There is a fine line between conduct which warrants only compensatory damages and conduct which warrants an award of punitive damages. Over the years, Arizona appellate courts have struggled to draw that line with sufficient accuracy such that trial courts and parties will have a clear understanding as to when punitive damages may be awarded in a negligence case. In Swift Transportation Co. of Arizona L.L.C. v. Carman, the Arizona Supreme Court provided some additional guidance on this issue which will shape the course of discovery in future negligence cases.
In January 2018, the driver of a tractor trailer owned by Swift Transportation was involved in a motor vehicle accident while driving on the freeway. The driver of the tractor trailer had engaged the “Jake Brake” (engine brake), set the cruise control to 62 mph in a 75 mph zone, was on the phone with his daughter using a hands-free Bluetooth device, and was passing a vehicle on the right on a downhill-sloping curve when the accident occurred. After the accident, he remained in the vehicle for five minutes without placing any traffic warning devices on the road to warn other motorists of the accident. Unfortunately, the driver of another tractor trailer collided with two other vehicles while trying to avoid the Swift trailer, killing and injuring several travelers. The plaintiffs sued Swift alleging negligence and filed a Motion on Prima Facie Case for Punitive Damages with the trial court to allow them to obtain Swift’s financial records. The trial court granted plaintiffs’ motion, and that order was affirmed by the Arizona Court of Appeals. The Arizona Supreme Court accepted special action review to clarify the standard for punitive damages, and ultimately held that the evidence in this case was insufficient to allow the claim to be presented to the jury.
Arizona courts require a plaintiff to make a prima facie showing that he or she will be entitled to present the issue of punitive damages to the jury before allowing discovery of a defendant’s financial information. In a negligence case, the plaintiff must establish that there is a reasonable likelihood that the punitive damages claim will be submitted to the jury. Recognizing that the purpose of punitive damages is to punish and deter, the Arizona Supreme Court confirmed that punitive damages may not be awarded based on mere negligence, gross negligence, or recklessness. “[A] defendant may not be subject to civil punishment through punitive damages unless he or she acts ‘with a knowing, culpable state of mind.”’ Swift Transp. Co. v. Carman, 515 P.3d 685,691 (2022)(citing Gurule v. Ill. Mut. Life & Cas. Co., 152 Ariz. 600, 601 (1987)). Compensatory damages are recognized as sufficient to deter unintentional and even grossly negligent conduct. Instead, there must be evidence that the defendant acted with an “evil mind.” “To establish an evil mind requires clear and convincing evidence that defendant’s actions either (1) intended to cause harm, (2) were motivated by spite, or (3) were outrageous, creating a ‘substantial risk of tremendous harm to others.’” Id. (citing Volz v. Coleman Co., 155 Ariz. 567, 570-71 (1987)).
The Arizona Supreme Court explained that “to be entitled to punitive damages in a negligence action, a plaintiff generally must show that the defendant’s conduct was ‘outrageous, oppressive or intolerable,’ and ‘create[d] [a] substantial risk of tremendous harm,’ thereby evidencing a ‘conscious and deliberate disregard of the interest[s] and rights of others.’” Id. at 692 (citing Volz and Gurule, supra). While this may be proven by establishing that the defendant engaged in criminal conduct, this is not required. Instead, the Plaintiff must prove that the defendant had reason to know of the facts which created a substantial, unreasonable risk of physical harm. “[I]t is not enough that a defendant had reason to appreciate the severity of the risk; the defendant must have actually appreciated the severity of the risk before consciously disregarding it.” Id. at 693. This is, of course, a very high standard. “Indeed, it will only be the rare negligence case that meets this standard.” Id.
Given the facts of the Swift Transp. Co. case, the Arizona Supreme Court held that the trial courted abused its discretion by committing an error of law when it reached the conclusion that the plaintiff made a prima facie case for punitive damages. Ultimately, the driver’s conduct may have been negligent, or even grossly negligent, but it was not enough for punitive damages. There was no evidence that the driver intended to injure anyone, or was motivated by spite or ill will, and the driver’s post-accident admissions were insufficient to establish that he consciously pursued a course of conduct knowing he created a substantial risk of significant harm to others. In other words, his actions did not amount to the sort of outrageous conduct required to establish an “evil mind.” Even though he was going faster than which may have been prudent under the circumstances, he was still driving at least 10 mph below the posted speed limit, and his actions were not so far outside the realm of reasonable conduct that they may be considered one of the “most egregious of cases” warranting punitive damages. Id. at 694. In fact, speeding alone is recognized by the court as insufficient to support a punitive damages award. The driver’s legal, hands-free use of his cell phone at the time of the accident was not considered to be aggravated or outrageous conduct. The driver’s post-accident conduct of remaining in the vehicle for five minutes and failing to put out traffic warning devices did not give rise to the level of outrageous conduct. Federal regulations require the driver of a tractor trailer to place traffic warning devices on the road as soon as possible, or at least within ten minutes of being stopped on the highway. Since only five minutes had passed since the original accident, the driver did not violate federal regulations. Even if he did, his violation of the regulation would be a “far cry from the outrageous or quasi-criminal conduct sufficient to establish an evil mind.” Id.
The Court’s ruling in Swift Transp. Co. v. Carman begs the question as to what level of conduct would give rise to an award of punitive damages in an automobile case. Based on the Court’s opinion, the driver’s conduct must be quasi-criminal in nature, and there must be proof the driver actually appreciated the severity of the substantial risk of tremendous harm to others, and consciously disregarded it prior to the accident. Plaintiff must meet this burden of proof by clear and convincing evidence, which is much higher than the preponderance of the evidence standard which applies in a typical negligence case. As such, the ruling in Swift Transp. Co. v. Carman is proof that Arizona Courts should be reluctant to allow a claim for punitive damages to proceed to a jury, and should reserve the possibility of punitive damages for only the most egregious cases.
Thomas Rubin and Kelley has extensive experience litigating automobile negligence cases including claims for wrongful death and punitive damages. If you require legal assistance or have questions regarding this issue, please feel free to contact Michael G. Kelley at mkelley@trkfirm.com or Brian D. Rubin at brubin@trkfirm.com.