California Civil Jury Instructions (CACI) (2017)

3944. Punitive Damages Against Employer or Principal for Conduct of a Specific Agent or Employee - Bifurcated Trial (First Phase)

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3944.Punitive Damages Against Employer or Principal for
Conduct of a Specifi Agent or Employee—Bifurcated Trial (First
If you decide that [name of employee/agent]’s conduct caused [name of
plaintiff]harm, you must decide whether that conduct justifie an award
of punitive damages against [name of defendant] for [name of employee/
agent]’s conduct. At this time, you must decide whether [name of
plaintiff] has proved by clear and convincing evidence that [name of
employee/agent] engaged in that conduct with malice, oppression, or
fraud. The amount of punitive damages, if any, will be decided later.
“Malice” means that [name of employee/agent] acted with intent to cause
injury or that [name of employee/agent]’s conduct was despicable and
was done with a willful and knowing disregard of the rights or safety of
another. A person acts with knowing disregard when he or she is aware
of the probable dangerous consequences of his or her conduct and
deliberately fails to avoid those consequences.
“Oppression” means that [name of employee/agent]’s conduct was
despicable and subjected [name of plaintiff] to cruel and unjust hardship
in knowing disregard of [his/her] rights.
“Despicable conduct” is conduct that is so vile, base, or contemptible
that it would be looked down on and despised by reasonable people.
“Fraud” means that [name of employee/agent] intentionally
misrepresented or concealed a material fact and did so intending to
harm [name of plaintiff].
[Name of plaintiff] must also prove [one of] the following by clear and
convincing evidence:
1. [That [name of employee/agent] was an officer, a director, or a
managing agent of [name of defendant] who was acting on behalf
of [name of defendant]; [or]]
2. [That an officer, a director, or a managing agent of [name of
defendant] had advance knowledge of the unfitnes of [name of
employee/agent] and employed [him/her] with a knowing
disregard of the rights or safety of others; [or]]
3. [That an officer, a director, or a managing agent of [name of
defendant] authorized [name of employee/agent]’s conduct; [or]]
4. [That an officer, a director, or a managing agent of [name of
defendant] knew of [name of employee/agent]’s wrongful conduct
and adopted or approved the conduct after it occurred.]
An employee is a “managing agent” if he or she exercises substantial
independent authority and judgment in his or her corporate decision
making such that his or her decisions ultimately determine corporate
New September 2003; Revised April 2004, December 2005
Directions for Use
CACI No. 3942, Punitive Damages—Individual Defendant—Bifurcated Trial
(Second Phase) may be used for the second phase of a bifurcated trial.
This instruction is intended for use when the plaintiff is seeking to hold only an
employer or principal liable for punitive damages based on the conduct of a
specifi employee or agent. When the plaintiff is seeking punitive damages from
both the employer/principal and the employee/agent, use CACI No. 3948, Punitive
Damages—Individual and Corporate Defendants (Corporate Liability Based on
Acts of Named Individual)—Bifurcated Trial (First Phase). When punitive damages
are sought against a corporation or other entity for the conduct of its directors,
officers, and managing agents, use CACI No. 3946, Punitive Damages—Entity
Defendant—Bifurcated Trial (First Phase).
For an instruction explaining “clear and convincing evidence,” see CACI No. 201,
More Likely True—Clear and Convincing Proof.
If any of the alternative grounds for seeking punitive damages are inapplicable to
the facts of the case, they may be omitted.
In an appropriate case, the jury may be instructed that a false promise or a
suggestion of a fact known to be false may constitute a misrepresentation as the
word “misrepresentation” is used in the instruction’s definitio of “fraud.”
Sources and Authority
• When Punitive Damages Permitted. Civil Code section 3294.
Deferral of Financial Condition Evidence to Second Stage. Civil Code section
• “[E]vidence of ratificatio of [agent’s] actions by [defendant], and any other
finding made under Civil Code section 3294, subdivision (b), must be made by
clear and convincing evidence.” (Barton v. Alexander Hamilton Life Ins. Co. of
America (2003) 110 Cal.App.4th 1640, 1644 [3 Cal.Rptr.3d 258].)
• “[Section 3295(d)] affects the order of proof at trial, precluding the admission
of evidence of defendants’ financia condition until after the jury has returned a
verdict for plaintiffs awarding actual damages and found that one or more
defendants were guilty of ‘oppression, fraud or malice,’ in accordance with
Civil Code section 3294.” (City of El Monte v. Superior Court (1994) 29
Cal.App.4th 272, 274–275 [34 Cal.Rptr.2d 490].)
• “Evidence of the defendant’s financia condition is a prerequisite to an award of
punitive damages. In order to protect defendants from the premature disclosure
of their financia position when punitive damages are sought, the Legislature
enacted Civil Code section 3295.” (City of El Monte, supra, 29 Cal.App.4th at
p. 276.)
• “[C]ourts have held it is reversible error to try the punitive damages issue to a
new jury after the jury which found liability has been excused.” (Rivera v.
Sassoon (1995) 39 Cal.App.4th 1045, 1048 [46 Cal.Rptr.2d 144].)
• “Under the statute, ‘malice does not require actual intent to harm. [Citation.]
Conscious disregard for the safety of another may be sufficient where the
defendant is aware of the probable dangerous consequences of his or her
conduct and he or she willfully fails to avoid such consequences. [Citation.]
Malice may be proved either expressly through direct evidence or by
implication through indirect evidence from which the jury draws inferences.
[Citation.]’ ” (Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1299
[164 Cal.Rptr.3d 112].)
• “Used in its ordinary sense, the adjective ‘despicable’ is a powerful term that
refers to circumstances that are ‘base,’ ‘vile,’ or ‘contemptible.’ As amended to
include this word, the statute plainly indicates that absent an intent to injure the
plaintiff, ‘malice’ requires more than a ‘willful and conscious’ disregard of the
plaintiffs’ interests. The additional component of ‘despicable conduct’ must be
found.” (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 725 [34
Cal.Rptr.2d 898, 882 P.2d 894], internal citations omitted.)
• “Section 3294 is no longer silent on who may be responsible for imputing
punitive damages to a corporate employer. For corporate punitive damages
liability, section 3294, subdivision (b), requires that the wrongful act giving rise
to the exemplary damages be committed by an ‘officer, director, or managing
agent.’ ” (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 572 [88 Cal.Rptr.2d
19, 981 P.2d 944].)
• “[I]n performing, ratifying, or approving the malicious conduct, the agent must
be acting as the organization’s representative, not in some other capacity.”
(College Hospital, Inc., supra, 8 Cal.4th at p. 723.)
• “[T]he concept [of managing agent] assumes that such individual was acting in
a corporate or employment capacity when the conduct giving rise to the
punitive damages claim against the employer occurred.” (College Hospital, Inc.,
supra, 8 Cal.4th at p. 723.)
• “No purpose would be served by punishing the employer for an employee’s
conduct that is wholly unrelated to its business or to the employee’s duties
therein.” (College Hospital, Inc., supra, 8 Cal.4th at pp. 723–724.)
• “[T]he determination of whether certain employees are managing agents ‘ “does
not necessarily hinge on their ‘level’ in the corporate hierarchy. Rather, the
critical inquiry is the degree of discretion the employees possess in making
decisions . . . .” ’ ” (Powerhouse Motorsports Group, Inc. v. Yamaha Motor
Corp., U.S.A. (2013) 221 Cal.App.4th 867, 886 [164 Cal.Rptr.3d 811].)
• “Although it is generally true . . . that an employee’s hierarchy in a corporation
is not necessarily determinative of his or her status as a managing agent of a
corporation, evidence showing an employee’s hierarchy and job duties,
responsibilities, and authority may be sufficient, absent conclusive proof to the
contrary, to support a reasonable inference by a trier of fact that the employee
is a managing agent of a corporation.” (Davis v. Kiewit Pacifi Co. (2013) 220
Cal.App.4th 358, 370 [162 Cal.Rptr.3d 805].)
• “[W]e conclude the Legislature intended the term ‘managing agent’ to include
only those corporate employees who exercise substantial independent authority
and judgment in their corporate decisionmaking so that their decisions
ultimately determine corporate policy. The scope of a corporate employee’s
discretion and authority under our test is therefore a question of fact for
decision on a case-by-case basis.” (White, supra, 21 Cal.4th at pp. 566–567.)
• “In order to demonstrate that an employee is a true managing agent under
section 3294, subdivision (b), a plaintiff seeking punitive damages would have
to show that the employee exercised substantial discretionary authority over
significan aspects of a corporation’s business.” (White, supra, 21 Cal.4th at p.
• “ ‘[C]orporate policy’ is the general principles which guide a corporation, or
rules intended to be followed consistently over time in corporate operations. A
‘managing agent’ is one with substantial authority over decisions that set these
general principles and rules.” (Cruz v. Homebase (2000) 83 Cal.App.4th 160,
167–168 [99 Cal.Rptr.2d 435].)
• “ ‘[R]atification is the ‘[c]onfirmatio and acceptance of a previous act.’ A
corporation cannot confir and accept that which it does not actually know
about.” (Cruz, supra, 83 Cal.App.4th at p. 168.)
• “For purposes of determining an employer’s liability for punitive damages,
ratificatio generally occurs where, under the particular circumstances, the
employer demonstrates an intent to adopt or approve oppressive, fraudulent, or
malicious behavior by an employee in the performance of his job duties.”
(College Hospital, Inc., supra, 8 Cal.4th at p. 726.)
• “Corporate ratificatio in the punitive damages context requires actual
knowledge of the conduct and its outrageous nature.” (College Hospital, Inc.,
supra, 8 Cal.4th at p. 726.)
Secondary Sources
6 Witkin, Summary of California Law (10th ed. 2005) Torts, §§ 1581–1585
California Tort Damages (Cont.Ed.Bar) Punitive Damages, §§ 14.13–14.14, 14.23
4 Levy et al., California Torts, Ch. 54, Punitive Damages, §§ 54.07, 54.24[4][d]
(Matthew Bender)
15 California Forms of Pleading and Practice, Ch. 177, Damages, § 177.51
(Matthew Bender)
6 California Points and Authorities, Ch. 64, Damages: Tort, § 64.24 et seq.
(Matthew Bender)