Punitive damages must be considered whenever jury finds actual fraud.

 
Follo v. Florindo, 2009 VT 11 (Burgess, J.)  

This is an action for common-law fraud and violations of Vermont’s Consumer Fraud Act in connection with the sale of a bed and breakfast business.  The purchaser and current operator of the bed and breakfast claims error in the trial court’s exclusion of punitive damages as a matter of law.  We reverse the trial court’s punitive-damages decision.

The particular intentional tort for which a party is liable is one of the integral issues in determining whether punitive damages are appropriate.  Because the jury found defendants liable for actual common-law fraud, an intentional act with a specific intent to defraud the buyer, the trial court erred in not sending the issue of punitive damages to the jury. 

The prerequisites for imposing punitive damages in tort actions are demanding, Brueckner “limit[s] the availability of punitive damages to cases where the evidence shows that ‘defendant’s wrongdoing has been intentional and deliberate, and has the character of outrage frequently associated with crime.’”  Monahan, 2005 VT 110, ¶ 55 (quoting Brueckner,) 169 Vt. at 129, 730 A.2d at 1095 (internal quotation omitted)).  Malice is not established by proof of “intentional, wrongful, [or] even illegal conduct” alone; it requires, additionally, proof sufficient to “support[] an inference of ‘bad motive.’“  Id. ¶ 56 (quoting Brueckner,). Merely intentional, but non-fraudulent torts, can be performed without the tortfeasor acting maliciously. 

By contrast, our cases indicate that it is proper to put the issue of punitive damages to the jury whenever the jury finds that “actual fraud” was committed.  Proctor Trust Co. v. Upper Valley Press, Inc., 137 Vt. 346, 354, 405 A.2d 1221, 1226 (1979).  Actual common-law fraud, as opposed to other kinds of intentional torts, inherently possesses the necessary malice and ill will that may make punitive damages appropriate.