September 6, 2020

Court of Appeal affirms $1.95 million punitive damages award in wrongful termination case (Albarracin v. Fidelity National Financial)

I'm catching up on some unpublished opinions from the past few weeks. In this one, the plaintiff alleged she was fired after complaining that her supervisor sexually harassed her.  A jury found defendant Fidelity National liable for intentional infliction of emotional distress, retaliation, and wrongful termination.  The jury awarded $250,000 in emotional distress damages and $1,950,000 in punitive damages.

Fidelity appealed, challenging only the punitive damages award.  Fidelity argued that the plaintiff failed to present clear and convincing evidence of malice or oppression within the meaning of Civil Code section 3294.  Fidelity argued that the evidence showed at most that Fidelity's investigation of the plaintiff's sexual harassment complaint was negligent, but not malicious.  

The Court of Appeal (Second District, Division Three) rejected that argument because Fidelity had not challenged the jury's finding that Fidelity intentionally inflicted emotional distress.  The court said that finding was inconsistent with Fidelity's appellate argument that its conduct was merely negligent, and because Fidelity had not challenged that finding on appeal, it could not characterize its conduct as mere negligence.

Next, Fidelity argued that the punitive damages award was excessive and should be reduced to no more than $250,000, the amount of the jury's emotional distress award. The court rejected that argument too, finding that Fidelity's conduct was reprehensible enough to justify a nearly eight-to-one ratio.  Fidelity relied on caselaw holding that the maximum ratio may be one-to-one in cases where the compensatory damages are substantial.  But the Court of Appeal rejected that argument on the grounds that the $250,000 award was not all that large. Your mileage may vary; other courts have found that lesser amounts qualified as "substantial."