CACI No. 3948. Punitive Damages - Individual and Corporate Defendants (Corporate Liability Based on Acts of Named Individual) - Bifurcated Trial (First Phase)
Judicial Council of California Civil Jury Instructions (2023 edition)
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3948.Punitive Damages - Individual and Corporate Defendants
(Corporate Liability Based on Acts of Named
Individual) - Bifurcated Trial (First Phase)
If you decide that [name of individual defendant]’s conduct caused [name
of plaintiff] harm, you must decide whether that conduct justifies an
award of punitive damages against [name of individual defendant] and, if
so, against [name of corporate defendant]. The amount, if any, of punitive
damages will be an issue decided later.
You may award punitive damages against [name of individual defendant]
only if [name of plaintiff] proves by clear and convincing evidence that
[name of individual defendant] engaged in that conduct with malice,
oppression, or fraud.
“Malice” means that a defendant acted with intent to cause injury or
that a defendant’s conduct was despicable and was done with a willful
and knowing disregard of the rights or safety of another. A defendant
acts with knowing disregard when the defendant is aware of the
probable dangerous consequences of the defendant’s conduct and
deliberately fails to avoid those consequences.
“Oppression” means that a defendant’s conduct was despicable and
subjected [name of plaintiff] to cruel and unjust hardship in knowing
disregard of [his/her/nonbinary pronoun] 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 a defendant intentionally misrepresented or
concealed a material fact and did so intending to harm [name of
plaintiff].
You may also award punitive damages against [name of corporate
defendant] based on [name of individual]’s conduct if [name of plaintiff]
proves [one of] the following by clear and convincing evidence:
1. [That [name of individual defendant] was an officer, a director, or a
managing agent of [name of corporate defendant] who was acting
on behalf of [name of corporate defendant] at the time of the
conduct constituting malice, oppression, or fraud; [or]]
2. [That an officer, a director, or a managing agent of [name of
corporate defendant] had advance knowledge of the unfitness of
[name of individual defendant] and employed [him/her/nonbinary
pronoun] with a knowing disregard of the rights or safety of
others; [or]]
3. [That [name of individual defendant]’s conduct constituting malice,
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oppression, or fraud was authorized by an officer, a director, or a
managing agent of [name of corporate defendant]; [or]]
4. [That an officer, a director, or a managing agent of [name of
corporate defendant] knew of [name of individual defendant]’s
conduct constituting malice, oppression, or fraud and adopted or
approved that conduct after it occurred.]
An employee is a “managing agent” if the employee exercises substantial
independent authority and judgment in corporate decisionmaking such
that the employee’s decisions ultimately determine corporate policy.
New September 2003; Revised April 2004, December 2005, May 2020
Directions for Use
Use CACI No. 3949, Punitive Damages - Individual and Corporate Defendants
(Corporate Liability Based on Acts of Named Individual) - Bifurcated Trial (Second
Phase), for the second phase of a bifurcated trial.
This instruction is intended to apply to cases where punitive damages are sought
against both an individual person and a corporate defendant. When damages are
sought only against a corporate defendant, use CACI No. 3944, Punitive Damages
Against Employer or Principal for Conduct of a Specific Agent or
Employee - Bifurcated Trial (First Phase), or CACI No. 3946, Punitive
Damages - Entity Defendant - Bifurcated Trial (First Phase). When damages are
sought against individual defendants, use CACI No. 3941, Punitive
Damages - Individual Defendant - Bifurcated Trial (First Phase).
For an instruction explaining “clear and convincing evidence,” see CACI No. 201,
Highly Probable - 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.
See CACI No. 3940, Punitive Damages - Individual Defendant - Trial Not
Bifurcated, for additional sources and authority.
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 definition of “fraud.”
Sources and Authority
• When Punitive Damages Permitted. Civil Code section 3294.
• Deferral of Financial Condition Evidence to Second Stage. Civil Code section
3295(d).
• “[E]vidence of ratification of [agent’s] actions by [defendant] and any other
findings 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].)
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• “[Section 3295(d)] affects the order of proof at trial, precluding the admission of
evidence of defendants’ financial 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], internal citations omitted.)
• “Evidence of the defendant’s financial condition is a prerequisite to an award of
punitive damages. In order to protect defendants from the premature disclosure
of their financial 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, internal citations omitted.)
• “[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], internal
citations omitted.)
• “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
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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 Pacific 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 decision making 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
significant aspects of a corporation’s business.” (White, supra, 21 Cal.4th at p.
577.)
• “ ‘[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].)
• “The key inquiry thus concerns the employee’s authority to change or establish
corporate policy. The fact that an employee has a supervisory position with the
power to terminate employees under his or her control does not, by itself, render
the employee a managing agent. Nor does the fact that an employee supervises a
large number of employees necessarily establish that status.” (CRST, Inc. v.
Superior Court (2017) 11 Cal.App.5th 1255, 1273 [218 Cal.Rptr.3d 664].)
• “ ‘[R]atification’ is the ‘[c]onfirmation and acceptance of a previous act.’ A
corporation cannot confirm 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,
ratification generally occurs where, under the particular circumstances, the
employer demonstrates an intent to adopt or approve oppressive, fraudulent, or
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malicious behavior by an employee in the performance of his job duties.”
(College Hospital, Inc., supra, 8 Cal.4th at p. 726.)
• “Corporate ratification 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 (11th ed. 2017) Torts, §§ 1752-1756
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[17]
(Matthew Bender)
6 California Points and Authorities, Ch. 64, Damages: Tort, § 64.24 et seq.
(Matthew Bender)
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