Court Opinion

ID: 9471806
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:41:36.112858+00
Date Added: 2024-06-11T17:42:35.347877
License: Public Domain

POOLE, Circuit Judge,
dissenting:
Despite the majority’s effort to apply a gloss of reason, the magistrate’s award of punitive damages in this case is shockingly excessive and ought to be set aside. It is patently disproportionate to the wrongful conduct and to the appellants’ financial statements. The magistrate’s sense of balance seems to have been overcome by the zeal to inflict harsh punishment, even though some punishment was within his discretion.
The awards were as follows:
(1) $120,000 for special damages for conversion (of the $102,000 check) and for “implied indemnity.”
(2) $100,000 in general damages for libel— the basis for such damage is unknown.
(3) $200,000 in punitive damages for fraud and conversion.
(4) $200,000 in punitive damages for libel.
This case was essentially a claim for conversion because Lin misappropriated $102,-000. The court awarded $120,000 which was full compensation for that loss. It then awarded $100,000 as general damages for the libel because Lin “stone-walled” the plaintiffs while denying the conversion and contending that plaintiffs were responsible.
Not content with awarding $220,000 to an organization which was fully compensated by half that sum, the magistrate next awarded an additional $200,000 as punitive damages for the conduct of fraud and conversion. And above that, he awarded $200,-000 more as punitive damages for libel.
In sum, the plaintiffs, who were out of pocket not more than $120,000, got $500,000 more in what amounted to penalty amercements.
The magistrate might well have been incensed at Lin’s conduct and could properly impose Rule 37 sanctions. But the size and circumstances of the sanctions here amount to a forfeiture and reflect outrageous vindictiveness. In giving this windfall, there *1475are no findings justifying the amounts as measured against the appellants’ net worth. The appellees suggest that the net worth figure, including the value of Lin’s home, may have been a million dollars. No such finding of net worth was made by the magistrate when he fixed damages.
I disapprove what, despite the majority’s attempt to explain it, is a forfeiture, and would reverse.