This unpublished opinion provides guidance about the evidentiary showing that a plaintiff must make when seeking punitive damages as part of a default judgment.
As often discussed on this blog, plaintiffs seeking punitive damages in California must present meaningful evidence of the defendant’s financial condition, so that the court can ensure that the amount of punitive damages is not disproportionate to the defendant’s ability to pay. In this case, the plaintiff obtained a judgment by default, including an award of punitive damages. To meet his burden of presenting evidence of the defendant’s financial condition, he submitted a declaration stating that the defendant owns revenue-generating websites, owns two Porsches, and lives in a house owned by his parents and therefore has no housing expenses. However, the plaintiff’s declaration did not explain how he knew any of these facts.
On appeal, the Court of Appeal (Fourth District, Division Three) struck the amount of punitive damages on the ground that the plaintiff’s declaration was not based on personal knowledge, as required by Code of Civil Procedure section 585, subdivision (d). Ordinarily, when a court reverses a punitive damages award due to insufficient evidence of the defendant’s financial condition, the court simply vacates the award and does not allow the plaintiff to try again. But in this case, because judgment was entered by default and the plaintiff did not have an opportunity to conduct discovery on the defendant’s financial condition, the court remanded the case to permit the plaintiff to conduct such discovery “should he chose to expend the fees necessary to acquire this information.”