November 8, 2011

Unpublished opinion reverses $500,000 punitive damages award against law school (Rose v. Whittier College)

Over the years, we've reported on quite a few unpublished opinions in which the California Court of Appeal has reversed a punitive damages award because the plaintiff failed to introduce meaningful evidence of the defendant's financial condition. This unpublished opinion from the California Court of Appeal (Second Appellate District, Division Two) is just the latest example.

The plaintiff in this case was a law professor at Whittier Law School.  He claimed the school fraudulently induced him to accept an early retirement package.  His lawyers persuaded a jury to award $350,000 in compensatory damages and $500,000 in punitive damages, but they neglected to present any evidence regarding the law school's financial condition.  On appeal, they tried to save the award by arguing that financial condition evidence is unnecessary when the record contains evidence that the defendant profited from its tortious conduct. 

The Court of Appeal held that there is a conflict in authority on this issue, but concluded that under the better reasoned authority, evidence of the profits from the wrongful conduct is not an adequate substitute for evidence of financial condition.  As a result, the court reversed the punitive damages award in its entirety.  I have no quibbles with the court's analysis, but I'm a little surprised the court didn't publish the opinion.  Ordinarily I would expect the court to publish an opinion that takes sides on an issue that has divided published opinions.