King v. Insurance Company of North America

Annotate this Case

159 S.E.2d 891 (1968)

273 N.C. 396

Robert Floyd KING v. INSURANCE COMPANY OF NORTH AMERICA (a foreign insurance corporation).

No. 275.

Supreme Court of North Carolina.

March 27, 1968.

*893 Don Davis, Charlotte, for plaintiff appellant.

Carpenter, Webb & Golding, Charlotte, for defendant appellee.

LAKE, Justice.

The motion to dismiss the appeal is overruled. The motion to strike the allegations concerning the recovery of punitive damages and the prayer therefor is in the nature of a judgment sustaining a demurrer for the failure to allege facts sufficient to constitute a cause of action for the recovery of punitive damages. Peoples Oil Co. v. Richardson, 271 N.C. 696, 157 S.E.2d 369; Williams v. Hunter, 257 N.C. 754, 127 S.E.2d 546. In this respect there is a distinction between an order striking portions of a pleading because redundant, irrelevant, evidentiary or otherwise improper allegations and an order striking portions of a pleading on the ground that the allegations are not legally sufficient to constitute a basis for the asserted right. The order here in question falls into the second category insofar as the plaintiff's exceptions thereto, which are now before us, are concerned. We turn, therefore, to a consideration of the appeal on its merits.

Punitive or exemplary damages are never awarded on the ground that the plaintiff has a right thereto. Cotton v. Fisheries Products Co., Inc., 181 N.C. 151, 106 S.E. 487. With the exception of a breach of promise to marry, punitive damages are not given for breach of contract. Swinton v. Savoy Realty Co., 236 N.C. 723, 73 S.E.2d 785; Richardson v. Wilmington & W.R.R., 126 N.C. 100, 35 S.E. 235; Restatement of the Law, Contracts, § 342. See also: Williston on Contracts, Rev.Ed., § 1340; Southerland on Damages, 4th Ed., § 390; Sedgwick on Damages, 9th Ed., § 603; McCormick on Damages, § 81; Hale on Damages, p. 318; 22 Am.Jur.2d, Damages, § 245; 25 C.J.S. Damages § 120; Annot., 84 A.L.R. 1345. An apparent exception to this rule is found in cases where such damages have been allowed for a breach of duty to serve the public by a common carrier or other public utility. See: Carmichael v. Southern Bell Telephone & Telegraph Co., 157 N.C. 21, 72 S.E. 619; Hutchinson v. Southern R.R., 140 N.C. 123, 52 S.E. 263. In those instances, there is frequently a contractual relationship between the parties, but the award of punitive damages is upon the ground that the carrier or utility has violated a duty imposed upon it by law to serve those who apply. See Trout v. Watkins Livery & Undertaking Co., 148 Mo.App. 621, 130 S.W. 136.

The complaint in the present action, including the allegations stricken by the order of the superior court, alleges only a breach of contract by the defendant. It is true that one of the stricken allegations was that the defendant's breach of its contract was "aggravated fraud," but no facts which, if true, would give rise to a cause of action for damages for deceit are alleged. Without such allegation, the charge of "aggravated fraud" is a mere epithet and does not alter the nature of the action from that of a mere suit for damages for breach of contract. Even where there is allegation and proof of actionable fraud and the jury has found the issue of fraud against the defendant, an award of punitive damages does not follow as a conclusion of law. Swinton v. Savoy Realty Co., supra. Here, however, there is no allegation of facts giving rise to a right of action for deceit or any other tort.

The allegations in the complaint that the breach of contract by the defendant was "wilful", "intentional," in "wanton disregard of the rights of the plaintiff" and "calculated * * * to hamper, prevent and impair the plaintiff's legal position" in his suit against Mullis, do not give rise to a cause of action sounding in tort and, therefore, do not constitute allegations of fact which, if proved, would subject the defendant to liability for punitive damages.

*894 There was, therefore, no basis alleged in the complaint for an award of punitive damages. The striking of the allegations with reference to such award and the prayer therefor did not in any way impair the right of action alleged in the remaining portions of the complaint for the recovery of compensatory damages arising from the alleged breach of the contract by the defendant.