concurring in result and dissenting.
I concur in result with the Majority as to the award of compensatory damages. I dissent to the reversal of the punitive damages. Budget raised the issue of whether the evidence was sufficient to clearly and convine-ingly establish all of the elements of actual 6 fraud, which serves as an underlying challenge to the awards of compensatory and punitive damages. However, the Majority construes this to mean Budget Car has waived the issue of whether there was sufficient evidence to support the award of compensatory damages. To the extent the Majority is willing to recognize an award of compensatory damages, it recognizes the cause upon which those damages are based: actual fraud. Actual fraud is actual fraud and any finding thereof supports the trier's of fact decision to award compensatory or punitive damages.
In other words, either there was actual fraud or there was not actual fraud. The award of compensatory damages, upheld by the Majority, is dispositive of the issue of whether actual fraud was proved. Had actual fraud not been proved, there would be no compensatory damages. Because actual fraud was proved, we must next determine whether the award of punitive damages was correct. The standard for awarding punitive *269damages for the commission of a tort remains unchanged:
Punitive damages may be awarded only if there is clear and convincing evidence that the defendant 'acted with malice, fraud, gross negligence, or oppressiveness which was not the result of a mistake of fact or law, honest error or judgment, overzea-lousness, mere negligence, or other human failing, in the sum [that the jury believes] will serve to punish the defendant and to deter it and others from the like conduct in the future.'
Erie Ins. Co. v. Hickman by Smith (1998), Ind., 622 N.E.2d 515, 520 (citing Bud Wolf Chevrolet, Inc. v. Robertson (1988), Ind., 519 N.E.2d 185, 137-138).
I disagree that when the underlying tort of actual fraud has been proved, a different standard of review is ultimately applied in determining whether to allow for punitive damages. Our supreme court, in examining the application of punitive damages to the tort of an insurer's breach of its duty of good faith, applied a different standard of proof required to obtain punitive damages: "Thus, the mere finding by a preponderance of the evidence that the insurer committed the tort will not, standing alone, justify the imposition of punitive damages." 7 Id.
Actual fraud is a unique tort in terms of punitive damages because the requisites for use of the "clear and convincing" standard must have been met in obtaining a judgment of fraud in the first place. One cannot commit actual fraud without the intent to injure another. Whereas, with breach of a duty of good faith (Frie Ins. Co.), negligence (Or-kin), breach of contract (Seibert v. Mock (1987), Ind.App., 510 N.E.2d 1373),8 or any other tort that may invoke the application of punitive damages, the presumption created by the "clear and convincing" standard may not have been overcome in proving the underlying tort because the intent of the actor is not at issue.
Our supreme court discussed the origin of the "clear and convincing" standard in the context of civil litigation:
[We established the "clear and convincing evidence" standard for application in the trial of punitive damages claims, a standard which is but minutely below the "reasonable doubt" standard, because such actions are more akin to criminal actions than to civil suits, there being a presumption that the defendant's conduct that gave rise to the underlying claim and entitlement to compensatory damages was not inflicted with the obduracy relied upon by the plaintiff to sustain his claim that the defendant, in the public interest, should be penalized.
Orkin Ext. Co., Inc. v. Traina (1986), Ind., 486 N.E.2d 1019, 1022-28 (emphasis in original).
The conduct in Orkin was negligence and punitive damages were denied because the negligent conduct was not clearly and convincingly intentional or obdurate. Unlike the tort of actual fraud, it is possible to be unintentionally negligent. Our supreme court in Erie did not have to address whether an insurer's duty of good faith can be unintentionally, nonmaliciously, nonfraudulently, or nonoppressively violated because it held under the facts of that case that, although there was a duty of good faith, it had not been violated.
In terms of the punitive damage judgment, the presumption created in favor of Budget with the clear and convincing standard is that Budget's conduct was not the result of mistake of fact or law, honest error or judgment, overzealousness, mere negligence, or other human failing. However, when the elements of actual fraud have been proved, by definition, those presumptions created by *270use of the "clear and convincing" standard have already been overcome. "Mistake" is a defense to fraud which was asserted by Budget and rejected by the jury. Budget asserted none of the other above defenses to fraud, which also serve as the basis of a favorable presumption in determining whether to award punitive damages.
I agree with our supreme court when it relied on Justice Prentice's words:
"Clear and convincing" evidence, a stricter degree of proof than a mere preponderance of the evidence is required in some jurisdictions with respect to such issues as fraud, specific performance, forfeiture, etc.
In ordinary civil actions a fact in issue is ... sufficiently proved by a preponderance of evidence. However, clear and convincing proof is a standard frequently imposed in civil cases where the wisdom of experience has demonstrated the need for greater certainty, and where this high standard is required to sustain claims which have serious social consequences or harsh or far reaching effects on individuals to prove willful, wrongfal and unlawful acts to justify an exceptional judicial remedy....
So, in a number of cases where an adverse presumption is to be overcome, or on the grounds of public policy and in view of peculiar facilities for perpetrating injustice by fraud or perjury, the degree of proof required is expressed in such terms as 'clear,' 'clear and conclusive,' 'clear precise and indubitable, 'convineing,' 'clear and convineing,' 'satisfactory,' 'entirely satisfactory,' 'strong," 'clear, strong and convincing," 'clear, distinct and convincing,' 'clear, positive and credible, and 'unequivocal,' and the phrase preponderance of evidence' has been expressly disapproved as an insufficient measure of the proof required, as has also the phrase, 'a fair preponderance of the evidence.
Estate of Reasor v. Putnam County (1994), Ind., 685 N.E.2d 153 (citing Travelers Indem. Co. v. Armstrong (1982), Ind., 442 N.E.2d 349, 360-61 (emphasis in the original) (citations omitted)).
The issue in Reasor was reformation, based on mutual mistake and fraud. Our supreme court recognized that when intent is at issue, proof must be established by clear and convincing evidence. If we are to affirm the judgment in relation to compensatory damages, we are affirming the trier's of fact determination that fraud has been proved with clear and convincing evidence. It is only this standard which can truly prove whether there was the requisite intent necessary to sustain a judgment of fraud.
The Majority reweighs the evidence and credibility of witness testimony in arriving at its conclusion that there is no clear and convincing evidence that Budget's conduct was malicious, fraudulent, grossly negligent, or oppressive. Only one of these requisites must be found to justify an imposition of punitive damages because of the use of the conjunction "or" and also because being "grossly negligent" by definition excludes the others. Malice, fraud, and oppressive conduct all require proof of the actor's intent. By allowing Budget the presumption of those defenses for purposes of punitive damages, we call in to question the jury's finding of actual fraud as the underlying tort. Therefore, proof of the elements of fraud inherently a priori rebuts any presumption created by the "clear and convincing" standard in arriving at an award of punitive damages.
Albeit, punitive damages are not awarded as a matter of course under Indiana law. Such damages are intended to punish and deter wrongdoers rather than compensate those who have been wronged. The analysis ultimately turns on the actor's state of mind: whether a defendant knew of but consciously disregarded the likely injurious consequences of his course of conduct. Likewise, in Bud Wolf Chevrolet, a case involving the issue of actual fraud and punitive damages, our supreme court upheld the jury's finding of clear and convincing evidence in favor of punitive damages. A two-step process was used: (1) whether there was conduct, though not malicious, which constituted fraud, gross negligence or oppressiveness, and (2) whether the conduct was inconsistent with any contention of mistake of law or fact, honest error of judgment, overzealousness, mere negligence, or other such noniniquitous human failing. Bud Wolf Chevrolet, 519 N.E.2d at 137.
*271There appear to be no cases which support a claim of actual fraud, while simultaneously rejecting sought-after punitive damages. In this respect we are presented with a case of first impression in Indiana. We discussed punitive damages in the context of actual fraud in the case of Martin Chevrolet Sales, Inc. v. Dover (1986), Ind.App., 501 N.E.2d 1122, We held that "[plunitive damages may not be allowed upon evidence that is merely consistent with a hypothesis of fraud." We erroneously relied on two cases in support of that proposition: Travelers Indemmity Co. v. Armstrong (1982), Ind., 442 N.E.2d 349 and Orkin, 486 N.E.2d 1019. Our supreme court in Travelers did not have to decide whether to deny punitive damages because it held there was insufficient evidence to support the complaint of actual fraud. And, as previously mentioned, the issue in Orkin was punitive damages in the context of negligence. Moreover, the punitive damage award in Martin was reversed due to improper jury instruction, and not due to use of a higher evidentia-ry standard on the underlying claim of actual fraud.
Actual fraud, by its very nature, is conduct that, in the public interest, justifies penalty. I agree that "it is better to exonerate a wrongdoer from punitive damages, even though his wrong be gross or wicked, than to award them at the expense of one whose error was one that society can tolerate and who has already compensated the victim of his error." Orkin, 486 N.E.2d at 1023. However, actual fraud, unlike other torts which can be inflicted unintentionally or non-maliciously, is not conduct that society can tolerate.
When actual fraud has been proved, the trier of fact is free to, but is not required to impose, punitive damages without further ev-identiary burden. It is for that reason that I would uphold the jury's finding of actual fraud with a damage award of compensatory and punitive damages.
. There is a difference between actual and constructive fraud. Actual fraud requires proof of an intent to misrepresent, whereas constructive fraud, as noted by Judge Sullivan requires only proof of reckless ignorance. Constructive fraud is a form of negligence which will not always merit punitive damages. The case relied upon by Judge Sullivan, Block v. Lake Mortgage Co. (1992), Ind.App., 601 N.E.2d 449, reh. denied, does not deal with punitive damages. Rather, the court in that case distinguished between actual and constructive fraud, supporting the contention that proof of actual fraud is achieved through a higher degree of proof because intent of the actor is at issue.
. Judge Sullivan relies on the Erie case in support of his position that punitive damages are not justified in every situation of actual fraud. However, the underlying tort in Erie was not actual fraud, but breach of a good faith duty.
. Judge Sullivan relies on the case of Seibert v. Mock in support of his proposition that "the burden to establish entitlement to punitive damages is more onerous than the burden to prove compensable fraud." However, this case was for breach of contract. Fraud was nol the issue on appeal. The footnote upon which Judge Sullivan relies falls below the level of dicta. Moreover, we cannot determine from the facts in this case whether it was actual or constructive fraud at issue before the trier of fact.