Defense Digest

Punitive Damages Obtainable in Negligent Supervision Claim Based On Ordinary Negligence

The Supreme Court of Pennsylvania recently held that a negligent supervision claim sounding in ordinary negligence may support an award of punitive damages. Under Pennsylvania law, punitive damages may be awarded for outrageous conduct because of the defendant's evil motive or reckless indifference to the rights of others. In Hutchinson v. Luddy, 870 A.2d 766 (2005), the plaintiff brought suit against the Diocese of Altoona-Johnstown and a Bishop of the diocese for negligent retention and supervision of a priest, who the plaintiff claimed sexually molested him. In Hutchinson, the plaintiff argued that the defendants' conduct of allegedly ignoring allegations that the priest was molesting children constituted wanton disregard for others and warranted an award of punitive damages. At the conclusion of the trial, the jury awarded the plaintiff over $1 million in punitive damages. The defendants appealed the verdict, and on remand, the Superior Court reversed the award of punitive damages, stating that a negligent supervision claim based on ordinary negligence can never support an award of punitive damages.

In its decision, the Pennsylvania Supreme Court relied on its ruling in Martin v. Johns-Manville Corp., 494 A.2d 1088 (1985), and the Restatement (Second) of Torts §500 to support the conclusion that a plaintiff in an ordinary negligence case can undertake the additional burden of proving, as a matter of damages, that the defendant's conduct was not only negligent, but reckless and outrageous enough to warrant an award of punitive damages. The Court applied §500, which defines the requisite state of mind for punitive damages based on reckless indifference as a situation "where the actor knows, or has reason to know, . . . of facts which create a high degree of physical harm to another, and deliberately proceeds to act, or fail to act, in conscious disregard of, or indifference to, that risk." The Court ruled that this type of reckless conduct was sufficient to create a jury question on the issue of punitive damages. The Court vacated the Superior Court's reversal of the awarded punitive damages and remanded the matter to the Superior Court for a determination of whether the evidence was sufficient to warrant the jury's award of punitive damages.

The Court held that under Pennsylvania law, a punitive damages award must be supported by evidence which establishes that "(1) a defendant had a subjective appreciation of the risk of harm to which the plaintiff was exposed and that (2) he acted, or failed to act . . . in conscious disregard of that risk." The Court stated that the mere fact that a claim based on negligence does not require a heightened showing of culpability should not automatically deem punitive damages unavailable, even if the defendant's conduct was beyond negligence and in the realm of outrageous.

In discussing the standard governing the award of punitive damages, the Court emphasized that the purpose of punitive damages is to punish the defendant and to deter him, or others like him, from engaging in similar reckless conduct. The Court stated that the penal and deterrent purposes of punitive damages is furthered when an intentional tort is committed as well as when reckless and outrageous conduct occurs in a case arising from negligence.

The Court further commented that many leading Pennsylvania cases discussing the standard for awarding punitive damages have arisen from causes of action sounding in negligence. In Rizzo v. Haines, 555 A.2d 58 (1989), the Court found that an award of punitive damages was proper in an attorney malpractice case based on breach of fiduciary duty, intentional withholding of information, and fraudulent misrepresentation. This case was partially based on negligence, and punitive damages were deemed appropriate. Also, in Feld v. Merriam, 485 A.2d 742 (1984), a landlord was accused of being negligent in providing security for an apartment complex. The Feld Court held that the issue of punitive damages was improperly submitted to the jury, not because punitive damages were unavailable in negligent actions, but because there was insufficient evidence for a jury to conclude that the landlord acted outrageously. Basically, the Court made it clear that the notion of allowing punitive damages for claims based on negligence is not a novel concept.

The Court was careful to note that ordinary negligence is not sufficient to warrant an award of punitive damages and a jury should not be instructed that such an award is appropriate after having found negligence. But if the evidence is sufficient to sustain a finding of reckless conduct by the defendant, a jury question on the issue of punitive damages is created, and a plaintiff can proceed in proving that the defendant's conduct was so outrageous that an award of punitive damages is justifiable.

The opinion of the Pennsylvania Supreme Court is important because it alerts insurers and attorneys of the possibilities of punitive damages recovery in cases based on negligence. The possibility of recovering punitive damage awards in such cases has important implications given the potential for insurance coverage issues and the need for separate counsel.

*Fabiana was a 2005 summer law clerk in our Cherry Hill, NJ office. Questions regarding this article can be addressed to Walter Kawalec, Esquire at (856) 414-6024 or wkawalec@mdwcg.com.