Am Jur 2d - Damages § 559

V. Exemplary or Punitive Damages, A. In General, § 559 - Purposes; punishment and deterrence

The view has been followed that punitive damages are awarded for the sake of example[1] and to punish the defendant,[2] thereby deterring others from similar behavior.[3] Indeed, courts have stated that the primary purpose of a punitive award is to deter misconduct or improper conduct.[4] However, punitive damages must not be so oppressive or so large as to shock the sense of fair-minded persons.[5] The purpose of punitive damages is not served by financially destroying a defendant.[6]

Punitive damages have been said to be awarded to punish the defendant and deter or warn others from the same conduct[7] or to punish or deter conduct deemed wrongful when the availability of a cause of action and compensatory damages are considered an insufficient punishment or deterrence.[8] Many holdings also expressly state that the purpose of punitive damages is to deter the defendant him- or herself, as well as others, from repeating the wrongful act in the future.[9] Thus, exemplary damages have been said to serve a threefold purpose:

punishment
specific deterrence
general deterrence[10]

Other courts simply state more generally that the dual or twin purposes of punitive damages are punishment and deterrence[11] or that punitive damages are aimed at deterrence and retribution.[12]

In this regard, it has been stated that punitive damages may properly be imposed to further a state's legitimate interests in punishing unlawful conduct and deterring its repetition[13] and that an award of punitive damages serves the purpose of protecting or benefiting the public generally.[14] Similarly, it has been stated that the basis of the doctrine of punitive damages is that a person whose conduct amounts to a criminality should be punished for the good of society.[15]

Caution:

State courts cannot authorize procedures that create an unreasonable and unnecessary risk of confusion which leads the jury, in awarding punitive damages, to impermissibly punish a defendant for harm caused to others rather than permissibly taking that conduct into account in determining reprehensibility. Punitive-damages awards may not be used for the purpose of punishing a defendant for harming others.[16]

In some jurisdictions, all awards of punitive damages must be supported by a finding that the public interest will be served by punishing the wrongdoer,[17] and both the punishment of the tortfeasor and deterrence are required to satisfy a statutory punitive-damages provision.[18] Also, under some authority, a private party seeking to recover punitive damages must demonstrate that the defendant's egregious conduct was part of a pattern of similar conduct directed at the public generally.[19]

Some courts which particularly emphasize the punishment and deterrent effect upon the defendant as a purpose of punitive damages have concluded that the reason for awarding punitive damages ceases to exist with the death of the tortfeasor and that public policy is not served by permitting the recovery of punitive damages against the estate of a deceased tortfeasor.[20] However, other courts have held punitive damages are appropriate against a decedent's estate[21] as the award sends a message to the public at large.[22]

Practice Tip:

Courts should ensure that punitive-damages awards do not exceed an amount necessary to accomplish society's goals of punishment and deterrence.[23]

Observation:

The courts have often found it necessary to decide whether insurance coverage of liability for punitive damages is invalid as contrary to public policy. Some courts have taken the position that public policy precludes coverage, generally reasoning that the deterrence and punishment purposes of punitive damages would be undermined by a contrary result, although a number of these courts have recognized an exception in cases where the insured's liability for punitive damages is purely vicarious. On the other hand, some courts have held that shifting liability for such damages to an insurance company does not violate public policy although an exception is sometimes made such that coverage would not be allowable where the wrongdoer's conduct was "intentional."[24]

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1 Vickery v. Evans, 266 P.3d 390 (Colo. 2011) ; Alpha Gulf Coast, Inc. v. Jackson, 801 So. 2d 709 (Miss. 2001) ; Goff v. Elmo Greer & Sons Const. Co., Inc., 297 S.W.3d 175 (Tenn. 2009) .

2 Bayer CropScience LP v. Schafer, 2011 Ark. 518, 385 S.W.3d 822 (2011) ; Wyman v. Terry Schulte Chevrolet, Inc., 1998 SD 96, 584 N.W.2d 103 (S.D. 1998) ; Kessel v. Leavitt, 204 W. Va. 95, 511 S.E.2d 720 (1998) .

3 Cabe v. Lunich, 70 Ohio St. 3d 598, 1994-Ohio-4, 640 N.E.2d 159, 33 A.L.R.5th 825 (1994) .

4 Ballinger v. Delaware River Port Authority, 172 N.J. 586, 800 A.2d 97 (2002) ; Culbreath v. First Tennessee Bank Nat. Ass'n, 44 S.W.3d 518 (Tenn. 2001) ; Sweet v. Roy, 173 Vt. 418, 801 A.2d 694 (2002) .

5 Roth v. Farner-Bocken Co., 2003 SD 80, 667 N.W.2d 651 (S.D. 2003) .

6 Bankhead v. ArvinMeritor, Inc., 205 Cal. App. 4th 68, 139 Cal. Rptr. 3d 849 (1st Dist. 2012) , as modified, (Apr. 25, 2012) and review denied, (July 11, 2012).
As to considering financial matters in determining the amount of punitive damages, see § 623 .

7 Freudeman v. Landing of Canton, 702 F.3d 318 (6th Cir. 2012) (applying Ohio law) ; Cook v. Rockwell Intern. Corp., 618 F.3d 1127, 77 Fed. R. Serv. 3d 555 (10th Cir. 2010) , cert. denied, 133 S. Ct. 22, 183 L. Ed. 2d 675 (2012) (applying Colorado law) ; Ash v. Tyson Foods, Inc., 664 F.3d 883 (11th Cir. 2011) ; Slack v. Stream, 988 So. 2d 516, 235 Ed. Law Rep. 1235 (Ala. 2008) ; Hudgins v. Southwest Airlines, Co., 221 Ariz. 472, 212 P.3d 810 (Ct. App. Div. 1 2009) .

8 Phillips v. General Motors Corp., 2000 MT 55, 298 Mont. 438, 995 P.2d 1002 (2000) .

9 Ex parte Vulcan Materials Co., 992 So. 2d 1252 (Ala. 2008) ; Slovinski v. Elliot, 237 Ill. 2d 51, 340 Ill. Dec. 210, 927 N.E.2d 1221 (2010) ; Kalwitz v. Kalwitz, 934 N.E.2d 741 (Ind. Ct. App. 2010) ; Estate of Ruszala ex rel. Mizerak v. Brookdale Living Communities, Inc., 415 N.J. Super. 272, 1 A.3d 806 (App. Div. 2010) ; Mazloom v. Mazloom, 382 S.C. 307, 675 S.E.2d 746 (Ct. App. 2009) , decision aff'd, 392 S.C. 403, 709 S.E.2d 661 (2011) .

10 Wolinsky v. Kadison, 2013 IL App (1st) 111186, 370 Ill. Dec. 205, 987 N.E.2d 971 (App. Ct. 1st Dist. 2013) ; Mosing v. Domas, 830 So. 2d 967 (La. 2002) ; Jensen v. Walsh, 623 N.W.2d 247 (Minn. 2001) .

11 State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155 L. Ed. 2d 585, 60 Fed. R. Evid. Serv. 1349, 1 A.L.R. Fed. 2d 739 (2003) ; Modern Management Co. v. Wilson, 997 A.2d 37 (D.C. 2010) , cert. denied, 132 S. Ct. 111, 181 L. Ed. 2d 36 (2011) ; Tarr v. Bob Ciasulli's Mack Auto Mall, Inc., 194 N.J. 212, 943 A.2d 866 (2008) ; Solis-Vicuna v. Notias, 71 A.D.3d 868, 898 N.Y.S.2d 45 (2d Dep't 2010) ; T.P. v. Weiss, 2013-Ohio-1402, 990 N.E.2d 1098 (Ohio Ct. App. 5th Dist. Delaware County 2013).

12 Exxon Shipping Co. v. Baker, 554 U.S. 471, 128 S. Ct. 2605, 171 L. Ed. 2d 570 (2008) ; State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155 L. Ed. 2d 585, 60 Fed. R. Evid. Serv. 1349, 1 A.L.R. Fed. 2d 739 (2003) ; Arnold v. Wilder, 657 F.3d 353, 86 Fed. R. Evid. Serv. 664 (6th Cir. 2011) ; Quintero v. Rogers, 221 Ariz. 536, 212 P.3d 874 (Ct. App. Div. 1 2009) ; Osborne v. Keeney, 399 S.W.3d 1 (Ky. 2012) .

13 BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996) ; Mendez-Matos v. Municipality of Guaynabo, 557 F.3d 36 (1st Cir. 2009) ; Bullock v. Philip Morris USA, Inc., 198 Cal. App. 4th 543, 131 Cal. Rptr. 3d 382 (2d Dist. 2011) , review denied, (Nov. 30, 2011).

14 Darcars Motors of Silver Spring, Inc. v. Borzym, 150 Md. App. 18, 818 A.2d 1159 (2003) , judgment aff'd, 379 Md. 249, 841 A.2d 828 (2004) ; Choctaw Maid Farms, Inc. v. Hailey, 822 So. 2d 911 (Miss. 2002) ; Allstate Ins. Co. v. Wade, 265 Va. 383, 579 S.E.2d 180 (2003) .

15 White v. Ultramar, Inc., 21 Cal. 4th 563, 88 Cal. Rptr. 2d 19, 981 P.2d 944 (1999) .

16 Philip Morris USA v. Williams, 549 U.S. 346, 127 S. Ct. 1057, 166 L. Ed. 2d 940 (2007) .

17 Bell v. Clark, 670 N.E.2d 1290 (Ind. 1996) .

18 Olson-Roti v. Kilcoin, 2002 SD 131, 653 N.W.2d 254 (S.D. 2002) .

19 Tartaro v. Allstate Indem. Co., 56 A.D.3d 758, 868 N.Y.S.2d 281 (2d Dep't 2008) .

20 In re Vajgrt, 801 N.W.2d 570 (Iowa 2011) ; Parker v. Artery, 889 P.2d 520 (Wyo. 1995) , rejected by Tillett v. Lippert, 275 Mont. 1, 909 P.2d 1158 (1996) .
As to whether a claim for punitive damages may be brought against a deceased tortfeasor's estate, generally, see § 613 .

21 § 613 .

22 Tillett v. Lippert, 275 Mont. 1, 909 P.2d 1158 (1996) .

23 Bankhead v. ArvinMeritor, Inc., 205 Cal. App. 4th 68, 139 Cal. Rptr. 3d 849 (1st Dist. 2012) , as modified, (Apr. 25, 2012) and review denied, (July 11, 2012); Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35 (Tex. 1998) .
As to the amount of punitive damages, generally, see §§ 620 to 631 .

24 Am. Jur. 2d, Insurance § 1538 .

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