Brief of Appellant - Appellate.net

No. 97-CA-1361
_________________________________________
IN THE SUPREME COURT OF MISSISSIPPI
_________________________________________
GENERAL MOTORS ACCEPTANCE CORPORATION,
v.
MENOLA BAYMON,
Appellant,
Appellee.
____________________________________________
On Appeal From Humphreys County Circuit Court
No. 95-0072
____________________________________________
BRIEF OF APPELLANT
____________________________________________
ANDREW L. FREY JESS H. DICKINSON
EVAN M. TAGER MS Bar No. 6120
MIRIAM R. NEMETZ Page, Mannino, Peresich,
Mayer, Brown & Platt Dickinson & McDermott, P.L.L.C.
2000 Pennsylvania Avenue, N.W. 2301 - 14th Street, Suite 800
Washington, D.C. 20006 Gulfport, Mississippi 39501
(202) 463-2000 (601) 863-8861
Attorneys for Appellant
General Motors Acceptance Corporation
ORAL ARGUMENT REQUESTED

General Motors Acceptance Corporation v. Menola Baymon
No. 97-CA-1361
CERTIFICATE OF INTERESTED PERSONS
The undersigned counsel of record certifies that the following listed persons have an interest in the
outcome of this case. These representations are made in order that the justices of the Supreme Court may
evaluate possible disqualification or recusal.
General Motors Acceptance Corporation (“GMAC”) is the Appellant. GMAC, a Delaware
corporation, is a wholly-owned subsidiary of General Motors Corporation, whose common stock is
publicly traded on the New York Stock Exchange. GMAC is the sole owner of Motors Insurance
Corporation, a New York corporation, which in turn is the sole owner of MIC Property and Casualty
Insurance Corporation, a Michigan corporation.
Menola Baymon is the Appellee.
___________________________________
Jess H. Dickinson
Attorney of Record for
General Motors Acceptance Corporation
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TABLE OF CONTENTS
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Page
CERTIFICATE OF INTERESTED PERSONS ...................................... i
TABLE OF CONTENTS ....................................................... ii
TABLE OF AUTHORITIES .................................................... iv
STATEMENT OF ISSUES ......................................................1
STATEMENT OF THE CASE ...................................................2
SUMMARY OF ARGUMENT ..................................................12
ARGUMENT ................................................................14
I. GMAC IS ENTITLED TO JUDGMENT AS A MATTER OF LAW ..............14
A. GMAC Did Not Breach Its Contract With Baymon ......................14
B. GMAC Did Not Breach The Duty of Good Faith And Fair Dealing ..........17
C. Baymon Failed To Establish The Elements Of Her Fraud Claim ............20
1. Baymon failed to establish the elements of her claim that GMAC
fraudulently failed to disclose its relationship with MIC and the means by
which MIC’s premium was established ..........................21
2. Baymon failed to establish the elements of her claim that GMAC
fraudulently failed to disclose its internal policies regarding enforcement of
its contractual rights .........................................22
D. Baymon Failed To Establish Her Fiduciary Duty Claim ...................24
II. HIGHLY PREJUDICIAL TRIAL ERRORS REQUIRE A NEW TRIAL ...........26
A. The Court Erred By Permitting Plaintiff To Inject Racial Issues Into The Case . 26
B. The Court Erred By Permitting Plaintiff’s Expert Witnesses To Testify Outside
Their Areas Of Competence ........................................28

Table Of Contents - Cont’d Page
C. The Court Erred By Admitting Evidence Concerning The Reasonableness Of
MIC’s Rates .....................................................30
D. The Jury Instructions Were Flawed ...................................32
III. THE AWARD OF COMPENSATORY DAMAGES IS UNSUSTAINABLE ........35
IV. THE PUNITIVE AWARD IS UNSUSTAINABLE ............................38
A. GMAC Cannot Be Subject To Liability For Punitive Damages .............38
1. GMAC did not have fair notice that its conduct was unlawful ........38
2. The standard for imposing punitive damages has not been met .......39
B. GMAC Is Entitled To A New Trial Because Baymon Impermissibly Argued That
GMAC Should Be Punished For Conduct Outside Mississippi .............41
C. The Punitive Damages Are Excessive .................................42
1. The punitive damages are unconstitutionally excessive .............42
a. The degree of reprehensibility of the conduct ...............43
b. The relationship between the punitive damages and the plaintiff’s
injury ..............................................44
c. Penalties for comparable misconduct. .....................45
2. The punitive damage award is grossly excessive under Mississippi law . 46
CONCLUSION ..............................................................50
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Cases
TABLE OF AUTHORITIES
- iv -
Page(s)
Ace v. Aetna Life Ins. Co., 1998 WL 106106 (9th Cir. Mar. 12, 1998) .................43, 45
Acree v. GMAC, No. 531927, July 12, 1995 Special Verdict and April 26, 1996
First Amended Tentative Decision (Cal. Super. Ct.) .........................31, 42
Adams v. GMAC Mortgage Corp.,1994 WL 702639 (N.D. Ill. 1994) ....................42
Allen v. Edwards, 217 So. 2d 284 (Miss. 1969) .....................................36
Allen v. Ritter, 235 So. 2d 253 (Miss. 1970) ........................................49
American Funeral Assurance Co. v. Hubbs, 700 So. 2d 283 (Miss. 1997) ..............39, 40
American Pioneer Life Ins. Co. v. Williamson, 704 So. 2d 1361 (Ala. 1997) ............43, 45
Andrew Jackson Life Ins. Co. v. Williams, 566 So. 2d 1172 (Miss. 1990) .................17
Apache Corp. v. Moore, 960 S.W.2d 746 (Tex. Ct. App.1997) ......................43, 45
Askew v. Askew, 699 So. 2d 515 (Miss. 1997) ......................................22
Auster Oil & Gas, Inc. v. Stream, 835 F.2d 597 (5th Cir. 1988) ......................47, 48
Bankers Life & Cas. Co. v. Crenshaw, 483 So. 2d 254 (Miss. 1985) .....................46
Beech v. Leaf River Forest Prods., Inc., 691 So. 2d 446 (Miss. 1997) ....................28
Beta Chapter of Beta Theta Pi v. May, 611 So. 2d 889 (Miss. 1992) .....................39
BMW of North America, Inc. v. Gore, 701 So. 2d 507 (Ala. 1997) ....................43, 50
BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996) ........................ passim
Boling v. A-1 Detective & Patrol Serv., 659 So. 2d 586 (Miss. 1995) ..............19, 37, 39
Carter Equip. Co. v. John Deere Indus. & Equip. Co., 681 F.2d 386 (5th Cir. 1982) .....25, 34
Cenac v. Murry, 609 So. 2d 1257 (Miss. 1992) .....................................17

Table Of Authorities - Cont’d Page(s)
Consolidated Am. Life Ins. Co. v. Toche, 410 So.2d 1303 (Miss. 1982) ...................39
Continental Airlines v. Lelakis, 943 F. Supp. 300 (S.D.N.Y. 1996) ......................23
Continental Cas. Co. v. Hester, 360 So. 2d 695 (Miss. 1978) ..........................15
Continental Trend Resources, Inc. v. OXY USA Inc., 101 F.3d 634 (10th Cir. 1996),
cert. denied, 117 S.Ct. 1846 (1997) ......................................43, 45
Creative Demos, Inc. v. Wal-Mart Stores, Inc., 955 F. Supp. 1032 (S.D. Ind. 1997),
aff’d in relevant part on other grounds, 1998 WL 161726 (7th Cir. Apr. 8, 1998) . 43, 50
Deramus v. Jackson Nat’l Life Ins. Co., 92 F.3d 274 (5th Cir. 1996), cert. denied,
117 S. Ct. 956 (1997) ..............................................18, 24, 26
Dixie Ins. Co. v. Mooneyhan, 684 So. 2d 574 (Miss. 1996) ...................35, 46, 47, 49
Dixon v. TCF Bank Illinois, FSB, 1995 WL 622409 (N.D. Ill. Oct. 23, 1995) ..............42
Doe v. Norwest Bank Minnesota, N.A., 107 F.3d 1297 (8th Cir. 1997) ...................41
Dunn v. State Farm Fire & Cas. Co., 927 F.2d 869 (5th Cir. 1991) ......................38
Eastland v. Gregory, 530 So. 2d 172 (Miss. 1988) ...................................35
EEOC v. HBE Corp., 135 F.3d 543 (8th Cir. 1998) ...............................43, 45
Ex Parte Ford Motor Credit Co., 1997 WL 694692 (Ala. Nov. 7, 1997) ...............20, 23
FDIC v. Hamilton, 122 F.3d 854 (10th Cir. 1997) ................................43, 45
Filbotte v. Pennsylvania Truck Lines, Inc., 131 F.3d 21 (1st Cir. 1997) ...................23
First Am. Nat’l Bank v. Mitchell, 359 So. 2d 1376 (Miss. 1978) .....................36, 47
Florez v. Delbovo, 939 F. Supp. 1341 (N.D. Ill. 1996) ..........................43, 45, 50
Food Lion, Inc. v. Capital Cities/ABC, Inc., 1997 WL 337460 (M.D.N.C. Aug. 29, 1997) ...43
Ford Motor Co. v. Sperau, 1997 WL 545878 (Ala. Sept. 5, 1997), cert. denied,
1998 WL 86082 ....................................................43, 45
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Table Of Authorities - Cont’d Page(s)
Foremost Ins. Co. v. Parham, 693 So.2d 409 (Ala. 1997) .............................43
Franklin v. Lovitt Equip. Inc., 420 So. 2d 1370 (Miss. 1982) ........................19, 21
Geuss v. Pfizer, Inc., 971 F. Supp. 164 (E.D. Pa. 1996) ............................43, 45
Gordon v. Ford Motor Credit Co., 868 F. Supp. 1191 (N.D. Cal. 1992) ..................42
Gorman v. Southeastern Fidelity Ins. Co., 775 F.2d 655 (5th Cir. 1985) ..................38
Griffin v. Fletcher, 362 So. 2d 594 (Miss. 1978) ....................................34
Groom v. Safeway, Inc., 973 F. Supp. 987 (W.D. Wash. 1997) ......................43, 45
Grynberg v. Citation Oil & Gas Co., 573 N.W.2d 493 (S.D. 1997) ...................43, 45
Guastella v. Wardell, 198 So. 2d 227 (Miss. 1967) ..................................19
Gulf Guar. Life. Ins. Co. v. Kelley, 389 So. 2d 920 (Miss. 1980) ........................39
Hall v. Resolution Trust Co., 958 F.2d 75 (5th Cir. 1992) .............................17
Harrison v. Allstate Ins. Co., 662 So. 2d 1092 (Miss. 1995) ...........................38
Hart v. State, 637 So. 2d 1329 (Miss. 1994) ........................................29
Hendricks v. James, 421 So. 2d 1031 (Miss. 1982) ..................................34
Honda Motor Co. v. Oberg, 512 U.S. 415 (1994) ................................48, 50
Hopewell Enters., Inc. v. Trustmark Nat’l Bank, 680 So. 2d 812 (Miss. 1996) .......24, 25, 34
Iannone v. Harris, 941 F. Supp. 403 (S.D. N.Y. 1996) .............................43, 45
In re Arnold, 206 B.R. 560 (Bankr. N.D. Ala. 1997) ..................................45
Jackson Rapid Delivery Serv., Inc. v. Jones Truck Lines, Inc., 641 F. Supp. 81
(S.D. Miss. 1986) ......................................................25
Kelso v. McGowan, 604 So. 2d 726 (Miss. 1992) ....................................22
Kim v. Dial Service Int’l, Inc., 1997 WL 458783 (S.D.N.Y. Aug. 11, 1997) ............43, 45
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Table Of Authorities - Cont’d Page(s)
Kim v. Nash Finch Co., 123 F.3d 1046 (8th Cir. 1997) .............................43, 45
Kimzey v. Wal-Mart Stores, Inc., 107 F.3d 568 (8th Cir. 1997) ......................43, 45
Langmead v. Admiral Cruises, Inc., 696 So. 2d 1189 (Fla. Dist. Ct. App. 1997) ...........43
Lawyer v. 84 Lumber Co., 1997 WL 827395 (N.D. Ill. Nov. 26, 1997) ................43, 45
Leab v. Cincinnati Ins. Co., 1997 WL 360903 (E.D. Pa. June 26, 1997) ...............43, 50
Lee v. Edwards, 101 F.3d 805 (2d Cir. 1996) .......................................43
Life Ins. Co. of Georgia v. Johnson, 701 So. 2d 524 (Ala. 1997) .....................43, 45
Loatman v. Summit Bank, 1997 WL 809772 (D.N.J. Aug. 29, 1997) .....................41
Maiorino v. Schering-Plough Corp., 695 A.2d 353 (N.J. Super. App. Div. 1997) ...........43
Management Computer Servs., Inc. v. Hawkins, Ash, Baptie & Co.,
557 N.W.2d 67 (Wis. 1996) ...........................................43, 45
McClain v. South Carolina Nat’l Bank, 105 F.3d 898 (4th Cir. 1997) ....................41
McDonald v. State, 285 So. 2d 177 (Miss. 1973) ....................................27
McGehee v. McGehee, 227 Miss. 170, 85 So. 2d. 799 (1956) .......................22, 23
Merchants & Planters Bank v. Williamson, 691 So. 2d 398 (Miss. 1997) ............. passim
Miller v. Fowler, 200 Miss. 776, 28 So. 2d 837 (1947) ...............................15
Minneapolis, St. P. & S. Ste. M. Ry. v. Moquin, 283 U.S. 520 (1931) ....................48
Mississippi State Hwy. Comm’n v. Hall, 252 Miss. 863, 174 So. 2d 488 (1965) ............28
Montgomery Ward & Co. v. Skinner, 200 Miss. 44, 25 So. 2d 572 (1946) .................49
Morrison v. Means, 680 So. 2d 803 (Miss. 1996) ....................................37
Murphree v. Federal Ins. Co., 707 So. 2d 523 (Miss. 1997) ............................38
Murphy v. Burney, 27 So. 2d 773 (Miss. 1946) ................................32, 33, 38
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Table Of Authorities - Cont’d Page(s)
Mutual Life Ins. Co. of New York v. Wesson, 517 So. 2d 521 (Miss. 1987) .............47, 49
Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991) ................................44
Parnell v. First Savings & Loan Ass’n, 336 So. 2d 764 (Miss. 1976) .....................26
Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927 (5th Cir. 1996),
cert. denied, 117 S. Ct. 767 (1997) ......................................43, 45
Pauley v. Bank One Colorado Corp., 205 B.R. 272 (D. Colo. 1997) .....................42
People’s Bank & Trust Co. v. Cermack, 658 So. 2d 1352 (Miss. 1995) .............24, 25, 41
Pivot Point Int’l v. Charlene Prods., Inc., 932 F. Supp. 220 (N.D. Ill. 1996) ...............50
Polk v. Sexton, 613 So. 2d 841 (Miss. 1993) ........................................36
Puckett v. Rufenacht, Bromagen & Hertz, Inc., 587 So. 2d 273 (Miss. 1991) ..............26
Rankin v. Brokman, 502 So. 2d 644 (Miss. 1987) ....................................19
Rush v. Scott Specialty Gases, Inc., 930 F. Supp. 194 (E.D. Pa. 1996), rev’d on
other grounds, 113 F.2d 476 (3d Cir. 1997) ...............................43, 45
Schmizzi v. Illinois Farmers Ins. Co., 928 F. Supp. 760 (N.D. Ill. 1996) ...............43, 45
Schoppe v. Applied Chems. Div., 418 So. 2d 833 (Miss. 1982) .........................35
Seal v. Miller, 605 So. 2d 240 (Miss. 1992) ........................................28
Senich v. Transamerica Premier Ins. Co., 766 F. Supp. 339 (W.D. Pa. 1990) ..............42
Shell Oil Co. v. Pou, 204 So. 2d 155 (Miss. 1967) ................................28, 48
Simmons v. Bank of Mississippi, 593 So. 2d 40 (Miss. 1992) ...........................15
Singleton v. Stegall, 580 So. 2d 1242 (Miss. 1991) ...................................37
South Central Bell v. Epps, 509 So. 2d 886 (Miss. 1987) ..............................40
Southwest Mississippi Regional Med. Ctr. v. Lawrence, 684 So. 2d 1257 (Miss. 1996) ......37
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Table Of Authorities - Cont’d Page(s)
Strickland v. Liberty Nat’l Life Ins. Co., 1998 WL 57759 (Ala. Feb. 13, 1998) .............43
Strickland v. Rossini, 589 So. 2d 1268 (Miss. 1991) ...............................36, 37
Talent Tree Personnel Servs. v. Fleenor, 703 So. 2d 917 (Ala. 1997) .................43, 45
TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443 (1993) .....................50
UHS-Qualicare, Inc. v. Gulf Coast Community Hosp., Inc., 525 So.2d 746 (Miss. 1987) .....17
Universal Life Ins. Co. v. Veasley, 610 So. 2d 290 (Miss. 1992) ........................40
Utah Foam Prods. Co. v. Upjohn Co., 930 F. Supp. 513 (D. Utah 1996) ............43, 45, 50
Various Markets, Inc. v. Chase Manhattan Bank, N.A., 908 F. Supp. 459
(E.D. Mich. 1995) ......................................................23
W.M. Phillips v. Chevron U.S.A., Inc., 792 F.2d 521 (5th Cir. 1986) .....................25
Wells v. Dallas Indep. Sch. Dist., 793 F.2d 679 (5th Cir. 1986) .........................48
White v. Mississippi Power Co., 252 Miss. 97, 171 So. 2d 312 (1965). ..................35
Whitley v. City of Meridian, 530 So. 2d 1341 (Miss. 1988) ............................30
Wilson v. IBP, Inc., 558 N.W.2d 132 (Iowa 1996), cert. denied, 118 S. Ct. 52 (1997) .......43
Statutes and Rules
Miss. Code Ann. § 11-1-55 .....................................................35
Miss. Code Ann. § 75-24-19(1)(b) ...............................................46
Miss. Rules of Evid. 402 .......................................................27
Miss. Rules of Evid. 403 .......................................................27
Miss. Rules of Evid. 702 .......................................................28
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Miscellaneous
Table Of Authorities - Cont’d Page(s)
Creditor-Placed Insurance Model Act (1997) .......................................39
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1986) ............................15
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STATEMENT OF ISSUES
Appellee Menola Baymon breached her contractual obligation to maintain property damage
insurance on the car she had purchased under a retail instalment sale contract with appellant General
Motors Acceptance Corporation (“GMAC”). As an optional remedy for this breach, the contract
authorized GMAC to purchase insurance and charge her the “cost of the insurance” plus a finance charge.
Despite several notices from GMAC, Baymon left her car uninsured, prompting GMAC to exercise its
contractual remedy by purchasing collateral protection insurance to protect its interest in her vehicle. The
premiums it paid — $1654 for the first year and $836 when coverage was renewed for a second year —
were the lowest available for that kind of insurance in Mississippi. GMAC’s notices to Baymon disclosed
the scope of the coverage and the amount of the premiums. Consistent with those notices, GMAC charged
Baymon’s account the precise amount of the premiums paid by GMAC for the insurance.
Three years later, without ever once complaining to GMAC about the amount of the premiums or
asking how they had been calculated, Baymon sued GMAC, alleging breach of contract, breach of the duty
of good faith and fair dealing, fraud, and breach of fiduciary duty. Although GMAC did nothing more than
charge Baymon the premiums that it paid to the insurance company (which Baymon had not sued), Baymon
contended principally that several cost factors built into the insurance rates were improper, making the
premiums she was charged $762 higher than they should have been. Although racial discrimination was
not part of her theory of the case and she adduced no factual foundation to support it, Baymon was
permitted over GMAC’s objection to inflame a predominantly African-American jury by speculating
through expert witness testimony and closing argument that GMAC’s insurance follow-up activity targeted
African-American customers. In response, the jury awarded Baymon $35,000 in compensatory damages
— even though the trial court had granted a directed verdict on Baymon’s claim for emotional distress
damages and Baymon presented no credible evidence of other non-monetary harms — and $5,000,000
in punitive damages. The questions presented are:
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1. Whether the trial court erroneously denied GMAC’s motions for directed verdict or for
judgment notwithstanding the verdict on Baymon’s claims for (a) breach of contract, (b) breach of the
implied duty of good faith and fair dealing, (c) fraud, and (d) breach of fiduciary duties.
2. Whether the trial court committed reversible error by (a) allowing irrelevant and prejudicial
testimony and argument suggesting that GMAC’s use of collateral protection insurance is racially
discriminatory; (b) permitting Baymon’s expert witnesses to testify regarding matters outside their areas of
expertise; (c) admitting evidence concerning the reasonableness of the rates charged and the profits earned
by the seller of the insurance that GMAC purchased to cover Baymon’s car, and/or (d) giving jury
instructions Nos. 6, 7, 9, 10, and 20, and refusing to give GMAC’s proposed jury instructions D-4, D-5
and D-16.
3. Whether the award of compensatory damages award was unsupported by the evidence
and/or grossly excessive.
4. Whether the award of punitive damages was improper because (a) GMAC lacked fair
notice that its conduct was subject to punishment; (b) GMAC’s alleged conduct did not meet the standard
for such an award; (c) Baymon impermissibly argued that GMAC should be punished for conduct outside
Mississippi; and/or (d) the award of punitive damages was grossly excessive and therefore contrary to the
Due Process Clause of the United States Constitution and Mississippi law.
STATEMENT OF THE CASE
Nature of the Case. On September 20, 1995, Baymon sued GMAC, asserting claims for breach
of contract and breach of the duty of good faith and fair dealing in connection with GMAC’s purchase of
insurance on her car. R. 4-19. In April 1996, the Complaint was amended to add GMAC employee
Sharron Mitchell as a codefendant and to add claims of fraud or fraudulent concealment and breach of
fiduciary duties. R. 57-76. Following a five-day trial in June 1997, the jury returned a verdict in favor of
Baymon and against GMAC on all counts, awarding her compensatory damages of $35,000, and punitive
damages of $5,000,000. A directed verdict was entered in favor of Sharron Mitchell.
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Statement of Facts. It is undisputed in this case that GMAC was entitled under its contract to
purchase insurance for Baymon’s car and charge her for the “cost of the insurance” after she defaulted on
her undisputed contractual obligation to keep the car insured herself. It also is undisputed that GMAC
purchased the least expensive collateral protection insurance available in Mississippi, that it charged
Baymon the precise amount of the premium that it paid for that insurance, and that it notified Baymon of
the amount of the premium — and gave her the opportunity to purchase her own insurance — months
before charging her for it. Given these undisputed facts, Baymon’s claims are frivolous and should have
been thrown out long ago. The centerpiece of Baymon’s case is the allegation that the premium actually
charged to and paid by GMAC is not the “cost of the insurance” and that, by adding that amount to her
account, GMAC therefore breached the contract, violated a supposed fiduciary duty, and committed fraud.
There is, however, not the slightest reason for construing the “cost of the insurance” to mean anything other
than what GMAC has always thought it means and always said in its notices it means — namely, the
premium GMAC paid to obtain the coverage. Baymon’s efforts to subvert the plain meaning of her
contract and salvage her monstrous windfall in this case cannot be squared with the facts.
1. GMAC’s Collateral Protection Insurance Coverage. When an automobile dealer sells a
vehicle under a retail instalment sale contract — i.e., one that permits the purchaser to pay for the vehicle
over time and with a finance charge — the dealer typically sells its interest in the contract to a bank or
finance company like GMAC, which then assumes the risk and burdens of non-payment. GMAC will not
purchase any contract unless the car owner has promised to protect the collateral by maintaining physical
damage insurance. Tr. 211:28-212:17. Standard contract forms give GMAC the right to demand payment
of the entire balance of the retail account if the debtor fails to keep the vehicle insured. Tr. 271:4-16.
GMAC also retains the optional remedy of purchasing insurance on the vehicle and adding the cost of the
insurance to the debtor’s outstanding balance, to be paid over the remaining period of the account. Tr.
213:25-214:16. Baymon’s expert on lending practices testified that these provisions of GMAC’s
instalment contracts were “standard operating procedure” and that it was “prudent for a lender to require
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that.” Tr. 214:14-16.
The insurance purchased by GMAC to cover the vehicles of debtors who default on their insurance
obligations is called “collateral protection insurance” (“CPI”). At all times relevant to this case, GMAC
held a master CPI policy issued by MIC Property and Casualty Insurance Corporation (“MIC”), its
wholly-owned subsidiary. Under this policy, MIC would insure any vehicle on which the customer had let
his or her own insurance lapse. MIC would bill the premium to GMAC, and GMAC would pay the
premium to MIC. Exs. P-12, P-13, Record Excerpts (“RE”) 71-72. MIC agreed to accept the risk of
coverage for all vehicles financed through retail instalment sale contracts with GMAC, regardless of the
owner’s driving record (Tr. 321:8-22), and to provide coverage for losses retroactive to the date the
debtor allowed his or her own insurance to lapse (Tr. 454:2-11). MIC also “tracked” or monitored the
insurance status of GMAC debtors (Tr. 541:25-544:15), and, as required by regulation, reimbursed
1/
GMAC for certain insurance-related expenses (Tr. 585:13-586:11, 589:10-16). MIC’s CPI was 15 to
25% less expensive than the CPI offered by its major competitors in Mississippi. Tr. 552:6-28.
2. The Retail Instalment Sale Contract Between Baymon and GMAC. In July 1991, Baymon
bought a new Mitsubishi Galant from Regency Mitsubishi in Jackson, Mississippi. Tr. 623:17-24. Baymon
signed a retail instalment sale contract (“the instalment contract”) (which was subsequently assigned to
GMAC) agreeing to make monthly payments over a period of five years. Ex. P-1, RE 54-55. Baymon
also agreed to keep the car insured against loss or physical damage as long as any portion of her account
remained unpaid; if Baymon failed to do so, the instalment contract gave GMAC the right to purchase
insurance and charge her for the cost of that insurance plus a finance charge. Specifically, the instalment
contract provided:
You agree to have physical damage insurance covering loss or damage to the vehicle for
the term of this contract. At any time during the term of this contract, if you do not have
physical damage insurance which covers both the interest of you and the Creditor in the
vehicle, then the Creditor may buy it for you. If the Creditor does not buy physical
damage insurance which covers both interests in the vehicle, it may, if it decides, buy
1/
The insurance-related expenses borne by GMAC included “salaries and administrative staff, service to policyholders
or customers in their case, answering questions.” Tr. 589:10-17; Ex. D-8.
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insurance which covers only the Creditor’s interest.
The Creditor is under no obligation to buy any insurance, but may do so if it
desires. If the Creditor buys either of these coverages, it will let you know what
type it is and the charge you must pay. The charge will consist of the cost of the
insurance and a finance charge, at the highest lawful contract rate. You agree to
pay the charge in equal installments along with the payments shown on the payment
schedule.
Id. at 2, RE 55 (emphasis added). The instalment contract further gave GMAC the right to repossess the
car if Baymon were to fail to comply with any of the terms of the contract. Id. Baymon also signed a
separate “Agreement To Provide Accidental Physical Damage Insurance” which stated, in part, that
Baymon’s failure to provide insurance would give GMAC “the right to declare the entire unpaid balance
immediately due and payable.” Ex. P-2, RE 56.
3. Baymon’s Insurance Lapse and GMAC’s Purchase of Insurance. Baymon concedes that
she was required to maintain property damage insurance on her vehicle. R. 60. She initially fulfilled that
requirement by obtaining coverage from State Farm. Tr. 626:15-18; Ex. P-2, RE 56. However, due to
financial difficulties, she let the State Farm insurance lapse as of March 30, 1992, and purchased no other
insurance. R. 60; Tr. 637:26-638:2.
Baymon admitted receiving several notices from GMAC concerning the need to keep the vehicle
insured. Tr. 638:3-13. The first notice advised Baymon of the lapse and of her obligation to keep the
vehicle insured. Furthermore, it notified her of GMAC’s intent to purchase CPI if she did not provide proof
of her own insurance, stated the premium for that coverage, and encouraged her to get her own insurance.
Tr. 563:3-12; Ex. P-21 at 4-15, RE 115. Two weeks later, a phone call was made to State Farm to
determine whether coverage had been reinstated. Tr. 563:10-16. Several weeks after that phone call,
GMAC sent a second notice to Baymon, advising her that GMAC had purchased insurance, enclosing a
three-page certificate explaining the terms of coverage, and disclosing the premium paid by GMAC and
the effective date and termination date of the coverage. Tr. 565:4-24; Exs. P-13, P-14, and P-21 at 4-16,
RE 72-74, 115.
GMAC purchased one year of coverage from MIC for the period May 24, 1992, to May 24,
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1993. GMAC paid the $1654 premium to MIC by check on August 28, 1992. Ex. P-13, RE 72. The
insurance covered loss caused by fire, explosion, theft, windstorm, hail, earthquake, flood, mischief,
vandalism, and collision. Ex. P-14, Part IV, “Physical Damage Coverages,” RE 73.
On September 1, 1992, GMAC sent Baymon a third notice confirming that it had purchased
insurance, disclosing the premium and coverage period, and notifying her of GMAC’s intent to add the
premium, plus a finance charge, to her monthly payments. Like the first and second notices, this letter
encouraged Baymon to procure her own coverage, stating: “Because [CPI] might not protect your
investment in the vehicle, we strongly suggest you buy Fire, Theft, and Collision Insurance that covers
both your interest in the vehicle and GMAC’s interest.” Ex. P-4, RE 57 (emphasis added).
Baymon admitted that she called GMAC “once or twice” after receiving the notices. Tr. 638:14-
19. GMAC’s records reflect that on September 15, 1992, Baymon called GMAC and directed GMAC
to “add [the] premium into [her] payments.” Exs. P-18, P-24, RE 78, 273; Tr. 774:18-775:5. In
November, Baymon asked for and received a 60-day extension in her payment schedule. Ex. P-17, RE
77. Accordingly, although Baymon’s monthly payments were increased by about $44 to $439.64 to pay
for CPI, her first increased payment was not due until January 22, 1993. Exs. P-9 at 3, P-15, RE 64, 75.
In April 1993, a notice was sent to Baymon indicating that the initial CPI certificate would expire
May 24, 1993, and that GMAC would renew it for another twelve months at a cost of $836 unless she
provided proof of her own coverage. Ex. P-20, RE 79. Having received no response from Baymon,
GMAC paid the $836 premium to MIC for coverage from May 24, 1993 to May 24, 1994. Ex. P-12,
RE 71. On July 1, 1993, GMAC rebilled Baymon’s account, increasing her monthly payment
approximately $25 to $464.53 effective with the payment due July 22, 1993. Exs. P-24, P-9 at 2, RE
273, 63. Before the second CPI certificate expired, however, Baymon did secure her own insurance.
Accordingly, on March 28, 1994, GMAC retroactively canceled its insurance as of January 31, 1994 (the
date Baymon obtained her own insurance), and credited Baymon’s account with the return premium
received from MIC, reducing her monthly payments to $455.44. Exs. P-6, P-7, P-9 at 2, P-24, RE 59-
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60, 63, 273. The premium for collision and comprehensive coverage in the policy purchased by Baymon
was higher than the $836 premium paid by GMAC for the second year of CPI coverage. Tr. 460:13-28.
4. Baymon’s Payment Problems. Beginning immediately after she purchased her car, Baymon
had difficulty making her car payments. During the first 14 months after the July 1991 purchase of her car
— before any amount was added to her payments for CPI — Baymon made her monthly payment more
than 30 days late on at least six occasions. Ex. P-10 at 1, RE 67. On November 13, 1992, Baymon paid
for an extension on several of her payments after informing GMAC that she was having financial trouble
due to her pending divorce. Ex. P-17, RE 77. Between January and June of 1993, Baymon did not
increase her payment to account for the additional charges for CPI. Ex. P-10 at 1, RE 67. She began
making the additional payments after GMAC sent her a letter, dated June 10, 1993, reminding her that her
monthly payments had been increased to cover the CPI and stating that it would send her a new coupon
book. Ex. P-15, RE 75.
At trial, Baymon claimed that she was distressed by phone calls from GMAC concerning her
payment problems. Although unable to recall the dates, she testified that she had “received several phone
calls” from GMAC at work and at home, stating that “if I didn’t make the payment that they would
repossess my car.” Tr. 632:15-23. Baymon stated that she was “embarrassed” to receive the phone calls
at work; that “sometimes I wouldn’t drive my car to work * * * [t]hinking that they would repossess it”
(Tr. 633:2-7); and that she would sometimes hide the car when she received a phone call (Tr. 636:25-26).
She stated that she became depressed and had difficulty eating and sleeping. Tr. 636:13-24.
Baymon’s testimony was vague and inconsistent concerning whether the alleged threats of
repossession related to her failure to pay the additional insurance charges, or related instead to her many
late payments for the car itself. On direct examination, Baymon agreed with her lawyer that the insurance
payments were mentioned in the phone calls. Tr. 632:20-26. But on cross-examination, Baymon admitted
that she did not recall any mention of insurance during any of the alleged phone calls concerning
repossession. Tr. 656:6-26. Baymon contended that a June 10, 1993, letter from GMAC, told her that
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she “had to make the payments or they were going to get the car, and that was the last notice that they were
going to give [her].” Tr. 633:23-634:2. But that letter, which merely reminded Baymon that her payments
had been increased to cover CPI, said no such thing. Ex. P-15, RE 75. And, although Baymon’s counsel
asserted in his opening statement that defendant Sharron Mitchell, an insurance specialist at GMAC, had
threatened during the telephone conversation on September 15, 1992 — i.e., before the first payment for
CPI was due — to repossess Baymon’s car (Tr. 126:19-127:11), Baymon testified that she had no
recollection of discussing repossession with Mitchell. Tr. 644:2-13.
Baymon also claimed that she experienced credit problems after she began making the additional
payments for CPI in June 1993. She testified that, because she paid GMAC an additional $44 per month
for CPI, “some of the [other] bills were not paid.” Tr. 634:13. When asked by her lawyer whether this
hurt her credit in other areas, Baymon said “yes.” Tr. 634:16-18. But Baymon did not say which bills went
unpaid and presented no evidence that any such unpaid bills had ever appeared on a credit report or had
affected any credit application.
Proceedings Below. More than three years after GMAC purchased CPI for Baymon’s car,
without questioning GMAC about her CPI coverage or complaining about its expense, Baymon sued
GMAC and Mitchell. While conceding both that GMAC was entitled to purchase and charge her for
insurance on her car, and that GMAC had in fact charged her the premium it paid MIC, Baymon alleged
that GMAC had nonetheless violated its contract because of the way that MIC calculated that premium.
Baymon also claimed that GMAC should have informed her that MIC was its subsidiary and should have
disclosed its internal policies not to exercise its contractual right to repossess vehicles for failure to pay CPI
charges and to forgo in some cases its contractual right to place CPI with debtors who failed to insure their
vehicles.
GMAC moved before trial to exclude evidence concerning MIC’s rate-setting. GMAC argued that
MIC’s conduct was irrelevant to the issues in the case, since MIC was not a defendant, GMAC was not
legally responsible for MIC’s conduct, and MIC’s rates had been subject to regulatory review and
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approval. Tr. 95:1-3, 95:24-96:2. Baymon stated that she was not attacking MIC’s rates as excessive
(Tr. 101:2-102:2), and the court granted GMAC’s motion (Tr. 103:22-24).
During the 5-day jury trial, Baymon relied principally on the testimony of two “expert” witnesses.
The first, Thomas Myers, was admitted as an expert in the area of “lending practices.” Tr. 202:1-3, 210:8-
19. Despite his conceded lack of expertise concerning the insurance industry (Tr. 195:1-7, 196:2-6,
200:20-29), Myers was permitted to opine that the premium GMAC paid MIC exceeded the “cost” of
insurance because it included amounts allocated in MIC’s rate filing to “tracking” expenses and expense
reimbursements to GMAC, which he labeled “commissions.” Tr. 231:22-23, 232:5-7, 233:27-28.
Without referring to any industry customs or standards to support his views, Myers also offered
many opinions about the propriety of GMAC’s practices. For example, Myers averred “that [GMAC]
should have shopped for the most competitive insurance policy” on the ground that “I just think that’s being
fair and being reasonable with the borrower”. Tr. 219:5-12. But he could not dispute that MIC’s CPI was
the least expensive in Mississippi. Tr. 299:17-24. He stated that it was not “reasonable” and “violate[d]
the terms of the agreement between GMAC and Ms. Baymon” for GMAC to accept any payments from
MIC without informing Baymon, simply because “I don’t think that would be fair to you or what you would
expect.” Tr. 233:5-23. When asked whether GMAC had a duty to disclose its relationship with MIC,
Myers replied: “They had a duty to, yes.” Tr. 234:2-3. But Myers never even attempted to identify the
source of that putative duty.
Myers also opined that GMAC had a duty to disclose to debtors its internal policies directing
employees not to repossess vehicles for failure to pay for CPI and granting managers discretion not to
require the purchase of CPI in some cases. Tr. 262:6, 285:9-10. But Myers acknowledged that
customers “would tend to disregard [a] requirement that wasn’t going to be enforced” (Tr. 272:20-21) and
admitted that GMAC would be well within its rights to repossess its collateral as soon as a debtor allowed
the required insurance to lapse (Tr. 332:11-22).
The second purported expert, Donald Sibbring, was an Ohio insurance agent who had sold CPI
- 9 -

policies to ten or twelve lending institutions. Over GMAC’s objection, Sibbring was accepted as an expert
on CPI even though he had not sold such insurance since 1984 (Tr. 363:15-20) and had never sold CPI
in Mississippi (Tr. 343:24-344:20). Sibbring testified that GMAC had overcharged Baymon a total of
$762 for her first CPI certificate because MIC’s premium rate filing included cost factors for “tracking”
expenses, expense reimbursements to GMAC that Sibbring deemed “commissions”, and “excess profits”
to MIC. Tr. 393:1-14; Ex. P-41, RE 274. Sibbring asserted that the recovery of tracking expenses
through CPI premiums was wrongful, despite the facts that Sibbring’s own customers had received from
their CPI providers tracking services that were funded through the premiums (Tr. 425:22-426:6), and that
he himself had provided such services when he sold CPI (Tr. 433:20-435:16). He opined that any
payments from MIC to GMAC in connection with the placement of CPI were improper (Tr. 421:28-
422:3), even though he had failed to disclose his own commissions for the sale of CPI to the individuals with
whom the CPI was placed (Tr. 451:27-452:11). Despite his conceded lack of expertise in insurance
ratemaking, Sibbring further opined that MIC’s profits were “excessive,” and therefore improperly
recovered through Baymon’s premium. Tr. 402:21-403:10, 403:11-16; Ex. P-41, RE 274.
Sibbring also opined that GMAC should have loaned Baymon the money to purchase her own
insurance rather than buying CPI. Tr. 384:7-9. But Sibbring did not know of a single finance company
that had ever made such a loan, and conceded that he did not even know whether such a company could
lawfully do so. Tr. 440:18-23, 439:14-22. Finally, Sibbring was allowed to testify, based on his own
experience servicing CPI policies in Ohio, that “a lot of the minority people were the unfortunate
targets of most of the forced placing.” Tr. 389:17-21 (emphasis added).
Although MIC was not a party, and the court had ruled that evidence concerning MIC’s rate-
setting was not admissible, much trial testimony focused on MIC’s rates and its profits from the sale of CPI.
Myers testified in detail regarding MIC’s profits on CPI policies, emphasizing repeatedly that during one
year MIC’s profits of 23% had exceeded the 5% profit MIC had predicted in state rate filings. Tr. 225:5-
8, 226:16-228:26, 230:14-231:17. Sibbring testified that MIC had earned “outrageous profits” and had
- 10 -

“cooked the books” to make its profits seem lower. Tr. 418:25, 420:17. Baymon also called Michael
Miller (who had testified as an expert for GMAC in another case) and questioned him extensively about
MIC’s ratemaking practices. Tr. 579:7-619:5. Finally, the court admitted into evidence, over GMAC’s
objection, documents concerning MIC’s rate-setting and profits that had been produced during discovery
in unrelated litigation in California (the Acree case), including one set of unidentified handwritten notes that
made an oblique reference to “gouging” in connection with MIC’s profits. Ex. P-26; Tr. 601:3-27.
At the close of Baymon’s case, GMAC and Mitchell moved for a directed verdict on all counts
on the ground that there was insufficient evidence to support Baymon’s claims, and moved for a mistrial
as a remedy for the admission of improper evidence concerning MIC’s ratemaking and suggesting that
GMAC’s CPI program targeted racial minorities. Tr. 674:6-9, 696:12-15, 700:23-28. The court directed
a verdict for Mitchell. Tr. 699:15-16. The court also granted GMAC’s motion for a directed verdict on
damages for emotional distress, based on its view that Baymon’s testimony concerning the purported threat
of repossession was too equivocal to support such damages. The court stated: “The evidence is unclear,
and it’s not enough evidence to submit to the jury as to that each time Ms. Baymon received a
telephone call, that call was related to insurance premiums in that Ms. Baymon testified that she
does not remember what the calls were related to.” Tr. 732:21-27 (emphasis added). The court
denied GMAC’s other motions.
In his summation, Baymon’s counsel repeatedly underscored Sibbring’s testimony that members
of racial minorities are the “targets” of CPI, noting that Sibbring “has seen * * * the typical victims of this”
and “told you who the obvious targets were” (Tr. 893:28-894:3), and even suggesting that defendant
Sharron Mitchell, an African-American, had been subject to racial discrimination as an employee of
GMAC (Tr. 894:9-14). He asked the jury to consider “the other victims just like” Ms. Baymon (Tr.
889:26-29), and called the courtroom “the only place in the country where the little man has an even
chance against a powerful corporation.” Tr. 901:17-19. Later, when arguing to the jury on punitive
damages, Baymon’s counsel expressly claimed (without any factual foundation) that “[t]he uncontradicted
- 11 -

evidence in this case is that GMAC’s victims are working people on the economic edge, struggling,
predominantly * * * African-Americans.” Tr. 967:19-23. He exhorted the jury to administer justice to
the “600,000 Menola Baymons” nationwide who had been the “victims” of GMAC’s CPI program and
told the jury that “[y]ou can change the way this insurance is done * * * [t]he way people are ripped off
across the country, you can stop it.” Tr. 967:13-15, 970:4-6. He added that if the jury awarded Baymon
“less than a substantial multi-million dollar verdict, they’re going to be popping champagne corks in Detroit
or Dearborn at the country club, wherever their board meets tonight.” Tr. 969:3-7.
Apparently moved by these inflammatory arguments, the jury found in favor of Baymon and against
GMAC on all counts, and awarded her compensatory damages of $35,000 — $10,000 more than
Baymon’s counsel requested in his summation (Tr. 900:15) — and $5,000,000 in punitive damages. The
court denied GMAC’s timely motions for judgment notwithstanding the verdict, for a new trial, or for
remittitur of the damages awards.
SUMMARY OF ARGUMENT
This is the kind of case that leaves people scratching their heads about the rationality and fairness
of the American litigation system. Plaintiff Baymon agreed to a contract that unquestionably gave GMAC
the right to obtain insurance for her vehicle, and charge her for that insurance, if she failed to insure it
herself. This is a standard contract provision to protect a creditor’s collateral. GMAC exercised its
contractual rights only after Baymon failed to maintain insurance and received due notice that her default
could lead GMAC to purchase insurance for her at her expense. It was this routine and prudent action on
GMAC’s part — which even under Baymon’s theories cost her no more than $762 in excess insurance
charges — that became the basis for a jury verdict awarding $35,000 in compensatory damages and
$5,000,000 in punitive damages. This astonishing verdict is the product of numerous errors by the trial
court. If allowed to stand, the verdict will make it more difficult for finance companies like GMAC to
extend any credit to high-risk instalment purchasers, and may require such companies to forgo the
purchase of collateral protection insurance and instead resort to more drastic remedies, such as
- 12 -

epossession, in the event of default. In other words, while Baymon may benefit from her claim to the tune
of $5,035,000, other similarly situated purchasers will suffer.
It is impossible to justify the novel legal duties on which the verdict depends. For example, although
Baymon contended that GMAC breached its contract with her by charging more than the “cost of the
insurance,” she identified no meaning of that phrase other than the premium paid by GMAC. She claimed
that GMAC acted in bad faith and defrauded her by failing to disclose to her certain details concerning the
CPI policy it obtained from MIC, but she could point to no source for the alleged obligation of GMAC to
disclose these facts, nor could she show why they even mattered to her. Perhaps most astonishingly,
Baymon asserted that GMAC was obliged to tell her that it would not enforce its right to collect the CPI
premiums from her, an irrational and self-defeating disclosure obligation that, not surprisingly, is wholly
without precedent. Finally, she sought to impose on GMAC the duties of a fiduciary, based solely on the
fact that the entirely routine terms of its arms-length instalment contract with her gave it the right to
repossess its collateral.
Although Baymon’s claims should have been dismissed as patently insubstantial, the trial court
instead propped them up through the many errors it committed during the trial. First, the court inexcusably
allowed inflammatory and unsubstantiated testimony and argument that GMAC’s insurance requirement
disproportionately affected racial minorities. Second, the court allowed opinion testimony by two
purported experts who lacked expertise in the areas they addressed. Third, the court permitted Baymon,
through testimony and documents, to repeat incessantly the allegations that MIC (which was not a party
to the case and whose conduct could not be attributed to GMAC) had made exorbitant profits, had misled
state insurance regulators, and had “gouged” its customers. And finally, through its flawed, confusing, and
argumentative instructions, the court suggested to the jury that it believed all of Baymon’s contentions and
gave the jurors virtually no meaningful guidance on how to apply the law.
In keeping with the invalid liability determinations, the compensatory damage award was wholly
untethered to any evidence of harm. Baymon demonstrated, at most, that the actions of which she
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complained caused her to pay a premium inflated by $762 in one year; her claims for “inconvenience” and
“credit problems” were neither factually nor legally supportable. Accordingly, the jury’s award of $35,000
in compensatory damages was contrary to the overwhelming weight of credible evidence and compels an
inference that the jury was influenced by bias, prejudice or passion. As for the astonishing $5,000,000
punitive verdict, no award of punitive damages was appropriate here, because defendant engaged in no
conduct warranting punitive sanctions and had no notice that its practices could subject it to punishment.
And even if some punitive exaction were justified, a new trial is necessary because Baymon improperly
encouraged the jury to punish GMAC’s use of CPI outside of Mississippi. Finally, putting that fatal defect
to one side, the exorbitant sum awarded by the jury — 143 times the compensatory damages awarded and
6557 times the most generous conceivable measure of Baymon’s out-of-pocket loss — violates every
guidepost established by the Supreme Court for ensuring that punitive damages awards comply with the
Due Process Clause and substantially exceeds the highest punitive award ever approved by this Court.
Neither damage award can be permitted to stand.
ARGUMENT
I. GMAC IS ENTITLED TO JUDGMENT AS A MATTER OF LAW
A. GMAC Did Not Breach Its Contract With Baymon
GMAC’s instalment contract with Baymon permitted it to purchase insurance on her vehicle and
charge her “the cost of the insurance and a finance charge, at the highest lawful contract rate.” Ex. P-1 at
2, RE 55. Baymon did not dispute that, for each of the two CPI certificates issued to her, GMAC paid
MIC the CPI premium and then charged Baymon that premium, plus a finance charge. She claimed,
however, that GMAC violated the instalment contract because the premium included components that were
not part of the “cost of insurance.” That claim is legally untenable.
“The most basic principle of contract law is that contracts must be interpreted by objective, not
subjective standards. A court must effect a determination of the meaning of the language used, not the
ascertainment of some possible but unexpressed intent of the parties.” Simmons v. Bank of Mississippi,
- 14 -

593 So. 2d 40, 42-43 (Miss. 1992) (internal quotation marks and citations omitted). “In construing a
written contract the words employed will be given their ordinary and popularly accepted meaning.” Miller
v. Fowler, 200 Miss. 776, 779, 28 So. 2d 837, 838 (1947); see also Continental Cas. Co. v. Hester,
360 So. 2d 695, 697 (Miss. 1978) (“It is well settled that the words of a contract are to be given their
ordinary meanings.”).
The standard dictionary definition of “cost” is “the amount or equivalent paid or given or charged
or engaged to be paid or given for anything bought or taken in barter or for service rendered.” WEBSTER’S
THIRD NEW INTERNATIONAL DICTIONARY at 515 (1986). Here, then, the “cost of the insurance” was
the “amount paid” by GMAC to MIC — i.e., the premium. The undisputed evidence showed that GMAC
paid MIC premiums of $1654 and $836, respectively, for Baymon’s first and second CPI certificates (Tr.
573:28-574:9, 750:12-16) and that it charged her precisely those amounts, after informing her exactly what
coverage it was purchasing on her vehicle and the amount she would be charged. GMAC thus did
precisely what the instalment contract said it had the option to do.
Baymon never offered an alternative definition of “cost of the insurance.” She nonetheless
contended through her retained experts that GMAC charged her more than the “cost” of insurance because
MIC recovered through its premiums (1) compensation for “tracking services” that MIC provided to
GMAC; (2) amounts paid to GMAC either, as Baymon would label it, as a “commission,” or, as other
evidence showed, to reimburse GMAC for certain insurance-related expenses; and (3) “excess profits”
supposedly earned by MIC on its CPI program. Although presenting no evidence of the market cost of
comparable CPI coverage, Baymon claimed that she was overcharged a total of $762 because these
2/
elements were allegedly included in the premium for the first CPI certificate. Ex. P-41, RE 274.
2/
Even though tracking costs and expense reimbursements were factored into the rate tables applicable to that year (Ex.
P-23, Exhibit III, RE 261), Baymon did not claim that she was overcharged for the second CPI certificate, perhaps because
the insurance she purchased on her own to replace that certificate was more expensive than the CPI. Tr. 460:13-28.
- 15 -

But, as Baymon’s paid “experts” failed to disclose, “expense reimbursements” were never factored
into MIC’s rates before December 1992, and thus could not possibly have had any impact on the $1654
premium Baymon paid. See Ex. P-22, Exhibit 3, RE 235; Ex. P-23, Exhibit III, RE 261. Moreover,
Baymon never showed that such expenses are not normally considered part of insurance “costs” and
recouped through insurance premiums; to the contrary, the evidence was that such elements are legitimate
components of the cost of CPI. For example, the evidence showed that other creditors, like GMAC,
recover the costs of monitoring their debtors’ insurance coverage through CPI premiums paid by defaulting
debtors. Tr. 425:22-27, 433:20-435:16. Although Baymon’s paid expert witnesses opined that such costs
would more fairly be recovered through finance charges to all debtors — including the vast majority who
never for a day fail to satisfy their obligation to keep their cars insured (Tr. 249:12-18) — there was no
allegation that the costs themselves were not actually incurred and no evidence that they must be, or
normally are, recovered in the manner suggested by the “experts.”
Baymon’s witnesses further insisted that any payments to GMAC by MIC in connection with CPI
were improper “kickbacks” (Tr. 301:18), but they presented no evidence that these payments were not
actually used to cover costs associated with CPI placement, admitting that they did not know how GMAC
used expense reimbursements received from MIC (Tr. 315:12-15). In fact, there was ample unrefuted
evidence that GMAC did incur significant costs in connection with the CPI program. See, e.g., Tr. 589:10-
17. And to the extent that any part of MIC’s payments to GMAC were properly considered
“commissions,” the evidence is that such commission expenses are customary costs that are routinely
recovered through insurance premiums. Tr. 433:25-27. Finally, Baymon could have no possible
understanding that the “cost” of insurance would not include some profit; indeed, she implicitly conceded
this point by claiming that she was overcharged only for so-called “excess” profits — i.e., the amount by
which MIC’s profits on CPI exceeded the amount predicted in its insurance filings. Ex. P-41, RE 274.
But the profits MIC would actually earn — which turned out to be higher than expected because of
- 16 -

MIC’s favorable loss experience on its new CPI product (Tr. 561:5-10) — could not have been known
at the time that MIC’s rates for CPI were filed, much less when Baymon’s instalment contract was first
assigned to GMAC. Accordingly, any “excess profits” cannot be the ground for a breach of contract claim.
B. GMAC Did Not Breach The Duty Of Good Faith And Fair Dealing
Baymon also contended that GMAC breached an implied duty of good faith and fair dealing. As
articulated by the trial court, Baymon’s theory was that GMAC violated this duty by:
accepting undisclosed commissions or other payments from MIC, or engaging in selfdealing,
or failing to search for competitive pricing or failing to disclose the relationship
between GMAC and MIC, or using the threat of repossession to collect insurance
premiums and fail[ing] to disclose GMAC’s policy not to repossess, or transferring
GMAC’s tracking expenses to Plaintiff, without disclosing this fact to Plaintiff, or
automatically force-placing Plaintiff with MIC insurance without disclosing or offering other
available options.
Instr. No. 7 (R. 615, RE 32). There was no basis for allowing this theory to go to the jury.
The implied duty of good faith and fair dealing emphasizes “faithfulness [to] an agreed purpose
between two parties, a purpose which is consistent with justified expectations of the other party.” Cenac
v. Murry, 609 So. 2d 1257, 1272 (Miss. 1992). The duty “requires abstinence by all parties from
commission of wrongful conduct which injures the right of another to receive the benefits of the agreement.”
Andrew Jackson Life Ins. Co. v. Williams, 566 So. 2d 1172, 1188 (Miss. 1990) (citation omitted).
Because the courts “imply into * * * contracts only such terms as may be expected to fill out the parties’
agreement and reasonable expectations” (UHS-Qualicare, Inc. v. Gulf Coast Community Hosp., Inc.,
525 So.2d 746, 755 (Miss. 1987)), the duty of good faith and fair dealing may not be used to rewrite a
contract or add terms not contemplated by the parties. Hall v. Resolution Trust Co., 958 F.2d 75, 79
(5th Cir. 1992). Moreover, in performing a contract, the parties need not refrain from “protecting their
respective economic interests” or from exercising their contractual rights in the event of a default.
Merchants & Planters Bank v. Williamson, 691 So. 2d 398, 405 (Miss. 1997).
In this case, the undisputed facts reflect that, when Baymon defaulted on her obligation to maintain
- 17 -

insurance on her vehicle, GMAC took precisely those acts that were contemplated and authorized by the
instalment contract, at the same time giving her ample opportunity to comply with her contractual promise.
GMAC notified Baymon that she was violating her agreement to keep her car insured; strongly urged her
to obtain her own insurance; and gave her the opportunity to obtain outside coverage and cancel the CPI
certificate at any time. Once GMAC purchased CPI coverage for Baymon’s vehicle, it twice notified her
of the scope of the coverage and its price, and (after discussing the matter with her and giving her still
another chance to purchase her own insurance) added the premium to the outstanding balance to be paid
over the remaining term of the instalment contract. None of these acts hindered Baymon’s right to receive
the benefits of her agreement with GMAC. To the contrary, GMAC’s exercise of its option to purchase
CPI after Baymon allowed her insurance to lapse, rather than repossessing the vehicle, permitted her to
keep her car and continue enjoying the benefits of her purchase. See Deramus v. Jackson Nat’l Life Ins.
Co., 92 F.3d 274, 281 (5th Cir. 1996) (rejecting plaintiff’s claim of breach of the duty of good faith and
fair dealing under Mississippi law where defendant did not interfere with plaintiff’s right to receive
contractual benefits), cert. denied, 117 S. Ct. 956 (1997); Merchants & Planters Bank, 691 So. 2d at
406 (bank’s assignment of a note did not breach the duty of good faith and fair dealing where plaintiff had
the same legal right to make payments on the note before and after the assignment). GMAC’s forbearance
concerning the repossession of Baymon’s vehicle similarly furthered, rather than hindered, Baymon’s
receipt of benefits under the agreement.
Under Baymon’s theory of the case, however, good faith and fair dealing required GMAC to do
more than allow her to receive the benefits of her agreement. She contends that this implied contract term
somehow limited GMAC in its choice of where to secure a CPI policy, precluded GMAC from allocating
the cost of tracking services to those whose conduct created the need for the services, prevented GMAC
from accepting any payments from its CPI provider (even to reimburse GMAC for legitimate costs), and
required GMAC to cripple its expectations of receiving payments to which it was entitled under the
contract by disclosing to debtors its internal enforcement policies. But the instalment contract gave Baymon
- 18 -

no justified expectations that GMAC would forgo such actions in seeking to protect in a cost-effective
way its interest in the collateral of defaulting debtors. Indeed, Baymon presented no evidence that GMAC’s
conduct was at all inconsistent with customary business practice. See Merchants & Planters Bank, 691
So. 2d at 405 n.4. To sanction the jury’s use of the duty of good faith and fair dealing to saddle GMAC
with duties never contemplated by the parties would, in effect, transform every contractual relationship into
an unlimited fiduciary relationship — a result that is not only contrary to Mississippi law but plainly
irrational as well. 3/
C. Baymon Failed To Establish The Elements Of Her Fraud Claim
To prevail on her claim of fraud, Baymon was required to prove “(1) a representation, (2) its falsity,
(3) its materiality, (4) the speaker’s knowledge of its falsity or ignorance of its truth, (5) his intent that it
should be acted on by the hearer and in the manner reasonably contemplated, (6) the hearer’s ignorance
of its falsity, (7) [her] reliance on its truth, (8) [her] right to rely thereon, and (9) [her] consequent and
proximate injury.” Franklin v. Lovitt Equip. Inc., 420 So. 2d 1370, 1373 (Miss. 1982). “Fraud is never
to be presumed or inferred, but must be proven by clear and convincing evidence.” Boling v. A-1
Detective & Patrol Serv., 659 So. 2d 586, 590 (Miss. 1995).
As a general rule, a failure to disclose cannot support a claim of fraud under Mississippi law. This
Court has identified only two narrow circumstances in which a nondisclosure may be treated as the
equivalent of an affirmative misrepresentation: (1) where the defendant “took some action, affirmative in
nature, which was designed or intended to prevent and which did prevent the discovery of the facts giving
rise to the fraud claim” (Rankin v. Brokman, 502 So. 2d 644, 646 (Miss. 1987) (citation omitted)), and
(2) where the defendant remained silent under circumstances in which “silence amounted to an affirmation
that a state of things existed which did not exist” — e.g., where the defendant failed to correct a
misimpression created by its previous representations or actions. Guastella v. Wardell, 198 So. 2d 227
3/
At a minimum, GMAC should receive a new trial because the trial court erroneously refused to give GMAC’s proposed
instruction D-16 (R. 664, RE 53), which stated that “you may not imply terms that override or contradict the express terms
of the Retail Installment Sale Contract between [GMAC] and Plaintiff.” That instruction was a correct statement of
Mississippi law and would have prevented the jury from using the cause of action to override the contractual agreement.
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(Miss. 1967).
Baymon alleged two sets of nondisclosures by GMAC as the basis of her fraud claims: first,
nondisclosures about the collateral protection insurance itself (i.e., the relationship between GMAC and
MIC and the components of MIC’s premium) and, second, nondisclosures about GMAC’s policies for
enforcing its contractual rights concerning that insurance. See Instr. No. 10 (R. 618, RE 35). The evidence
at trial did not establish the elements of fraud as to either set of allegations.
1. Baymon failed to establish the elements of her claim that GMAC
fraudulently failed to disclose its relationship with MIC and the means by
which MIC’s premium was established
Baymon did not allege that GMAC affirmatively lied to her about the insurance it placed on her
vehicle; instead, she contended that GMAC failed to disclose that it was a parent company of MIC; that
it received from MIC what she deemed to be “commissions”; and that the CPI premiums included a
recovery of overhead attributable to tracking expenses. But GMAC’s alleged silence on these issues did
not amount to misrepresentation under Mississippi law. First, Baymon never even suggested that GMAC
affirmatively concealed information about the CPI. Second, she did not prove that GMAC’s silence
concerning its relationship with MIC or the bases for the CPI premium was equivalent to the affirmation
of any untrue fact. She produced no evidence that the premium was established in a manner contrary to
industry norms; that she ever questioned GMAC about the premium or indicated any concern that it might
be higher than she could have obtained on her own; or that she was misled by GMAC’s silence into
believing something contrary to the truth. Thus, there was no basis for imposing any duty of disclosure on
GMAC under Mississippi law.
The law of other jurisdictions similarly fails to support any such duty of disclosure. Indeed, in a stri-
kingly similar case, the Supreme Court of Alabama (which has recognized a far broader nondisclosure tort
than has this Court) recently dismissed a car buyer’s claim of fraudulent suppression after ruling that an
automobile dealership had no duty to disclose to the buyer that it received a three-percent commission from
the financing company it recommended to the buyer, even though (unlike Baymon) the buyer asked why
- 20 -

the interest rate was so high. Ex Parte Ford Motor Credit Co., 1997 WL 694692 (Ala. Nov. 7, 1997).
Baymon also failed to show that the alleged omissions were material. When GMAC obtained CPI
for Baymon’s vehicle, it fully disclosed to her the nature of the coverage and its price. Baymon thus knew
the bottom line, as well as what she had been paying State Farm for her own insurance. This allowed her
to decide whether to accept the CPI or to exercise the other options available to her — i.e., purchasing
her own insurance, refusing to pay for insurance and allowing GMAC to pursue its contractual remedies,
selling her car, or refinancing it with a different creditor. Baymon never explained how the method of
calculation of the premium could have been more significant to her decision than the amount of the premium
itself. Moreover, it was undisputed that MIC’s rates for CPI were 15 to 25% lower than the rates of its
major competitors in Mississippi. Tr. 552:6-28.
Nor did Baymon show that she had some misunderstanding regarding the undisclosed facts, let
alone that she justifiably relied upon such a misunderstanding. She did not testify that she had any particular
understanding about the basis for the CPI premium; she never expressed the slightest interest in the matter
to GMAC; and she produced no evidence that CPI premiums are normally determined differently than they
were here. Thus, Baymon had no right to draw from GMAC’s silence any conclusion about how the CPI
premium had been determined. Nor did she testify that she did rely on any conclusion she may have drawn,
or explain how knowledge of the undisclosed facts would have affected her conduct. Although she stated
in conclusory fashion that she would not have paid for the CPI coverage had she known the full facts (Tr.
635:10-13), it defies common sense that information concerning the components of the premium would
have changed her decision when her knowledge of the actual price of the insurance did not. Accordingly,
Baymon’s testimony cannot possibly constitute “clear and convincing” evidence of reliance. That
conclusion necessarily follows from a case like Franklin, 420 So. 2d at 1372, which held that a seller’s
misrepresentation concerning the model year of a front-end loader did not support a fraud claim when the
plaintiff purchased the machine after satisfactory performance during a two-week trial period and did not
show reliance on the incorrect statement.
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Finally, Baymon failed to show that GMAC intended her to rely on the purported nondisclosures.
Her fraud claim amounts to a contention that GMAC “tricked” her into paying for CPI by failing to disclose
its relationship with MIC or MIC’s method of determining the premium. But the evidence did not reflect
any eagerness by GMAC for Baymon to participate in the CPI program. GMAC repeatedly urged
Baymon to secure her own insurance (Ex. P-21 at 4-15, 4-16, Ex. P-4, RE 114-115, 57); waited to issue
a CPI certificate until three months after Baymon’s individual coverage expired, even then giving her a full
opportunity to back out (Ex. P-4, RE 57); and canceled Baymon’s CPI coverage retroactively, refunding
the unused portion of her premium, after she informed GMAC that she had finally obtained her own
insurance (Ex. P-7, RE 60).
2. Baymon failed to establish the elements of her claim that GMAC
fraudulently failed to disclose its internal policies regarding enforcement
of its contractual rights
. At trial, Baymon presented evidence that GMAC had a policy not to enforce its contractual right
to repossess cars of debtors who, although neglecting to make payments for CPI, continued making their
car payments. Tr. 786:15-787:9. She also adduced evidence that GMAC branch managers had discretion
in some cases not to require the purchase of CPI or, if a customer refused to pay for CPI, to cancel the
coverage, attempt to collect the premium at the end of the instalment contract before releasing the title, or
waive collection of the premium. Exs. P-7, P-44, RE 60, 277-78; Tr. 244:11-245:25, 784:14-18, 786:6-
14, 787:1-9. Baymon claimed that GMAC should have disclosed these internal pro-consumer policies
when it placed CPI on her vehicle. That claim is utterly untenable.
First, GMAC indisputably had the contractual right to procure insurance for Baymon’s vehicle, to
charge her for that insurance, and to repossess her car if she failed to make the required payments. It is
4/
not wrongful for a business to insist on pursuing its legal rights, or to threaten to do so. It necessarily
4/
See Askew v. Askew, 699 So. 2d 515, 518 (Miss. 1997) (refusing to vacate divorce on grounds of duress; “it is not duress
* * * for any person to declare that he intends to use the court wherein to insist upon what he believes to be his legal
rights”) (quoting McGehee v. McGehee, 227 Miss. 170, 183, 85 So. 2d. 799, 804 (1956)); Kelso v. McGowan, 604 So. 2d 726,
732 (Miss. 1992) (threat not to co-sign loan absent payment of $25,000 did not establish economic duress because it was
not “wrongful”; “It is never duress to threaten to do that which a party has a legal right to do.”) (quoting McGehee, 227
Miss. at 183, 85 So. 2d at 804); see also, e.g., Filbotte v. Pennsylvania Truck Lines, Inc., 131 F.3d 21 (1st Cir. 1997) (termination
- 22 -

follows that it cannot be wrongful for the business to seek to achieve voluntary compliance even if it has
decided not to use all available legal remedies to compel compliance.
Second, GMAC had no duty to disclose to Baymon its internal policies relating to enforcement.
Baymon identified no source for such a duty; no witness testified that any firm in any industry has a habit
of disclosing to defaulting contractual partners precisely how far it intends to press its rights. See Ex Parte
Ford Motor Credit Co., 1997 WL 694692, at *6 (“the law * * * generally allows a business to keep
confidential its internal operating procedures”). And that is not surprising, since a rule requiring such
disclosures would be completely counterproductive, injuring both businesses and consumers. As Myers
acknowledged, customers would be likely to disregard a contractual obligation that they knew would not
be enforced. Tr. 272:20-21 Accordingly, an obligation to disclose their internal policies concerning
contractual defaults as a precondition to demanding payments due under the contract would simply force
companies like GMAC to adopt a policy of strict enforcement of all contractual provisions in all cases —
e.g., requiring the prompt initiation of repossession proceedings each time a customer fails to make required
payments. Consumers would be far worse off under such a regime.
Finally, Baymon did not demonstrate justifiable reliance on the purported nondisclosures. Baymon
claimed that she would not have paid for the CPI had she known of GMAC’s internal policies, implying
that those policies entitled her to breach her contractual obligations with impunity. But such action, certainly
amounting to bad faith under Baymon’s own position in this case, would not be justifiable either morally
or empirically. GMAC never waived its right to repossess Baymon’s car and could have done so at any
time had she failed to pay for the CPI premium (even if this would require a change in GMAC’s internal
policy). Indeed, the instalment contract expressly provided that “[t]he creditor can delay or refrain from
of employee consistent with terms of collective bargaining agreement could not support a claim for intentional infliction
of emotional distress); Continental Airlines v. Lelakis, 943 F. Supp. 300, 307 (S.D.N.Y. 1996) (party’s threat to exercise its
contractual right to terminate contract was not wrongful; “A party’s threat to take action which it is legally entitled to
take is not wrongful, nor is a threat to insist upon one’s legal rights.”); Various Markets, Inc. v. Chase Manhattan Bank, N.A.,
908 F. Supp. 459 (E.D. Mich. 1995) (threat to file legitimate lawsuit could not support claim for extortion or for intentional
infliction of emotional distress).
- 23 -

enforcing any of its rights under this contract without losing them.” Ex. P-1 at 2, RE 55. Moreover,
Baymon made no showing that, had she refused to pay for CPI, GMAC would in fact have exercised its
“discretion” to release her from her contractual obligations rather than pursuing vigorous efforts to collect
the CPI premium. Indeed, the facts of her own case reflect that GMAC did attempt to secure her
compliance after she failed to increase her payments to cover the addition of CPI. See pp. 5-6, supra.
D. Baymon Failed To Establish Her Fiduciary Duty Claim
Baymon also claimed that GMAC’s conduct in placing CPI on her vehicle violated a fiduciary duty
it owed her. This position is frivolous; if adopted, it would wreak havoc on banking and other lending and
financing activity in this State. “[T]he general rule is that there is no presumption of a fiduciary relationship
between a debtor and creditor * * *.” People’s Bank & Trust Co. v. Cermack, 658 So. 2d 1352, 1358
(Miss. 1995); see also Merchants & Planters Bank, 691 So. 2d at 404. A fiduciary relationship does
not arise between a debtor and a creditor unless there is:
something about the relationship between the parties which would justifiably create an
expectation on the part of one party that the other was protecting the first party from the
occurrence of a particular risk; and, moreover, such justifiable reliance must have
necessarily caused the first party to be lulled into a false sense of security so that the first
party did not protect his own interest as he might have ordinarily.
Deramus, 92 F.3d at 278; see also Hopewell Enters., Inc. v. Trustmark Nat’l Bank, 680 So. 2d 812,
816 (Miss. 1996) (borrowers had no fiduciary relationship with bank where they “failed to prove that they
established a trust in the bank or that the bank was aware that a trust was being reposed”). “Because of
the severity of the burdens and penalties that are integral to a fiduciary relationship, the party seeking to
prove the existence of the relationship must do so by clear and convincing evidence.” Cermack, 658 So.
2d at 1358.
Baymon utterly failed to demonstrate that her relationship with GMAC — which consisted almost
entirely of exchanges of form contracts and form letters — was fiduciary in character. Baymon produced
neither evidence of any relationship between her and GMAC that would “justifiably create an expectation”
- 24 -

on her part that GMAC would protect her interests, nor any evidence that she was in fact “lulled into a false
sense of security” by reliance on GMAC. Indeed, GMAC’s repeated warnings that CPI might not fully
protect Baymon’s interest in the vehicle (Exs. P-21 at 4-15, 4-16, P-4, RE 114-115, 57) plainly counseled
against such reliance. Absent evidence that Baymon imposed trust in GMAC in a manner inconsistent with
an arms-length business relationship, GMAC owed her no fiduciary duty. See Hopewell, 680 So. 2d at
817 (finding no fiduciary duty where “the relationship between [plaintiff and defendant] was simply an arms
length business transaction involving a normal debtor-creditor relationship”).
The jury instructions invited a finding that a fiduciary duty existed because “GMAC held as security
the title to Plaintiff’s car.” Instr. No. 9 (R. 617, RE 34). But this Court has repeatedly held that the power
to foreclose on a security interest does not, without more, create a fiduciary relationship. See, e.g.,
Merchants & Planters Bank, 691 So. 2d at 404; Cermack, 658 So. 2d at 1358-60; Hopewell, 680 So.
2d at 816-17. A contrary ruling with respect to this perfectly routine instalment purchase would wholly
transform (for the worse) the provision of credit in Mississippi.
Even assuming that GMAC’s arms-length dealings with Baymon were somehow sufficient to create
a fiduciary relationship, that relationship would not give rise to the extraordinary duties that Baymon seeks
to foist upon GMAC. The scope of any contract-based fiduciary relationship is circumscribed by the
contract’s express terms. See Jackson Rapid Delivery Serv., Inc. v. Jones Truck Lines, Inc., 641 F.
Supp. 81, 85 (S.D. Miss. 1986) (“contractual provisions * * * are not only relevant to but determinative
of the scope of an alleged fiduciary relationship” under Mississippi law). Thus, “activity in conformance
with the terms of the contract cannot amount to misconduct that constitutes a breach of a fiduciary duty.”
Carter Equip. Co. v. John Deere Indus. & Equip. Co., 681 F.2d 386, 392 n.14 (5th Cir. 1982); see
also W.M. Phillips v. Chevron U.S.A., Inc., 792 F.2d 521, 525 (5th Cir. 1986) (no fiduciary duty
breached under Mississippi law where the challenged conduct “was well within [the defendant’s] rights as
governed by the contract * * * [and] there was no evidence that the contract itself was unconscionable,
- 25 -

illegal or violative of public policy”). Accordingly, the concept of fiduciary duty may not be used to impose
obligations not contemplated by the parties. See Deramus, 92 F.3d at 278 (insurance company doctor
had no fiduciary duty under Mississippi law to inform plaintiffs of medical problems where the company
“specifically advised the [plaintiffs] that [it] undertook simply to determine for itself whether it would accept
the risk of providing insurance coverage” and there was no evidence that the plaintiffs reasonably expected
him to do more); Puckett v. Rufenacht, Bromagen & Hertz, Inc., 587 So. 2d 273, 279 (Miss. 1991)
(broker on non-discretionary account had no fiduciary duty to warn customers about unwise trading
strategy where the contract did not require the broker to provide investment advice and there was no
evidence that the customers understood him to have such obligations).
Here, the instalment contract gave GMAC the option, should Baymon fail to maintain the necessary
coverage, of securing CPI. At most, any fiduciary duty arising from that contract might require GMAC
actually to obtain any coverage benefiting Baymon that it undertook to procure. See Parnell v. First
Savings & Loan Ass’n, 336 So. 2d 764, 767 (Miss. 1976) (bank violated contract and fiduciary duty by
failing to obtain credit life insurance as agreed). But no fiduciary duty conceivably arising from the
instalment contract could preclude GMAC from enforcing its contractual rights or securing a CPI policy
that served its own interest in insuring its collateral prudently and efficiently. Accordingly, Baymon’s claims
that GMAC was somehow precluded by a fiduciary duty from obtaining CPI from a related firm (that
happened to offer the lowest rates for CPI), from allocating the cost of tracking services to those who
defaulted on their obligation to obtain insurance, from obtaining expense reimbursements or even
commissions from the insurer, or from demanding that she pay for CPI as provided for by the contract, are
groundless.
II. HIGHLY PREJUDICIAL TRIAL ERRORS REQUIRE A NEW TRIAL
A. The Court Erred By Permitting Plaintiff To Inject Racial Issues Into The Case
In an obvious effort to inflame the emotions of the jury, ten of whose members were African-Amer-
ican, and to distract the jurors from the legitimate issues in the case, Baymon proffered irrelevant and preju-
- 26 -

dicial testimony implying that GMAC’s CPI program disproportionately impacted racial minorities. Bay-
mon’s counsel also implied openly in his summation that GMAC was motivated by racial bias. The court’s
admission of this improper testimony and argument was clear error that necessitates a new trial.
The court allowed Sibbring to testify that, during his years selling CPI policies in Ohio, he had
observed that CPI was placed disproportionately on collateral belonging to racial minorities. Before he
was even tendered as an expert, Sibbring testified that “most generally they were people that, unfortunately,
were on the ragged edge of economic survival. And further unfortunately, a lot of those people were
minorities that were in those programs.” Tr. 336:26-29 (emphasis added). Later, over GMAC’s
vehement objection, Sibbring repeated that, “as time passed, it became obvious to me that * * * a lot of
the minority people were the unfortunate targets of most of the forced placing.” Tr. 389:19-21. Because
this irrelevant and prejudicial evidence was outrageously improper and presumptively harmful to GMAC
(see M.R.E. 402, 403; McDonald v. State, 285 So. 2d 177, 179 (Miss. 1973) (“Incompetent evidence,
inflammatory in character, when presented to a jury carries with it a presumption that it was harmful.”)),
GMAC moved for a mistrial based on its admission (Tr. 693:19-694:15). The motion was denied. Tr.
696:15-16.
Baymon’s counsel emphasized this testimony in his summation, stating that Sibbring “has seen * * *
the typical victims of this. He doesn’t do it anymore. He told you who the obvious targets were, and
I think his testimony is believable just like the other expert.” Tr. 893:28-894:3 (emphasis added).
Baymon’s counsel compounded this outrageous argument by insinuating immediately thereafter — without
the slightest factual basis — that defendant Sharron Mitchell, an African-American, had been subject to
racial discrimination as an employee of GMAC:
Ms. Mitchell, she’s obviously a very smart lady. She got her Masters, I believe. It sort
of struck me that they never gave her any more responsibility than she had. I wonder
about that, but they didn’t.
Tr. 894:9-14 (emphasis added). In his rebuttal argument, he wondered aloud: “[W]hat is she doing after
20 years, this lady this capable, this smart, with a master’s degree, * * * why do they have her in prac-
tically a clerical job? Why isn’t she in management?” Tr. 937:20-24. And he repeated again his allega-
- 27 -

tion that GMAC’s use of CPI was “discrimination. It may not be intended, but it’s discrimination.” Tr.
939:8-9.
After the trial court denied GMAC’s motion for a mistrial and refused even to admonish counsel
against continuing to make racially inflammatory arguments (Tr. 952:11-953:22), Baymon’s counsel grew
even bolder. In his argument to the jury on punitive damages, he claimed openly (without any factual basis)
that “[t]he uncontradicted evidence in this case is that GMAC’s victims are working people on
the economic edge, struggling, predominantly * * * African-Americans” Tr. 967:19-23 (emphasis
added). Such “[a]ppeals to passion and prejudice are always improper and should never be allowed.”
Shell Oil Co. v. Pou, 204 So. 2d 155, 157 (Miss. 1967); see also Mississippi State Hwy. Comm’n v.
Hall, 252 Miss. 863, 877, 174 So. 2d 488, 493-94 (1965) (condemning “the use of inflammatory
language calculated to mislead the jury and which has no relation to the issues of fact which are being
presented to the jury for determination.”).
B. The Court Erred By Permitting Plaintiff’s Expert Witnesses To Testify Outside
Their Areas Of Competence
Baymon’s contention that GMAC’s conduct in obtaining CPI for her vehicle was wrongful rested
almost entirely on the testimony of two witnesses who appeared as experts on her behalf — Donald
Sibbring and Thomas Myers. The trial court erroneously permitted each of these witnesses to testify
concerning matters falling outside their areas of expertise. This error requires a new trial.
A witness “qualified as an expert by knowledge, skill, experience, training, or education” may testify
and offer opinions if his “scientific, technical, or other specialized knowledge will assist the trier of fact to
understand the evidence or to determine a fact in issue.” M.R.E. 702. The expert witness must possess
qualifications sufficient “to make it appear that his opinion or inference will probably aid the trier in his
search for truth.” Seal v. Miller, 605 So. 2d 240, 247 (Miss. 1992). The court should limit an expert’s
testimony to matters within his demonstrated area of expertise. See id. at 245-47; Beech v. Leaf River
Forest Prods., Inc., 691 So. 2d 446 (Miss. 1997).
Thomas Myers was admitted as an expert in the area of “lending practices.” Tr. 202:1-3; 210:8-
19. He professed no expertise regarding the insurance industry generally or CPI in particular (Tr. 195:1-7);
- 28 -

he had no familiarity with applicable insurance regulations (Tr. 196:2-6) and no knowledge of insurance
industry practices concerning the payment of commissions or calculation of expenses (Tr. 200:20-29).
Myers was nevertheless permitted, over GMAC’s objections, to offer testimony and opinions regarding
MIC’s premiums and its profits. For example, Myers was permitted to testify that tracking costs were
recovered through CPI premiums (Tr. 231:22-23), that MIC’s payments to GMAC were “commissions”
(Tr. 220-7-225:5, 232:5-7), that MIC earned $28 million in profits on CPI in one year (Tr. 226:16-
228:26), and that MIC’s profits for that year had exceeded the amounts predicted in state rate filings (Tr.
230:14-231:17).
The second purported expert, Donald Sibbring, was accepted as an expert on “collateral protection
insurance” over GMAC’s objections. Tr. 374:25-375:1. Sibbring’s sole claim to expertise was his own
experience selling and servicing CPI policies to ten or twelve companies, in the course of which he had
participated in many of the practices that he claimed at trial were improper. Tr. 425:22-426:6, 433:20-
435:16. Sibbring had sold no CPI since 1984 (Tr. 363:15-20) and had never sold CPI in Mississippi (Tr.
343:24-344:20). Accordingly, Sibbring was not qualified to testify concerning the propriety of GMAC’s
practices, and his many opinions about GMAC’s conduct — for example, that GMAC “grossly
overcharged” Baymon for insurance (Tr. 392:3-6), should have financed Baymon’s personal insurance (Tr.
384:7-9), should not have received any commission (Tr. 421:28-422:3), and should have recovered the
costs of tracking in its finance charges to all customers (Tr. 423:28-29) — were not properly admitted.
Moreover, Sibbring did not cite any relevant standards or practices in support of his many opinions, which
were thus mere conclusory assertions that could not possibly assist the jury. See Hart v. State, 637 So.
2d 1329, 1339-40 (Miss. 1994) (internal quotation marks and citations omitted) (court should “exclude
opinions * * * which are so conclusory, or so framed in terms of the legal conclusions to be drawn, that
they will not assist the trier of fact, or will pose a danger of confusing the jury which outweighs their
probative value, or if there is an insufficient factual basis to support the conclusions”).
To make matters worse, Sibbring was permitted to testify and offer opinions on issues far afield
- 29 -

even of his purported area of expertise. Although Sibbring concededly had no expertise on insurance
ratemaking or rate filings (Tr. 374:11-24), he testified over GMAC’s objection that MIC made more profit
than it predicted in its rate filings (Tr. 402:21-403:10) and had failed to disclose to state regulators its
payments to GMAC (Tr. 403:11-16). Sibbring was permitted to testify, further, that GMAC “absolutely
controls the actions of MIC, its wholly-owned subsidiary.” Tr. 403:17-404:20. The admission of this
improper testimony, which suggested misconduct by MIC in its state rate filings and attempted to attribute
this supposed misconduct to GMAC, entitles GMAC to a new trial.
C. The Court Erred By Admitting Evidence Concerning The Reasonableness Of
MIC’s Rates
Before the trial, GMAC moved to exclude evidence concerning MIC’s ratemaking on the ground
that the conduct of MIC — which was not a party — in setting its rates was irrelevant to GMAC’s liability
and that MIC’s rates for CPI were, in any event, subject to review and approval
by insurance regulatory agencies. Tr. 95:1-3, 95:24-96:2. After counsel for Baymon represented that
Baymon was not challenging MIC’s rates (Tr. 101:2-102:2), stating that “if we were attacking the rates
themselves we would have named MIC as a party” (Tr. 96:7-9), the court granted GMAC’s motion in
limine (Tr. 103:22-24). Despite its favorable ruling on GMAC’s motion, the court nonetheless admitted
much evidence concerning MIC’s rate-setting practices, and then failed to give adequate corrective
instructions to the jury. These errors entitle GMAC to a new trial.
After granting a motion in limine, “it is the trial court’s responsibility to assume the initiative in
compelling compliance with its order.” Whitley v. City of Meridian, 530 So. 2d 1341, 1344 (Miss.
1988). As discussed above (at pages 10-11), the court permitted Baymon to adduce a great deal of
documentary and testimonial evidence concerning MIC’s rates for CPI. Through this evidence, Baymon
sounded a drumbeat that MIC’s profits were excessive, that its rates amounted to “gouging,” and that it
had somehow manipulated the rate approval process. See, e.g., Tr. 225:5-8, 226:16-228:26, 230:14-
231:17, 418:25, 420:17, 579:7-619:5; Ex. P-26. The court defended its admission of this evidence on the
ground that some reference to MIC “was necessary in order to show the purchase of the insurance, * * *
- 30 -

the breakdown of the premium, [and] * * * the other expenses as a result of the insurance costs.” Tr.
696:11-15. But because MIC’s ratemaking practices and its actual profit levels had no conceivable
relevance to GMAC’s possible liability for charging Baymon more than the “cost” of insurance, there was
no reason for the court to allow Baymon’s obsessive and highly prejudicial focus on these issues.
Because the evidence concerning MIC’s rate-setting had irreparably infected the trial, GMAC
moved for a mistrial. Tr. 674:6-9. The court refused to grant a mistrial, but agreed to instruct the jury
appropriately concerning “the relationship between GMAC and MIC,” “repeated reference to the Acree
documents,” and “the reasonableness of the rates.” Tr. 696:5-26. In reliance on the court’s statement that
it would so instruct the jury, GMAC refrained from calling its expert Michael Miller, who was prepared
to testify to the reasonableness of MIC’s rates and the validity of its rate-setting practices. Tr. 734:26-
5/ 735:10. Later, however, the court refused to give GMAC’s proposed jury instruction No. D-5 (R. 639,
RE 52), which would have admonished the jury not to consider, among other things, the reasonableness
of MIC’s “rates,” “rate-making,” “rate filings,” “actuarial practices,” or “profits,” instead giving the jury only
the bland instruction that it could not consider “[t]he reasonableness of MIC’s rates.” Instr. No. 16 (R.
624, RE 41). The court thus not only failed to cure its earlier error, but also further prejudiced GMAC,
which decided to forgo calling Miller based on its understanding that an adequate corrective instruction
would be given. These errors necessitate a new trial.
5/
As the Court will understand but the jury evidently failed to, underwriting a new insurance product — like the CPI
policy GMAC obtained from MIC— involves making projections that may overestimate or underestimate the actual loss
experience. If rates are set too low, the insurer cannot go back to the insured and collect additional premiums; it can only
adjust its rates for future periods. Similarly, if anticipated losses exceed actual loss experience, the rates will be, as they
were here, reduced in subsequent years. Baymon should not have been permitted to characterize this perfectly ordinary
attribute of the insurance business as a wrongful practice, let alone to lay it at GMAC’s door.
- 31 -

D. The Jury Instructions Were Flawed
As demonstrated in Part I, none of Baymon’s claims was legally and factually tenable, and it was
therefore error for the trial court to permit the jury to decide them. The court seriously compounded this
error by its instructions to the jury, which were severely and multiply flawed, and eliminated any chance that
the jury would decide the claims before it properly.
First, the jury instruction on breach of contract was improper. That instruction stated:
The Court instructs you that Defendant [GMAC] and Plaintiff Menola Baymon entered
into a contract. The Court further instructs you that Plaintiff has alleged a breach of
contract by Defendant [GMAC] by charging more than the cost of insurance or by
failing to adequately inform Plaintiff concerning said insurance or the charge.
If you find that Defendant [GMAC] did in fact breach said contract, you may return a
verdict for Plaintiff and against Defendant [GMAC]. If you find defendant did not breach
the contract you may return a verdict for the Defendant.
Instr. No. 6 (R. 614, RE 31) (emphasis added). Under Mississippi law, “a party has the right to embody
his theory of the case in his instruction if there is testimony to support it,” but only “if made conditional
upon the jury’s finding that such facts existed.” Murphy v. Burney, 27 So. 2d 773, 774 (Miss.
1946) (emphasis added). Jury Instruction No. 6 violated this rule, by suggesting that GMAC had, in fact,
“charge[d] more than the cost of insurance” and “fail[ed] to adequately inform Plaintiff concerning said
insurance or the charge,” and that the only question for the jury to decide was whether such conduct
breached the contract. The instruction thus failed to convey to the jury its obligation to determine whether
or not Baymon’s factual allegations were supported by the evidence, and communicated instead the
devastating suggestion that the court believed those facts to exist. GMAC specifically pointed out this
defect, but the trial court refused to alter the instruction to make it conditional. Tr. 797:27-29.
Second, the instruction on good faith and fair dealing was similarly flawed. It stated:
The Court instructs you that in every contract entered into in Mississippi there exists a duty
of good faith and fair dealing. This means that parties to a contract must perform that
contract with the [sic] good faith and with fair dealing toward one another. The Court
further instructs you that Defendant [GMAC] and Plaintiff, Menola Baymon, both had
duties of good faith and fair dealing toward one another. The Plaintiff alleges that
Defendant [GMAC] breached its duty of good faith and fair dealing by accepting
undisclosed commissions or other payments from MIC, or engaging in self-dealing, or
failing to search for competitive pricing or failing to disclose the relationship between
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GMAC and MIC, or using the threat of repossession to collect insurance premiums and
failed to disclose GMAC’s policy not to repossess, or transferring GMAC’s tracking
expenses to Plaintiff, without disclosing this fact to Plaintiff, or automatically force-placing
Plaintiff with MIC insurance without disclosing or offering other available options, and if
you further find that by such acts GMAC did not act in good faith and deal fairly with
Plaintiff, you must return a verdict in favor of Plaintiff.
Instr. No. 7 (R. 615-16, RE 32-33) (emphasis added). Like Jury Instruction No. 6, this instruction
improperly suggested that GMAC had in fact committed all of the acts alleged, and that the only issue for
the jury to decide was whether such actions breached the duty of good faith and fair dealing. Murphy, 27
So. 2d at 774. Here, again GMAC specifically brought this flaw to the court’s attention. See Tr. 802:26-
29 (noting that the instruction “implies that the court is telling the jury that the defendants did these things”).
The instruction thus failed to convey to the jury its duty to determine the facts, and drove home the
impression that the court believed all of Baymon’s allegations to be true.
Third, the instruction on fraud made this same error. It repeated Baymon’s litany of allegations
against GMAC and told the jury that “if you find that said acts of GMAC fall within this definition of fraud
and if you also believe from the evidence that Plaintiff suffered some harm as a result of her reliance on
Defendant [GMAC’s] said fraud, then you must return a verdict in favor of Plaintiff.” Instr. No. 10 (R.
618, RE 35) (emphasis added). Once again, the instruction improperly suggested that GMAC had in fact
committed all the acts alleged and that the only issue for the jury to decide was whether such actions
constituted fraud, and once again GMAC brought this to the court’s attention. Tr. 817:17-818:12. In
addition, by directing the jury to find for Baymon “if you also believe from the evidence that Plaintiff suffered
some harm as a result of her reliance on Defendant [GMAC’s] said fraud,” the instruction suggested
that Baymon had, in fact, relied on fraudulent acts by GMAC, and that the only issue for the jury to
determine was whether she suffered some harm as a result. Id. (emphasis added). The court’s failure to
communicate to the jury its obligation to determine the existence of each and every element of Baymon’s
fraud claim by clear and convincing evidence was reversible error.
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Finally, the instruction on breach of fiduciary duty misstated the law and was improperly
argumentative. That instruction stated:
The Court instructs you that the law defines a fiduciary relationship as one in which one
party is in a position to exercise dominant influence upon the other party because of the
latter’s dependency upon the former arising or through trust [sic]. The law does not
hesitate to categorize this relationship as fiduciary in character. If you determine from a
preponderance of the evidence that GMAC held as security the title to Plaintiff’s car and
that GMAC thereby acquired such a position of dominance over Plaintiff and that GMAC
elected to place insurance and selected that insurance and took compensation therefore,
and did such to GMAC’s benefit and Plaintiff’s detriment and if you further find that
GMAC thereby breached the relationship of trust between the parties, you should award
as damages the value of whatever you may find defendant to have gained as a result of this
wrong.
Instr. No. 9 (R. 617, RE 34). As GMAC pointed out to the court when it objected to this instruction (Tr.
814:2-816:9), Mississippi law is clear that the power to foreclose on a security interest does not by itself
create fiduciary duties (see, e.g., Merchants & Planters Bank, 691 So. 2d at 404); nonetheless, this
instruction contravenes that law by inviting the jury to find that GMAC owed a fiduciary duty to Baymon
solely because it held a security interest in her car. The confusingly worded instruction also failed to
communicate that domination and trust are necessary to finding a fiduciary relationship between debtor and
6/
creditor. Hopewell, 680 So. 2d at 816. Moreover, although a party to a contract does not breach any
fiduciary duty by exercising its rights under the contract, even to the detriment of the other party (see, e.g.,
Carter Equip., 681 F.2d at 392 n.14), the instructions effectively stated that the mere act of purchasing
CPI for Baymon’s vehicle and charging her for it would violate a fiduciary duty that GMAC owed her. “It
is error for the court in any case to grant instructions which are likely to mislead or confuse the jury as to
the principles of law applicable to the facts in evidence.” Griffin v. Fletcher, 362 So. 2d 594, 596 (Miss.
1978) (internal quotation marks omitted).
Furthermore, the court’s statement that “the law does not hesitate to categorize this relationship as
6/
The relevant language in this instruction appears to be a garbled version of language in Hendricks v. James stating that
“[w]henever there is a relation between two people in which one person is in a position to exercise a dominant influence
upon the other because of the latter’s dependency upon the former, arising either from weakness of mind or body, or
through trust, the law does not hesitate to characterize such relationship as fiduciary in character.” 421 So. 2d 1031, 1041
(Miss. 1982) (emphasis added). There is no suggestion that Baymon was “weak[] of mind or body.”
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fiduciary in character” was argumentative. Such instructions, which “are not only confusing to the jury, but
put the trial court in the position of arguing the case for the respective litigants,” are improper and are
grounds for reversal. White v. Mississippi Power Co., 252 Miss. 97, 103, 171 So. 2d 312, 315 (1965).
III. THE AWARD OF COMPENSATORY DAMAGES IS UNSUSTAINABLE
Even assuming arguendo that Baymon’s claims were legally and factually tenable, she would not
be entitled to the astonishing $35,000 in compensatory damages awarded by the jury. At trial, Baymon
adduced evidence sufficient to support compensatory damages of, at most, $762 — the amount she
allegedly was overcharged for insurance. The jury’s award — which exceeded by $10,000 the already
exorbitant figure requested by plaintiff’s counsel in his summation — is contrary to the overwhelming weight
of credible evidence and compels an inference that the jury was influenced by bias, prejudice or passion.
See Schoppe v. Applied Chems. Div., 418 So. 2d 833, 836 (Miss. 1982). The court’s instructions to
the jury on compensatory damages were also flawed. Accordingly, this Court should either order an
unconditional new trial on damages or order a remittitur of the compensatory damages to $762. Miss.
Code Ann. § 11-1-55; Dixie Ins. Co. v. Mooneyhan, 684 So. 2d 574, 587 (Miss. 1996).
“It is absolutely incumbent upon the party seeking to prove damages to offer into evidence the best
evidence available [on] each and every item of damage.” Eastland v. Gregory, 530 So. 2d 172, 174
7/
(Miss. 1988). Aside from the alleged overcharge of $762 on the first CPI certificate, Baymon sought
compensation for (i) credit problems allegedly resulting from her payment of charges for CPI rather than
other bills; (ii) the inconvenience and interference of calls from GMAC threatening repossession of her car
for nonpayment of insurance and (iii) “absence from work due to health problems, depression and the
embarrassment of having to explain her circumstances and condition to co-workers.” Instr. No. 20 (R.
7/
Baymon was charged $1,654 for CPI coverage for May 1992 to May 1993. Tr. 392:28-393:1. Sibbring testified that this
premium would have been $891.51 absent the alleged overcharges. Tr. 393:1-14; P-41. Baymon’s attorney used this same
figure in his summation, in which he asked the jury to “take off the excess profits that they didn’t tell her about, take off
the tracking expense that they didn’t tell her about and it’s $891 instead of $1,654.” Tr. 893:15-18 (emphasis added).
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628, RE 45). Yet Baymon presented only the thinnest of evidence to substantiate these purported injuries.
Concerning her credit problems, Baymon testified that, in order to make “extra payments of $44
per month” for CPI, she did not pay other bills. Tr. 634:10-15. When asked by her attorney if “it hurt
your credit in other areas,” Baymon responded “Yes.” Tr. 634:16-18. But she did not specify what bills
went unpaid, did not introduce a copy of her credit report, and introduced no evidence that she had applied
or been turned down for credit. Such evidence provides no basis for a jury award of damages. See First
Am. Nat’l Bank v. Mitchell, 359 So. 2d 1376, 1381 (Miss. 1978) (reversing damages awarded in part
on basis of alleged injury to plaintiff’s credit rating, where “there was no proof as to loss of credit rating
other than the testimony of the two Mitchell brothers that they had trouble getting credit”).
Baymon offered no more substantiation for her allegations of “inconvenience” and “absence from
work.” Claims of “inconvenience and interference” do not constitute legally cognizable injury. Allen v.
Edwards, 217 So. 2d 284, 286 (Miss. 1969) (“mere inconvenience, without more, is not a proper element
of damages”). As for Baymon’s claim to have missed work as a result of her depression and
embarrassment, she did not testify how many days (or hours) she missed, introduced no documentary
evidence of her claimed absences, and produced no evidence — not even her own testimony — that she
lost wages as a result. Her “evidence” thus fell far short of the “reasonable certainty” required for recovery
for “absence from work.” Polk v. Sexton, 613 So. 2d 841, 844 (Miss. 1993); see also Strickland v.
Rossini, 589 So. 2d 1268, 1274-75 (Miss. 1991) (plaintiff’s “word” that she had been damaged not
sufficient when plaintiff failed to provide details or documentation of damage claims).
In fact, Baymon’s request for damages for “absence from work due to health problems, depression
and the embarrassment of having to explain her circumstances and condition to co-workers” (Instr. No.
20, R. 628, RE 45) was self-evidently designed to circumvent the court’s ruling that she was not entitled
to damages for emotional distress. As discussed above, the trial court directed a verdict against Baymon
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on emotional distress damages because the evidence did not support Baymon’s theory that GMAC’s
supposed threats to repossess her car (the only alleged cause of her emotional distress) arose from her
failure to pay for CPI rather than her lateness in making her regular car payments. Tr. 732:13-733:13.
Plainly hoping to sidestep this ruling, Baymon’s counsel stated in his summation that, although “emotional
pain and suffering” were “not in the case” (Tr. 900:10-11), the jury could award compensatory damages
for Baymon’s “depression, and the embarrassment of having to explain her circumstances and conditions
to co-workers.” Tr. 900:7-9. The size of the compensatory damages award suggests that this strategy
succeeded.
But any award of damages for emotional distress was improper in this case. First, there was no
proof that Baymon’s purported distress rose to the level of anxiety or anguish required to support an award
for emotional distress. See Strickland, 589 So. 2d at 1275-76 (testimony that plaintiff had “been very
depressed,” “upset,” “sick,” and “not able to sleep at night,” and that her children had “been very upset
over all this and emotional,” was legally insufficient to support emotional distress damages); Morrison v.
Means, 680 So. 2d 803, 806-07 (Miss. 1996) (evidence that the plaintiff’s loss of a significant portion of
his family’s income caused his “stress and anxiety” and led to “many sleepless nights” was insufficient to
support an award of damages). Second, recovery for emotional distress requires proof that a defendant’s
wrongful conduct was the proximate cause of the plaintiff’s injuries. See Southwest Mississippi Regional
Med. Ctr. v. Lawrence, 684 So. 2d 1257, 1269 (Miss. 1996) (“plaintiff may recover for emotional injury
proximately resulting” from defendant’s wrongful conduct); Boling, 659 So. 2d at 590; Singleton v.
Stegall, 580 So. 2d 1242, 1247 (Miss. 1991). As discussed above, the trial court found the evidence
concerning repossession insufficient to connect Baymon’s alleged emotional distress to the CPI charges.
Moreover, given Baymon’s general financial problems, which caused her difficulties in meeting her
contractual obligations to GMAC, nothing but the rankest speculation could assign any distress she
experienced to GMAC’s conduct relating to CPI.
For these reasons, the court’s instruction to the jury concerning the award of compensatory
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damages (Instr. No. 20, R. 628, RE 45) was also flawed. By permitting the jury to award damages for
her “inconvenience and interference” stemming from her receipt of “numerous telephone calls at work and
at home from GMAC threatening to repossess her car for nonpayment of insurance” and for her “absence
from work due to health problems, depression and * * * embarrassment,” the instruction erroneously
invited the jury to nullify the court’s ruling granting GMAC a directed verdict on emotional distress
damages. The court compounded this error by refusing to give GMAC’s proposed instruction D-4, which
would have informed the jury that it could not “award any damages to Mrs. Baymon for alleged mental
anguish or emotional distress.” R. 638, RE 51. Moreover, Instruction No. 2 presented Baymon’s
damages theories without making them “conditional upon the jury’s finding that such facts existed”
(Murphy, 27 So. 2d at 774) — an error that was especially harmful and prejudicial to GMAC in view of
the meager evidence Baymon presented to prove her alleged injuries.
IV. THE PUNITIVE AWARD IS UNSUSTAINABLE
A. GMAC Cannot Be Subject To Liability For Punitive Damages
1. GMAC did not have fair notice that its conduct was unlawful
The U.S. Supreme Court has held that “[e]lementary notions of fairness enshrined in our
constitutional jurisprudence dictate that a person receive fair notice * * * of the conduct that will subject
him to punishment.” BMW of North America, Inc. v. Gore, 517 U.S. 559, 574 (1996). Similarly,
Mississippi law prohibits the imposition of punitive damages where the defendant had “no prior notice” that
its actions were wrongful. Harrison v. Allstate Ins. Co., 662 So. 2d 1092, 1095 (Miss. 1995); see also
Murphree v. Federal Ins. Co., 707 So. 2d 523, 534 (Miss. 1997) (“The Mississippi Supreme Court, in
cases of first impression, has refused to award punitive damages even though its ultimate decision was
against” the defendant); Dunn v. State Farm Fire & Cas. Co., 927 F.2d 869, 873 (5th Cir. 1991)
(punitive damages could not be imposed because defendant “was entitled to have court resolve the
undecided question of law to determine its liability without being punished for referring the question to a
court”); Gorman v. Southeastern Fidelity Ins. Co., 775 F.2d 655, 659 (5th Cir. 1985) (applying
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Mississippi rule disallowing punitive damages in cases of first impression where “[t]here [were] no reported
opinions construing [the statute in question] in the situation presented by th[e] case”); Gulf Guar. Life. Ins.
Co. v. Kelley, 389 So. 2d 920, 923 (Miss. 1980) (issue of punitive damages should not have been
submitted to jury where case was the first in which a court had held defendant’s interpretation of insurance
contract to be incorrect). This “fair notice” principle prohibits imposition of punitive damages on GMAC.
As discussed above, the use of CPI is a common practice that enables creditors to refrain from
demanding immediate payment of secured debts when the debtor defaults on the obligation to maintain
insurance on the collateral. GMAC’s purchase of CPI on Baymon’s car was an entirely routine action that
accorded with customary industry practice. There is no statute or regulation barring the use of CPI in
Mississippi or, for that matter, in any other state; indeed, the practices challenged by Baymon have been
expressly approved by an independent body of state insurance officials. See Creditor-Placed Insurance
Model Act § 12(D)(1), (2), and (4) (1997) (R. 753, RE 286). No Mississippi court or jury has
previously found the practices at issue here to be unlawful. Accordingly, until the jury rendered its verdict
in this case, GMAC had no notice that its conduct would be considered illegal under Mississippi law.
Under these circumstances, the award of any punitive damages against GMAC violates both the United
States Constitution and Mississippi law.
2. The standard for imposing punitive damages has not been met
Even if this were not a case of first impression, Mississippi law would bar the imposition of punitive
damages. Mississippi law is clear that punitive damages are appropriate only in “extreme cases,” and
“should be allowed only with caution and within narrow limits.” Boling, 659 So. 2d at 588-89 (quoting
Beta Chapter of Beta Theta Pi v. May, 611 So. 2d 889, 894 (Miss. 1992) and Consolidated Am. Life
Ins. Co. v. Toche, 410 So.2d 1303, 1304 (Miss. 1982)). Before punitive damages can be recovered from
the defendant, the plaintiff must prove by a preponderance of the evidence that the defendant “acted with
(1) malice, or (2) gross negligence or reckless disregard for the rights of others.” American Funeral
Assurance Co. v. Hubbs, 700 So. 2d 283, 286 (Miss. 1997) (quoting Universal Life Ins. Co. v.
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8/
Veasley, 610 So. 2d 290, 293 (Miss. 1992)). The plaintiff “carries a heavy burden” in seeking to meet
this standard. South Central Bell v. Epps, 509 So. 2d 886, 893 (Miss. 1987).
The evidence in this case affords not the slightest basis for concluding that GMAC acted with
“malice,” “gross negligence,” or “reckless disregard” for Baymon’s rights. Even according to Baymon’s
expert witnesses, most of GMAC’s actions were perfectly proper. These witnesses testified that the use
of CPI is a common and prudent practice. Tr. 214:14-15 (CPI is “standard operating procedure and
there’s nothing wrong” with it); Tr. 441:19-21 (agreeing that GMAC “had a right and * * * should have
put some collateral protection insurance policy on Ms. Baymon”). Baymon conceded that GMAC had the
right to insist that she maintain insurance on her vehicle, and could lawfully elect to buy such insurance itself,
and charge her for it, if she failed to do so. Tr. 214:1-10. She acknowledged GMAC’s right to repossess
her car if she defaulted on her contractual obligations. Tr. 332:11-22. She concededly had received notice
of the insurance placement, the coverage for which she was charged was actually secured, and no one at
GMAC was “ugly” in communications with her. Tr. 638:3-26, 659:3-5.
Baymon alleged, at worst, that GMAC’s implementation of this concededly reasonable practice
was improper in certain respects, which resulted in her paying too much for her insurance during one year.
But the challenged aspects of GMAC’s conduct — that it purchased CPI from a subsidiary, that it
recovered tracking costs from defaulting debtors rather than all debtors, that it received “commissions” or
expense reimbursements from its CPI provider, and that its CPI provider earned more profits than it had
projected in state rate filings — reflect neither malice nor gross negligence nor reckless disregard for
Baymon’s rights. In fact, the evidence showed that many of the premium-setting practices of which
Baymon complained were standard in the industry. See, e.g., Tr. 451:27-452:11. As for Baymon’s novel
contention that GMAC should have told her that it would not enforce her contractual obligation to pay for
CPI, there was no evidence presented that any firm in any industry follows that practice, and we are aware
8/
This Court has ruled that the common law standard for awarding punitive damages applies to tortious breach of
contract. Hubbs, 700 So. 2d at 286. Punitive damages are not available for simple breach of contract. See id. Accordingly,
the punitive damages award must be vacated if the jury’s verdict on Baymon’s claims other than breach of contract are
reversed.
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of no court, in Mississippi or elsewhere, ever to have imposed such an extraordinary duty. Accordingly,
punitive damages are entirely unwarranted. See Cermack, 658 So. 2d at 1362 (punitive damages not
warranted where plaintiff’s expert testified that allegedly wrongful conduct was “not unusual” in the
industry).
B. GMAC Is Entitled To A New Trial Because Baymon Impermissibly Argued That
GMAC Should Be Punished For Conduct Outside Mississippi
In BMW, the Supreme Court held that principles of state sovereignty and comity embodied in the
Constitution bar a state (or a state jury) from imposing a punitive damage award “with the intent of changing
the tortfeasors’ lawful conduct in other States.” 517 U.S. at 572. In this case, Baymon openly encouraged
the jury to award punitive damages in order to change GMAC’s practices with regard to CPI nationwide.
The punitive damages thus rest on an unconstitutional foundation, necessitating a new trial.
At trial Baymon introduced extensive evidence, including graphic exhibits, concerning MIC’s
nationwide profits on the CPI program. See, e.g., Tr. 224:21-24, 228:3-20; Exs. P-42, P-43, RE 275-
76. Baymon’s counsel stressed this material with evident effect in his argument on punitive damages. Over
GMAC’s vehement objections (Tr. 956:21-957:25), counsel exhorted the jury to administer justice to the
“600,000 Menola Baymons” nationwide who had been the “victims” of GMAC’s CPI program; argued
that the jury should calculate its damage award by considering the “55.8 million dollars for one year from
Menola Baymon and 600,000 other Menola Baymon’s in Humphreys County, in Sunflower County, in
Holmes County, in Memphis, Tennessee, and everywhere else in this country”; and told the jury that
“[y]ou can change the way this insurance is done * * * [t]he way people are ripped off across the
country, you can stop it.” Tr. 967:13-15, 968:19-24, 970:4-6 (emphasis added). Yet Baymon made
no attempt to prove that GMAC’s conduct was illegal in other states, nor is it likely she could have done
9/
so had she tried.
9/
In fact, many courts across the country have dismissed claims that placing CPI insurance is illegal. See, e.g., Doe v.
Norwest Bank Minnesota, N.A., 107 F.3d 1297 (8th Cir. 1997); McClain v. South Carolina Nat’l Bank, 105 F.3d 898 (4th Cir. 1997);
Loatman v. Summit Bank, 1997 WL 809772 (D.N.J. Aug. 29, 1997); Pauley v. Bank One Colorado Corp., 205 B.R. 272 (D. Colo.
1997); Dixon v. TCF Bank Illinois, FSB, 1995 WL 622409 (N.D. Ill. Oct. 23, 1995); Adams v. GMAC Mortgage Corp.,1994 WL
702639 (N.D. Ill. 1994); Gordon v. Ford Motor Credit Co., 868 F. Supp. 1191 (N.D. Cal. 1992); Senich v. Transamerica Premier
- 41 -

The punitive damage award is thus an unconstitutional attempt to export Mississippi’s law (assuming
arguendo that plaintiff’s theories constitute an accurate statement of Mississippi law) to govern GMAC’s
conduct all over the country. See BMW, 517 U.S. at 572-73 (“Alabama does not have the power * * *
to punish BMW for conduct that was lawful where it occurred and that had no impact on Alabama or its
residents.”). For that reason too, the award must be vacated.
C. The Punitive Damages Are Excessive
Even if imposition of punitive damages were permissible, the punitive award of $5 million — to a
plaintiff who suffered at most a few hundred dollars in out-of-pocket damage, and against a defendant that
followed standard industry practice — is grossly excessive. That award, which exceeds the bounds set by
both the United States Constitution and Mississippi law, must be thrown out entirely or substantially
reduced.
1. The punitive damages are unconstitutionally excessive
In BMW, the Supreme Court struck down a $2 million punitive award as unconstitutionally
excessive. The Court stated that “[e]lementary notions of fairness enshrined in our constitutional
jurisprudence dictate that a person receive * * * fair notice * * * of the severity of the penalty that a State
may impose.” 517 U.S. at 574 (footnote omitted). It then proceeded to identify three “guideposts” for
evaluating whether a defendant has had such adequate notice: (1) the degree of reprehensibility of the
defendant’s conduct (id. at 575); (2) the ratio of the punitive damages to the plaintiff’s actual damages (id.
at 580); and (3) the relationship between the punitive damages and the statutorily prescribed penalty for
comparable misconduct (id. at 583). Although this Court has not yet had the opportunity to apply the
BMW test, the great majority of courts to have done so have concluded that the punitive awards being
Ins. Co., 766 F. Supp. 339 (W.D. Pa. 1990). And, in a recent California case, the court and jury found in favor of GMAC
on all claims related to the type of conduct involved here — a fact that GMAC was barred from introducing into evidence
at the trial. Tr. 306:4-308:5. See Acree v. GMAC, No. 531927, July 12, 1995 Special Verdict and April 26, 1996 First Amended
Tentative Decision (Cal. Super. Ct.).
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10/
challenged were unconstitutionally excessive. Application of the guideposts here compels the same
conclusion.
a. The degree of reprehensibility of the conduct. As the Court noted in BMW, the degree
of reprehensibility of a defendant’s conduct is “[p]erhaps the most important indicium of the reasonableness
10/
See, e.g., Ace v. Aetna Life Ins. Co., 1998 WL 106106 (9th Cir. Mar. 12, 1998) ($16.5 million punitive award reduced to
$381,000); EEOC v. HBE Corp., 135 F.3d 543 (8th Cir. 1998) ($4.3 million aggregate punitive award reduced to $480,000);
Kim v. Nash Finch Co., 123 F.3d 1046 (8th Cir. 1997) ($7 million award reduced to $300,000); FDIC v. Hamilton, 122 F.3d 854
(10th Cir. 1997) ($1,200,000 award reduced to $264,000); Kimzey v. Wal-Mart Stores, Inc., 107 F.3d 568 (8th Cir. 1997) ($5
million award reduced to $350,000); Continental Trend Resources, Inc. v. OXY USA Inc., 101 F.3d 634 (10th Cir. 1996) ($30
million award reduced to $6 million), cert. denied, 117 S.Ct. 1846 (1997); Lee v. Edwards, 101 F.3d 805 (2d Cir. 1996) ($200,000
award reduced to $75,000); Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927 (5th Cir. 1996) ($150,000 award excessive under
BMW; case remanded to district court for further consideration), cert. denied, 117 S. Ct. 767 (1997); Lawyer v. 84 Lumber
Co., 1997 WL 827395 (N.D. Ill. Nov. 26, 1997) ($250,000 award reduced to $150,000); Food Lion, Inc. v. Capital Cities/ABC,
Inc., 1997 WL 337460 (M.D.N.C. Aug. 29, 1997) (awards of $4 million and $1.5 million reduced to $50,000 and $250,000);
Kim v. Dial Serv. Int’l., Inc., 1997 WL 458783 (S.D.N.Y. Aug. 11, 1997) ($750,000 award reduced to $25,000); Groom v.
Safeway, Inc., 973 F. Supp. 987 (W.D. Wash. 1997) ($750,000 award reduced to $50,000); Leab v. Cincinnati Ins. Co., 1997
WL 360903 (E.D. Pa. June 26, 1997) ($5.5 million award reduced to $35,000); Creative Demos, Inc. v. Wal-Mart Stores, Inc.,
955 F. Supp. 1032 (S.D. Ind. 1997) ($6.5 million award so grossly excessive as to justify a new trial), aff’d in relevant part
on other grounds, 1998 WL 161726 (7th Cir. Apr. 8, 1998); Geuss v. Pfizer, Inc., 971 F. Supp. 164 (E.D. Pa. 1996) ($150,000
award reduced to $17,500); Iannone v. Harris, 941 F. Supp. 403 (S.D. N.Y. 1996) ($250,000 award reduced to $50,000); Florez
v. Delbovo, 939 F. Supp. 1341 (N.D. Ill. 1996) ($750,000 award reduced to $275,000); Utah Foam Prods. Co. v. Upjohn Co.,
930 F. Supp. 513 (D. Utah 1996) ($5.5 million award reduced to approximately $600,000); Rush v. Scott Specialty Gases, Inc.,
930 F. Supp. 194 (E.D. Pa. 1996) ($3 million award reduced to $300,000), rev’d on other grounds, 113 F.2d 476 (3d Cir. 1997);
Schmizzi v. Illinois Farmers Ins. Co., 928 F. Supp. 760 (N.D. Ill. 1996) ($600,000 award reduced to $135,000); Strickland v.
Liberty Nat’l Life Ins. Co., 1998 WL 57759 (Ala. Feb. 13, 1998) (affirming reduction of $5 million punitive award to $37,500);
Talent Tree Personnel Servs. v. Fleenor, 703 So. 2d 917 (Ala. 1997) ($3 million award reduced to $1.5 million); Ford Motor Co.
v. Sperau, 1997 WL 545878 (Ala. Sept. 5, 1997), cert. denied, 1998 WL 86082 ($6 million award reduced to $1.8 million);
American Pioneer Life Ins. Co. v. Williamson, 704 So. 2d 1361 (Ala. 1997) ($3 million award reduced to $2 million and then
further reduced to $750,000); Life Ins. Co. of Georgia v. Johnson, 701 So. 2d 524 (Ala. 1997) ($15 million award reduced to
$5 million and then further reduced to $3 million); BMW of North America, Inc. v. Gore, 701 So. 2d 507 (Ala. 1997) (reducing
what was once a $4 million award to $50,000); Foremost Ins. Co. v. Parham, 693 So.2d 409 (Ala. 1997) (reducing two $7.5
million awards to $175,000 and $173,000); Langmead v. Admiral Cruises, Inc., 696 So. 2d 1189 (Fla. Dist. Ct. App. 1997)
(holding that $3.5 million award was so excessive as to warrant a new trial); Wilson v. IBP, Inc., 558 N.W.2d 132 (Iowa
1996) ($15 million award reduced to $2 million), cert. denied, 118 S. Ct. 52 (1997); Maiorino v. Schering-Plough Corp., 695 A.2d
353 (N.J. Super. App. Div. 1997) ($8 million award so excessive as to require a new trial); Grynberg v. Citation Oil & Gas
Co., 573 N.W.2d 493 (S.D. 1997) ($4.8 million award reduced to $1 million); Apache Corp. v. Moore, 960 S.W.2d 746 (Tex.
Ct. App.1997) (aggregate punitive award of $1.5 million reduced to $43,000); Management Computer Servs., Inc. v. Hawkins,
Ash, Baptie & Co., 557 N.W.2d 67 (Wis. 1996) ($1.75 million award reduced to $650,000).
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of a punitive damages award * * *.” 517 U.S. at 575. Deeply rooted principles of fairness dictate that
“punitive damages may not be grossly out of proportion to the severity of the offense.” Id. at 576 (internal
quotation marks omitted). In BMW, in which liability was based on the defendant’s failure to disclose that
a car sold to the plaintiff as “new” had in fact been repainted, the Court found that the defendant’s conduct
involved “none of the circumstances ordinarily associated with egregiously improper conduct.” Id. at 580.
In all respects relevant to the assessment of its reprehensibility, GMAC’s conduct is strikingly similar to the
conduct analyzed in BMW.
Here, as in BMW, the alleged tort was “purely economic in nature”; the defendant’s conduct
“evinced no indifference to or reckless disregard for the health and safety of others.” Id. at 576. Like the
conduct in BMW, GMAC’s conduct did not involve violence, trickery, or malice. Like the conduct in
BMW, as discussed above, GMAC’s conduct has been found lawful in other states. Finally, in BMW the
Court noted that “the omission of a material fact may be less reprehensible than a deliberate false statement,
particularly when there is a good-faith basis for believing that no duty to disclose exists.” Id. at 580. Here,
Baymon’s case rests upon her claim that GMAC failed to disclose to her certain facts about its CPI
program, and she adduced nothing but her experts’ bald opinions — perhaps never expressed publicly
before this case— to support her view that GMAC had a duty to disclose those facts.
b. The relationship between the punitive damages and the plaintiff’s injury. The second
“and perhaps most commonly cited” guidepost for assessing excessiveness is the ratio of punitive damages
to the plaintiff’s actual harm. BMW, 517 U.S. at 580. In BMW, the Supreme Court noted that it had
previously characterized punitive damages of “more than 4 times the amount of compensatory damages”
as “close to the line” of constitutionality. Id. at 581 (quoting Pacific Mut. Life Ins. Co. v. Haslip, 499
U.S. 1, 23-24 (1991)). In BMW itself, the Supreme Court deemed unacceptably high punitive damages
that were 500 times the plaintiff’s compensatory damages and “35 times greater than the total damages of
all 14 Alabama consumers who purchased repainted BMW’s” (assuming that all 14 incurred damages in
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the same amount as the plaintiff). Id. at 582 & n.35; see also id. at 590 (Breyer, J., concurring). In the
two years since BMW was decided, numerous courts have concluded that ratios of the magnitude involved
in this case violate the Due Process Clause and routinely have ordered remittiturs to within a range of 1:1
11/ to 6:1.
In this case, the ratio of the $5 million punitive award to the actual injury proved at trial — $762
— is an astonishing 6557:1. Even if the jury’s inflated compensatory award of $35,000 were accepted
as an accurate measure of actual injury, the ratio would be a still breathtaking 143:1. While BMW sets
no precise mathematical ratio of universal applicability, it is crystal clear that ratios anywhere near that high
are not sustainable under that decision.
c. Penalties for comparable misconduct. Finally, the third BMW guidepost is the civil or
criminal penalty that could be imposed for comparable misconduct, which, like the other criteria, is
animated by the requirement that the defendant have fair notice of the punishment that may be exacted for
its conduct. 517 U.S. at 584. Here, as already noted, GMAC could have scoured Mississippi statutes
and case law without uncovering even a hint that its conduct might subject it to a multimillion dollar fine.
11/
See, e.g., Ace, supra (130:1 ratio reduced to 3:1 where actual damages were $127,000); EEOC v. HBE Corp., supra (43:1 ratio
reduced to just over 4:1 where aggregate actual damages were $112,000; Kim v. Nash Finch, supra (reducing 70:1 ratio to
3:1 where actual damages were $100,000); FDIC v. Hamilton, supra (27:1 ratio reduced to 6:1 where actual damages were
$44,000); Kimzey, supra (140:1 ratio reduced to 10:1 where actual damages were $35,000); Continental Trend, supra (reducing
punitive award that was between 15 and 30 times the actual and potential harm of $1 million to $2 million to an amount
that is between three and six times that aggregate harm); Patterson, supra (holding a punitive award that was
approximately 6.5 times the roughly $20,000 actual damages to be excessive and observing that a 4:1 ratio is “close to
the line”); Lawyer, supra (reducing 5:1 ratio to 3:1 where actual damages were $25,000) Kim v. Dial, supra (reducing 30:1
ratio to 1:1 where actual damages were $25,000); Groom, supra (reducing 150:1 ratio to 10:1 where actual damages were
$5,000); Geuss, supra (punitive damages award that was roughly equal to the actual damages reduced to one-tenth of
$165,000 actual damages award); Iannone, supra (10:1 ratio reduced to 2:1 where actual damages were $25,000); Florez,
supra (15:1 ratio reduced to 5:1 where actual damages were $55,000); Utah Foam, supra (18:1 ratio reduced to 2:1 where
actual damages were approximately $315,000); Rush, supra (3:1 ratio reduced to 1:1 where actual damages were
approximately $300,000); Schimizzi, supra (13:1 ratio reduced to 3:1 where actual damages were approximately $45,000);
In re Arnold, 206 B.R. 560, 569 (Bankr. N.D. Ala. 1997) (observing that ratios of 4:1 to 10:1 may be appropriate depending
on the circumstances, but imposing $15,000 punitive award that was between two and three times the debtor’s actual
damages); Talent Tree, supra (reducing ratio from 10:1 to 5:1 where actual damages were $300,000); Ford Motor Co., supra
(reducing ratio from less than 4:1 to just over 1:1 where actual damages were $1,692,000); American Pioneer, supra
(reducing 12:1 ratio to 3:1 where actual damages were $250,000); Life Ins. Co. of Georgia, supra (reducing 60:1 ratio to 12:1
where actual damages were $250,000); Grynberg, supra (reducing 13:1 ratio to 3:1 where actual damages were $354,000);
Apache, supra (reducing aggregate ratio of 138:1 to 4:1 where aggregate actual damages were $10,835); Management
Computer Servs., supra (27:1 ratio reduced to 10:1 where actual damages were $65,000).
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As in BMW, the most analogous penalty is that imposed for unfair trade practices. Mississippi law
provides that a civil penalty of up to $10,000 may be imposed on a person found by clear and convincing
evidence to have “knowingly and willfully used any unfair or deceptive trade practice.” Miss. Code Ann.
§ 75-24-19(1)(b). This statutory penalty may be imposed only if the violating party “knew or should have
known that his conduct was a violation” of the Mississippi statute governing unfair trade practices — a
standard clearly unmet here. Other states, as noted in BMW, authorize penalties ranging from $2,000 to
$10,000 for unfair trade practices. 517 U.S. at 584 & nn. 39-40. Just as in BMW, none of these state
statutes would give a company like GMAC notice that its conduct could be subject to a $5 million penalty.
Id. at 584.
2. The punitive damage award is grossly excessive under Mississippi law
In addition to violating the Due Process Clause, the jury’s $5 million award also violates Mississippi
law, which requires remittitur or a new trial where a punitive damage award is so excessive that it “evinces
passion, bias and prejudice on the part of the jury so as to shock the conscience of the court.”
Mooneyhan, 684 So. 2d at 586 (internal quotation marks omitted). The sheer magnitude of the punitive
award in this case — which far exceeds any award previously upheld by the Mississippi courts — and the
extreme ratio between the compensatory and punitive awards are each sufficient to suggest that the jury
was moved by improper factors, and command reversal of the award. If the sheer size and
disproportionality of the punitive award were not enough, however, Baymon’s overt appeals to passion,
bias, and prejudice confirm that the award is improper under Mississippi law.
a. At $5 million, the jury’s award is more than three times the largest punitive damage award ever
upheld by this Court. See Bankers Life & Cas. Co. v. Crenshaw, 483 So. 2d 254 (Miss. 1985)
(affirming award of $1.6 million). This Court has substantially reduced awards of comparable enormity.
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See Mutual Life Ins. Co. of New York v. Wesson, 517 So. 2d 521, 533 (Miss. 1987) (reducing $8
million punitive damages award to $1.5 million). In ordering a remittitur in Wesson, this Court emphasized
that the plaintiffs had suffered only monetary loss rather than personal injuries. Id. at 532. Similar
considerations, as well as the sheer size of the award, warrant drastic reduction here. It is simply
preposterous to suggest that GMAC is the worst wrongdoer in the history of Mississippi.
In addition, the ratio between punitive and actual damages is unjustifiably high under Mississippi
law. Even before BMW, this Court was concerned with maintaining a reasonable relationship between
actual and punitive damages. Id. at 532-33 (citing cases). As noted earlier, the punitive damage award
was 6,557 times the actual injury proved at trial, and 143 times the jury’s inflated compensatory damages
award. This Court has found much lower ratios of punitive to actual damages to be impermissible. In
Wesson, for example, the Court pointedly refused to uphold a ratio of 92:1, granting remittitur to bring the
ratio to 17:1. Id. at 533. Similarly, in Mooneyhan, the Court reversed and remanded for a new trial a $1
million punitive damage award which was 1,875 times actual damages. And this Court has reduced
punitive awards where the ratios of actual to punitive damages were much lower: for example, in a case
involving a compensatory damages award of the precise amount involved here, the Court found a punitive
award of $250,000 “so grossly excessive” as to be “shocking,” ordering an unconditional new trial on both
actual and punitive damages. Mitchell, 359 So. 2d at 1381.
b. The gross excessiveness and disproportionality of the punitive award, by itself, supports an
inference that the jury was motivated by passion, bias and prejudice and commands a new trial or a drastic
remittitur. See, e.g., Mooneyhan, 684 So.2d at 586; accord Auster Oil & Gas, Inc. v. Stream, 835 F.2d
597, 603 (5th Cir. 1988) (size of punitive damages award in and of itself “indicate[s] inherent passion and
prejudice”). In this case, however, there is substantial additional evidence in the record that improper
considerations infected the punitive damages verdict.
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First and foremost, as discussed above (at pages 26-28), Baymon’s witnesses made outrageously
improper and prejudicial claims that racial minorities were the “targets” of GMAC’s CPI program, and
Baymon’s counsel overtly argued in seeking punitive damages that “GMAC’s victims are working people
on the economic edge, struggling, predominantly * * * African-Americans.” Tr. 967:19-23. Such state-
ments were plainly designed to inflame the emotions of the predominantly African-American jury.
Second, Baymon’s counsel referred repeatedly to the fact that GMAC is a large, non-Mississippi
corporation, virtually inviting the jury to reach into a far-off deep pocket to reward a fellow citizen. For
example, he told the jury that the courtroom was “the only place in the country where the little man has an
even chance against a powerful corporation” (Tr. 901:17-19) and stated that, if the jury awarded Baymon
“less than a substantial multi-million dollar verdict, they’re going to be popping champagne corks in Detroit
or Dearborn at the country club, wherever their board meets tonight” (Tr. 969:3-7). Such incitement to
prejudice against corporate defendants was clearly improper. See Pou, 204 So. 2d at 157; see also Hon-
da Motor Co. v. Oberg, 512 U.S. 415, 432 (1994) (expressing concern about juries “us[ing] their verdicts
to express biases against big businesses, particularly those without strong local presences”).
These improper appeals to emotion, bias and prejudice obviously had the intended effect of
distorting the deliberations on punitive damages. Where a verdict is the product of passion, prejudice, or
bias, the defendant is entitled to a new trial. Minneapolis, St. P. & S. Ste. M. Ry. v. Moquin, 283 U.S.
520, 521-22 (1931); accord Auster Oil, 835 F.2d at 603 (finding passion and prejudice and ordering a
new trial in case in which trial court had ordered a $5 million punitive exaction reduced to $650,000); Wells
v. Dallas Indep. Sch. Dist., 793 F.2d 679, 683-84 (5th Cir. 1986) (finding passion and prejudice and
ordering a new trial in case in which trial court had ordered a $1.9 million compensatory award reduced
to $250,000).
c. Baymon no doubt will attempt to justify the $5 million punishment on the basis of GMAC’s
substantial net worth. Indeed, at trial she argued to the jury that a huge punitive damage award was
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justified because GMAC had an annual net income of $1.2 billion and assets of $92 billion. Tr. 969:19-
23. But it is clear as a matter of both Mississippi law and federal constitutional law that GMAC’s finances
may not be used to salvage an otherwise excessive punishment.
Although a defendant’s “pecuniary ability and financial worth” is a factor to consider in evaluating
a punitive damage award under Mississippi law (Mooneyhan, 684 So. 2d at 585), this Court long ago
made clear that the wealth of the defendant “is not the sole factor which is to be considered” in setting a
punitive award. Allen v. Ritter, 235 So. 2d 253, 256 (Miss. 1970). Consistent with this principle, the
Court has on a number of occasions found punitive awards to be excessive despite the fact that the awards
have been a small fraction of the defendant’s net assets. See Mooneyhan, 684 So. 2d at 586-87
(remanding punitive damages award of $1,000,000 for new trial even though award constituted only 1.67%
of defendant’s net assets); Wesson, 517 So. 2d at 533 & n.4 (reducing punitive damages award from $8
million to $1.5 million although the defendant’s net assets totaled $8 billion); Montgomery Ward & Co.
v. Skinner, 200 Miss. 44, 25 So. 2d 572, 581 (1946) (en banc) (reducing combined
compensatory/punitive award from $11,250 to $7,500 against defendant corporation with assets of over
$261 million).
A defendant’s financial condition, moreover, cannot, consistent with the Due Process Clause, be
used to justify a punitive award that is excessive under the factors outlined by the Supreme Court in BMW.
Although BMW did not expressly condemn the use of a corporate defendant’s wealth to support a sizable
award, the Supreme Court, by setting aside the punitive damages as excessive, implicitly rejected the
plaintiff’s argument that the $2 million punishment could be upheld because a penalty of that size would not
have had a substantial impact on BMW’s financial position. See Brief for the Respondent at 39 & n.49,
BMW of North Am. Inc. v. Gore, 517 U.S. 559 (1996). Moreover, corporate wealth bears no
discernible relationship to any of the three guideposts for evaluating a punitive award that the Court did
identify. Furthermore, the use of wealth to justify a penalty that is otherwise excessive is inconsistent with
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the principle that the defendant is entitled to “fair notice * * * of the severity of the penalty that a State may
impose.” BMW, 517 U.S. at 574. Indeed, as the Court emphasized in BMW, the “fact that BMW is a large
corporation rather than an impecunious individual” not only could not justify the $2 million punitive award
in that case, but actually served to further implicate “the federal interest in preventing individual States from
imposing undue burdens on interstate commerce.” Id. at 585 Like considerations apply here. 12/
CONCLUSION
For the foregoing reasons, the Court should reverse the judgment and render judgment in favor of
GMAC. If the Court determines that Baymon’s causes of action and claim for punitive damages are legally
and factually tenable, it nonetheless should order a new trial because of the erroneous admission of
improper evidence and expert testimony, the plaintiff’s injection into the case of inflammatory racial issues,
and the severely flawed jury instructions. At a minimum, because the outrageous compensatory and
punitive damages awards are grossly excessive and violate both Mississippi law and the Due Process
Clause, the Court should order a new trial on damages or order a drastic remittitur.
12/
The BMW Court’s refusal to allow large punitive damages based solely on a defendant’s net worth confirms earlier
statements of the Court expressing strong reservations about using a corporate defendant’s net worth to measure
punishment. See Honda, 512 U.S. at 432 (“the presentation of evidence of a defendant’s net worth creates the potential
that juries will use their verdicts to express biases against big businesses * * *”); TXO Prod. Corp. v. Alliance Resources
Corp., 509 U.S. 443, 464 (1993) (plurality op.) (agreeing with petitioner that “emphasis on the wealth of the wrongdoer
increased the risk that the award may have been influenced by prejudice against large corporations, a risk that is of
special concern when the defendant is a nonresident”). Since BMW was decided, many courts have explicitly recognized
that the decision forbids the use of financial condition to justify an award that is excessive under the three BMW
guideposts. See, e.g., BMW v. Gore, 701 So. 2d 507, 514 (Ala. 1997) (“where a defendant has not committed an act that
would warrant a large punitive damages award, such an award should not be upheld upon judicial review merely because
the defendant has the ability to pay it”); Leab v. Cincinnati Ins. Co., 1997 WL 360903, at *16 (E.D. Pa. June 26, 1997)
(“Contrary to [plaintiff’s] assertions, the wealth of a defendant is not, by itself, sufficient justification for the imposition
of a large punitive damages award”); Creative Demos, 955 F. Supp. at 1044 (“The Supreme Court has consistently stated
that the fact that a defendant is a large corporation with deep pockets cannot serve to justify an otherwise excessive
punitive damages award”); Florez, 939 F. Supp at 1345 (BMW decision “appears to disfavor consideration of the
defendant’s financial worth and condition in deciding on what level of punitive damages to award”); Pivot Point Int’l v.
Charlene Prods., Inc., 932 F. Supp. 220, 223 (N.D. Ill. 1996) (observing that “the Supreme Court did not treat the defendant’s
wealth as relevant” and that basing punitive damages on income and assets “calls into question that courts’ commitment
to do equal justice to the rich and the poor”); Utah Foam Prods. Co. v. Upjohn Co., 930 F. Supp. at 531 (“Manifestly, wealth
alone does not justify imposition of a disproportionately large punitive damage award”).
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- 51 -
Respectfully submitted,
_________________________ ____________________________
ANDREW L. FREY JESS H. DICKINSON
EVAN M. TAGER MS Bar No. 6120
MIRIAM R. NEMETZ Page, Mannino, Peresich,
Mayer, Brown & Platt Dickinson & McDermott, P.L.L.C.
2000 Pennsylvania Avenue, N.W. 2301 - 14th Street, Suite 800
Washington, D.C. 20006 Gulfport, Mississippi 39501
(202) 463-2000 (601) 863-8861
May 12, 1998
Attorneys for Appellant
General Motors Acceptance Corporation