Punitive damages are generally awarded for malicious, tortious misconduct. For purposes of awarding punitive damages, “malicious” conduct is normally defined to include grossly negligent conduct likely to result in serious injury or death, reckless conduct demonstrating a conscious disregard for the safety or rights of others, and/or intentional and willful misconduct meant to harm others or their property. Punitive damages are generally only awarded for claims sounding in “tort.” A tort is generally described as a civil wrong that proximately causes a person to suffer injuries or damages and that results in legal liability for the wrongdoer who committed the tortious act. Wrongdoing that causes physical or mental injuries or property damage typically falls within the law of torts. In the business field, a simple breach of contract is not a tort and will not give rise to a claim for punitive damages. However, conduct constituting a fraud will potentially give rise to an award of punitive damages if the conduct is sufficiently egregious.
In addition to the law’s bedrock principle of assuring injured or damaged people or entities are fully compensated for their injuries and damages, the purpose of the law in providing an award of punitive damages is generally twofold, including punishing the wrongdoer for their conduct and deterring others similarly situated from performing the same type of conduct in the future. Because an improper award of punitive damages may violate the Constitutions of the United States and the individual states, the United States Supreme Court and state appellate courts have set forth requirements and guidelines Courts must follow in instructing juries as to the factors that must be considered in awarding punitive damages and in reviewing such jury awards.
Once a trial court determines the evidence may permissibly support an award of punitive damages, constitutional concerns typically require the trial court to instruct a jury to consider the following or similar types of factors:
(1) Punitive damages should bear a reasonable relationship to the harm that is likely to occur from the defendant’s conduct as well as to the harm that actually has occurred. If the defendant’s actions caused or would likely cause in a similar situation only slight harm, the damages should be relatively small. If the harm is grievous, the damages should be greater.
(2) The jury may consider the reprehensibility of the defendant’s conduct. The jury should take into account how long the defendant continued in his actions, whether he was aware his actions were causing or were likely to cause harm, whether he attempted to conceal or cover up his actions or the harm caused by them, whether/how often the defendant engaged in similar conduct in the past, and whether the defendant made reasonable efforts to make amends by offering a fair and prompt settlement for the actual harm caused once his liability became clear to him.
(3) If the defendant profited from his wrongful conduct, the punitive damages should remove the profit and should be in excess of the profit, so that the award discourages future bad acts by the defendant.
(4) As a matter of fundamental fairness, punitive damages should bear a reasonable relationship to compensatory damages.
(5) The financial position of the defendant is relevant.
Syl. Pt. 3, Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991).
Should a jury when applying these factors to the evidence in a case decide to award punitive damages, the trial court will review the award, with the discretion to reduce the award, by considering the costs of the litigation, any criminal sanctions already imposed on the defendant for his conduct, any other civil actions against the same defendant based on the same conduct, and the appropriateness of the award to encourage fair and reasonable settlements when a clear wrong has been committed, including a consideration of the cost of the litigation to the plaintiff. Syl. Pt. 4, Garnes v. Fleming Landfill, Inc., id.
Although the above factors are those specifically required to be used by trial courts in West Virginia by the West Virginia Supreme Court of Appeals, because the federal constitution applies to all United States citizens, each state will use a similar set of factors in instructing a jury as to the factors it must consider in determining whether to award punitive damages. It also should be noted that some state legislatures have adopted statutes that address what conduct will justify an award of punitive damages, and some have also set limits as to the maximum amount any award cannot exceed. Accordingly, the state in which you file your lawsuit may place certain restrictions on the availability and number of punitive damages that may be awarded to you.