October 25, 2017

Court of Appeal affirms $371,250 punitive damages award against San Diego Zoo (Diamond One Construction v. Zoological Society of San Diego)

There isn't much to say about this unpublished decision, but we try to report all California appellate decisions involving significant amounts of punitive damages.

A construction contractor sued the San Diego Zoo for fraud and recovered $222,741 in compensatory damages and $371,250 in punitive damages.  The zoo appealed, arguing that the punitive damages should be reversed because it was based on the conduct of a zoo employee who was not a managing agent within the meaning of Civil Code section 3294.

The Court of Appeal (Fourth Appellate District, Division One) disagreed, finding that the employee originated the idea for the construction project and made a number of discretionary decisions that influenced the scope and tenor of the project: "There can be no serious dispute he 'exercise[d] substantial discretionary authority over decisions that ultimately determine[d] corporate policy.' "

The court also rejected the zoo's argument that the ratio of 1.667-to-1 between the punitive damages and compensatory damages was constitutionally excessive.