Indiana: No Recovery of Punitive Damages from Decedent’s Estate

The Indiana Supreme Court handed down an opinion on Nov. 9 holding that Indiana law does not permit recovery of punitive damages from a decedent’s estate.

The court further held that under the terms of the policy in question, the final judgment should exclude damages included in the verdict that were already satisfied by payment under the defendant’s medical expense coverage.

Crabtree v. Estate of Crabtree, No. 55S01-0409-CV-431, arose out of an automobile accident in which the plaintiff children (sisters) were injured while passengers in a car driven by their intoxicated father. The investigating officer’s report of the accident concluded that the father was at fault. The father’s insurer made payments under the medical payments coverage of his policy in the amounts of $3,200 for one child and $3,600 for the other.

After the father died of unrelated causes a year later, the children, by their mother, sued the father’s estate for both compensatory and punitive damages. The trial court granted the estate’s motion to dismiss the punitive damage claim and the case was tried to a jury.

Jury verdict

The jury rendered a verdict for the plaintiffs and awarded $11,500 to each child. On the estate’s motion, the court reduced the judgments by the amounts the decedent’s insurer, Allstate, had paid under the medical payments part of the decedent’s policy.

The plaintiffs appealed, contesting both the dismissal of the punitive damages claim and the reduction of their awards for medical payments. The Court of Appeals held that the punitive damages claim survived the death of the father and that the medical payments were not “advance payments” under the statute allowing reduction of an award to the extent of advance payments by an insurer.

The Supreme Court found that the punitive damage claim does not survive death of the decedent. Faced with a case of first impression, the court reviewed the cases in other jurisdictions on the issue of recovery of punitive damages from a deceased tortfeasor’s estate. The court sided with the majority view that death of the tortfeasor eliminates the court’s ability to accomplish the primary goal of punitive damages.

The court also reviewed Indiana’s survival statute, which is silent on punitive damages, and concluded that the failure to mention punitive damages within the survival statute can be viewed as an implicit rejection of punitive damages.

The court also pointed out that the survival statute provides only for preservation of a “cause of action” and that there is no cause of action for punitive damages. Punitive damages are a remedy, not a separate cause of action.

Advance payment statute

With respect to the question of medical payments, the plaintiffs argued that Allstate should be required to seek subrogation rights, giving the plaintiffs the benefit of the cost allocation provisions of the subrogation statute and thus providing a larger recovery to the children. The court reviewed the “advance payment” statute, the subrogation statute, and the Allstate policy language and concluded that the medical payments did constitute advance payments in this case and that the reduction in the amounts of the judgments was appropriate.

Two justices dissented on the issue of recovery of punitive damages from a decedent’s estate, their rationale being that while the tortfeasor can no longer be punished, the value of deterrence to others by imposition of punitive damages should be given greater weight.