Opposition Brief — Transamerica Occidental Life Insurance v. Koire

Supeame Court, US

FILED

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\2) MAY 2 199)

No. 90-1611 OFFICE OF THE CLERK

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In The

Supreme Court of the United States

October Term, 1990

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TRANSAMERICA OCCIDENTAL LIFE

INSURANCE COMPANY,

Petitioner,

VS.

LEONARD J. KOIRE,

Respondent.

a

we

Petition For Writ Of Certiorari To The

California Court Of Appeal

Second Appellate District

y

v

RESPONDENT’S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

4

vw

EpwarpD L. LAscHER*

LASCHER & LASCHER,

A PROFESSIONAL CORPORATION

605 Poli Street

P.O. Box 25540

Ventura, California 93002

Telephone: (805) 648-3228

Attorneys for Respondent

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO,, (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Whether this Court should add this case to the

others which it has remanded to state courts to determine

compliance with principles enunciated in Pacific Mutual

Life Ins. Co. v. Haslip, 499 U.S. __, 111 S.Ct. 1032 (1991).

2. Whether the Court should hold the awarding of

punitive damages by California courts to be violative of

the Due Process Clause of the 14th Amendment to the

United States Constitution.

ii

TABLE OF CONTENTS

WUBSIRONS PRESENTED .............000decccaces

SiAroeeer OF THE CAGE. ...... 60660.

REASONS WHY THE PETITION SHOULD BE

S| ee eR ee as tote Rea! A to aes

I. REMAND TO THE STATE COURTS FOR EXAM-

INATION OF PROCEDURAL DETAIL, NEVER

BEFORE SOUGHT BY PETITIONER, WOULD BE

ok eee re ee ray cone

Il. CALIFORNIA’S POST-JUDGMENT REVIEW OF

PUNITIVE DAMAGE AWARDS AFFORDS ADE-

QUATE DUE PROCESS TO DEFENDANTS ....

Ape esd 4a th won ee eR ee Aa care ke

3

iii

TABLE OF AUTHORITIES

Page

Cases

Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809,

157 Cal.Rptr. 482, 598 P.2d 452 (1979).............. 5

Neal v. Farmers Ins. Exchange, 21 Cal.3d 910, 148

Cal.Rptr. 389, 582 P.2d 980 (1978)..............-. 4,5

Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. __,

TE ED wav ncar sav srecsserecesces passim

CONSTITUTIONAL PROVISIONS

United States Constitution, 14th Amendment......... 3

STATUTES AND RULES

California Code of Civil Procedure § 3294(a)......... 4

.

STATEMENT OF THE CASE

Respondent Koire, an individual, has been insured

under a disability insurance policy issued by petitioner

TransAmerica. After paying him benefits under that pol-

icy for certain forms of disability, TransAmerica decided

that injuries respondent sustained in a fall, though dis-

abling, were merely a continuance of an earlier sickness

and refused to resume payments under the policy, peti-

tioner’s responsible executive accusing respondent of

being a “deadbeat”.

Although the fact was uninvolved in the denial of the

claim, petitioner knew that respondent, a small business-

man, is afflicted by various manifestations of lung cancer

and therefore in position of unusual dependence on the

insurance benefits.

Respondent sued for the benefits and was awarded

compensatory and punitive damages in a jury trial. These

awards were reviewed by the trial judge on new trial

motion and found not to be excessive. Petitioner

appealed, urging several grounds of a nonfederal, state-

procedure nature; also challenged was the constitu-

tionality, vel non, of the awarding of punitive damages.

The California Court of Appeal, by an unpublished (and

therefore nonprecedential) opinion, reviewed on appeal

but affirmed the trial court judgment in its entirety. The

state Supreme Court, in the exercise of its discretionary

powers, declined to review the decision of the Court of

Appeal and petitioner sought certiorari in this Court.

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REASONS WHY THE PETITION SHOULD BE DENIED

I.

REMAND TO THE STATE COURTS FOR

EXAMINATION OF PROCEDURAL DETAIL,

NEVER BEFORE SOUGHT BY PETITIONER,

WOULD BE INAPPROPRIATE

Petitioner now has decided that this case should be

added to others which have been remanded after grant of

certiorari, in order to cause the state’s courts to examine

the procedures utilized in California to process claims of

invalidity of specific punitive damage awards.' There are

at least two reasons why this newly articulated quest

should not prevail.

First, it ignores a rather conspicuous distinction

between the other cases remanded and the instant case:

In all the others, certiorari had already been granted,

while in this case it has not. It is judicially noticeable fact

(stressed in this Court’s opinion in Haslip, supra, and

elsewhere), that punitive damage litigation is not an iso-

lated rarity in the United States today, but rather a form

of litigation which is finding considerable utilization in

the lower courts around the country. Thus, it may safely

be assumed that the instant case is far from being the

only decision of a state court or a lower federal court in

which appellate review by one side or the other is in

progress today. By parity of reasoning with petitioner’s

current thesis, this Court would be obligated to grant

certiorari in every one of those other cases and return

1 Petitioner also notes that certain other cases in which

certiorari had been granted have been remanded to other juris-

dictions [Petition, p. 6, fn. 3].

them to the courts from which they come, with advice to

puzzle through the state and lower federal procedures

employed in each of those cases.

That, respondent submits, is not the way this Court

operates; rather, it assumes that the cases in which cer-

tiorari is granted will be the vehicles of change in pro-

cedure. It does not go about the country, sweeping all

other litigation into a sort of collective certiorari rag bag

and shipping the contents to whatever jurisdictions may

be involved.

Second, this aspect of petitioner’s urging is a brand-

new position never taken in the trial court or the state

appellate tribunals. While it is true that petitioner raised,

in the lower courts, constitutional issue as to whether the

awarding of punitive damages was intrinsically violative

of 14th Amendment Due Process, petitioner did not aise,

at any stage before its petition for certiorari, any claim

that the procedures followed for appellate review were in

any way constitutionally defective. It is one thing to say

that an entire form of relief is invalid, quite another thing

to say that the specific procedures adopted for post trial

review in a specific case were somehow amorphously

deficient and to ask this Court to have it all done over

again. Until now, petitioner said the former; now, it has

changed its thrust abruptly and improvidently.

Il.

CALIFORNIA’S POST-JUDGMENT REVIEW

OF PUNITIVE DAMAGE AWARDS AFFORDS

ADEQUATE DUE PROCESS TO DEFENDANTS.

There is some irony in petitioner’s seeking to over-

ride the still-drying ink of Haslip by invoking the

supposed deficiencies of California’s treatment of puni-

tive damages. In point of fact, that state has some of the

most sophisticated jurisprudence in the field and both

legislative and common law precepts guide both the trier

of fact and the trial and appellate courts cn the subject of

punitive damages.

For example, one finds the California statute requir-

ing, at the outset, not only that specific and precisely

defined characteristics are prerequisite to a punitive dam-

age award - oppression, fraud or malice, each of which is

in turn legislatively defined - but also that any such

threshold of liability be based on “clear and convincing

evidence” (California Code of Civil Procedure § 3294(a)

and (c) (Petition, A-72-73]). Of interest is the fact that in

Haslip it is said that: “There is much to be said in favor”

of requiring a higher standard of proof, but the Court was

not persuaded that the Due Process Clause required as

much as California has itself enacted (111 S.Ct. at 1046,

fn. 11).

The decisional attention to the matrices of punitive

liability has, of course, been episodic, but that attention

has had the opportunity to be quite well developed by

the state. For instance, it is now required that a California

verdict clearly segregate the punitive increment of any

recovery from other forms of damage (Neal v. Farmers Ins.

Exchange, 21 Cal.3d 910, 927, 148 Cal.Rptr. 389, 582 P.2d

980 (1978)). Moreover, it is settled that, not only is the

jury’s assessment of punitive damages subject to review

by the trial judge on motion for new_trial and remittitur,

but also the amount is subject to subsequent review on

appeal for both passion and prejudice on the part of

jurors and the more comnion variety of excessiveness as a

matter of law (Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d

809, 823-824, 157 Cal.Rptr. 482, 598 P.2d 452 (1979)).

For further example, the appellate decisions have

clearly spelled out the factors to be considered in review-

ing an assessment as being:

- The particular nature of the defendant's

acts in light of the whole record;

- The amount of compensatory damages, to

which a punitive award must bear a reazsonabie

relationship; and

— The wealth of the defendant and the effect

thereof on the function of deterrence.?

There is no reason to presume in advance that either

the California courts or the California Legislature will be

insensitive to the factors this Court found significant in

Haslip to the extent that those factors are not already part

of California’s law. This Court should await the develop-

ments on the scene - including any steps taken in

response to the remand of the cases in which certiorari

had already been granted (see supra, Section I) - before

assuming a role as co-maker of state law.

ys

_

2 The state Supreme Court has said that the function of

deterrence will not be served “if the wealth of the defendant

allows him to absorb the award with little or no discomfort”,

but also “by the same token, of course, the function of punitive

damages is not served by an award which, in light of the

defendant’s wealth and the gravity of the particular act,

exceeds the level necessary to properly punish and deter”

(Neal, supra, 21 Cal.3d at 928 [14)]).

CONCLUSION

For the reasons stated above, and sensitivity to the

relative newness of the Haslip decision, the petition for

certiorari should be denied.

Respectfully submitted,

Epwarp L. LASCHER*

LASCHER & LASCHER,

A PROFESSIONAL CORPORATION

Attorneys for Respondent

*Counsel of Record