Seraji v. Perket

452 N.W.2d 399, 1990 Iowa Sup. LEXIS 69, 1990 WL 32189
CourtSupreme Court of Iowa
DecidedMarch 21, 1990
Docket88-1470
StatusPublished
Cited by6 cases

This text of 452 N.W.2d 399 (Seraji v. Perket) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seraji v. Perket, 452 N.W.2d 399, 1990 Iowa Sup. LEXIS 69, 1990 WL 32189 (iowa 1990).

Opinion

SNELL, Justice.

On March 26, 1984, a truck owned by Lenertz Inc. (Lenertz) and operated by one of its employees, Michael Allen Perket, collided with a ear driven by Mahmoud Seraji. Seraji was seriously injured and brought suit against both Perket and Lenertz. The jury awarded Mahmoud Seraji, $147,800.76, his wife, Mehri Seraji, $20,000, and his child, Mauni Seraji, $5000 compensatory damages from both Lenertz and Perket. Although the trial court instructed the jury that it could award punitive damages against both defendants, the jury awarded such damages only against Lenertz, Inc. The punitive damage award was $80,000.

The accident occurred as Perket, southbound on highway 6 and 218 in Iowa City, attempted to stop for a traffic light. The truck jackknifed across the median, and the rear portion of the trailer struck the northbound car driven by Seraji. Although Perket felt a bump at the time of the accident, he believed that it was caused by the trailer bouncing across the median. Not realizing that his jackknifed trailer had struck the Seraji automobile, he continued on his way and only learned of the accident sometime later, when apprised of it by Len-ertz.

Lenertz appeals from that portion of the judgment awarding punitive damages, urging reversal on two grounds. First, Len-ertz contends that Iowa law does not allow the award of punitive damages against an employer when the conduct of its employee is found to be merely negligent. Secondly, it argues that even if punitive damages are properly assessed against an employer in such a situation, the award in this case was not supported by substantial evidence.

Lenertz first contends that the jury instructions in this case allowed punitive damages to be assessed against it only if its employee, Perket, had been found responsible for such damages. This case, it argues, was tried under the theory that Perket acted with legal malice, and that such malice could be imputed to Lenertz. It concludes that the instructions correctly tracked this court’s decision in Briner v. Hyslop, 337 N.W.2d 858 (Iowa 1983), which, it urges, stands for the proposition that an employer may not be held liable for punitive damages because of the acts of its employee, unless the employee is also held liable for such damages.

In Briner this court adopted the so-called complicity rule for determining whether an employer may be held liable for punitive damages in conjunction with the acts of one of its agents. Id. at 867. The premise adopted by Lenertz in arguing that *401 it may not be held liable for punitive damages is that the rule adopted in Briner is one of vicarious liability. Since the conduct of its employee was found to constitute simple negligence, it reasons, only simple negligence may be imputed to the company. As a result, Lenertz contends it cannot be held liable for punitive damages.

Punitive damages may be awarded upon a showing of legal malice. Midwest Management Corp. v. Stephens, 353 N.W.2d 76, 82 (Iowa 1984). Such malice may be proven by showing that a defendant acted with personal spite, hatred, or ill will. Lala v. Peoples Bank and Trust Co. of Cedar Rapids, 420 N.W.2d 804, 807 (Iowa 1988). The requisite malice also may be implied from circumstances when a defendant has acted illegally or engaged in wrongful conduct with a reckless disregard for the rights of the plaintiff. Id.; Barnhouse v. Hawkeye State Bank, 406 N.W.2d 181, 184 (Iowa 1987).

An award of punitive damages is intended both to punish and deter such conduct. Briner, 337 N.W.2d at 865. This court has established that these purposes would not be well served by a rule that granted punitive damages against an employer whose own conduct did not constitute legal malice. Id. at 865-66. We declined to adopt the so-called “course of employment rule” because its application might lead to assessment of punitive damages against an “innocent” employer. Id.

When an employer has engaged in culpable conduct, however, our decision in Bri-ner allows the imposition of punitive damages. The Restatement rule adopted in Briner grants punitive damages to punish and deter such conduct by the employer. The rule states:

Punitive damages can properly be awarded against a master or other principal because of an act by an agent if, but only if:
(a) the principal authorized the doing and the manner of the act, or
(b) the agent was unfit and the principal was reckless in employing him, or
(c) the agent was employed in a managerial capacity and was acting in the scope of his employment, or
(d) the principal or the managerial agent of the principal ratified or approved the act.

Restatement (Second) of Torts § 909 (1979).

The four alternatives presented by the Restatement rule set out the type of conduct by the employer that constitutes legal malice. It logically follows that the employer should not be insulated from punitive damages when he or she has acted with legal malice, while the act of the employee which gave rise to the tort claim was merely negligent. Cf. Wilson N. Jones Memorial Hosp. v. Davis, 553 S.W.2d 180, 181-82 (Tex.Civ.App.1977). It is the reckless conduct of the employer that the rule seeks to punish and deter.

We find that the relevant jury int structions were compatible with this principle. It is in fact quite clear that the trial court correctly instructed the jury that it could find Lenertz liable for punitive damages based upon its own reckless conduct. Instruction number 13, dealing with liability for punitive damages as it related to Lenertz, states as follows:

Punitive damages may be awarded against a principal such as the Defendant, Lenertz, because of an act by an agent if the agent was unfit and the Defendant was reckless in employing him or retaining him in its employment.

This instruction tracks alternative (b) of Restatement (Second) of Torts section 909. It clearly indicates that punitive damages may be assessed against an employer because of the employer’s own recklessness in hiring an unfit employee, if an act by that employee results in damages to a third party. The instruction focuses upon legal malice on the part of the employer, and does not require such malice on the part of the employee. It is completely consistent with our adoption of the complicity rule in Briner. The jury was properly instructed on the relevant law.

As the foregoing discussion indicates, the Serajis’ claim for punitive damages against Lenertz is predicated upon the alie- *402

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Guardian Angel v. MetaBank
2011 DNH 112 (D. New Hampshire, 2011)
IOWA, CHICAGO & EASTERN RAILROAD v. Pay Load, Inc.
348 F. Supp. 2d 1045 (N.D. Iowa, 2004)
Hoffert v. Luze
578 N.W.2d 681 (Supreme Court of Iowa, 1998)
Rosenberger Enterprises, Inc. v. Insurance Service Corp. of Iowa
541 N.W.2d 904 (Court of Appeals of Iowa, 1995)
Pulla v. Amoco Oil Co.
882 F. Supp. 836 (S.D. Iowa, 1994)
O'Brien v. Delaware Olds, Inc.
833 F. Supp. 447 (D. Delaware, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
452 N.W.2d 399, 1990 Iowa Sup. LEXIS 69, 1990 WL 32189, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seraji-v-perket-iowa-1990.