No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

of others.” Id. at 415-16. Violation of ICFA alone does not warrant punitive damages. See
Malooley, 251 Ill.App.3d at 57-58 (punitive damages inappropriate even though defendant
violated ICFA). Rather, punitive damages are proper “only if the defendant’s misconduct
is above and beyond the conduct needed for the basis of the action.” Parsons v. Winter, 142
Ill.App.3d 354, 361 (1st Dist. 1986). Courts routinely set aside punitive awards when the
defendant’s conduct, though tortious, was not sufficiently egregious to warrant punishment.
See, e.g., Loitz, 138 Ill.2d at 427; Kopczick v. Hobart Corp., 308 Ill.App.3d 967, 974-78 (3d
Dist. 1999); Malooley, 251 Ill.App.3d at 57-58; Overbey v. Illinois Farmers Ins. Co., 170
Ill.App.3d 594, 605 (2d Dist. 1988). As with liability for the underlying tort, plaintiffs must
prove liability for punitive damages with clear and convincing evidence, see Grissom, 150
Ill.App.3d at 65, a standard the circuit court ignored.
The circuit court made no findings about motive, nor is there any evidence in the
record — much less clear and convincing evidence — that State Farm acted with an “evil
motive” or “reckless indifference” to the rights of its policyholders. Loitz, 138 Ill.2d at 415-
16. The most common motive that punitive damages are designed to punish and deter —
greed — is obviously absent here, because State Farm passes on “profits” to policyholders
in the form of lower premiums and dividends. State Farm’s use of non-OEM parts resulted
in direct cost savings to policyholders of over $360 million during 1987-1997; policyholders
saved hundreds of millions more during that period because of the enhanced competition
between non-OEM and OEM parts that State Farm helped foster. Id. Thus, the people that
plaintiffs accuse State Farm of defrauding were the same people State Farm intended to
benefit. The circuit court obviously disagreed with State Farm’s view that policyholders in
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