BUTTS, Justice.
The Supreme Court of the United States has vacated our judgment in this case and has remanded the case for our further consideration in light of BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996).
In BMW, Dr. Ira Gore sued BMW of North America for damages for fraud, based upon BMW's failure to disclose that it had made presale repairs to an automobile it sold to him as new. The jury awarded Gore $4,000 in compensatory damages and $4 million in punitive damages; this Court reduced the punitive award to $2 million. See BMW of North America, Inc. v. Gore, 646 So.2d 619 (Ala. 1994). The Supreme Court determined that the $2 million punitive damages award was "grossly excessive," particularly in relation to the compensatory damages award, and violated the Due Process Clause of the Fourteenth Amendment. 517 U.S. at 575, 116 S.Ct. at 1599. The Supreme Court then remanded the BMW case, as well as this present case, for this Court to reconsider in each the punitive damages award.
I.
We begin with this statement of the pertinent facts, as they are set out in our original opinion in this case, Union Sec. Life Ins. Co. v. Crocker, 667 So.2d 688 (Ala. 1995):
"Union Security . . . sells credit life insurance through lending institutions nationwide, including [First Alabama Bank of Choctaw]. Various First Alabama loan officers are contractually authorized in this state to take applications for credit life insurance from their customers and to issue certifications of insurance for approved applications, showing that the coverage is in effect.
"Union Security requires that, for credit life policies issued in conjunction with First Alabama loans in excess of $10,000, the customer execute a 'Statement of Debtor's Physical Condition' before credit life coverage is issued. This health disclosure statement authorizes Union Security to receive any information related to the health . . . of the applicant, as long as this information is for the purpose of evaluating or underwriting the application for credit life coverage.
"The health disclosure statement has nine boxes to be checked 'yes' or 'no' in response to specific questions concerning the applicant's medical history. [Before it will issue coverage to an applicant, Union Security requires that all of these boxes be checked 'no,' indicating that the applicant has had no prior . . . illnesses [or poor health conditions]. . . . Union Security [reserves] the right to examine applicants' health records to determine 'after the fact' whether coverage should have been issued. Union Security does not issue a written policy to those applicants who are accepted for coverage.
"In October 1990, Union Security was selling credit life insurance in conjunction with loans made by First Alabama in Choctaw County, Alabama. Union Security authorized Sammy Taylor, a First Alabama branch manager in Choctaw County, as its agent to offer the coverage to loan applicants, and it paid him a commission of the premiums on the credit life policies that it issued pursuant to the applications he obtained.
"[Evelyn and Coleman Crocker] knew Taylor and contacted him at the bank to
inquire about obtaining a consolidation loan. Taylor advised Mrs. Crocker to pick up an application from the bank and complete it; [the Crockers] picked up one and then they met with Taylor. During this meeting, Taylor completed a separate health disclosure statement for each of the Crockers. He had premarked each of the nine health questions on the statements by checking the 'no' boxes, indicating that neither of the Crockers suffered from any past illnesses. Mr. Crocker, however, had been suffering from Parkinson's disease for some years and had also undergone serious heart surgery twice within the last 10 years. The Crockers signed the respective health disclosure statements that Taylor had prepared for them.
". . . .
". . . There was . . . evidence that Taylor and his wife had vacationed with the Crockers and that they had visited them in their home during the years that Mr. Crocker suffered from heart disease and Parkinson's disease. In spite of this, Taylor nevertheless indicated on the health disclosure statement that the Crockers were in good health and had no history of illness; doing so enabled him to issue the insurance policy on them and collect the commission from the policy for himself."
667 So.2d at 691-92.
Mr. Crocker died from heart disease in August 1991; Mrs. Crocker submitted a death certificate to Union Security and attempted to collect the credit life benefits. Union Security investigated the claim and denied coverage, based on Mr. Crocker's history of heart disease. Without her husband's income, and without the benefits of the coverage for which she had paid premiums, Mrs. Crocker was unable to pay off the balance on her First Alabama loan. On December 11, 1991, Taylor wrote Mrs. Crocker to inform her that, because of her default on the loan, First Alabama would foreclose the mortgage on her double-wide mobile home, which was the collateral for the loan. The foreclosure was to take place on December 20, 1991, five days before the first Christmas that Mrs. Crocker would spend as a widow. The foreclosure proceedings were halted only after Mrs. Crocker obtained legal counsel. Mrs. Crocker subsequently brought this fraud action against Union Security, Taylor, and First Alabama.
II.
With these facts in mind, we will now apply the three "guideposts" set out by the United States Supreme Court in BMW v. Gore, which are intended to gauge whether Union Security had received adequate notice that misconduct such as that committed in this case could lead to a $2 million punitive damages award.
A. The Reprehensibility of Union Security's Misconduct
"Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct." BMW, 517 U.S. at 575, 116 S.Ct. at 1599. Although the Supreme Court in BMW did not provide any particular yardstick by which to measure reprehensibility, it did acknowledge that " 'trickery and deceit' . . . are more reprehensible than negligence" and that acts of affirmative misconduct, such as making deliberate false statements, are more reprehensible that an innocent misrepresentation. 517 U.S. at 576, 116 S.Ct. at 1599. Likewise, this Court has stated that in determining the reprehensibility of a defendant's conduct the reviewing court may consider " '[the] duration of this conduct, the degree of the defendant's awareness of any hazard which his conduct has caused or is likely to cause, and any concealment or "cover up" of that hazard, and the existence and frequency of similar past conduct.' " Green Oil Co. v. Hornsby, 539 So.2d 218, 223 (Ala. 1989), quoting Aetna Life Ins. Co. v. Lavoie, 505 So.2d 1050, 1062 (Ala. 1987).
The evidence shows that the Crockers could not obtain the First Alabama loan they needed unless they also obtained credit life insurance from Union Security. Sammy Taylor, acting as Union Security's agent, knew that applicants for credit life insurance who revealed previous or existing health problems on the health disclosure statement contained in the application would not qualify for the coverage. There was evidence that Taylor was a friend of Mr. Crocker, that he and his wife had vacationed with the Crockers, and that they had visited the Crockers during the time that Mr. Crocker suffered from both Parkinson's disease and heart disease. There is evidence that Taylor knew that these health conditions existed when Mr. Crocker and his wife applied to him for credit life insurance in conjunction with this home equity loan. Taylor knew that he would receive a commission from the sale of credit life insurance to Mr. Crocker, even if a future claim for the benefits was denied.
With this knowledge, Taylor deliberately precompleted for the Crockers the health disclosure statement on the Crockers' application form, marking "No" beside questions that asked if Mr. Crocker suffered from heart disease or certain other illnesses. Taylor thus intentionally falsified information on the Crockers' life insurance application, to secure a fraudulent approval by Union Security. He did so knowing that the Crockers were relying on the coverage to pay off the loan and to prevent the foreclosure of their home mortgage in the event either of them died. He assured them they would receive coverage, and he collected his commission when they did, knowing that their benefits would be denied if his false representations on their applications were discovered after the fact.
Union Security issued insurance to Mr. Crocker without any meaningful knowledge of his medical history, and it collected premiums from him until he died on August 28, 1991. When Mrs. Crocker, newly widowed, submitted her claim for benefits under the policy, Union Security denied it, leaving her with no means to pay her debt to First Alabama. She was threatened with foreclosure of her home mortgage, only five days before the first Christmas that she would spend without her husband after 31 years of marriage.
Given these facts, we agree that the gravity of Union Security's misconduct is a factor that would support a considerable punitive damages award. However, we must also recognize that Union Security's misconduct appears to have been an isolated incident, rather than the result of a standard operating procedure. The evidence shows that in 1991 Union Security received 134 claims for payment on credit life insurance issued through First Alabama, and that Mrs. Crocker's claim was the only one it denied. In 1992, Union Security received 119 claims for payment and denied only two; both were denied because the insureds had committed suicide and the policies had suicide-exclusion clauses. In 1993, Union Security received 113 claims and denied only four of them. Thus, during the period 1991-1993, Union Security's denial rate on credit life claims was less than 1% and most of the denials were based upon an insured's having committed suicide. The evidence thus indicates that, while Union Security's misconduct in this case was highly reprehensible, it was also an aberration for the company.
B. The Ratio of Punitive Damages to Compensatory Damages
According to the United States Supreme Court in BMW, a second factor to be considered in determining whether an award of punitive damages is excessive is the ratio of punitive damages to the actual harm inflicted upon the plaintiff. Because the jury awarded general damages in this case, we cannot determine with certainty the ratio of punitive damages to compensatory damages. Certainly we do not consider the compensatory damages award to be based solely upon economic loss, as Justice See suggests in his dissent. Rather, we have thoroughly reviewed the compelling evidence of Mrs. Crocker's emotional and mental distress over Union Security's misconduct, as well as her economic loss, in determining the possible ratio of punitive damages to compensatory damages.
The evidence shows that Mrs. Crocker suffered as much as $16,222.61 in actual economic loss, representing not only the $1,659.61 that Mrs. Crocker and her husband paid for the credit life insurance, but also the $14,563 outstanding balance on the loan, which the insurance policy was to have paid. It is important to recognize that this economic injury was catastrophic for Mrs. Crocker in the wake of her husband's death; without his income to help make the loan payments to First Alabama, those benefits were all she had to keep from losing her home to foreclosure.
The United States Supreme Court in BMW held that an economic loss to the plaintiff in that case, a well-to-do medical doctor, did not support a large punitive damages award; however, the Supreme Court was careful to point out that economic injury inflicted upon the "financially vulnerable" is an entirely different concern and "can warrant a substantial penalty." 517 U.S. at 576, 116 S.Ct. at 1599. Where, as here, the economic harm could devastate its target, this is an especially serious consideration to be weighed against the amount of damages awarded. The Supreme Court also recognized in BMW that "[a] higher ratio [of punitive damages to compensatory damages] may . . . be justified in cases in which the injury is hard to detect or the monetary value of noneconomic harm [is] difficult to determine." 517 U.S. at 582, 116 S.Ct. at 1602.
Likewise, in the recent case of First Commercial Bank v. Spivey, 694 So.2d 1316 (Ala. 1997), this Court emphasized: "There is no fixed standard for ascertaining the amount of compensatory damages that may be awarded for emotional distress. The determination of how much to award is left to the sound discretion of the jury, subject only to review by the court for a clear abuse of that discretion." 694 So.2d at 1326. In Spivey, this Court upheld the jury's award of $1 million in damages, $500,000 of which was compensatory damages awarded largely on the basis of the plaintiff's evidence of mental and emotional distress arising from the defendant's fraudulent conduct that led to the foreclosure of the mortgage on the plaintiff's home.
Aside from the economic loss the evidence suggests, there is the unknowable amount of compensation the jury could have awarded to Mrs. Crocker based upon the emotional and mental toll the wrongful conduct took upon her; that conduct led to her fight over insurance and caused her to face the threat of losing her home in foreclosure proceedings only months after losing her husband. Based on this evidence, we cannot conclude that the possible ratio of punitive damages to compensatory damages in this case would indicate excessiveness.
C. Civil Penalties for Comparable Misconduct
A third factor we must consider in determining whether the punitive damages award was excessive is the relationship of the punitive damages award to the civil or criminal penalties that could be imposed for comparable misconduct. BMW, 517 U.S. at 583, 116 S.Ct. at 1603. In BMW, the Supreme Court questioned whether the Alabama Deceptive Trade Practices Act, which imposes a maximum penalty of $2,000 for a violation, was adequate to provide BMW with notice of the severity of the punishment that would result from its deceptive practice. 517 U.S. at 584, 116 S.Ct. at 1603. However, as this Court stated in its opinion upon remand in BMW of North America, Inc. v. Gore, 701 So.2d 507 (Ala. 1997) ( "BMW II"), the maximum statutory sanction against insurance fraud in this state is meager and, "[b]ecause the legislature has set the statutory penalty for deceitful conduct at such a low level, there is little basis for comparing it with any meaningful punitive damages award." 701 So.2d at 514.
III.
As we determined in BMW II, the United States Supreme Court's "due process" guideposts are not intended to exclude judicial consideration of the factors of review already established by this Court in Hammond v. City of Gadsden, 493 So.2d 1374 (Ala. 1986), and Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala. 1989). We will now reconsider those factors as they apply in this case.
A. Union Security's Profit from its Misconduct
In a Hammond-Green Oil review, we are required to determine whether, if the wrongful conduct was profitable to the defendant, the punitive damages award removes the profit and is in excess of the profit, so that the defendant recognizes a loss. Green Oil, 539 So.2d at 223. It is undisputed that Union Security and Taylor made a profit from the sale of credit life insurance to the Crockers. Taylor testified that he received an annual commission of $600-$800 from selling credit life insurance for Union Security through First Alabama. There was evidence that Union Security earned $67,019 from selling credit life insurance through First Alabama in 1991. Clearly, the punitive damages award removes this profit and so exceeds it that Union Security will recognize a significant loss.
B. Union Security's Financial Position
In determining whether the punitive damages award was excessive, we must next consider Union Security's financial position. In 1993, when the jury awarded the damages in this case, Union Security had a net worth of $24,340,000. Out of that sum, Union Security had an unassigned surplus of approximately $15,000,000, from which it would pay the punitive damages award. Thus, the $2 million in punitive damages would remove 8.2% of Union Security's net worth and 13% of its available surplus. As we stated in BMW II, if a punitive damages award exceeds 10% of the defendant's net worth, that fact might, under certain circumstances, indicate that the punitive damages award has gone beyond reasonable punishment and is excessive, BMW II, 701 So.2d at 514. The punitive damages award in this case is close to that range, and we agree that it would be excessive for misconduct that, while reprehensible, was isolated.
C. The Costs of Litigation
In a Green Oil review, the court should consider whether the punitive damages award was sufficient to reward the plaintiff's lawyer for assuming the risk of bringing the lawsuit and to encourage other victims of wrongdoing to come forward. In its Green Oil review of this case, the trial court determined that the plaintiff's attorneys had spent approximately $35,000 in prosecuting this claim. Although the plaintiff's attorneys have since incurred additional expenses in defending the verdict and the punitive damages award on appeal before this Court and before the United States Supreme Court, the $2 million award is well out of proportion to these expenses.
D. Criminal Sanctions
A Hammond-Green Oil review requires us to consider whether criminal sanctions have been imposed on Union Security for its conduct. There were no such sanctions.
E. Other Civil Actions
The record does not indicate that other civil actions have been filed based on the same misconduct by Union Security that is present in this case.
IV. Conclusion
We have carefully reconsidered this case in view of the United States Supreme Court's ruling in BMW v. Gore, and we have conducted a second Hammond-Green Oil review. We find that Union Security's misconduct was highly reprehensible and that it caused Mrs. Crocker mental and emotional distress, as well as serious economic harm. However, the evidence indicates that this misconduct was an aberration for Union Security and that the $2 million award would take away a considerable percentage of Union Security's net worth as punishment for it. Based upon all the factors of this review, and given the evidence, we conclude that the $2 million award was excessive and that an award of $1 million would be proper.
The trial court's judgment and its order denying Union Security's motion for a new trial are affirmed on the condition that the plaintiff file with this Court within 21 days a remittitur of damages in the amount of $1 million, thus reducing the award to $1 million; otherwise, the judgment will be reversed and the cause remanded for a new trial.
AFFIRMED CONDITIONALLY.
ALMON, SHORES, HOUSTON, KENNEDY, and COOK, JJ., concur.
HOOPER, C.J., and MADDOX and SEE, JJ., dissent.