August 27, 2010

Cutler v. Dike: Small Punitive Damages Awards Affirmed, Court not Persuaded by "Self-Serving" Testimony that Defendants Had Negative Net Worth

We have blogged quite a bit about the frequency with which California Court of Appeal reverses punitive damages awards on the ground that the plaintiff failed to introduce meaningful evidence of the defendant's financial condition. But here's an unpublished opinion from the Second Appellate District, Division Five, rejecting a challenge to a punitive damages award on that basis.

The plaintiff here presented audited financial statements showing that the two defendants had net worths of $3.6 million and $246,000 shortly before trial. The Court of Appeal said that evidence was more than enough to support punitive damages awards of $2,500 and $5,000 against the two defendants, nothwithstanding the "self-serving" testimony by the defendants' CEO that the defendants had a negative net worth at the time of trial.