August 3, 2011

State Fish Co., Inc. v. Deluca: California Court of Appeal explains interplay between nominal and punitive damages

In this unpublished opinion handed down last week, the California Court of Appeal (Second District, Division Three), rejected a plaintiff's appeal challenging the trial court's denial of nominal damages under Cal. Civil Code section 3360 and denial of punitive damages. The appellate opinion explains that, even if the trial court erred in denying statutory nominal damages for a breach of fiduciary duty that did not apparently cause actual damages, reversal is not warranted unless some further consequence would result---such as triggering the possibility that the plaintiff might obtain a punitive damages award. The court noted,

An award of “nominal damages” can mean two different things: “a trifling or token allowance for mere technical invasion of a right, without actual damages; and the very different allowance made when actual damages are substantial, but their extent and amount are difficult of precise proof.” (Kluge v. O'Gara (1964) 227 Cal.App.2d 207, 209–210.) Only the second can provide a basis for an award of punitive damages. (Id. at p. 210.) Punitive damages cannot be awarded in the absence of actual damages. (Id. at p. 209.) The type of nominal damages to which State Fish would conceivably be entitled is the type of nominal damages which do not imply the existence of actual damages and therefore do not justify an award of punitive damages.

As the nominal damages sought by State Fish would not permit an award of punitive damages, the failure to award nominal damages is not a sufficient basis for reversal. We therefore need not consider whether a breach of fiduciary duty which did not cause actual damages justifies an award of nominal damages.
Side note: if you're interested in the fate of punitive damages where no compensatory damages were awarded, you might follow the continuing progress of a Missouri wrongful death case against Alberta Comstock, whose daughter sued her mother, claiming the mother shot and killed her ex-husband (the plaintiff's adoptive father). According to news accounts (e.g., "Comstock lawyers appeal judgment"), the civil jury found no compensatory damages were owed, but awarded $125,000 in punitive damages---half the amount suggested by the plaintiff's attorney. Ms. Comstock is reportedly challenging the award.

UPDATE (8/4/11): In a decision decided this week, the Missouri Court of Appeal ruling in Lindahl v. State that a jury verdict awarding no compensatory damages but awarding punitive damages is inconsistent, and that a defendant who obtained judgment notwithstanding the verdict (on the ground that no punitives can stand where no compensatory damages are awarded) had invited an error by the trial court by affirmatively suggesting the matter need not be returned to the jury while it was still empaneled, to resolve the inconsistency. Therefore, the appellate court reversed the defense judgment and granted a complete new trial.

Related posts discussing punitive damages in the context of nonexistent or nominal compensatory damages:

Pending cert. petitions raise punitive damages issues

A Curious Punitive Damages Opinion from Florida

California DOI Loses Out on Collecting $700 Million Punitive Damages Award---For Now

Grimes v. Rave Motion Pictures: District Court Holds FACTA Punitive Damages Provision Unconstitutional