Court Opinion

ID: 9728468
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:08:56.180234+00
Date Added: 2024-06-11T18:25:48.844223
License: Public Domain

ELKINGTON, Acting P. J., Concurring and Dissenting.
I concur generally with my respected colleagues’ opinion, except that I would not remand to the trial court for the suggested reduction of punitive damages because “the evidence was weak in establishing malice.”
I would reverse the punitive damage award for lack of substantial evidence of malice. Although, as the court’s opinion says, “malice is ordinarily a question of fact for the jury,” it is not such a question of fact where there is no substantial evidence to support it.
Here plaintiff Krusi negligently entrusted SFIC with endorsed, and therefore negotiable, stock certificates (street shares) for “safekeeping.” SFIC became indebted to defendant broker, Bear, Stearns & Co., represented the shares to be owned by itself, and delivered them to the broker as security for its debt, collection of which would otherwise be enforced. SFIC there*682after failed financially and the broker heard rumors, or was advised, that the supposedly hypothecated shares were not owned by SFIC. Going to its attorney for advice the broker was told that the stock certificates, having been acquired in good faith and for a consideration, with reason to believe that they were street shares owned by SFIC, it had a right to sell them and apply the proceeds toward SFIC’s debt. (Many would believe the advice sound, and that plaintiff Krusi was estopped to claim otherwise.) The broker, Bear, Stearns & Co., followed the advice.
My colleagues find substantial evidence of malice. I do not.
I believe I have adequately expressed my views on the subject of punitive damages by the concurring opinion in Rosener v. Sears, Roebuck & Co. (1980) 110 Cal.App.3d 740, 758 [168 Cal.Rptr. 237]. I shall not here repeat them, except to say that malice is patently not shown where one acting on the advice of counsel believes himself to be entitled to security, the true owner of which had negligently clothed a later convicted thief with the indicia of ownership.
I commend to higher authority, a curb on today’s rampant punitive damage awards, to which concededly no plaintiff is entitled, against which one may not obtain insurance, and as to which one may now be mulcted, without fraud, oppression, or malice on his part, but instead for negligence or advice of counsel found by a trier of fact to be erroneous.
A petition for a rehearing was denied August 1, 1983, and the opinion was modified to read as printed above. The petition of plaintiff and appellant for a hearing by the Supreme Court was denied September 7, 1983.