25.4.1 Instances Where Punitive Damages Can Be Awarded.

• Jurisdiction: Arizona

25.4.1 Instances Where Punitive Damages Can Be Awarded. Initially, a prayer for punitive damages is not an independent cause of action and, thus, the plaintiff must establish the underlying claim before punitive damages may be pursued. Punitive damages are awardable in tort cases¹⁸ but not cases where the sole recovery is for breach of contract.¹⁹ While a breach of contract claim would not permit a punitive damage recovery, tort claims that accompany a breach of contract action could have a punitive damage component to the award.²⁰

For instance, tortious interference with a contract claim would support a request for punitive damages.²¹ A fraud claim would allow an award for punitive damages.²² Breach of the covenant of good faith and fair dealing would also permit a plaintiff to seek punitive damages.²³ This claim, however, is not permitted for every contract but rather there must be a special relationship between the parties arising from elements of public interest, adhesion and fiduciary responsibility.²⁴ Torts caused by intoxicated drivers are subject to a punitive damages claim even though intoxication alone is insufficient to establish the claim.²⁵ Punitive damages could also be assessed in claims arising out of breach of fiduciary duty,²⁶ consumer deception,²⁷ malpractice,²⁸ personal injury,²⁹ products liability,³⁰ wrongful discharge,³¹ and invasion of privacy.³² The above are examples of the types of claims in which punitive damages could also be sought and are certainly not exhaustive.

Punitive damages can also be awarded in equitable matters.³³ The Arizona Supreme Court noted that allowing punitive damages in equity facilitates the judicial administration, deters misconduct and completely serves justice.³⁴ The court noted that:

The critical inquiry should be whether such an award is appropriate to penalize a party for “outwardly aggravated, outrageous, malicious, or fraudulent conduct” coupled with an “evil mind.”³⁵

Thus, the court found no reason to distinguish between equitable and compensatory damages as a basis for allowing or denying punitive damages. Irrespective of the underlying claim seeking an exemplary award, a prerequisite to such an award is that the plaintiff must be entitled to actual damages before being entitled to punitive damages.³⁶

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Notes:

^[18] See Tarnoff v. Jones, 17 Ariz. App. 240, 497 P.2d 60 (1972) (punitive damages are recoverable in an action sounding in tort).

^[19] Hudgins v. Sw. Airlines Co., 212 Ariz. 472, 212 P.3d 810, review denied (App. 2009) (punitive damages are appropriately awarded in tort cases to punish the wrongdoer); Cont’l Nat’l Bank v. Evans, 107 Ariz. 378, 489 P.2d 15...