February 23, 2016

Court of Appeal holds that Probate Code double damages may be punitive in nature, but are not punitive damages (Hill v. Superior Court)

Last week the California Court of Appeal (First Appellate District, Division Two) issued this published opinion holding that double damages under the Probate Code may be "punitive in nature" and may have a "punitive effect," but they are not technically "punitive damages."

The issue arises at the intersection of Probate Law and punitive damages law.  The plaintiffs in this case sued their stepfather under a Probate Code provision that permits double damages against someone who in bad faith takes property from the estate of a decedent.  Things got complicated, however, when the defendant died and his son was substituted into the case as his successor in interest. The Code of Civil Procedure states that, when a defendant dies, the plaintiffs can recover from the successor in interest all the damages that they could have recovered from the decedent, except for punitive damages.

The trial court in this case ruled that the plaintiffs could not recover double damages under the Probate Code, because double damages are akin to punitive damages and therefore were no longer available when the decedent was replaced by his successor in interest.

The plaintiffs petitioned the Court of Appeal for writ relief.  The Court of Appeal granted the petition and reversed the trial court, ruling that double damages, even if similar to punitive damages, are not  punitive damages.  As the court explained: (1) punitive damages require a showing of malice, fraud, or oppression, which is not true for Probate Code double damages; (2) punitive damages are subject to the clear-and-convincing-evidence standard of proof, which Probate Code double damages are not; and (3) punitive damages require proof of the defendant's financial condition, with Probate Code double damages do not.

On its way to that conclusion, the Court of Appeal included an interesting aside on the relationship between punitive damages and statutory penalties.  It said that plaintiffs can recover both statutory penalties and punitive damages in the same case.  Many other cases have held, however, that plaintiffs cannot recover both statutory penalties and punitive damages, and must elect one or the other.  The opinion cites one of these cases, Hassoldt v. Patrick Media Group, but the only thing the opinion says about Hassoldt is that "Hassoldt is not a First District case."  

Ultimately, this case is not really about whether plaintiffs can recover both statutory penalties and punitive damages for the same wrong, so the statements on that issue are dicta.  But this opinion may end up causing some confusion on that point if cited out of context.