June 20, 2011

Progressive Environmental v. El Cap Ranch: $1 million punitive damages award affirmed because of vague verdict form

This case illustrates how a defendant can lose its ability to challenge a punitive damages award by not requesting a sufficiently detailed verdict form.  This case involved both contract and tort claims, and the jury rendered a lump-sum $500,000 compensatory damages award, without differentiating between tort damages and contract damages. The defendant argued on appeal that the portion of the compensatory damages attributable to the tort claim might be as low as $1 (or even $0), making the $1 million punitive damages award constitutionally excessive.

The California Court of Appeal (Second Appellate District, Division Six) didn't buy it.  In this unpublished opinion, the court held that, because the defendant failed to ask for a verdict form segregating the tort damages from the contract damages, it must be inferred that the jury found the damages co-extensive for both claims (i.e., that the tort and the breach of contract both caused the same $500,000 in damages).  The court then concluded that the $1 million punitive damages award was not excessive in relation to the $500,000 compensatory damages award.