Punitive damages serve three purposes: (i) to punish the wrongdoer, (ii) to deter the wrongdoer from engaging in similar conduct in the future, and (iii) to deter others from similar conduct.7 The basis of an award of punitive damages has been variously described as malice, hatred, spite, a conscious desire to cause injury, intentional, willful or outrageous conduct, evil motive, conscious or reckless indifference to the rights of others, and an “I don’t care” attitude.8 Under these standards, the actor’s state of mind is critical in determining any entitlement to an award of punitive damages.9 A plaintiff will rarely be able to present direct evidence of the defendant’s state of mind at the time of the conduct in question. In many cases, however, the conduct itself and the circumstances immediately surrounding it may warrant an inference of reckless, willful or wanton conduct. Such state of mind might also be inferred from evidence of the plaintiff’s prior behavior toward persons other than the plaintiff.10 When a claim of recklessness is based on a form of passive negligence, such as an error of judgment, it must be shown that the precise harm that resulted must have been reasonably apparent but was consciously ignored in the formulation of the judgment.11
Whether to award punitive damages, as well as any amount, is within the province of the trier of fact.12 There is no formula that can be applied mathematically to determine an award of punitive damages.13 Consideration must be given, however, to the amount of compensatory damages and the tortious act causing the injury.14 An award of punitive damages should be reasonably proportionate to the amount of compensatory damages.15 Indeed, an award of punitive damages may not be made unless the plaintiff has also been awarded some type of compensatory damages.16 An award of nominal damages, however, will support an award of substantial punitive damages since such an award must be based on facts which, apart from punitive damages, are sufficient to maintain a cause of action.17 An award of punitive damages, however, is not required, even when the finder of fact determines that the defendant acted with fraud or malice.17.1
Because the law recognizes that punitive damages can be awarded both to punish a defendant and to deter others for similar conduct, and because punitive damages traditionally served as civil penalties to substitute for criminal prosecution, juries may consider the amount of punishment a defendant has already received in a related criminal action in order to determine whether to award punitive damages.17.2
Admissible evidence in determining punitive damages is not limited to that necessary to prove compensatory damages.18 It is appropriate for the jury to hear evidence relating to the financial circumstance of the defendant.19 This is because what is punitive for a person or organization in modest circumstances would not be enough to deter a wealthy person or organization.
As a general rule, punitive damages may not be assessed in an action for breach of contract.20 Where, however, the breach is similar to a tort or the breach is otherwise willful or malicious, punitive damages may be. awarded.21
In the absence of express statutory authorization, the Court of Chancery is precluded from awarding punitive damages.22
7. Estate of Farrell ex rel. Bennett v. Gordon, 770 A.2d 517, 521 (Del. 2001); Strauss v. Biggs, 525 A.2d 992, 999-1000 (Del. 1987); Jardel Co. v. Hughes, 523 A.2d 518, 529 (Del. 1987); Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1077 (Del. 1983); Riegel v. Aastad, 272 A.2d 715, 718 (Del. 1970); Beals v. Washington International, Inc., 386 A.2d 1156, 1160 (Del. Ch. 1978); Sheppard v. A.C. & S. Co., 484 A.2d 521, 524 (Del. Super. 1984), app. denied, 497 A.2d 783 (Del. 1985); Bryan v. Thos. Best & Sons, Inc., 453 A.2d 107, 108 (Del. Super. 1982); Guthridge v. Pen-Mod, Inc., 239 A.2d 709, 715 (Del. Super. 1967); Chapman v. Bank of Delaware, C.A. No. 90C-JN-1 10, slip op. at 9, Toliver, J. (Del. Super. Aug. 11, 1992).
8. See Estate of Rae v. Murphy, 956 A.2d 1266, 1270 (Del. 2008); Porter v. Turner, 954 A.2d 308, 312 (Del. 2008); Cummings v. Pinder, 574 A.2d 843, 845 (Del. 1990); Jardel Co. v. Hughes, 523 A.2d 518, 529 (Del. 1987); Cloroben Chemical Corp. v. Comegys, 464 A.2d 887, 891 (Del. 1983); Reynolds v. Willis, 209 A.2d 760, 763 (Del. 1965); Mattern v. Hudson, 532 A.2d 85, 86 (Del. Super. 1987); Hodges v. Smith, 517 A.2d 299, 302 (Del. Super. 1986); Bryan v. Thos. Best & Sons, Inc., 453 A.2d 107 (Del. Super. 1982); McClain v. Faraone, 369 A.2d 1090, 1095 (Del. Super. 1977); Guthridge v. Pen-Mod, Inc., 239 A.2d 709, 715 (Del. Super. 1967).
9. Jardel Co. v. Hughes, 523 A.2d 518, 530 (Del. 1987); Strauss v. Biggs, 525 A.2d 992, 999 (Del. 1987).
10. Strauss v. Biggs, 525 A.2d 992, 999 (Del. 1987).
11. Jardel Co. v. Hughes, 523 A.2d 518, 531 (Del. 1987).
12. Jardel Co. v. Hughes, 523 A.2d 518, 527 (Del. 1987); Alston v. Chrysler Corp., C.A. No. 97C-09-214-WTQ, slip op. at 1, Quillen, J. (Del. Super. May 24, 1999) (citing treatise); Concors Supply Co. v. Giesecke Int’l, Ltd., C.A. No. 83C-MR-122, slip op. at 9, Toliver, J. (Del. Super. Apr. 28, 1992), aff’d mem. sub nom. Home Ins. Co. v. Concors Supply Co., Inc., 618 A.2d 90 (Del. 1992).
13. Malcolm v. Little, 295 A.2d 711, 714 (Del. 1972).
14. Malcolm v. Little, 295 A.2d 711, 714 (Del. 1972); Guthridge v. Pen-Mod, Inc., 239 A.2d 709, 715 (Del. Super. 1967).
15. Gannett Co., Inc. v. Kanaga, 750 A.2d 1174, 1190 (Del. 2000); Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1077 (Del. 1983); Reynolds v. Willis, 209 A.2d 760, 764 (Del. 1965); Sheppard v. A.C. & S. Co., 484 A.2d 521, 525 (Del. Super. 1984), app. denied, 497 A.2d 783 (Del. 1985).
16. Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1077 (Del. 1983); Connelly v. Willey, C.A. No. 86C-OC-132, slip op. at 8, Stiftel, J. (Del. Super. Feb. 28, 1989).
17. Q-Tone Broadcasting Co. v. MusicRadio of Maryland, Inc., C.A. No. 93C-09-21-WTQ, slip op. at 3, Quillen, J. (Del. Super. Apr. 22, 1996); Standard Distributing Corp. v. NKS Distributors, Inc., C.A. No. 92C-05-036-WTQ, slip op. at 16-17, Quillen, J. (Del. Super. Jan. 3, 1996 (nominal damages of $1 supported punitive damages of $150,000); Marcus v. Funk, C.A. No. 87C-SE-26, Balick, J. (Del. Super. Apr. 21, I993) (nominal award of $1 supported punitive damages of $37,000); Lutz v. Wilmington Trust Co., C.A. No. 9494, slip op. at 2, Taylor, J. (Del. Super. Aug. 23, 1977).
17.1. Alston v. Chrysler Corp., C.A. No. 97C-09-214-WTQ, slip op. at 2, Quillen, J. (Del. Super. May 24, 1999).
17.2. Wilhelm v. Ryan, 903 A.2d 745, 752 (Del. 2006).
18. Miller v. Suburban Propane Gas Corp., C.A. No. 87C-MR-14, slip op. at 5, Taylor, J. (Del. Super. Aug. 15, l989)(ORDER), app. dismissed, 565 A.2d 913 (Del. 1989).
19. Strauss v. Biggs, 525 A.2d 992, 1000 (Del. 1987); Bryan v. Thos. Best & Sons, Inc., 453 A.2d 107, 108 (Del. Super. 1982); Guthridge v. Pen-Mod, Inc., 239 A.2d 709, 715 (Del. Super. 1967); Wiener v. Markel, 92 A.2d 706, 707 (Del. Super. 1952).
20. Casson v. Nationwide Ins. Co., 455 A.2d 361, 365 (Del. Super. 1982); J. J. White, Inc. v. Metropolitan Merchandise Mart, Inc., 107 A.2d 892, 894 (Del. Super. 1954).
21. E.I. du Pont de Nemours and Co. v. Pressman, 679 A.2d 436, 445 (Del. 1996); Jardel Co. v. Hughes, 523 A.2d 518, 529 (Del. 1987); Casson v. Nationwide Ins. Co., 455 A.2d 361, 368 (Del. Super. 1982); Bryan v. Thos. Best & Sons, Inc., 453 A.2d 107, n.1 (Del. Super. 1982); Anderson v. State, Dept. of Administrative Services, C.A. No. 89C-NO-16, slip op. at 3, Steele, J. (Del. Super. Oct. 8, 1992), aff’d mem., 620 A.2d 856 (Del. 1993).
22. Moore v. Graybeal, No. 340, 1988, slip op. at 3, Walsh, J. (Del. Oct. 28, 1988) (ORDER), disposition reported at 550 A.2d 35 (Del. 1988) (TABLE); Kaye v. Pantone, Inc., 395 A.2d 369, 372 (Del. Ch. 1978); Beals v. Washington International, Inc., 386 A.2d 1156, 1159 (Del. Ch. 1978).
© 2010 David L. Finger