Court Opinion

ID: 9618673
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:15:24.970899+00
Date Added: 2024-06-11T18:04:31.165013
License: Public Domain

ERICKSON, Justice.
In this original proceeding, the defendant seeks to prohibit the district court from enforcing an order that he disclose his assets, income, and net worth in a medical malpractice action where the plaintiff has asserted a claim for punitive damages. We issued a rule to show cause. We now make that rule absolute and remand to the district court with directions.
Pursuant to C.R.C.P. 33, the plaintiff addressed the following interrogatories to the defendant:
“26. List specifically and in detail, for each year beginning January 1, 1975 and continuing to date, your gross income as shown on your federal income tax return, and identify the amount of your income *770in each year which constitute compensation from your practice as a physician and surgeon.
“27. List, specifically and in detail, your assets, liabilities and net worth, both as of August 30, 1976 and as of the present date.”
The defendant filed a motion for a protective order which was denied, and the trial court ordered the defendant to answer the interrogatories. The interrogatories are predicated on the complaint which asserts a claim for punitive damages. The complaint charged that the defendant, in performing a laminectomy on the plaintiff, failed to remove a surgical sponge from the surgery site. The claim for punitive damages centers on the alleged failure of the defendant to notify the plaintiff of the presence of the sponge after the surgery was completed and the presence of the sponge was discovered in post-operative x-rays.
It is too plain for cavil that the interrogatories in issue would not be relevant if punitive damages were not in issue. It has long been established as a principle of tort law that in suits involving the assessment of compensatory damages, evidence of a defendant’s financial status is inadmissible. See Barnes v. Sand Mountain Electric Co-op, 40 Ala.App. 88, 108 So.2d 378 (1958); Packard v. Moore, 9 Cal.2d 571, 71 P.2d 922 (1937); Baggett v. Davis, 124 Fla. 701, 169 So. 372 (1936); Laidlaw v. Sage, 158 N.Y. 73, 52 N.E. 679 (1899); 1 Jones on Evidence, §§ 4.48, 49 (6th ed. 1972). However, in determining whether punitive damages should be awarded to a plaintiff, the financial condition of the defendant is a proper factor to be considered. Miller v. Carnation Company, 39 Colo.App. 1, 564 P.2d 127 (1977); McAllister v. McAllister, 72 Colo. 28, 209 P. 788 (1922); Cour-voisier v. Raymond, 23 Colo. 113, 47 P. 284 (1896). The purpose of punitive damages is not to compensate an injured plaintiff, but to punish the defendant and to deter others from similar conduct in the future.1 See Beebe v. Pierce, 185 Colo. 34, 521 P.2d 1263 (1974). Therefore, in determining the amount which should be awarded as punitive damages, the severity of the defendant’s wrong, as well as the extent of the defendant’s assets, must be considered to ensure that the award will punish the defendant. See Note, The Use of Evidence of Wealth in Assessing Punitive Damages in New York; Rupert v. Sellers, 44 Albany L.Rev. 422 (1980).
C.R.C.P. 26(b)(1) permits broad discovery and provides:
“Parties may obtain discovery regarding any matter, not privileged which is relevant to the subject matter involved in the pending action.... It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.”
See also, Lucas v. District Court, 140 Colo. 510, 345 P.2d 1064 (1959).
Because this rule permits broad discovery, it has often been interpreted to mean that more is better. However, disproportionate discovery may increase the cost of litigation, harass the opponent, and tend to delay a fair and just determination of the legal issues. We have utilized a balancing test to resolve other discovery issues, and believe that such a test is appropriate in this case. Curtis, Inc. v. District Court, 186 Colo. 226, 526 P.2d 1335 (1974). The need for discovery must be balanced by weighing the defendant’s right to privacy and protection from harassment by an intrusion into his financial affairs, against the *771plaintiff’s right to discover information which is relevant to a claim- for punitive damages. See Griswold v. Connecticut, 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965); Davidson v. Dill, 180 Colo. 123, 503 P.2d 157 (1972); Rugg v. McCarty, 173 Colo. 170, 476 P.2d 753 (1970); Cobb v. Superior Court, 99 Cal.App.3d 543, 160 Cal.Rptr. 561 (1979). Compare United States v. Reynolds, 345 U.S. 1, 73 S.Ct. 528, 97 L.Ed. 727 (1953), dealing with disclosure of privileged material. Consequently, the mere allegation that a plaintiff is entitled to punitive damages will not support an order for discovery of a defendant’s financial condition.2
Procedurally, the question is in what manner and at what stage of the proceedings should evidence of a defendant’s financial worth be discoverable? We hold that prima facie proof of a triable issue on liability for punitive damages is necessary to discover information relating to the defendant’s financial status.3 The trial judge should grant the plaintiff some leeway in establishing his prima facie case. The existence of a triable issue on punitive damages may be established through discovery, by evidentiary means, or by an offer of proof. This procedure protects the defendant from an unwarranted invasion of privacy and harassment where the plaintiff has merely asserted a claim for punitive damages. It also comports with the broad right of discovery granted by C.R.C.P. 26(b)(1), and adequately promotes the goals of deterrence and punishment that an award of punitive damages seeks to accomplish. Cobb v. Superior Court, supra; Gierman v. Toman, 77 N.J.Super. 18, 185 A.2d 241 (1962). See also, Stern v. Abramson, 150 N.J.Super. 571, 376 A.2d 221 (1977); Belinski v. Goodman, 139 N.J.Super. 351, 354 A.2d 92 (1976).
The discovery issue may be presented to the court, as it was in this case, when interrogatories are submitted by the plaintiff pursuant to C.R.C.P. 33 and the defendant responds with a motion for a protective order. C.R.C.P. 26(c)(1). Alternatively, the issue may be raised at a discovery hearing, or at a pretrial conference. C.R.C.P. 16. Generally, the burden is cast upon the party who seeks a protective order to show annoyance, embarrassment or oppression. However, we hold that the nature of discovery of financial information of a litigant requires a broader basis for protection. .Thus, when punitive damages are in issue and information is sought by the plaintiff relating to the defendant’s financial condition, justice requires no less than the imposition on the plaintiff of the burden of establishing a prima facie right to punitive damages.
Rules 26 to 37, C.R.C.P., must be construed together along with the requirement which we now impose as a condition precedent to the plaintiff’s right to discovery of financial information. Following discovery of the facts relating to the liability issues and the claim for punitive damages, the trial judge can determine whether the plaintiff has developed a factual foundation and has established a prima facie case of liability for punitive damages.
The extent of discovery, however, even after a prima facie case is made, is not unlimited. Specific questions requesting detailed information regarding the defendant’s financial status may constitute unnecessary harassment. Cobb v. Superior Court, supra; Gierman v. Toman, supra. Consequently, the permissible scope of discovery should include only material evidence of the defendant’s financial worth, and should be *772framed in such a manner that the questions proposed are not unduly burdensome.
Accordingly, the rule to show cause is made absolute, and the case is remanded for further proceedings not inconsistent with the directions contained in this opinion.
LEE, DUBOFSKY and LOHR, JJ., dissent.

. In Colorado, a claim for punitive damages must be predicated upon section 13-21-102, C.R.S. 1973, which provides: "In all civil actions in which damages are assessed by a jury for a wrong done to the person, or to personal or real property, and the injury complained of is attended by circumstances of fraud, malice or insult, or a wanton and reckless disregard of the injured party’s rights and feelings, the jury, in addition to the actual damages sustained by such party, may award him reasonable exemplary damages.” See also, Sherwood v. Graco, Inc., 427 F.Supp. 155 (D.Colo.1977); Carlson v. McNeill, 114 Colo. 78, 162 P.2d 226 (1945); C.R.C.P. 101(d).

. We reject the procedure which requires a bifurcated trial when punitive damages are sought. In that procedure, evidence of a defendant’s financial worth cannot be brought out until the jury has returned a special verdict that the plaintiff is entitled to punitive damages. See Rupert v. Sellers, 48 A.D.2d 265, 368 N.Y.S.2d 904 (1975); Note, The Use of Evidence of Wealth in Assessing Punitive Damages in New York; Rupert v. Sellers, 44 Albany L.Rev. 422 (1980); Zeisel and Callahan, Split Trials and Time Savings: A Statistical Analysis, 76 Harv.L.Rev. 1606 (1963).

. The existence of a triable issue on liability for punitive damages is established by a showing of a reasonable likelihood that the issue will ultimately be submitted to the jury for resolution.