| Court: | WI Supreme Court |
| Facts: | Maxey owns an apartment building; HUD underwrote the construction mortgage. There's lots of vandalism: those darn kids. The fire alarms are inoperable because circuit breakers are tripped. The kids set a fire in the hall, and Brown is burned. |
| Posture: | Jury awards about $50K in damages, plus $200K in punitives. Punitives are quashed on appeal. We appeal from that. |
| Issue: | Are punitive damages available in this case, and does Maxey's insurance policy cover them? |
| Holding: | Yes and yes. |
| Rule: | You can have punitives if the conduct is outrageous. And we support free contract: had State Farm wanted not to be liable, they could have excluded punitives from the coverage. |
| Reasoning: | With the outrageousness, there's not much reasoning. You're either
outraged or you're not, and the court is. Punitive damages are
designed to hurt and deter, the defendant's objection that HUD's
limits on his rate of return precluded having money to make
repairs notwithstanding.
As for insuring against punitives, is there really punishment? You can't insure against criminal fines, for example. Good point, but this is not our only policy. Free contract is also a policy we like, and we like it enough that we'll entertain it here. |
| Dicta: | |