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Say Alice is harmed by the bad faith conduct of Bob that results a punitive damages’ multiplier in a suit therefor; however, Bob, post-motion and pre-judgment, offers a settlement for all compensatory damages, and Alice accepts it: Is the compensatory settlement amount accounted in calculating the amount of punitive damages if the factfinder imposes such on Bob to pay Alice after the two agree on a settlement for the compensatory, but not the punitive damages causes of actions?

A 50-state comparative analysis gets very close to the question, but still it is unclear whether a pre-judgment settlement would be considered actual damages for purposes of punitive damages:

"An award of actual damages, either compensatory or nominal, is a prerequisite for an award of punitive damages. If damages are actually suffered, punitive damages may be awarded in appropriate cases, even if the injured party is only awarded nominal damages. Carr v. Progressive Cas. Ins. Co., 199 Cal. Rptr. 835 (Cal. Ct. App.1984). See also Cheung v. Daley, 42 Cal. Rptr. 2d 164 (Cal. Ct. App. 1995)."

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    Can the compensatory and punitive damages actually be separate causes of action? It was my understanding that they're referring to damage for the same cause of action.
    – Ryan M
    Commented Dec 7, 2021 at 8:56
  • @RyanM Now I see where the practical/traditional problem lies.
    – kisspuska
    Commented Dec 7, 2021 at 23:21

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A true settlement is a full settlement of all outstanding issues in the case, and if accepted, would moot the availability of punitive damages or any other award by the court.

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  • I would argue though if a settlement is reached specifically asserting that settling actual damages should not include any settlement of any punitive damages claims should allow that a court still impose them as if the base of the punitive damages multiplied were either the amount of actual damages as settled or as deemed correct by the factfinder, and the settlement be considered in the reprehensibility as a mitigating factor to reduce the multiplier. Since the objective is to deter recidivism and imitation and where applicable, merely paying up what’s due wouldn’t achieve that objective.
    – kisspuska
    Commented Dec 8, 2021 at 5:48
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    "if a settlement is reached specifically asserting that settling actual damages should not include any settlement of any punitive damages claims should allow that a court still impose them" In theory, sure. In practice, it just never happens that way. The whole point of settling is to end the lawsuit and avoid further litigation costs, almost always with no admission of fault, and to secure subsequent voluntary payment of the amounts owed under the settlement. Punitive damages are often throwaway damages anyway, because often the defendant often won't have an ability to pay them.
    – ohwilleke
    Commented Dec 8, 2021 at 9:42
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    "Could such a stipulated and not full settlement work?" When actual compensatory damages are easily calculated or approximated, but there is dispute over whether punitive damages should be awarded, a stipulation as to the dollar amount of compensatory damages if there is liability at all, isn't uncommon. In a PI case the defense would frequently offer up the stipulation to limit risk at trial & to keep gory evidence of painful physical injuries from being presented to the jury to reduce jury sympathy for a plaintiff on that basis on liability/punitive eligibility & to cut expert witness costs.
    – ohwilleke
    Commented Dec 8, 2021 at 9:45
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    @kisspuska No. It wouldn't be a settlement at all. It would be a stipulation as to a finding of fact that would be included in the jury instructions along the line of:"if you agree that there is liability on the part of the defendant, you shall award the plaintiff $750,000 in compensatory damages that reflect the harm that the plaintiff suffered in the accident." Typically liability and punitive damages would still be left to the jury in a full trial with that one stipulated fact. Non-presentation of evidence flows from it is no longer being legally relevant.
    – ohwilleke
    Commented Dec 8, 2021 at 9:53
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    @kisspuska Along the same lines, it is common in a case where an agent commits a tort for which the principal has only respondiat superior liability to stipulate to entry of a judgment against the principal in whatever amount is entered against the agent who committed the actual tort by the judge without even informing the jury that the principal is a party in the case.
    – ohwilleke
    Commented Dec 8, 2021 at 9:58

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