Torts. The terms “punitive damages” and “exemplary damages” refer to damages that a jury or court may award to a plaintiff not to compensate that plaintiff for his loss, but to punish the defendant for his aggravated misconduct and to deter others from engaging in similar misconduct.
In determining whether to award punitive damages, courts/juries consider defendant’s mental state to determine whether the defendant’s conduct at issue was “malicious,” “oppressive,” “wanton,” “willful,” and “fraudulent.”
- The term “malice” in the context of punitive damages generally means that a defendant acted with the intent to cause injury or that a defendant’s conduct was despicable and was done with a willful and knowing disregard of the rights or safety of another. A defendant acts with knowing disregard when the defendant is aware of probable dangerous consequences of his conduct and deliberately fails to avoid those consequences.
- “Oppression” means that defendant’s conduct was despicable and subjected plaintiff to cruel and unjust hardship in knowing disregard of his rights.
- “Despicable conduct” means conduct that is so vile, base, or contemptible that it would be looked down on and despised by reasonable people.
- “Fraud” means that defendant intentionally misrepresented or concealed a material fact and did so intending to harm plaintiff.
Courts/juries also generally consdier defendant’s financial condition in determining the amount of the puntive damages. (See College Hospital Inc. v. Superior Court, 8 Cal.4th 704 (1994) [“Punitive damages are to e assessed in an amount which, depending upon defendant’s financial worth and other factors, will deter him and others from committing similar misdeeds. Because compensatory damages are designed to make the plaintiff ‘whole,’ punitive damages are a ‘windfall’ form of recovery.”]; Bertero v. National General Corp., 13 Cal.3d 43 (1974) [“It follows that the wealthier the wrongdoing defendant, the larger the award of exemplary damages need be in order to accomplish the statutory objective.”].)
Most courts follow the rule that punitive damages should be awarded only where there also is an award for compensatory or nominal damages.
- Pacific Mutual Life Ins. Co. v. Haslip, 449 U.S. 1 (1991) (the United States Supreme Court holding that punitive damages do not violate the Due Process Clause of the Fourteenth Amendment if imposed reasonably and with adequate guidance from the court)
- Honda Motor Co. v. Oberg, 512 U.S. 415 (1994) (holding that a state law precluding judicial review of punitive damage awards for excessiveness violated the Due Process Clause of the Fourteenth Amendment)
- Neal v. Farmers Ins. Exchange, 21 Cal.3d 910 (1978) (“The purpose of punitive damages is to punish wrongdoers and thereby deter the commission of wrongful acts.”)
- Myers Bldg. Ind. v. Interface Tech, 13 Cal. App. 4th 949 (1993) (“An award of punitive damages is not supported by a verdict based on breach of contract, even where the defendant’s conduct in breaching the contract was wilful, fraudulent, or malicious. Even in those cases in which a separate tort action is alleged, if there is ‘but one verdict based upon contract’ a punitive damage award is improper.”)
- Brewer v. Second Baptist Church of Los Angeles, 32 Cal.2d 791 (1948) (“A plaintiff, upon establishing his case, is always entitled of right to compensatory damages. But even after establishing a case where punitive damages are permissible, he is never entitled to them. The granting or withholding of the award of punitive damages is wholly within the control of the jury, and may not legally be influenced by any direction of the court that in any case a plaintiff is entitled to them. Upon the clearest proof of malice in fact, it is still the exclusive province of the jury to say whether or not punitive damages shall be awarded. A plaintiff is entitled to such damages only after the jury, in the exercise of its untrammeled discretion, has made the award.”)
California Civil Code § 3294
(a) In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.
(b) An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.
(c) As used in this section, the following definitions shall apply:
(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.
(2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.
(3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.
(d) Damages may be recovered pursuant to this section in an action pursuant to Chapter 4 (commencing with Section 377.10) of Title 3 of Part 2 of the Code of Civil Procedure based upon a death which resulted from a homicide for which the defendant has been convicted of a felony, whether or not the decedent died instantly or survived the fatal injury for some period of time. The procedures for joinder and consolidation contained in Section 377.62 of the Code of Civil Procedure shall apply to prevent multiple recoveries of punitive or exemplary damages based upon the same wrongful act.