Plaintiffs’ High
Hurdle

Tort Reformers
Are Wrong:
Punitives Face
Tough Test
In California
By Robert W. Armstrong
n recent years, proponents of tort reform have lobbied long and hard for legislative and judicial restrictions on the award of punitive damages. While there are jurisdictions in which the standard for the award of punitive damages needs to be tightened, California is certainly not one of them. California's punitive damage statute is a tort reformer's dream.

Defense attorneys facing claims for punitive damages should aggressively respond with motions to strike, motions for judgment on the pleadings, motions for summary judgment and motions for nonsuit, directed verdict and judgment notwithstanding the verdict. This aggressive posture is justified since the current standards allow for the imposition of punitive damages only where the defendant's conduct reaches criminal proportions.

Judicial decisions have recognized that the 1987 amendments to Civil Code Section 3294 were intended to make it more difficult to obtain punitive damages. See, e.g., Mock v. Michigan Millers, 4 Cal.App.4th 306, 332-3 (1992). But even the pre-1987 standard ‹ which the amendments to Civil Code Section 3294 were designed to “toughen” ‹ was a difficult burden to meet.

In Beck v. State Farm, 54 Cal.App.3d 347, 355 (1976), despite a finding that the insurer "had no reasonable grounds for refusing to settle the case and despite the fact that the insurer based its defense on a “patently untenable” defense, the Court of Appeal reversed an award of punitive damages, stating that “punitive damages are unfavored and should be granted with the greatest caution.”

And in Flyer's Body Shop Profit Sharing Plan v. Ticor Title Ins. Co., 185 Cal.App.3d 1149, 1154-55 (1986), the Court of Appeal reversed a punitive damage award, stating that punitive damages are appropriate only if the defendant's acts are “reprehensible, fraudulent or in blatant violation of law or policy."

The court said such damages should be awarded “only where the tortious conduct rises to levels of extreme indifference to the plaintff’s rights, a level which decent citizens should not have to tolerate.” The court also noted that punitive damages were not proper where the defendant's conduct was “negligent, grossly negligent or even reckless.”

The fact that “grossly negligent” and “reckless” conduct did not justify an award of punitive damages before the 1987 amendments provides a powerful backdrop to a discussion of just exactly how bad a defendant's conduct must be in order to justify punitive damages after the 1987 amendments.

The current definitions of “malice” and “oppression” are set forth in BAJI 14.71:

“[‘Malice’ means conduct which is [intended by the defendant to cause injury to the plaintiff] [or] [despicable conduct which is carried on by the defendant with a willful and conscious disregard for the] [rights] [or] [safety] of others.] [A person acts with conscious disregard of the rights or safety of others when [he] [she] is aware of the probable dangerous consequences of [his] [her] conduct and willfully and deliberately fails to avoid those consequences.]

“[‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.]”

Thus, in addition to proving that the defendant was guilty of “conscious disregard” and “willful and deliberate” conduct, a plaintiff must now also prove that the defendant’s conduct was “despicable.”

See, e.g, Kransco v. American Empire Suplus Lines Ins. Co. 97 Daily Journal D.A.R. 5875, which held that a carrier who was “stingy in setting reserves” “buried its head in the sand” and willfully and consciously disregarded the interests of the insured, could not be held liable for punitive damages.

f the foregoing standard were all the law required a party to prove to obtain punitive damages, everyone would agree that the plaintiff has a tough row to hoe. In fact, however, the BAJI committee put additional teeth in the statute when it adopted the following definition of “despicable”:

“[‘Despicable conduct’ is conduct which is so [vile,] [base,] [contemptible,] [or] [loathsome] that it would be looked down upon and despised by ordinary decent people.]” BAJI 1471.

Note that merely proving that conduct is “wretched,” “miserable,” “loathsome,” etc., is not sufficient. The plaintiff must prove that the defendant's conduct was so base, miserable, wretched, loathsome, etc, that it would cause “ordinary, decent people” to “look down upon it” and “despise it.”

It has been recognized that the current standard of “despicable” conduct requires a level of conduct that is nearly criminal before punitive damages can be awarded. Mock v. Michigan Millers, 4 Cal.App.4th 306, 328 (1992). Indeed, an examination of the California cases using the term “despicable” in its common, ordinary sense reveals that the term is routinely employed to describe criminal behavior. See, e.g., People v. McElrath, 175 Cal.App.3d 178 (1975) (branding rape, oral copulation and sodomy

were “outrageous, shocking and despicable”); People v. Adams, 137 Cal.App.3d 346 (1982) (characterizing a racially motivated shooting as a “despicable deed”; People v. Carter, 144 Cal.App.3d 534 (1983), describing the sexual assault and stabbing of a child as a “despicable series of crimes.”

owever, the Legislature did not stop there. The defendant's “despicable” conduct must now be proved by “clear and convincing evidence.” (In this regard, defense practitioners should object to the use of BAJI 2.62 which defines “clear and convincing” evidence as “evidence of such convincing force that it demonstrates, in contrast to the opposing evidence, a high probability of the truth of the facts for which it is offered as proof.” This instruction has been characterized as a “unnecessary limited” in In re Marriage of Weaver, 224 Cal.App.3d 478; 487 (1990). In Mock v. Michigan Millers, 4 Cal.App.4th 306, 332, the court held that the jury should be instructed that “clear and convincing evidence” is “evidence so clear as to leave no substantial doubt” and which is sufficiently strong so as to command the unhesitating assent of every reasonable mind.”)

The importance of the “clear and convincing evidence” standard cannot be overstressed. Our Supreme Court has recognized that this higher standard of proof reflects the degree of confidence that our society thinks the fact finder should have in the correctness of factual conclusions for a particular type of adjudication. Weiner v. Fleischman, 54 Cal.3d 476, 487 (1991).

The significance of this evidentiary standard is apparent when we consider that our society uses it to decide such fundamentally important issues as depriving a parent of child custody, In re Angelia P., 28 Cal.3d 908, 919 (1981); In re David C., 152 Cal.App3d 1189, 1208 (1984), or imposing restrictions on First Amendment privileges, Newton v. National Broadcasting Co., Inc., 930 F.2d 662 (9th Cir. 1990). As this discussion demonstrates, California’s legal standards present a formidable obstacle to obtaining punitive damages. They don’t get much tougher.

Robert W. Armstrong is the senior partner at Demler, Armstrong & Rowland, an insurance defense firm in Long Beach. He specializes in insurance coverage, bad faith, construction defect, and casualty defense.