We report on every California punitive damages decision, published or unpublished, but sometimes there isn’t much to say. In this unpublished opinion, the California Court of Appeal (Fourth Appellate District, Division One) affirms a trial court’s decision to strike a plaintiff’s claim for punitive damages on the ground that the facts alleged in the complaint, even if true, could not support a finding of malice, fraud, or oppression. Yawn.

In this unpublished opinion, the California Court of Appeal (Second Appellate District, Division 8) corrects an obvious error by the trial court.

The case involves Civil Code section 3295, which gives defendants the right to request a bifurcated trial on punitive damages. If a defendant invokes its rights under section 3295, the trial court must bifurcate the trial so that the jury does not hear any evidence of the defendant’s financial condition (or any other evidence relating to the amount of punitive damages), until the trier of fact has already ruled in the plaintiff’s favor on liability and ruled that the defendant acted with malice, oppression, or fraud, the prerequisites for awarding punitive damages under Civil Code section 3294.

The defendant in this case requested bifurcation under section 3295. The first phase went forward and the trial court, acting as the trier of fact, ruled in favor of the plaintiff on liability and found that the defendant had acted with malice, oppression, or fraud. But the court concluded that the plaintiff waived his right to punitive damages by failing to introduce evidence of the defendant’s financial condition during the first phase.

I can’t figure out what the trial court could have been thinking. Under section 3295, the plaintiff was prohibited from presenting any evidence of the defendant’s financial condition during the first phase of trial. Clearly the plaintiff did not waive any rights by complying with the plain language of the statute. That’s exactly what the Court of Appeal said, and reversed the case for a limited retrial on the punitive damages. (See our prior discussion of problems associated with limited retrials on punitive damages.)

Nothing earth-shattering here. The California Court of Appeal (Second District, Division Four) concludes in an unpublished opinion that a $142,500 punitive damages is not excessive in relation to a $57,000 compensatory damages award (ratio of 2.5 to one).

In this unpublished opinion, the California Court of Appeal (Second Appellate District, Division Five) affirms a punitive damages award of $1.3 million in an action for breach of contract and fraud arising out of a dispute between the co-owners of a real estate development corporation. The compensatory damages were nearly $13 million.

The defendant argued on appeal that the punitive damages award was procedurally improper because the trial court conducted a bifurcated trial even though the defendant had not requested bifurcation. The Court of Appeal concluded that the defendant had waived the argument because at one point he had filed a trial brief requesting bifurcation.

In this published opinion, the California Court of Appeal (Second Appellate District, Division Two) holds that a punitive damages award of $1.7 million is excessive and must be reduced to $500,000.

The jury in this insurance bad faith case originally awarded $170,000 in compensatory damages, plus $3 million in punitive damages, for a 17.6-to-1 ratio. After the verdict, the trial court awarded $346,541.25 in attorney’s fees as additional damages under Brandt v. Superior Court (1985) 37 Cal.3d 813. The trial court also concluded, however, that the jury’s punitive damages award was excessive and should be reduced to $1.7 million, ten times the jury’s compensatory damages award.

The Court of Appeal concluded that the trial court’s reduced award was still excessive. First, the court noted that the defendant’s conduct, which involved no physical harm or disregard for health and safety, implicated only one of the five “reprehensibility factors” identified by the U.S. Supreme Court in State Farm v. Campbell. The court held that the defendant could not be treated as a repeat offender merely because its conduct in this case involved a course of dealing with the plaintiff, rather than a single isolated incident; the court observed that the case involved only one insured and one claim, without any evidence that the defendant had engaged in similar conduct towards other insureds in the past.

Next, the court addressed the ratio of the punitive damages award to the compensatory damages award, and concluded that the defendant’s conduct could not support a 10-to-1 ratio. The court rejected the plaintiff’s invitation to add the trial court’s Brandt fee award to the jury’s compensatory damages award, which would yield a 3.2-to-1 ratio. The court said that the Brandt fees could not be considered for ratio purposes because they were awarded after the jury’s verdict.

Having concluded that a 10-to-1 ratio was too high, the court then turned to the question of what the maximum ratio should be. Although the court discussed the U.S. Supreme Court’s Exxon Shipping opinion and other recent decisions imposing a 1-to-1 ratio (including the California Supreme Court’s recent decision in Roby v. McKesson), the court ultimately decided upon a 3.8-to-1 ratio, which results in an award of $500,000. The court picked that figure not just because it’s a nice round number, but because defense counsel had suggested during closing argument that the jury could award as much as $500,000. The court didn’t assign any evidentiary value to counsel’s argument, and did not find estoppel based on that argument, but the court said it independently agreed that $500,000 was the appropriate ceiling.

Full disclosure: Horvitz & Levy LLP represented the defendant on appeal.