Often you can tell how a case is going to turn out when you read the  summary of the facts.  That’s certainly true in this case involving claims against a landlord for negligent failure to provide habitable premises.  Here’s how the court describes the condition of the defendant’s apartment building in this published opinion:

     Only two units in the [12-unit] Building had kitchens, and there were only two community rest rooms. There was evidence that human waste had been thrown out of the Building and had collected on the back. There were openings that permitted rodents and vermin to enter. Steps to the Building were infected with dry rot and were close to collapsing. The Building contained illegal electrical work. An inspection by Plaintiffs’ expert revealed dead and live cockroaches throughout the Building and dirty bathrooms.

        As discussed further below, each of the Plaintiffs testified about his or her experiences in the building, which included cockroaches, bed bugs and other vermin; mold; and filthy conditions in common areas. Tenants were forced to wash their dishes outside the Building. There were several months when the Building had no power or water and residents had to purchase buckets of water from Myllyla’s daughter. One tenant had a cockroach removed from her ear.

After reading that summary, you’re probably not surprised to learn that the court affirmed the award of punitive damages against the landlord (the jury awarded $95,000 in punitive damages to each of the nine plaintiffs).

The defendant’s main argument on appeal was that the plaintiff failed to present any evidence of the defendant’s financial condition.  As our readers know, that argument often succeeds because many California plaintiffs apparently don’t realize it is their burden to present such evidence.  In this case, however, the plaintiffs attempted to obtain financial information from the defendant, who stonewalled their efforts.

The plaintiffs served two notices on the defendant pursuant to Code of Civil Procedure section 1987, which provides a procedure to compel a party to attend trial and produce documents at trial.  Notices under section 1987 have the same effect as service of a subpoena. The notices in this case asked the defendant to appear at trial to testify about his financial condition, and to produce documents relating to his financial condition.

The defendant could have objected to the notices because they did not provide sufficient time to respond.  If the defendant had objected, he would have been excused from complying with the notices unless the plaintiffs moved to compel his compliance.  But instead of objecting, the defendant simply ignored the notices, refused to testify at trial, and refused to produce any financial documents.  As a result, the Court of Appeal (Second District, Division Two) holds that the defendant forfeited the right to complain about the lack of evidence of his finances.

The California Court of Appeal commonly reverses punitive damages awards when a plaintiff fails to present meaningful evidence of the defendant’s ability to pay.  This unpublished opinion falls into that category, but with an unusual wrinkle.

During trial, plaintiffs’ counsel made some effort tried to introduce evidence of the individual defendants’ finances, by asking them about their historic earnings.  The trial court sustained  relevance objections to those questions.  Plaintiffs’ counsel thereafter made no further efforts to introduce evidence of the defendants’ finances.

After the jury ruled for the plaintiffs and awarded punitive damages, the defendants moved to vacate the punitive damage award on the ground that the plaintiffs had failed to introduce any evidence of the defendants’ finances.  The trial court agreed the plaintiffs had presented no such evidence, but denied the defense motion because he blamed himself for the lack of evidence. 

The judge explained that he had sustained the defendants’ objections on two grounds: (1) the defendants’ earnings from fifteen years earlier were too remote in time to be relevant, and (2) the court mistakenly thought that the trial had been bifurcated so that financial condition would be presented only in the second phase of trial.

The court was correct on the first ground.  For punitive damages purposes, only the defendants’ finances at the time of trial are relevant.  But the court was wrong on the second ground.  The defendants had not asked for bifurcation. 

The trial court concluded that, because of his own confusion regarding bifurcation, the plaintiffs had not received a full and fair opportunity to present their case regarding the defendants’ financial condition.  So the court granted the plaintiffs a new trial on the issue of punitive damages
and denied the defendants’ motion for judgment notwithstanding the verdict.

The defendants appealed and the Fourth Appellate District, Division Three, reversed. It found that the trial court did nothing to prevent the plaintiffs from meeting their burden of presenting financial condition evidence.  The court correctly sustained objections to questions that did not seek current financial condition, and the matter never came up again.  Although the court may have believed that the trial was bifurcated, and based on that mistake the court would have sustained objections to other questions about financial condition, the court never explained that to plaintiffs’ counsel, who simply failed to ask any further questions on the issue. 

So in the end, the Court of Appeal concluded that the lack of evidence was the plaintiffs’ own fault.  The court reversed the order granting a new trial and directed the trial court to enter a new judgment in favor of the defendants on the issue of punitive damages.

The California Court of Appeal commonly reverses punitive damages awards when a plaintiff fails to present meaningful evidence of the defendant’s ability to pay.  This unpublished opinion falls into that category, but with an unusual wrinkle.

During trial, plaintiffs’ counsel made some effort tried to introduce evidence of the individual defendants’ finances, by asking them about their historic earnings.  The trial court sustained  relevance objections to those questions.  Plaintiffs’ counsel thereafter made no further efforts to introduce evidence of the defendants’ finances.

After the jury ruled for the plaintiffs and awarded punitive damages, the defendants moved to vacate the punitive damage award on the ground that the plaintiffs had failed to introduce any evidence of the defendants’ finances.  The trial court agreed the plaintiffs had presented no such evidence, but denied the defense motion because he blamed himself for the lack of evidence.

The judge explained that he had sustained the defendants’ objections on two grounds: (1) the defendants’ earnings from fifteen years earlier were too remote in time to be relevant, and (2) the court mistakenly thought that the trial had been bifurcated so that financial condition would be presented only in the second phase of trial.

The court was correct on the first ground.  For punitive damages purposes, only the defendants’ finances at the time of trial are relevant.  But the court was wrong on the second ground.  The defendants had not asked for bifurcation.

The trial court concluded that, because of his own confusion regarding bifurcation, the plaintiffs had not received a full and fair opportunity to present their case regarding the defendants’ financial condition.  So the court granted the plaintiffs a new trial on the issue of punitive damages
and denied the defendants’ motion for judgment notwithstanding the verdict.

The defendants appealed and the Fourth Appellate District, Division Three, reversed. It found that the trial court did nothing to prevent the plaintiffs from meeting their burden of presenting financial condition evidence.  The court correctly sustained objections to questions that did not seek current financial condition, and the matter never came up again.  Although the court may have believed that the trial was bifurcated, and based on that mistake the court would have sustained objections to other questions about financial condition, the court never explained that to plaintiffs’ counsel, who simply failed to ask any further questions on the issue.

So in the end, the Court of Appeal concluded that the lack of evidence was the plaintiffs’ own fault.  The court reversed the order granting a new trial and directed the trial court to enter a new judgment in favor of the defendants on the issue of punitive damages.

Back in February we reported on an unpublished decision that vacated $3.25 million in punitive damages because the plaintiff failed to present meaningful evidence of the defendants’ financial condition.

The Court of Appeal has now ordered that discussion published in the official reports.  See the order at the bottom of the court’s online docket. Other parts of the opinion remain unpublished.

Back in February we reported on an unpublished decision that vacated $3.25 million in punitive damages because the plaintiff failed to present meaningful evidence of the defendants’ financial condition.

The Court of Appeal has now ordered that discussion published in the official reports.  See the order at the bottom of the court’s online docket. Other parts of the opinion remain unpublished.

Here’s yet another unpublished opinion reversing a punitive damages award because the plaintiff failed to present meaningful evidence of the defendants’ financial condition.

This case involves breach of contract and fraud claims against two individuals who own companies involved in oil exploration in Russia.  The plaintiff entered into an agreement to invest in those companies, but later found out the defendants used the investment to pay off their debts.  The plaintiff won a jury verdict for $750,000 in compensatory damages, plus $2 million in punitive damages  against one defendant and $1.25 million in punitive damages against another defendant.

The Court of Appeal (Fourth District, Division Three) reversed both punitive damages awards because the plaintiff failed to present evidence of the defendants’ net worth.  The plaintiff had an expert witness who testified to the net worth of the defendants, but the Court of Appeal concluded that the expert’s opinions were not based on reliable information.  Although the expert purported to consider the defendants’ net worth, in reality he considered only their assets, without taking into account their liabilities.  The expert also relied on information from four years before trial, which failed to satisfy the plaintiff’s burden of proving the defendants’ net worth at the time of trial.

The court rejected the plaintiff’s attempt to blame the defendants for the lack of financial evidence.  The plaintiff never filed a motion under Code of Civil Procedure section 3295(c) for pretrial discovery of the defendant’s financial condition.  Nor did the plaintiff file any discovery requests in the second phase of trial, after the jury found that the defendants acted with malice, oppression, or fraud.  Thus, the plaintiff had only himself to blame for the lack of evidence on this issue.

The Court of Appeal reversed the punitive damages award without giving the plaintiffs a new trial on that issue.  That’s the correct result under California law, because a plaintiff who fails to present evidence is not entitled to a do-over.  But as we have seen, California courts sometimes overlook that rule (this court did a few years ago.)

Here’s yet another unpublished opinion reversing a punitive damages award because the plaintiff failed to present meaningful evidence of the defendants’ financial condition.

This case involves breach of contract and fraud claims against two individuals who own companies involved in oil exploration in Russia.  The plaintiff entered into an agreement to invest in those companies, but later found out the defendants used the investment to pay off their debts.  The plaintiff won a jury verdict for $750,000 in compensatory damages, plus $2 million in punitive damages  against one defendant and $1.25 million in punitive damages against another defendant.

The Court of Appeal (Fourth District, Division Three) reversed both punitive damages awards because the plaintiff failed to present evidence of the defendants’ net worth.  The plaintiff had an expert witness who testified to the net worth of the defendants, but the Court of Appeal concluded that the expert’s opinions were not based on reliable information.  Although the expert purported to consider the defendants’ net worth, in reality he considered only their assets, without taking into account their liabilities.  The expert also relied on information from four years before trial, which failed to satisfy the plaintiff’s burden of proving the defendants’ net worth at the time of trial.

The court rejected the plaintiff’s attempt to blame the defendants for the lack of financial evidence.  The plaintiff never filed a motion under Code of Civil Procedure section 3295(c) for pretrial discovery of the defendant’s financial condition.  Nor did the plaintiff file any discovery requests in the second phase of trial, after the jury found that the defendants acted with malice, oppression, or fraud.  Thus, the plaintiff had only himself to blame for the lack of evidence on this issue.

The Court of Appeal reversed the punitive damages award without giving the plaintiffs a new trial on that issue.  That’s the correct result under California law, because a plaintiff who fails to present evidence is not entitled to a do-over.  But as we have seen, California courts sometimes overlook that rule (this court did a few years ago.)

This unpublished opinion holds that a $1 million punitive damages award is excessive in light of the defendant’s financial condition.

A jury found the defendant liable for wrongful termination and awarded $500,000 in compensatory damages and $1 million in punitive damages.  The defendant appealed, arguing that the punitive damages award was excessive because it was disproportionate to the defendant’s ability to pay.

The Court of Appeal (Fourth District, Division Three) agreed.  The only evidence of the defendant’s financial condition showed an annual net income of $180,000 and a net worth of $86,000.  The Court of Appeal said the punitive damages award was “clearly excessive” because it represented five times the defendant’s annual net income and more then 10 times its net worth. The court explained that an award of one month of net income, or 10 percent of net worth, “would approximate the maximum award that would pass muster.”  Ten percent of net worth would be $8,600, and one month of net income would be $15,000, so the court averaged those two amounts and concluded that the maximum permissible award would be $11,800.

The Court of Appeal should have ended the proceedings by ordering the trial court to reduce the punitive damages to the maximum amount.  (See Simon v. San Paolo U.S. Holding Co.)  As some courts put it, the plaintiff should not get a “second bite at the apple” after having failed to present sufficient financial condition evidence to support the punitive damages award the first time around.  (See Kelly v. Haag.)  Here, however, the Court of Appeal did exactly that.  It let the plaintiff choose between a new trial or a reduction of the punitive damages to $11,800.

This unpublished opinion holds that a $1 million punitive damages award is excessive in light of the defendant’s financial condition.

A jury found the defendant liable for wrongful termination and awarded $500,000 in compensatory damages and $1 million in punitive damages.  The defendant appealed, arguing that the punitive damages award was excessive because it was disproportionate to the defendant’s ability to pay.

The Court of Appeal (Fourth District, Division Three) agreed.  The only evidence of the defendant’s financial condition showed an annual net income of $180,000 and a net worth of $86,000.  The Court of Appeal said the punitive damages award was “clearly excessive” because it represented five times the defendant’s annual net income and more then 10 times its net worth. The court explained that an award of one month of net income, or 10 percent of net worth, “would approximate the maximum award that would pass muster.”  Ten percent of net worth would be $8,600, and one month of net income would be $15,000, so the court averaged those two amounts and concluded that the maximum permissible award would be $11,800.

The Court of Appeal should have ended the proceedings by ordering the trial court to reduce the punitive damages to the maximum amount.  (See Simon v. San Paolo U.S. Holding Co.)  As some courts put it, the plaintiff should not get a “second bite at the apple” after having failed to present sufficient financial condition evidence to support the punitive damages award the first time around.  (See Kelly v. Haag.)  Here, however, the Court of Appeal did exactly that.  It let the plaintiff choose between a new trial or a reduction of the punitive damages to $11,800.