Lemmie L. Ruffin, Jr. was an Alabama licensed agent for Pacific Mutual Life Insurance and for Union Fidelity Life Insurance Company. Union wrote group health insurance policies for municipalities. While Pacific did not Plaintiffs Cleopatra Hashp, Cynthia Craig, Alma M. Calhoun and Eddie Hargrove were employees of Roosevelt City, Alabama Ruffin gave the city a single proposal for health and life insurance for its employees, which the city approved. Both companies provided the coverage. However, Union provided the health insurance and Pacific provided the life insurance. This packaging of coverage by two different and unrelated insurers was not unusual. Union would send its billings for health premiums to Ruffin at Pacific Mutual's office. The city clerk each month issued a check for those premiums and sent it to Ruffin. Ruffin however, did not remit to Union the premium payments he received from the city; instead, he misappropriated most of them. When Union did not receive payment from the city, it sent notices of lapsed health coverage to the plaintiffs, who did not know that their health polktes had been canceled. Plaintiff Haslip was subsequently hospitalized and because the hospital could not confirm her health coverage, it required her to make a partial payment on her bill her physician. When he was not paid plated her account with a collection agency, which obtained against Kulp a Judgment that damaged her credit. Plaintiffs sued Pacific Mutual and Ruffin for fraud. The case was submitted to a jury, which was instructed that if Art found liability for fraud, it could award punitive damages. The Jury returned verdicts for the plaintiffs and awarded $1,040,000 of which at least $840,000 was punitive damages. The Supreme Court of Alabama affirmed the trial court's judgment Pacific Mutual appealed. Decision,