Opinion ID: 1125390
Heading Depth: 3
Heading Rank: 2

Heading: Did the Trial Court Err in Awarding $185,000 in Punitive Damages?

Text: A punitive damage award is excessive if it is manifestly unreasonable, resulting from passion or prejudice or disregard of the rules of law. Relevant factors include the compensatory damage amount, magnitude of the offense, importance of the policy violated, and the defendant's wealth. Alaskan Village, Inc. v. Smalley, 720 P.2d 945, 949 (Alaska 1986) (citations omitted). Pluid next argues that the punitive damages award is excessive because it was based on passion or prejudice on the part of the trial judge. He finds evidence of this passion or prejudice in the ratio of punitive damages to compensatory damages. The award of punitive damages was five times that of compensatory damages. [3] Pluid recognizes, and this court has often stated, that [s]imply pointing to the ratio does not establish excessiveness. Alaska Ins. Co. v. Movin' On Constr., Inc., 718 P.2d 472, 475 (Alaska 1986). The ratio between compensatory and punitive damages is merely a factor to be taken into account and we have never laid out a definitive permissible ratio. Id. There may be cases in which the comparison is of no use in making a determination as to excessiveness. Clary Ins. Agency v. Doyle, 620 P.2d 194, 205 (Alaska 1980). To bolster his claim of passion or prejudice, Pluid points to the fact that in making its punitive damage award the trial court referred to criminal penalties. He also points to the court's obvious disappointment that certain damaging evidence was inadmissible. He argues that these factors, coupled with the ratio, show impermissible motive on the part of the judge. In its findings and conclusions, the superior court wrote: [T]his amount [of punitive damages] exceeds the criminal fine for a single offense of sexual abuse of a minor in the first degree under the present law and [the court] finds this to be reasonably proportionate as a penalty in light of the evidence that the conduct occurred more than once and not more than four times. Pluid argues that he was never convicted of sexual abuse of a minor in any degree for this incident, and therefore reference to criminal penalties is inappropriate and evidence of prejudice on the part of the Superior Court. The superior court did not err in taking the criminal penalty into account when calculating punitive damages. The court's reference to criminal penalties does not indicate passion or prejudice. During trial, the plaintiff attempted to introduce evidence that Pluid made sexual advances toward a former babysitter. Pluid objected and B.K. made the offer of proof that the testimony would fit an exception to the evidence rules against character evidence. The babysitter was allowed to testify, but the testimony failed to fit the exception. In its findings and conclusions, the superior court wrote: While the rule [Evidence Rule 404(b)(2)] is designed for criminal prosecution  the most commonly found circumstance in which the problem arises  the facts and the proof problems surrounding this civil prosecution for what would be a crime if criminally prosecuted call for the application of the same kind of common sense rule. Unfortunately, analysis of [the babysitter's] testimony demonstrates that even if believed, that it fails to meet the criteria of the exception.... Thus, the court, in effect, sustains the defendant's objection after the fact, and gives [the babysitter's] testimony no weight. Pluid argues that the trial court's obvious disappointment that [the babysitter's] testimony was inadmissible, clearly indicate[s] that the lower court was influenced by passion or prejudice in rendering its judgment. We find, to the contrary, no sign that the trial court was influenced by the inadmissible evidence. In fact, the trial court appears to have given the testimony no weight. In effect, Pluid asks us to find that the trial court was being disingenuous when it stated that it would disregard the evidence and this we decline to do. In sum, the ratio of punitive damages to compensatory damages, the reference to criminal penalties, and the reference to the inadmissible testimony do not, individually or taken as a whole, show passion or prejudice on the part of the trial court in making the punitive damages award. On the other hand, the magnitude of Pluid's offense and the importance of the public policy violated both strongly show that the punitive damages award is not excessive. Pluid was found, by clear and convincing evidence, to have sexually assaulted, two to four times, a child living in his home. [4]
Lastly, Pluid argues that the punitive damages award is excessive as a matter of law because B.K. did not put on evidence of Pluid's net worth at trial. The wealth of the defendant is one factor to be taken into account in determining whether an award of punitive damages was excessive. Alaskan Village, 720 P.2d at 949. There is a split in authority among the courts of other states as to whether evidence of the defendant's wealth must be introduced in order for a punitive damages award to be upheld. In Bundy v. Century Equipment Co., 692 P.2d 754 (Utah 1984), the court held a punitive damages award to be excessive as a matter of law in the absence of any evidence regarding the defendant's assets or net worth. Id. at 759. The court reasoned that, because the main purpose of punitive damages is to punish the defendant, there must be net worth evidence before a judgment can be made as to whether that punishment was excessive as to that particular defendant. Punitive damages should be more than an inconvenience.... Their amount should be sufficient to discourage [the defendant], or anyone similarly situated, from repeating such conduct in the future. Id. Other courts confronting the issue have placed responsibility for presenting net worth evidence on the defendant himself. In Hicks v. Lilly Enterprises, Inc., 45 Or. App. 211, 608 P.2d 186 (1980), the Oregon court said: While the wealth of defendant is a relevant inquiry on the issue of punitive damages, it is not a necessary element. The evidence is relevant to allow the jury to assess punitive damages in an amount which would constitute a penalty in relation to defendant's wealth. The evidence can enure to the benefit of either party. If defendant's wealth is minimal, the jury may conclude a small assessment of punitive damages would properly penalize defendant. Conversely, if defendant's wealth is substantial, the jury may be convinced that a larger award is necessary. A defendant which presents no evidence of its financial worth cannot complain the jury did not have such evidence. Id., 608 P.2d at 189 (citations omitted); see also Romero v. Hariri, 80 Hawai`i 450, 911 P.2d 85, 93 (Haw. App. 1996) (concluding that the failure to show net worth does not necessarily invalidate a punitive award but only eliminates a factor with which to gauge the reasonableness of the award); Rogers v. Florence Printing Co., 233 S.C. 567, 106 S.E.2d 258, 262 (1958) (noting that the defendant should not be heard to complain that the jury made its award without such [net worth] information, where he himself testified and did not offer it). We find the Oregon method preferable to that of the Utah courts. The defendant is uniquely situated to put on evidence of his own net worth. He may choose not to do so if he concludes that it would not be to his benefit. If a defendant with a small net worth is before the court, he may make sure that the finder of fact is aware of his financial situation. A defendant who does not put on evidence of his own net worth cannot, later, complain of its absence. We reject Pluid's argument on this point as well.