Opinion ID: 1172467
Heading Depth: 1
Heading Rank: 8

Heading: Measure of Damages Award of Exemplary Damages

Text: (14) We are also of the view that exemplary damages totalling $625,000 have been properly awarded. When the defendant is found to be guilty of express or implied malice, the jury may award damages against a defendant for the sake of example and by way of punishing him. (Civ. Code, § 3294.) It follows that the wealthier the wrongdoing defendant, the larger the award of exemplary damages need be in order to accomplish the statutory objective. ( Coy v. Superior Court (1962) 58 Cal.2d 210, 222-223 [23 Cal. Rptr. 393, 373 P.2d 457, 9 A.L.R.3d 678]; Marriott v. Williams (1908) 152 Cal. 705, 710 [93 P. 875]; Wetherbee v. United Ins. Co. of America (1971) 18 Cal. App.3d 266, 270-271 [95 Cal. Rptr. 678]; MacDonald v. Joslyn (1969) 275 Cal. App.2d 282, 293-294 [79 Cal. Rptr. 707, 35 A.L.R.3d 641].) Viewing the facts in a light most favorable to the judgment, we find that defendants' conduct consisted of filing fabricated claims in order to coerce Bertero to settle or abandon a legitimate claim. This flagrant abuse of the judicial process is precisely the type of tortious conduct that an award of exemplary damages is designed to deter. The vast wealths of the defendants warrant a large award. For reasons set forth in our consideration of compensatory damages, the award of exemplary damages is likewise not excessive. NGC argues that the element of malice which must be proved to establish a prima facie case of malicious prosecution is not necessarily sufficient to justify exemplary damages. It contends that while plaintiff's case may be proved by malice inferred from a want of probable cause, [a] state of mind which has sometimes been referred to as animus malus is required before punitive damages may be awarded. Defendants' statement of the rule is correct but the jury was instructed on the proper proof of malice in awarding of exemplary damages. Civil Code section 3294 sanctions the recovery of exemplary damages in non-contract cases ... where the defendant has been guilty of ... malice, express or implied. This has long been interpreted to mean that malice in fact, as opposed to malice implied by law, is required. ( Wolfsen v. Hathaway (1948) 32 Cal.2d 632, 647 [198 P.2d 1]; Davis v. Hearst (1911) 160 Cal. 143, 162 [116 P. 530]; Gombos v. Ashe (1958) 158 Cal. App.2d 517, 527 [322 P.2d 933].) The malice in fact, referred to by NGC as animus malus, may be proved under section 3294 either expressly (by direct evidence probative on the existence of hatred or ill will) or by implication (by indirect evidence from which the jury may draw inferences). ( Davis v. Hearst, supra, 160 Cal. 143, 162.) NGC fails to distinguish between concepts of malice proved indirectly through inference and malice implied by law. The latter admittedly may not serve to support an award of punitive damages. However, malice in fact may be proved by inference from the want of probable cause. ( Burke v. Watts (1922) 188 Cal. 118, 126 [204 P. 578]; Jensen v. Leonard (1947) 82 Cal. App.2d 340, 351 [186 P.2d 206].) The jury in the instant case was so charged and evidence of want of probable cause was sufficient proof of malice to justify an award of punitive damages. The jury was also properly instructed that in order to establish malice for both liability and punitive damages personal hostility or ill will need not be shown; that the absence of an honest and sincere belief in the validity of the cross-action was sufficient. [13] ( Albertson v. Raboff, supra, 46 Cal.2d 375, 383.) NGC finally urges that since a corporation may be liable for punitive damages only for malicious acts done by its agents and with the knowledge or under the direction of its corporate officials having the power to bind the corporation (see Lowe v. Yolo County etc. Water Co. (1910) 157 Cal. 503, 510-511 [108 P. 208]; Rest., Torts, § 909), it is not subject to such damages for the actions of Klein. Although Klein was an employee of National and not of Fox (NGC's predecessor), he controlled the litigation comprising the prior action in behalf of both corporate defendants. This included the filing of the cross-pleading in behalf of National and Fox. NGC's failure to challenge Klein's authority to act in its behalf is unquestionably a ratification of his actions. (Rest., Torts, § 909, subd. (d).) The judgment is modified by striking from the award of compensatory damages the sum of $25,000 and as so modified is affirmed. Respondent shall recover costs on appeal.