BEFORE ROY NOBLE LEE, DAN LEE AND PRATHER
PRATHER, JUSTICE, FOR THE COURT:
At issue in this lawsuit is the propriety of an award of punitive damages on an insurance contract claim where it is alleged an insurance company intentionally refused to pay a valid claim with reasonable promptness. Charles M. Day (hereinafter referred to as Day) sued his insurance carrier, Aetna Casualty and Surety Company, (hereinafter Aetna) for tortious breach of contract in the First Judicial District of Hinds County. *fn1 The jury verdict awarded Day $9,000.00 actual and $18,000.00 punitive damages, from which verdict Aetna appeals assigning as error:
(1) The verdict of the jury is contrary to the law and to the overwhelming weight of the competent evidence and evinces bias, prejudice and passion and the trial court erred in overruling defendant's motion for a directed verdict and for judgment notwithstanding the verdict, or in the alternative, defendant's motion for a new trial.
(2) The trial court erred in submitting the question of punitive damages to the jury over appellant's objection.
(3) The trial court erred in granting instructions P-1 and P-3 and in allowing the jury to award certain damages.
(4) The court erred in admitting proof of appellant's net worth and in permitting certain argument of counsel.
George M. Day owned a 1976 Massey Ferguson tractor purchased in 1981 for $8,500.00. The tractor and a three axle trailer were insured to the extent of $13,500.00 under a policy from the Aetna Casualty and Surety Company. Under the policy, the tractor was insured against direct physical loss of or damage to the property caused by specific perils. Relying on this insurance policy, Day made a claim for damages to his tractor by reason of vandalism and theft. Day asserts that his former employee (1) drove the tractor
without water in the engine causing the engine to burn up, (2) caused other physical damage, and (3) stole certain items belonging to Day.
After investigation of the claim, Aetna offered to pay Day for damage incurred as a result of theft in the amount of three hundred thirty-one dollars and ninety cents ($331.90). But Aetna denied that there was any damage to internal engine attributed to vandalism and claimed vandalism was not covered as a specific peril in the policy. Aetna's position was that the internal damage resulted from normal wear to the engine, not vandalism or theft. This decision was communicated to Day. The adjuster, although unable to recall Day's exact response to the offer, concluded that the claim was resolved and executed a check for the damage, less the deductible amount provided in the policy. The check was never negotiated, but this suit was instituted.
The threshold issue is the determination of Aetna's contractual liability. Day's claim for physical damage is based upon vandalism and theft; the policy clearly covers the peril of theft, however, theft is not defined. Day contends that theft includes damage incurred during vandalism. This Court addressed a similar argument in National Fire Insurance Co. of Hartford v. Slayden, 227 Miss. 285, 85 So. 2d 916 (1956) and stated:
Where a machine or vehicle is insured against theft, without words defining the term "theft" and some unauthorized person unlawfully takes possession of such vehicle or machine for use by the unlawful taker for so long as he sees fit, and the vehicle or machine is damaged, the loss is covered by the policy and the insurer is liable therefor. Id. at 917.
Therefore, upon this principle, this Court holds that the vandalism allegation for engine damage was within the covered peril of theft under the insurance policy.
The first and second assigned errors address the the propriety of punitive damages in this case. To recover punitive damage from an insurer for amounts over and above policy benefits an insured must prove by a preponderance of the evidence either (1) that the insurer acted with ...