Opinion ID: 853019
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Heading: Punitive Damages in Indiana

Text: In assessing the claim that the allocation statute takes property without just compensation, it is essential to understand the nature of a claim for punitive damages. The purpose of punitive damages is not to make the plaintiff whole or to attempt to value the injuries of the plaintiff. Rather, punitive damages, sometimes designated private fines or exemplary damages, have historically been viewed as designed to deter and punish wrongful activity. As such, they are quasi-criminal in nature. Cacdac v. West, 705 N.E.2d 506, 510 (Ind.Ct.App.1999) (punitive damages may be awarded upon a showing of a quasi-criminal state of mind or willful and wanton misconduct); Mitchell v. Stevenson, 677 N.E.2d 551, 564 (Ind. Ct.App.1997); see also Smith v. Wade, 461 U.S. 30, 59, 103 S.Ct. 1625, 75 L.Ed.2d 632 (1983) (Rehnquist, J., dissenting) (citing Huber v. Teuber, 10 D.C. 484, 490 (1877)); Felix Forte, Joinder of Civil and Criminal Relief in Indiana, 7 Notre Dame Law. 499, 501 (1932). As a matter of federal law, state legislatures have broad discretion in authorizing and limiting the award of punitive damages, just as they do in fashioning criminal sanctions. BMW of N. Am. Inc. v. Gore, 517 U.S. 559, 568, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). Victims in a criminal case have no claim to benefit from criminal sanctions. United States v. Newman, 144 F.3d 531, 538 (7th Cir.1998) (criminal law imposes punishment on behalf of all of society, but equitable payments of restitution inure only to specific victims of criminal conduct and do not possess a similarly punitive character); Charlton T. Howard III, Note: Booth v. Maryland Death Knell for the Victim Impact Statement?, 47 Md. L.Rev. 701, 738, n. 93 (1988) (the purpose of criminal punishment is to vindicate the interests of society as a whole, not the individual victim) (citing Tison v. Arizona, 481 U.S. 137, 149, 107 S.Ct. 1676, 95 L.Ed.2d 127 (1987)); Linda Curtis, Damage Measurements for Bad Faith Breach of Contract: An Economic Analysis, 39 Stan. L.Rev. 161, 178 (1986) (for punishment and deterrence purposes, criminal sanctions are more appropriate since they cannot provide a windfall to victims). For the same reason, it has been consistently held that civil plaintiffs have no right to receive punitive damages. Durham v. U-Haul Int'l, 745 N.E.2d 755, 762 (Ind.2001); Reed v. Central Soya Co., 621 N.E.2d 1069, 1076 (Ind. 1993); Travelers Indem. Co. v. Armstrong, 442 N.E.2d 349, 362-63 (Ind.1982); Indiana & Michigan Electric Co. v. Terre Haute Industries, Inc., 507 N.E.2d 588, 611-12 (Ind.Ct.App.1987); Miller Pipeline Corp. v. Broeker, 460 N.E.2d 177, 185 (Ind. Ct.App.1984); Farm Bureau Mut. Ins. Co. v. Dercach, 450 N.E.2d 537, 541 (Ind.Ct. App.1983). To the extent punitive damages are recoverable, they are a creature of the common law. Forte v. Connerwood Healthcare, Inc., 745 N.E.2d 796, 800 (Ind. 2001); Forte, 7 Notre Dame Law. at 501. As we have repeatedly held in other contexts, the legislature is free to create, modify, or abolish common law causes of action. McIntosh v. Melroe, 729 N.E.2d 972, 977 (Ind.2000); Martin v. Richey, 711 N.E.2d 1273, 1283 (Ind.1999). And, as a matter of federal constitutional law, no person has a vested interest or property right in any rule of common law. Munn v. Illinois, 94 U.S. 113, 134, 24 L.Ed. 77 (1876). As a result, the General Assembly is free to eliminate punitive damages completely, as other states have done, and also has wide discretion in modifying this quasi-criminal sanction. Indeed, several jurisdictions have chosen not to recognize punitive damages as an acceptable award in any form. [1] Indiana, like several other states, has chosen an intermediate ground permitting juries to award punitive damages and thereby inflict punishment on the defendant, but placing restrictions on the amount the plaintiff may benefit from the award. The facts warranting punitive damages must be established by clear and convincing evidence. Ind.Code § 34-51-3-2 (1998). Whether punitive damages may be awarded is usually a question of fact. Reed, 621 N.E.2d at 1076. In sum, Indiana law recognizes a right to assert a claim to be compensated for a cognizable wrong and to recover on that claim to the extent the law allows. But a number of consequences flow from the fundamentally different nature of a claim to punitive damages. The financial condition of the defendant is relevant, Hibschman Pontiac, Inc. v. Batchelor, 266 Ind. 310, 317, 362 N.E.2d 845, 849 (1977), which it would not be if the goal were to compensate the plaintiff, as opposed to deterring or punishing the defendant. [2] Proof is required by a clear and convincing standard rather than a preponderance of the evidence standard. I.C. § 34-51-3-2 (1998). For our purposes, the essential point is that because punitive damages do not compensate the plaintiff, the plaintiff has no right or entitlement to an award of punitive damages in any amount. Unlike a claim for compensatory damages, the trier of fact is not required to award punitive damages even if the facts that might justify an award are found. [3] Hibschman Pontiac, Inc., 266 Ind. at 317, 362 N.E.2d at 849.