February 24, 2020

Court of Appeal reverses $2 million punitive damages award due to lack of financial condition evidence (Chen v. Bam Brokerage)

In this unpublished opinion, the California Court of Appeal (Second District, Division Seven) once again reversed a punitive damages award because the plaintiff failed to present evidence of the defendant's financial condition.

The plaintiff presented evidence that the defendant owned four pieces of real property, but presented no evidence of the defendant's liabilities, including the encumbrances on those properties.  That was insufficient to support a punitive damages award, under the well-established rule that "evidence of liabilities should accompany evidence of assets."  Accordingly, the court directed the trial court to enter judgment for the defendant on the issue of punitive damages.