December 26, 2019

Court of Appeal vacates punitive damages in default judgment due to lack of evidence of defendant's finances (Dong v. Ryu)

This case is a reminder that California law requires plaintiffs to present evidence of the defendant's financial condition as a prerequisite to obtaining punitive damages, even in default judgments.

In this case, the plaintiffs argued on appeal that their default judgment should be affirmed, including $57,000 in punitive damages, even though they presented no evidence of the defendant's finances.  They argued that the defendant's failure to respond to their complaint deprived them of the opportunity to obtain information about the defendant's finances. 

The Court of Appeal (Second District, Division Two) rejected that argument in an unpublished opinion.  The court noted that plaintiffs failed to show that they even tried to meet their burden: "our review of the record reveals no showing of what efforts, if any, were undertaken by plaintiffs to obtain information regarding defendant’s financial condition."  The Court of Appeal reversed the punitive damages portion of the judgment and directed the trial court to enter judgment for the defendant on that issue.