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Punitive Damages
Posted by: Nicholas Mayle
December 30, 2011
Topic: Personal Injury
One of the most commonly reported aspects of the law in the media is the issue of punitive damages. Whenever a large punitive damage award is given in a high profile case, it is sure to draw the attention of the national media. Along with this attention usually comes debate over whether punitive damage awards are too high. Unfortunately, this debate is usually fueled by a lack of understanding regarding what punitive damages actually are, when they can be awarded, and how much can be awarded.
Punitive damages are awardable under Colorado law. However, in Colorado they are usually referred to as "exemplary damages." Punitive Damages are damages designed to punish the defendant for seriously bad conduct. The Colorado Supreme Court adopted this principle long ago, stating, there are two purposes of punitive damages: "punishing the wrongdoer and setting an example for others." French v. Deane, 23 P. 609, 612 (Colo. 1894).
How are punitive damages different from other types of damages? Other types of damages are usually called actual damages and are designed to help the victim or person bringing the lawsuit. For instance, if the defendant injures someone and causes them to incur $20,000.00 in medical bills and to lose $10,000.00 in income, the victim could recover $30,000.00 in actual damages to compensate them for the damage the defendant caused. Punitive damages would be damages to punish the defendant over and above the actual damages that the plaintiff sustained. Actual damages are designed to help the victim. Punitive damages are designed to help society send a message to the defendant and others like him that we will not tolerate that type of conduct. Colorado recognizes this principle and allows people bringing lawsuits to recover punitive damages in certain circumstances.
However, just because Colorado allows punitive damages awards, does not mean they are easy to obtain. In fact, Colorado law does not even permit a party bringing a law suit to ask for punitive damages in their initial Complaint. Section 13-21-102, C.R.S. A "Complaint" is a document filed with the court which initiates a law suit. A party bring a law suit in Colorado may only ask for punitive damages after discovery has been conducted and the party "establishes prima facie proof of a triable issue." Section 13-21-102 (1.5)(a), C.R.S. Basically, this means that the party has to first find or "discover" sufficient evidence to support that the defendant's conduct was bad enough to warrant an award of punitive damages. In other words, someone bringing a lawsuit cannot just allege that defendant behaved badly. There has to be strong evidence supporting the allegation before the court will allow it.
So how bad does a defendant's conduct have to be? Under Colorado law, the defendant's conduct has to involve "fraud, malice, or willful and wanton conduct." Section 13-21-102(1)(a), C.R.S. "'Willful and wanton conduct' means conduct purposely committed which the actor must have realized is dangerous, done heedlessly and recklessly, without regard to consequences, or the rights and safety of others, particularly the plaintiff." Section 13-21-102(1)(b), C.R.S. This includes conduct that creates a substantial risk of injury to the plaintiff, committed with awareness of the risk and with no regard to the consequences. Messler v. Phillips, 867 P.2d 128, 134 (Colo. App. 1993).
In other words, the defendant's conduct has to be pretty bad. Consider some real world examples. What if someone hit a child while speeding through a school zone and was driving with a blood alcohol content above the legal limit? This would definitely seem to be conduct this is "dangerous, done heedlessly and recklessly, without regard to consequences, or the rights and safety of others." This is the type of conduct that we as a society, through our legislature and legal system, have determined should be punished with an award of punitive damages. Consider another example. What if an insurance company responsible for paying a claim takes months to respond and only offers to pay their insured a fraction of what is owed? This would conduct would seem to be "purposely committed," and "with no regard to the consequences," to the person the insurance company owes. Unfortunately, this type of conduct by insurance companies occurs far too often, but, fortunately for the consumer, is the type of conduct that can be punished with an award of punitive damages.
So how much can be awarded when the defendant's conduct is found to be bad enough to be punished with an award of punitive damages? Much attention is given to large punitive damages awards around the country. However, Colorado actually has very restrictive laws regarding punitive damages. In Colorado, a punitive damages award can usually not exceed the amount of the actual damages. Section 13-21-102(1)(a), C.R.S. In other words, if a person has $100,000.00 in actual damages, like medical bills, lost income, permanent impairment, and emotional stress, they can usually recover no more than $100,000.00 in punitive damages.
So although much attention is given to the notion that punitive damages are "out of control," the reality is that they are difficult to obtain and, even when they are obtained, there are significant restrictions on how much can be awarded. If you have a potential claim involving malicious or willful conduct, and believe that you may be entitled to punitive damages, you will likely need the assistance of an experienced attorney to help navigate these punitive damages restrictions.
