FORT LAUDERDALE BUSINESS LITIGATION: PUNITIVE DAMAGES

Plaintiffs often attempt to pursue punitive damages in litigation. Punitive damages are intended to punish reprehensible conduct by a defendant. Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001). Punitive damages can be attractive for plaintiffs because they can multiply compensatory damages thereby resulting in a much larger recovery. See Fla. Stat. § 768.83 (generally allowing up to three times multiplier for punitive damages). In Florida, a plaintiff must move to amend its complaint to add a claim of punitive damages to recover punitive damages. The plaintiff must make a “reasonable showing by the evidence” supporting entitlement to punitive damages. Fla. Stat. § 768.72(1). What constitutes a “reasonable showing by the evidence”? The Supreme Court of Florida might answer this question in Fed. Ins. Co. v. Perlmutter, Case No. SC2024-0058 if it elects to assert jurisdiction over the matter. The Fort Lauderdale business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The Florida appellate courts established conflicting standards for how much evidence a plaintiff must proffer to add a claim for punitive damages. The Fifth District Court of Appeal and Second District Court of Appeal established relatively low standards. In Estate of Despain v. Avante Group Inc., 900 So. 2d 637 (Fla. 5th DCA 2005), the Fifth District Court of Appeal held that a plaintiff must proffer “merely a representation of what evidence the defendant proposes to present and is not actual evidence.” In Deaterly v. Jacobson, 313 So. 3d 798 (Fla. 2d DCA 2021), the Second District of Appeal held that the clear and convincing evidentiary standard used to prove punitive damages at trial under Florida Statute Section 768.72 does not apply to a plaintiff moving for leave to amend to add a punitive damages claim because Section 768.72 only applies at trial.

However, in Fed. Ins. Co. v. Perlmutter, 376 So. 3d 24 (Fla. 4th DCA 2023), the Fourth District Court of Appeal established a higher standard for adding punitive damage claims. In Perlmutter, the Fourth DCA addressed a trial court order granting a plaintiffs’ motion to amend to add a claim of punitive damages. The Fourth DCA reversed the trial court’s order finding that the plaintiffs did not make a sufficient evidentiary showing supporting a punitive damages claim. The Fourth DCA held that adding a claim for punitive damages requires “the trial court to make a preliminary determination of whether a reasonable jury, viewing the totality of proffered evidence in the light most favorable to the movant, could find by clear and convincing evidence that punitive damages are warranted.” Thus, unlike the Second DCA’s holding in Deaterly, the Fourth DCA held that the clear and convincing standard must be considered at the pleading stage. However, it appears the Fourth DCA was not positive in its conclusion because the Fourth DCA certified the question to the Supreme Court of Florida based on the conflict with the Second DCA and Fifth DCA rulings.

The plaintiffs in Perlmutter have since filed a Notice of Discretionary Jurisdiction with the Supreme Court of Florida requesting the case be reviewed further. The parties briefed jurisdiction and are awaiting an order on whether the Court will accept the appeal. There is a reasonable possibility the Supreme Court of Florida a will hear the case because the Fourth DCA certified conflict and the issue of punitive damages pleading standard is likely to be considered significant. Motions for leave to amend to add a claim of punitive damages are common in litigation and it is important for litigants to understand the correct standard for adding punitive damage claims. Hopefully, the Florida Supreme Court will shed some light on this issue soon.

The Fort Lauderdale business litigation lawyers of the Mavrick Law Firm also represent clients in Miami , Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.