Court Opinion

ID: 9569846
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:18:01.050368+00
Date Added: 2024-06-11T12:04:09.350841
License: Public Domain

Chief Justice ROVIRA
dissenting:
The majority holds that section 13-21-102(4), 6A C.R.S. (1987), results in a forced taking of a judgment creditor’s property in violation of both the United States and Colorado Constitutions. Because I believe that a claim for exemplary damages is purely a statutory right and such a claim may be limited or conditioned by the legislature, no taking of a property right results when an award of exemplary damages has been obtained pursuant to the statute. Accordingly, I respectfully dissent.
I
Based on plaintiff’s claim for malicious prosecution against the Denver Publishing Company, a jury awarded him exemplary damages in the amount of $160,500. At the time plaintiff brought his claim, section 13-21-102(4) was in effect and provided that one-third of any exemplary damages award collected must be paid to the state general fund. In addition, section 13-21-102(l)(a) provided that exemplary damages should not exceed the amount of actual damages unless exceptional circumstances justify an increase. §§ 13-21-102(1)(a) and 13-21-102(3), 6A C.R.S. (1987). In order to comply with the statute, plaintiff requested that his exemplary damages award be reduced so as not to exceed the amount of actual damages awarded. Pursuant to his request, the trial court reduced the exemplary damages award to $118,980. Plaintiff also requested the trial court to find section 13-21-102(4) unconstitutional. The trial court refused.
On appeal plaintiff contends that the legislative requirement that a portion of an exemplary damages judgment actually collected be paid into the state’s general fund is an unconstitutional taking of property. Although plaintiff has raised other constitutional issues, the majority relies only on the “taking” issue in arriving at the conclusion that the statute is unconstitutional.
II
The majority reasons that the entire judgment for exemplary damages is a property interest of the plaintiff and that if the state takes a portion such taking is unconstitutional.
To arrive at this conclusion, the majority examines the nature of an award for exemplary damages, and finds that compensatory damages and exemplary damages are related and dependent on one another, both having similar reparative functions. Compensatory damages serve a primary repara-*274tive function of making the injured party whole, while exemplary damages, although designed to punish and deter, contemplate the severity of the injury perpetrated on the injured party by the wrongdoer as well, thus also serving a reparative function.
Because the term property includes a “legal right to damage for an injury,” it follows that the term property includes the judgment itself. Maj. op. at 267 (quoting Rosane v. Senger, 112 Colo. 363, 370, 149 P.2d 372, 375 (1944)). According to the majority, because section 13-21-102(4) contemplates the entry and actual collection of a final judgment before the statutory grant of one-third interest to the state comes into play, the state is taking a property interest, violating the Fifth Amendment of the United States Constitution and article II, section 15 of the Colorado Constitution.
I do not dispute that a judgment is a property right. I also agree that a “taking” of a judgment without compensation would be unconstitutional. I disagree however, based upon facts and law applicable to this case, that the plaintiff has a right to the entire exemplary damages judgment. My disagreement is premised on the ground that a claim for exemplary damages is a statutory right which may be conditioned by the legislature and thus the entire judgment never vested in the plaintiff.
Exemplary damages were authorized by statute to punish and deter conduct attended by circumstances of fraud, malice or willful and wanton conduct. 1889 Colo. Sess.Laws 64-65. Although exemplary damages may have a negligible reparative function, it is well-established in Colorado that punishment and deterrence is the essential purpose of exemplary damages. Seaward Constr. Co., Inc. v. Bradley, 817 P.2d 971, 974 (Colo.1991); Mince v. Butters, 200 Colo. 501, 616 P.2d 127 (1980); French v. Deane, 19 Colo. 504, 511, 36 P. 609 (1894). The effort by the majority to establish a link between actual and exemplary damages due to their reparative functions is tenuous at best.
The uniqueness of exemplary damages is also demonstrated in the statute authorizing such damages. First, the wrong giving rise to exemplary damages must be attended by circumstances of fraud, malice, or willful and wanton conduct. Second, the amount of an exemplary damages award may not exceed the actual damages awarded without circumstances justifying an increase. Third, the court may reduce an exemplary damages award if the deterrent effect has been accomplished or if the purpose has been served. §§ 13-21-102(l)(a), (2)(a), & (c), 6A C.R.S. (1987). Finally, a claim for exemplary damages must be proven beyond a reasonable doubt, while compensatory damages may be proven by a preponderance of the evidence. One has a right to compensatory damages when one has suffered an injury, but exemplary damages are allowed only in very limited circumstances.
The two remedies may be interrelated, as the majority opinion suggests, but a claim for exemplary damages is unique and should not be viewed as a legal right which is any greater than that provided by statute.
Since a claim for exemplary damages arises from statute, such a claim may also be limited by statute. Kaitz v. District Court, 650 P.2d 553, 556 (Colo.1982). If the legislature may completely eliminate exemplary damages in civil cases, as the majority concedes, the legislature may also place conditions on a statutory grant of authority to recover such damages. The plaintiff recognized that the right to exemplary damages is a statutory right, and that right is subject to legislative conditions. Plaintiff accepted the condition pursuant to section 13-21-102(l)(a) which provides that exemplary damages must not exceed the amount of actual damages, when he requested that the exemplary damages award be reduced from $160,500 to $118,980. Thus, plaintiff concedes that exemplary damages may be limited by the legislature.
The legislature cannot modify a judgment which is a property right, but the legislature is free to condition a claim for exemplary damages which is allowed only *275pursuant to a statutory grant.1 It is true that the legislature can not pass an act depriving a citizen of any vested right, but to be a vested right, ‘[i]t must be something more than a mere expectation based upon an anticipated continuance of the existing law. It must have become a title, legal or equitable, to the present or future enjoyment of property....’” Smith v. Hill, 12 Ill.2d 588, 592, 147 N.E.2d 321, 325 (1958) (quoting People ex rel. Foote v. Clark, 283 Ill. 221, 222, 119 N.E. 329, 330 (1918)). The Illinois court went on to hold that a plaintiff is entitled to a cause of action for damages actually sustained, but a vested right to exemplary damages arises only when such damages have been allowed by a judgment. “There being no vested right in any plaintiff to exemplary, punitive, vindictive or aggravated damages the legislature may therefore restrict or deny the allowance of such damages at its will.” Smith, 147 N.E.2d at 325.
Any property right plaintiff may have in the award is limited as provided by the statute. When the statute became effective, plaintiff had a “mere expectancy” in a possible future exemplary damage award. This expectancy was conditioned by one-third going to the state, and plaintiff was aware of this at the time he filed his complaint.2
Section 13-21-102(4) repudiates any state interest in the tort litigation and prevents collection by the state until the plaintiff has collected the exemplary damages judgment. The majority reasons that this statutory provision supports its conclusion that the judgment creditor has a full property interest in the entire exemplary damages award. I disagree. The legislature, by that provision, has sought to protect the plaintiff’s interests by conditioning the state’s right to receive payment until the judgment has been collected. Since the state is only entitled to receive its portion of the exemplary damages award after collection has been successful, the plaintiff is not harmed.
The majority is concerned that the “forced contribution of one-third of the exemplary damages judgment is imposed not on the defendant wrongdoer ... but upon the plaintiff who suffered the wrong.” Maj. op. at 270. I disagree. There is minimal burden placed on the plaintiff where, as here, the plaintiff had a mere expectancy in exemplary damages, and where only a portion of that received is contributed to the state. Furthermore, the state’s receipt of one-third of an exemplary damages judgment does not negate the punishment of the wrongdoer. The wrongdoer must pay the entire exemplary damages judgment regardless of who receives it.
It is not unreasonable for the legislature to condition an exemplary damage award where the purpose behind exemplary damages is to punish the wrongdoer and deter dangerous or malicious conduct. The legislature has recognized that exemplary damages are allowed for the benefit of the public. In exercising its legislative powers, the legislature appropriately decided that the goal of benefitting society through exemplary damages awards required a portion of exemplary damages awards be paid to the state.
As I do not believe that the statute violates the taking clause of either the Colorado or the United States Constitutions, I am confronted with the other constitutional claims not addressed in the majority opinion.3 Because the majority reverses on the *276taking clause issue it would serve no worthwhile purpose to consider the other constitutional issues raised by the plaintiff. I respectfully dissent.
I am authorized to state that JUSTICE LOHR joins in this dissent.

. Non-economic damages have also been limited by statute in order to prevent undue burden on economic, commercial, and personal welfare. § 13-21-102.5, 6A C.R.S. (1987).

. Expressed alternatively, a plaintiff’s property right in a judgment for punitive damages is intrinsically subject to partial defeasance upon collection by reason of the statutory scheme in place at the time of entry of judgment. A plaintiff receives the full benefit of the property right so described; there is no taking.

. See maj. op. at 265 n. 3.