This unpublished opinion from the California Court of Appeal (Second Appellate District, Division Eight) affirms $500,000 in punitive damages. The defendant apparently didn’t challenge the amount of the award, and argued only that the evidence was insufficient to support a finding of malice, oppression, or fraud. The court easily disposed of that argument, concluding that the evidence of the defendants’ participation in human trafficking and false imprisonment was sufficient to warrant punitive damages.
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Uzyel v. Kadisha: An increase in compensatory damages does not entitle plaintiffs to a new trial on punitive damages
This published opinion holds that a plaintiff cannot take advantage of a procedural rule adopted for the benefit of defendants.We have previously blogged about California’s rule that, when a defendant gets hit with both compensatory damages and punitive damages, and a court later reduces the compensatory damages, the defendant is entitled to a reduction of the punitive damages (or possibly a retrial on punitive damages, depending on the reason why the compensatory damages were reduced). That’s the general rule, although we have seen some inconsistent decisions in this area. The rationale behind the rule is to ensure that the punitive damages bear a reasonable relationship to the reduced compensatory damages award.In this opinion from the Second Appellate District, Division Five Three, the court holds that when a trial court or appellate court increases the compensatory damages, the plaintiff is not entitled to a proportionate increase in punitive damages, nor to a retrial on punitive damages to try for a larger amount.Full disclosure: Horvitz & Levy represents the defendant on appeal in this case. -
Mack Film Development v. Johnson: Defendant Waived Right to Challenge $1.75 Million Punitive Damages Award By Failing to Comply With Court Order
The defendants in this unpublished opinion asked the California Court of Appeal to reverse a $1.75 million punitive damages award on the ground that the plaintiff had failed to introduce meaningful evidence of the defendants’ financial condition. The Second Appellate District, Division Five, wasn’t buying it.
The court put the blame on the defendant for failing to respond to a valid court order to produce its financial information after the jury found that the defendant had acted with malice. Citing Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, the Court of Appeal concluded that the defendant waived its right to complain that the award was not supported by financial condition evidence:
Johnson was not entitled to escape punitive damages by the simple expedient of refusing to produce financial information needed to fix such an award, as doing so would have allowed him to flout a court order with impunity and undermine the legal process. In view of Johnson’s failure to produce evidence of his financial condition, he may not complain the amount of punitive damages is excessive.
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Cutler v. Dike: Small Punitive Damages Awards Affirmed, Court not Persuaded by “Self-Serving” Testimony that Defendants Had Negative Net Worth
We have blogged quite a bit about the frequency with which California Court of Appeal reverses punitive damages awards on the ground that the plaintiff failed to introduce meaningful evidence of the defendant’s financial condition. But here’s an unpublished opinion from the Second Appellate District, Division Five, rejecting a challenge to a punitive damages award on that basis.
The plaintiff here presented audited financial statements showing that the two defendants had net worths of $3.6 million and $246,000 shortly before trial. The Court of Appeal said that evidence was more than enough to support punitive damages awards of $2,500 and $5,000 against the two defendants, nothwithstanding the “self-serving” testimony by the defendants’ CEO that the defendants had a negative net worth at the time of trial.
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Vidrio v. Hernandez: No Special Scrutiny of Default Judgments That Include Punitive Damages
I wonder why this opinion wasn’t published.
In Vidrio v. Hernandez, the California Court of Appeal (First Appellate District, Division Five) expressly disagreed with Nicholson v. Rose (1980) 106 Cal.App.3d 457. Nicholson included some broad language stating that courts should give special scrutiny to default judgments in which punitive damages are awarded. But the unpublished opinion in Vidrio says: “We find no support for the broad statement in Nicholson that appellate review of default judgments is any more or less stringent where punitive damages are awarded.” That sort of disagreement is usually enough to warrant publication.
Perhaps the court decided not to publish its opinion because the court found that it lacked jurisdiction to directly review the punitive damages award. Jurisdiction was lacking because the defendant appealed only from an order denying his motion to vacate the default judgment and did not appeal from the judgment itself. Thus, the criticism of Nicholson appears to be dictum. Still, publication of the opinion would have provided some guidance to future litigants.
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Citizens of Humanity v. Caitac Intern., Inc.: $1.5M Punitive Damages Award Affirmed
In this unpublished opinion, the California Court of Appeal (Second Appellate District, Division Two) affirms a $1.5 million punitive damages award without much discussion.
The court says that the appellant’s counsel waived a challenge to the evidence supporting the punitive damages award because the argument was asserted “perfunctorily asserted in two sentences in Caitac’s opening brief.” The court goes on to say that, even if the appellant had not waived the argument, the court would have upheld the punitive damages award because there was sufficient evidence that the defendant acted with conscious disregard of the plaintiff’s rights.
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Belk v. Electra Cruises: Court of Appeal Affirms Trial Court’s Reduction of Punitive Damages to 1 to 1 Ratio
Both the defendant and the plaintiff lose in this unpublished opinion.
The plaintiff prevailed at trial on a wrongful termination claim and won $80,000 in compensatory damages and $225,000 in punitive damages. The trial court reduced the punitive damages to $80,000 (a 1 to 1 ratio). Both sides appealed. The plaintiff sought reinstatement of the jury’s award, and the defendant argued that the $80,000 was still excessive.
The Court of Appeal (Fourth Appellate District, Division Three) rejected both appeals and affirmed the $80,000 punitive damages award. Even though both parties lost their respective appeals, the court apparently viewed the plaintiff as the prevailing party on appeal, because the court awarded the plaintiff her costs on appeal.
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Rambeau v. Barker: Punitive Damages Vacated Due to Defendant’s Negative Net Worth
In this unpublished opinion, the Court of Appeal (Fourth Appellate District, Division Three) vacated a $100,000 punitive damages award because the defendant had a negative net worth.
The opinion recites the evidence regarding the defendant’s financial condition in some detail and concludes that, although the defendant owned multiple properties, he had a negative net worth at the time of trial because of his significant debt. Quoting the Supreme Court’s statement that the purpose of punitive damages “is to deter, not to destroy” (Adams v. Murakami (1991) 54 Cal.3d 105, 112), the court ordered the punitive damages award stricken from the judgment.
Contrast this opinion with Zaxis Wireless Communications, Inc. v. Motor Sound Corp. (2001) 89 Cal.App.4th 577, 582-583, which upheld a $300,000 punitive damages award against a defendant with a negative net worth.
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Unzipped Apparel v. Sweet Sportswear: $5M Punitive Damages Award Affirmed
This is a very long unpublished opinion, only a small portion of which relates to punitive damages.
In a nutshell, the jury awarded $30 million in compensatory damages against one of the defendants, Guez, who succeeded in knocking out $3.8 million of that award on appeal. Despite the reduction of the compensatory damages, the Court of Appeal (Second Appellate District, Division Seven) declined to order a reduction of the punitive damages. Instead, the court examined the amount of the punitive damages award under state law (because the defendant did not challenge the amount of the award on federal due process grounds) and concluded that the award was not excessive.
It’s not all that surprising that the court affirmed the amount of this punitive damages award, since the compensatory damages, even as reduced, were still much larger than the punitive damages. But it’s interesting that the court did not discuss the case law stating that a reduction in compensatory damages necessarily requires a reduction of the punitive damages award, or at least a new trial on punitive damages. As we have noted before, California courts have taken conflicting positions on this issue. Neither line of authorities is discussed in this opinion.
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Singh v. Southland Stone: $350,000 Punitive Damages Award Reversed
In this published opinion, the California Court of Appeal (Second Appellate District, Division Three) reversed a $350,000 punitive damages award because the jury’s factual findings were fundamentally inconsistent.
The plaintiff alleged that the defendant, his former employer, made intentional misrepresentations in order to lure him to to the U.S. to work. In a confusing a contradictory verdict, the jury found that the defendant did not make the alleged misrepresentations, but also found that the defendant acted with malice, oppression, or fraud (the prerequisites for punitive damages under Civil Code section 3294). The Court of Appeal concluded that those findings were fundamentally inconsistent, requiring a new trial.