May 16, 2008

In re Estate of Sheen: California Court of Appeal Holds Statutory Penalty is Not Subject to Rule Requiring Proof of Net Worth for Punitive Damages

npublished opinion (2008 WL 2059133), the Second District court of appeal reviewed a trial court's decision not to award statutory penalties under Probate Code section 859 where the plaintiff failed to produce evidence of net worth. Section 859 allows a court to award twice the amount of damages against a person who, in bad faith, wrongfully takes estate or trust property. The court of appeal reversed, holding that the California Supreme Court's Adams v. Murakami rule (plaintiffs must present evidence of the defendant's financial condition to preserve a claim for punitive damages) does not apply to statutory penalties:

"In cases of statutory penalties, with amounts or ranges legislatively fixed, the precondition of showing the defendant's financial condition (Adams v. Murakami (1991) 54 Cal.3d 105) does not apply - although the defendant may raise financial condition as a fact in mitigation of the penalty or its amount. (E.g., Rich v. Schwab (1998) 63 Cal.App.4th 803, 814-817.) The trial court here overlooked this distinction, or misconstrued petitioners' prayer for a penalty as one for conventional punitive damages."