August 28, 2008

Lu v. Qi: California Court of Appeal Grants Rehearing and Affirms a Punitive Damages Award It Had Previously Reversed

Here's something you don't see every day. Or even every year. It's not often that the California Court of Appeal grants a petition for rehearing and completely changes directions from its original opinion. But that's exactly what happened in this case. Last month, the Second Appellate District, Division Five, issued an unpublished opinion reversing a $180,000 punitive damages award because the plaintiff failed to present meaningful evidence of the defendant's net worth. (See our prior post discussing that decision.)

Yesterday, the court issued a new opinion affirming the punitive damages award in its entirety. Here's what happened: the defendant had filed separate appeals, both from the judgment and from a subsequent order denying the defendant's motion to vacate the judgment. In the original opinion, the Court of Appeal concluded that the motion to vacate the judgment was untimely, and therefore the defendant was entitled to no relief on its appeal from the denial of that motion. But the court nevertheless granted relief on the defendant's appeal from the judgment itself. The Court of Appeal never noticed, however, that the appeal from the judgment was untimely. The plaintiff raised that issue on rehearing and the court, realizing its mistake, granted rehearing and issued a new opinion. Thus, the court ended up affirming an $180,000 punitive damages award that would have been reversed if the defendant had not blown (a) the deadline for appealing from the judgment and (b) the deadline for filing a post-judgment motion to vacate.

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