Punitive Standards and Limitations Under Florida Law

By David H Margol

I. Overview

Generally, punitive damages serve the dual purpose of punishing the defendant and deterring others from acting in a similar manner. Under Florida law, punitive damages focus on the defendant’s conduct in committing the wrongful act as opposed to the act itself. These damages, unlike compensatory damages, are not intended to provide additional compensation to the injured party. Therefore, a punitive damages analysis should focus on the defendant, as opposed to the plaintiff.

II. Procedural Standard

The first step a claimant must take in an effort to recover punitive damages is a procedural step. What is required of the claimant is set forth in Fla. Stat. Section 768.72 (1). This section dictates that a claim for punitive damages will not be permitted “unless there is a reasonable showing by evidence in the record, or proffered by the claimant, which would provide a reasonable basis for recovery of such damages.” Fla. Stat. 768.72 (1). The statute continues by addressing the appropriate civil procedure issues. “The rules of civil procedure shall be liberally construed so as to allow the claimant discovery of evidence which appears reasonably calculated to lead to admissible evidence on the issue of punitive damages.” Id. This procedural standard is reinforced and clarified by the Florida Supreme Court in Globe Newspaper Co. v. King, 658 So. 2d 518 (Fla. 1995). In ruling on this issue, the Court held that the plain meaning of Section 768.72 “requires a plaintiff to provide the court with a reasonable evidentiary basis for punitive damages before a court may allow a claim for punitive damages to be included in a plaintiff's Complaint.” Id. This means that a plaintiff seeking to recover such damages must first demonstrate to the trial court that a reasonable evidentiary basis for punitive damages exists before an argument can be made to the jury regarding this issue. Once this hurdle has been successfully crossed, the substance of the evidence put forth by the plaintiff becomes the issue of paramount importance.

III. Substantive Standard

Although a “traditional standard” exists and has been utilized for many years, there are more recent standards that have been put in place by the courts as well as the legislature. The traditional standard was set forth by the Florida Supreme Court in Winn & Lovett Grocery Co. v. Archer, 171 So. 214, (Fla. 1936). In Archer, the Court held that in order to recover punitive damages the plaintiff must “allege some general facts and circumstances of fraud, malice, gross negligence, or oppression tending to show plaintiff’s right to recover such damages in addition to damages by way of compensation.” Id. at 222. The Court goes on to state that these damages are “left to the discretion of the jury, as the degree of punishment to be inflicted must always be dependent on the circumstances of each case, as well as upon the demonstrated degree of malice, wantonness, oppression, or outrage found by the jury from the evidence.” Id. at 221-222. The Court’s decision in Archer further clarified that as a general rule, the liability of a corporation regarding punitive damages for “wanton or malicious torts committed by an agent or servant” of the corporation is no different than the liability of an individual acting in the same manner. Id. at 221.

Another significant Florida Supreme Court case, which has important implications when deciding the issue of punitive damages, is Ault v. Lohr, 538 So. 2d 454 (Fla. 1989). In Ault, the Court held that an award of nominal or compensatory damages is not required in order to award punitive damages. Id. at 454. Rather, all that is required is a finding of liability by the trier of fact. Id. This decision resolved conflicting lower court opinions and provided a clearer standard moving forward.

The “malice standard” or the existence of malice as a characteristic of the defendant’s actions is also commonly referred to by courts when the issue of punitive damages is raised. In most jurisdictions, including Florida, two types of malice exist: legal malice and actual malice. Legal malice has been defined as both “a wrongful act without reasonable excuse” and as “a wanton disregard for the rights of others.” Farish v. Smoot, 58 So. 2d 534, 538 (Fla. 1952); Richards Co. v. Harrison, 262 So. 2d 258, 262 (Fla. 1st DCA 1972); Adams v. Whitfield, 290 So. 2d 49, 51 (Fla. 1974). Actual malice, on the other hand, is often defined as ill will, hatred, spite, and evil intent. The significant difference between actual and legal malice is that the latter does not require proof of the defendant's ill will, hatred or spite, instead it is implied from the defendant’s conduct. In Florida, a showing of legal malice is all that is required in order to recover punitive damages. Adams v. Whitfield, 290 So. 2d 49 (Fla. 1974); Farish v. Smoot, 58 So. 2d 534 (Fla. 1952); Montgomery Ward & Co., Inc. v. Hoey, 486 So. 2d 1368 (Fla. 5th DCA 1986); Johns-Manville Sales Corp. v. Janssens, 463 So. 2d 242 (Fla. 1st DCA 1984); Wrains v. Rose, 175 So. 2d 75 (Fla. 2d DCA 1965).

The “intentional tort-malice rule” appears to be another standard that courts utilize in Florida. According to this rule, punitive damages are always recoverable in intentional tort cases where malice is one of the essential elements of the tort. According to the court in Ciamar Marcy, Inc. v. Monteiro Da Costa, the underlying rationale for this rule is that the proof of malice required to make out the cause of action is also sufficient evidence of malice on the part of the defendant to permit the jury to award punitive damages as punishment. Ciamar Marcy, Inc. v. Monteiro Da Costa, 508 So. 2d 1282, 1283 (Fla. 3d DCA 1987).

The Florida legislature has set forth a standard as well for the recovery of punitive damages. This standard can be found in Fla. Stat. 768.72(2), which provides that the defendant must be “personally guilty of intentional misconduct or gross negligence.” The legislature went on to define “intentional misconduct” in Fla. Stat.768.72(2)(a), which provides that the defendant must have “intentionally pursued a course of conduct with actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to the claimant would result.” The legislature further defines “gross negligence” in Fla. Stat. 768.72(2)(b) as conduct that is "so reckless or wanting in care that it constitutes a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct." This standard essentially codifies what the courts throughout Florida have already established, with regard to the recovery of punitive damages.

IV. Limitations and Restrictions

In an effort to keep punitive damage awards at an appropriate level, the legislature set forth limitations and restrictions on this breed of damages within Fla. Stat.768.73. Under this provision, no cap exists on the amount of punitive damages if the fact finder determines that at the time of the injury, the defendant had a specific intent to harm the claimant and further, determines that the defendant's conduct did in fact harm the claimant. Fla. Stat. 768.73(1)(c). In cases where specific intent to harm the claimant is not established, with limited exceptions, punitive damages may not exceed the greater of three times the amount of compensatory damages awarded to each claimant or the sum of $500,000. Fla. Stat. 768.73(1)(a)(1)-(2). However, different limitations apply if the finder of fact determines that the wrongful conduct was motivated solely by unreasonable financial gain and determines that the unreasonably dangerous nature of the conduct, together with the high likelihood of injury resulting from the conduct, were actually known by the defendant or the defendant's managing agent, director, officer, or other person responsible for making policy decisions on behalf of the defendant. Fla. Stat. 768.73(1)(b). In those instances, the award of punitive damages may not exceed the greater of four times the amount of compensatory damages awarded to each claimant or the sum of $2,000,000. Fla. Stat. 768.73(1)(b)(1)-(2). When a punitive damages award does not exceed the statutory limit, the Court still has the authority and responsibility under Fla. Stat. 768.74 to review the amount of the award to determine whether it is excessive or inadequate in light of the facts and circumstances of the particular case.

Although compensatory damages are the focus of most claims, punitive damages serve an important dual purpose and should be considered when the appropriate factual scenario surfaces.

*The foregoing is not intended to be legal advice and should not be construed as such.