March 5, 2009

Spinks v. Equity Residential: Court of Appeal Reverses Summary Judgment on Punitive Damages for Wrongful Eviction

The California Court of Appeal (Sixth District) issued this published opinion ruling that a trial court erred in dismissing a plaintiff's punitive damages claims on summary judgment.

The primary issue in this case--whether the plaintiff had a viable claim for breach of contract on a third-party beneficiary theory--is outside the scope of this blog. But the opinion also contains a brief discussion of some punitive damages issues.

First, the opinion concludes that the trial court properly rejected the plaintiff's claim for punitive damages for breach of the covenant of good faith and fair dealing. The court noted that in California, insurers are the only defendants who can be liable for tort damages for bad faith breach of contract.

Second, the opinion concludes that the trial court erred in dismissing plaintiffs' claims for punitive damages for wrongful eviction, trespass, invasion of privacy, and intentional infliction of emotional distress. The court said plaintiff should be able to seek punitive damages on those claims because she presented evidence that the defendant landlord evicted her despite concerns about the legality of the eviction and the impact on the plaintiff. The court said that evidence could support a finding that the defendant acted in "conscious disregard" of the plaintiff's rights within the meaning of California's punitive damages statute, Civil Code section 3294.

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