March 7, 2010

Montoya v. Shaw: Another Punitive Damages Award Reversed Because the Plaintiff Failed to Prove the Defendant's Financial Condition

This unpublished opinion illustrates yet again the consequences of failing to comply with California's unique rule that a plaintiff cannot obtain punitive damages unless the plaintiff presents meaningful evidence of the defendant's ability to pay.

The plaintiff here won a $20,000 punitive damages award at trial. But the only evidence he presented regarding the defendant's financial condition was the fact that the defendant owned several businesses. The plaintiff did not establish the value of those businesses, the income the defendant derived from them, or the liabilities associated with them. Accordingly, the California Court of Appeal (Fourth Appellate District, Division One) vacated the punitive damages award. And because the plaintiff had a full an fair opportunity to present his evidence the first time around, he doesn't get to go back to the trial court and try again.