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Punitive Damages Don’t Apply to Negligence, Right? WRONG!!!

Just as in life there is “stupid” and there is “really stupid,” so too does the law recognize different degrees of negligence. Those different degrees of negligence bring with them avenues to seek different forms of damages. Any attorney or claims representative believing a cause of action for negligence cannot support punitive damages risks falling into the “really stupid” category. Let’s take a look at what is mere negligence and what is negligence giving rise to punitive damages.

It is a common misconception punitive damages can only be claimed or awarded where a defendant intentionally harmed the plaintiff. Depending on the extent of the defendant’s actions or omissions, punitive damages may nevertheless lie even absent intent to harm.

A run-of-the-mill negligence claim generally alleges the defendant was simply careless, and such failure to exercise due care caused the harm complained of by the plaintiff. In such a scenario, punitive damages would be inappropriate because the defendant’s actions do not amount to malice, oppression or fraud. Civil Code § 3294(c). Indeed, punitive damages are not even appropriate in cases where the defendant was grossly negligent or otherwise exhibited reckless conduct. Lackner v. North (2006) 135 Cal.App.4th 1188, 1210-11.

Absent intent to harm, negligent conduct nevertheless gives rise to punitive damages when it amounts to “despicable conduct” done with a “willful and conscious disregard” of the safety of others. Civil Code § 3294(c)(1). But what is the difference between “malicious” and “despicable” conduct? Unfortunately, the Code doesn’t say, so we look to the courts.

Case law reasons “despicable” refers to circumstances that are base, vile and contemptible, with a “character of outrage frequently associated with crime.” College Hosp., Inc. v. Sup. Ct. (Crowell) 8 Cal.4th 704, 725; American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton (2002) 96 Cal.App.4th 1017, 1050. Indeed, jury instructions mirror case law on this point stating “despicable conduct” is that which is “so mean, vile, base, or contemptible that it would be looked down on and despised by reasonable people.” CACI 3940, 3941.

Despicable conduct is not enough for punitive damages, as the defendant must also be aware of the probable dangerous consequences of its actions while deliberately failing to avoid the consequences. Mock v. Michigan Millers Mut. Ins. Co. (1992) 4 Cal.App.4th 306, 328-29. The plaintiff must show by clear and convincing evidence the defendant’s conduct was sufficiently “wanton and willful” that harm to others was a virtual certainty. Taylor v. Sup. Ct. (Stille) (1979) 24 Cal.3d 890, 895-96. Whether the defendant’s awareness is to be determined on a subjective or reasonable person standard is undecided due to inconsistent opinions from the Supreme Court on the issue and a wide range of interpretation on the appellate level. See, Peterson v. Sup. Ct. (Thompson) (1982) 31 Cal.3d 147, 158-159; and Taylor, supra. at 894-95.

While the guidance from our courts and legislature for navigating punitive damages claims on theories of negligence is far from clear and highly fact-dependent, it is a mistake to believe your client or insured is insulated from getting hit with a big punitive damages award simply because the complaint says “negligence.” Defense counsel should be guarded accordingly.

ABOUT THE AUTHOR: Mr. Fallon specializes in civil litigation in the areas of professional liability. He has significant experience executing litigation strategies to the benefit of his individual and corporate clients. Contact Dan at 858.263.4132 or dfallon@tysonmendes.com

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