of the insurance code, would be harmless. I do not agree that there was a violation of the insurance code as a matter of law. The question of whether this insurance company failed to promptly settle claims as a general business practice was a question for the jury. Prior to our decision in Lipinski v. Flathead Title Co. 39 St.Rep. 2283 a plaintiff's riqht to recover punitive damages for bad faith arising out of an insurance contract was not clearly recognized in absence of a statutory violation. However, in Lipinski we said: "Should there be any doubt, we now expressly hold that insurance companies have a duty to act in good faith with their insureds, and that this duty exists independent of the insurance contract and independent of statute." An award of punitive damages without a statutory violation was approved. In this case the plaintiff presented the evidence from which a jury could find that defendant insurance company engaged in bad faith in its negotiation of this claim. The claim is grounded in tort. Therefore, this jury was entitled to make an award of punitive damages if it found defendant's conduct was sufficiently culpable to satisfy the statutory requirements of oppression and/or implied malice. I concur in the affirmance. Mr. Justice Fred J. Weber dissents as follows: I respectfully dissent from the majority opinion. My basic disagreement relates to the majority's interpretation of section 33-18-201(13), MCA. In substance I would hold that section does not give rise to an action in tort in the event of a failure to promptly settle a claim with an insured. Reference is made to my dissent in Klaudt v. Flink, P.2d- I - St.Rep. , and which case has Supreme Court No. 82-247. Mr. J u s t i c e D a n i e l J . S h e a , c o n c u r r i n g : I would a f f i r m t h e j u d g m e n t , b u t I c a n n o t do s o on t h e ground r e l i e d on by t h e m a j o r i t y . S e c t i o n 33-18-201 ( 1 3 ) , MCA, was n o t i n t e n d e d t o c r e a t e a s e p a r a t e c a u s e o f a c t i o n i n f a v o r o f t h e i n s u r e d w h e r e h i s i n s u r a n c e company h a s n o t d e a l t w i t h him i n good f a i t h . J u s t l i k e our recent d e c i s i o n i n Klaudt v. F l i n k ( 1 9 8 3 ) , Mont . 1 - P.2d I - St.Rep. (No. 82-247, d e c i d e d J a n u a r y 28, 1 9 8 3 ) , t h e m a j o r i t y h a s c r e a t e d a s t a t u t o r y c a u s e of a c t i o n o u t of t h i n air. The v e r d i c t a n d j u d g m e n t c a n , h o w e v e r , be a f f i r m e d i n any e v e n t b e c a u s e t h e r e is ample e v i d e n c e t h a t t h e i n s u r a n c e company was n o t a c t i n g i n good f a i t h w i t h i t s i n s u r e d . As i n d i c a t e d by J u s t i c e M o r r i s o n , w e h e l d i n L i p i n s k i v . Flat- head C o u n t y T i t l e Co. (1982), Plont. -1 - P.2d , 39 S t . R e p . 2283, a p u n i t i v e damage award i n f a v o r o f t h e i n s u r e d a g a i n s t a n i n s u r a n c e company " e x i s t s i n d e p e n d e n t of t h e i n s u r a n c e c o n t r a c t and i n d e p e n d e n t o f s t a t u t e . " Here t h e i n s u r a n c e company had a c l e a r d u t y t o i m m e d i a t e l y s e t t l e with the insured that part of the c l a i m w h i c h was u n d i s - puted. A jury could, under these facts, conclude t h a t its f a i l u r e t o d o s o was i n bad f a i t h .