dissenting.
Where an insurance company has breached its contract with an insured by failing to recognize a valid claim, the standard to be applied to the conduct of the insurance company in its dealings with its insured is not the standard applied by the trial court and approved by Majority Opinion of this Court. I dissent.
The standard applied by the trial court was whether the conduct of the insurance company would “:.. rise ... to the level of malicious or willful or obstreperous conduct which would support punitive damages.” The correct standard set forth by our Indiana Supreme Court is that “Punitive damages may be awarded in addition to compensatory damages whenever the elements of fraud, malice, gross negligence or oppression mingle in the controversy, and it can be shown that the public interest will be served by the deterrent effect of the punitive damages.” Art Hill Ford, Inc. v. Callender (1981), Ind., 423 N.E.2d 601, 602. Also see, Note, Indiana’s Allowance of Punitive Damages in Contract Actions Against Insurance Companies: How New is It?, 55 Ind.L.J. 563 (1979-80).
The privilege of disputing liability in good faith is not available to State Farm. Vernon Fire & Casualty Insurance Co. v. Sharp (1976), 264 Ind. 599, 349 N.E.2d 173. Finding 24 of the trial court negates good faith on the part of the insurance company. Here, the trial court states “the preponderance of the evidence indicates the unit was a total loss.” Therefore, any efforts on the part of the insurance company to make repairs would have been in bad faith. At Finding 15, Mr. Barker, a wrecking service operator, described the truck as “junk”. At Finding 16, Mr. O’Brien, a dealer in refuse handling equipment, described the truck , as a “total loss.” An insurance company dealing with the public is held to a higher standard than an uninformed layman when a determination must be made as, to whether a piece of insured equipment is a total loss or is repairable. It is gross negligence for the insurance company to rely on uninformed agents where specialized equipment is being evaluated.
There were repeated misrepresentations to the insured, D & T Sanitation, Inc., by State Farm and its agents that the truck would soon be repaired and available for use. This amounts to oppressive conduct which clearly comes under the standard in Art Hill Ford, Inc., supra. There was the testimony of Mr. Jackson, an insurance representative, who stated that they could get the truck running in 30 days. (Tr. p. 358). Another witness, Mr. McGinnis, Division Mgr. for State Farm, wrote to the Indiana Department of Insurance that hopefully the repairs will be done in 3-4 weeks. This was *1212nine months after Mr. Jackson’s assurance that the truck would be running in 30 days. (Tr. p. 375). When D & T Sanitation, Inc. was finally advised that the truck was ready in September 1979, the truck started to smoke profusely and had numerous other problems with its operation. The truck was obviously a total loss, a piece of junk. (Tr. 413-418). If ever there was a case where punitive damages would be in order, this case would more than qualify under the proper standard.1 I dissent.
. The Majority Opinion at Footnote 1 cites The Travelers Indemnity Company v. Armstrong Ind., 442 N.E.2d 349 (1982) in support of an evidentiary standard. However, the standard that has been incorrectly cited by the trial court is one of law not evidence. If the correct standard of law had been applied to the evidence, the trial court would have found the evidence more than adequate to support the award of punitive damages. Furthermore, I do not see that the evidentiary standard has been radically changed by the Travelers case. In Art Hill Ford, Inc. v. Callender (1981), Ind., 423 N.E.2d 601, Justice Hunter had established a standard of “cogent and convincing proof.” I do not see that “clear and convincing evidence” is much different. The difference, if any, may be semantical at best.
It should be further noted that the Travelers case cited by the Majority can be easily distinguished. The Court noted and prefaced its remarks on punitive damages by stating:
“As hereinbefore related, the dispute between the parties arose over the monetary extent of the defendant’s liability under the contract. Also, as hereinbefore determined, the issue was one of law, not of fact, and the law was unsettled in this state. It is, therefore, difficult to imagine circumstances more repugnant to an award of punitive damages.” (My emphasis.).