Senate Bill No. 384
(By Senators Anderson, Dittmar, Schoonover, Dugan, Minear,
Ross, Helmick, Sharpe, Boley, Buckalew, Kimble, Deem and Scott)
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[Introduced February 16, 1995; referred to the Committee
on the Judiciary.]
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A BILL to amend article six, chapter fifty-six of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto two new sections, designated
sections forty-two and forty-three, all relating generally
to the recovery of punitive damages; defining "clear and
convincing evidence", "punitive damages", "tort action" and
"trier of fact" as those terms are used therein; what the
plaintiff must establish and the trier of fact must find and
award before a trier of fact may find a defendant liable for
punitive damages; the bifurcation of the trial of a tort
action in which punitive damages are sought if requested by
a defendant; the kind of evidence that a trier of fact may
consider in determining the amount of punitive damages; a
requirement that a punitive damages award bear a reasonable
relationship to the compensatory damages awarded to the
plaintiff; imposing a limit on the total amount which may be
awarded against a defendant for punitive damages of no more than three times the amount of compensatory damages awarded
by the same trier of fact or two hundred fifty thousand
dollars, whichever is greater; imposing certain limits on
the kind of evidence that may be admitted in the first stage
of a bifurcated trial and in determining the defendant's
liability for, or the amount of, punitive damages; the
crediting against the amount awarded as punitive damages of
amounts previously paid by the defendant for punitive
damages arising out of the same conduct on which the
imposition of punitive damages is based subject to certain
requirements, conditions and exceptions; the preservation of
the doctrines of remittitur and additur to punitive damage
awards subject to certain limitations; the allocation of
punitive damage awards among the state, the plaintiff and
the plaintiff's attorneys to the extent and in the manner
provided therein; declaring that punitive damages shall not
be awarded on a claim for breach of contract; stating the
conditions under which punitive damages may be assessed
against a principal or employee for the act of an agent or
employee; stating the conditions under which punitive
damages may be assessed against an association, limited
liability company or partnership for the acts of a member or
partner; stating that new section forty-three does not grant
or create a cause of action or right to recover punitive
damages and shall apply to all trials and retrials of all
tort actions for punitive damages or after the effective date of said section; and that said section supersedes,
invalidates and repeals all laws or parts of laws which
conflict with its provisions.
Be it enacted by the Legislature of West Virginia:
That article six, chapter fifty-six of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto two new sections, designated sections
forty-two and forty-three, all to read as follows:
ARTICLE 6. TRIAL.
§56-6-42. Definitions.
As used in section forty-three of this article unless the
context clearly requires a different meaning:
(a) "Clear and convincing evidence" means evidence that,
when weighed against evidence in opposition, will produce in the
mind of the trier of fact a firm conviction as to every finding
with respect to each essential element of the claim and a high
probability as to the correctness of each finding. Proof by
clear and convincing evidence requires a level of proof greater
than a preponderance of the evidence or the substantial weight of
the evidence, but less than beyond a reasonable doubt.
(b) "Punitive damages" include exemplary and vindictive
damages and means all damages, other than compensatory and
nominal damages, awarded against a defendant in a tort action to
punish the defendant and to deter the defendant from similar
conduct in the future.
(c) "Tort action" does not include any action other than a
civil action for damages for injury or loss to person or
property.
(d) "Trier of fact" means the jury or, in a nonjury action,
the court.
§56-6-43. Recovery of punitive damages.
(a) A trier of fact shall not find a defendant liable for
punitive damages unless:
(1) The plaintiff establishes by clear and convincing
evidence that the defendant's acts or omissions for which
punitive damages are sought manifest a conscious, flagrant
indifference to the legal rights of the plaintiff and an actual
awareness by the defendant that the acts or omissions will result
in serious injury or loss to persons or property;
(2) Compensatory damages have been awarded to the plaintiff
for the same acts or omissions of the defendant;
(3) The trier of fact finds that its award of compensatory
damages alone is not sufficient to punish the defendant for the
acts or omissions and to deter the defendant from like conduct in
the future; and
(4) The trier of fact finds that the defendant has not been,
or is not likely to be, adequately punished by means of criminal
penalties or civil fines imposed or assessed against the
defendant as the result of the same acts or omissions of the
defendant.
(b) In a tort action in which punitive damages are sought,
the court shall bifurcate the trial of the action if requested by
a defendant. In the first stage of a bifurcated trial, the trier
of fact shall determine liability for compensatory damages, and
the amount of compensatory damages, including nominal damages.
If, during the first stage of a bifurcated trial, the trier of
fact determines that a defendant is liable for compensatory
damages, that same trier of fact shall determine, in a second
stage of the trial, whether punitive damages should be awarded
and in what amount.
(c) Any punitive damages awarded shall be solely for the
purpose of punishing the defendant for the acts or omissions for
which the defendant has been found liable for punitive damages
and of deterring the defendant from like conduct in the future.
In determining the amount of punitive damages, the trier of fact
may consider: (1) The reprehensibility of the acts or omissions
of the defendant which made the defendant liable for punitive
damages; (2) the length of the time the defendant continued the
acts or allowed the omissions; (3) whether the defendant
attempted to conceal or cover up the acts or omissions or the
harm caused thereby; (4) whether the defendant profited from the
acts or omissions; and (5) any criminal penalties or civil fines
imposed or assessed against the defendant as the result of the
acts or omissions. Punitive damages awarded shall bear a
reasonable relationship to the compensatory damages awarded to
the plaintiff.
(d) The total amount awarded against a defendant for
punitive damages shall not exceed three times the amount of
compensatory damages awarded by the same trier of fact, or two
hundred fifty thousand dollars, whichever is greater. The jury
shall not be advised of these limitations. If a jury returns a
verdict for punitive damages in excess of the limitations, the
trial court shall reduce the award so that it will not exceed the
limitations.
(e) No evidence that is relevant to the determination of
liability for punitive damages or their amount may be admitted in
the first stage of a bifurcated trial unless admitted for a
proper and relevant purpose other than the amount of punitive
damages. Evidence of other crimes, wrongs or acts of a defendant
otherwise admissible under Rule 404(b) of the West Virginia rules
of evidence shall not be admitted or considered in determining
the defendant's liability for, or the amount of, punitive
damages.
(f) Within the time for filing a motion for a new trial, a
defendant may file a posttrial motion requesting the amount
awarded as punitive damages be credited by the court with amounts
previously paid by the defendant for punitive damages arising out
of the same conduct on which the imposition of punitive damages
is based. At any hearing, the burden on all issues relating to
such a credit shall be on the defendant and either party may
introduce relevant evidence on such motion. Such a motion shall
be determined by the trial court within the time and according to procedures applicable to motions for new trial. If the trial
court sustains such a motion, the trial court shall credit the
award of punitive damages by the amount found by the trial court
to have been previously paid by the defendant arising out of the
same conduct and enter judgment accordingly. If the defendant
fails to establish entitlement to a credit under the provisions
of this section, or the trial court finds from the evidence that
the defendant's conduct out of which the prior punitive damages
award arose was not the same conduct on which the imposition of
punitive damages is based in the pending action, or the trial
court finds the defendant unreasonably continued the conduct
after acquiring actual knowledge of the dangerous nature of such
conduct, the trial court shall disallow such credit, or, if the
trial court finds that the laws regarding punitive damages in the
state in which the prior award of punitive damages was entered
substantially and materially deviate from the law of this state
and that the nature of such deviation provides good cause for
disallowance of the credit based on the public policy of this
state, then the trial court may disallow all or any part of the
credit provided by this subsection.
The credit allowable shall not apply to causes of action for
libel, slander, assault, battery, false imprisonment, malicious
prosecution or fraud.
The doctrines of remittitur and additur, based on the trial
judge's assessment of the totality of the surrounding circumstances, shall apply to punitive damage awards subject to
limitations imposed by subsection (d) of this section.
(g) Since the object of a punitive damage award is to punish
the defendant for such acts or omissions as are described in
subsection (a) subdivision (1) of this section and to deter the
defendant and others from engaging in such acts or allowing such
omissions, the entire award should not be a windfall to the
plaintiff but should be shared by the public at large throughout
the state. The state's share of each such award shall be payable
to the crime victims compensation fund established by the
provisions of article two-a, chapter fourteen of this code.
The state's share of each punitive damage award shall be
forty-five percent thereof after the deduction of reasonable
expenses, other than attorneys' fees, that are directly related
to the obtaining of the punitive damage award. The circuit
clerks shall notify the attorney general of any final judgment
awarding punitive damages in their counties. With respect to
such forty-five percent, the attorney general shall collect upon
such judgment, and may execute or make settlements with respect
thereto as he deems appropriate. The state shall have no
interest in or right to intervene at any stage of any judicial
proceeding involving a claim for punitive damages. A punitive
damage judgment debtor shall remit the state's share of a
punitive damage award to the clerk of the court in which the
judgment was rendered. It shall be the duty of the clerk to pay
over such amounts to the state in the manner provided by law.
The plaintiff's share of a punitive damage award shall be
forty-five percent thereof after the deduction of reasonable
expenses, other than attorneys' fees, that are directly related
to the obtaining of the punitive damages award, provided that if
the plaintiff's attorneys' fees are not payable from the punitive
damages award, the plaintiff's share of a punitive damages award
shall be fifty-five percent thereof.
If the plaintiff's attorneys' fees are payable from a
punitive damages award, the attorneys' share of a punitive
damages award shall be no more than ten percent thereof after the
deduction of reasonable expenses, other than attorneys' fees,
that are directly related to the obtaining of the punitive
damages award.
In the event the full amount of punitive damages awarded
cannot be collected, the state, the plaintiff, and the
plaintiffs' attorneys if sharing therein, shall each be entitled
to a proportional share of the punitive damages collected.
The fact that a share of each punitive damages judgment is
to be paid to the state shall not be made known to, or considered
by, the trier of fact in determining the amount of a punitive
damages award.
(h) Punitive damages shall not be awarded on a claim for
breach of contract.
(i) Punitive damages shall not be assessed against a
principal or employer for the act of an agent or employee unless the principal or employer expressly commanded, authorized,
ratified or knowingly condoned the conduct in question.
(j) Punitive damages shall not be assessed against an
association, limited liability company, or partnership for the
acts of a member or partner unless the association, limited
liability company or partnership expressly commanded, authorized,
ratified or knowingly condoned the conduct in question.
(k) Nothing contained in this section grants or creates a
cause of action or right to recover punitive damages.
(l) This section applies to all trials and retrials of all
tort actions for punitive damages commenced on or after the
effective date of this section.
(m) This section supersedes, invalidates and repeals all
laws or parts of law which conflict with its provisions.
NOTE: The purpose of this bill is to regulate the recovery
of punitive damages.
§§56-6-42 and 43 are new; therefore, strike-throughs and
underscoring have been omitted.