July 20, 2010

Rambeau v. Barker: Punitive Damages Vacated Due to Defendant's Negative Net Worth

In this unpublished opinion, the Court of Appeal (Fourth Appellate District, Division Three) vacated a $100,000 punitive damages award because the defendant had a negative net worth.

The opinion recites the evidence regarding the defendant's financial condition in some detail and concludes that, although the defendant owned multiple properties, he had a negative net worth at the time of trial because of his significant debt. Quoting the Supreme Court's statement that the purpose of punitive damages "is to deter, not to destroy" (Adams v. Murakami (1991) 54 Cal.3d 105, 112), the court ordered the punitive damages award stricken from the judgment.

Contrast this opinion with Zaxis Wireless Communications, Inc. v. Motor Sound Corp. (2001) 89 Cal.App.4th 577, 582-583, which upheld a $300,000 punitive damages award against a defendant with a negative net worth.