July 24, 2020

Court of Appeal concludes that $2.1 million punitive damages award is excessive, limits maximum amount to $371,000 (Orozco v. Conrad)

I'm a bit tardy in reporting on this unpublished decision, which was issued last week. 

The opinion arises out of a rather unusual dispute between a restaurant owner and her commercial landlord.  The dispute culminated with the landlord sending a crew of workers to forcibly remove equipment and supplies from the restaurant.  The tenant sued on various theories and a jury awarded her $50,000 in emotional distress damages, $3,000 for trespass to chattels, and $2.1 million in punitive damages.  The trial court determined that the punitive damages were excessive, and ordered a new trial unless the plaintiff consented to accept a reduce amount of $250,000 in punitive damages.

Both sides appealed.  The Third Appellate District largely affirmed the judgment, agreeing with the trial court that the jury's award of punitive damages was excessive.  But the court concluded that the maximum permissible amount is $371,000, rather than the $250,000 figure selected by the trial court. 

The court cited its prior opinion in Bardis v. Oates for the proposition that a four-to-one ratio of punitive damages to compensatory damages is usually the limit in a case in which the compensatory damages are neither exceptionally high nor low, and the defendant’s conduct is neither exceptionally extreme nor trivial.  But the court concluded that the defendant's conduct in this case registered "high on the reprehensibility meter," and therefore warranted a ratio of seven to one, rather than the usual four to one.