On appeal from and certification to the Superior Court, Appellate Division, whose opinion is reported at 390 N.J. Super. 557 (2007).
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
The issue in this appeal as of right is whether the Legislature, in enacting the Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -5.17 (Act), intended punitive awards to focus only on deterrence of the specific defendant that committed the wrongdoing as opposed to deterrence "of others" generally.
In this matter, before the Supreme Court for a second time, plaintiff Carol Tarr filed a sexual harassment in the workplace complaint against defendant, Bob Ciasulli's Mack Auto Mall, Inc. In the first appeal, the Supreme Court affirmed the Appellate Division's remand for a new trial on damages. On remand, the trial court held that general deterrence parameters could be considered by the jury and charged the jury that it could enhance an award of punitive damages against defendant to deter others from wrongdoing similar to defendant's. A jury awarded plaintiff $25,000 in compensatory damages and $85,000 in punitive damages, and the trial judge awarded attorney's fees, costs, and pre-judgment interest.
On appeal, the Appellate Division, in a divided opinion, reversed the punitive damages award and remanded the matter for a retrial on that issue. The majority held that, in fixing the amount of a punitive damages award, a jury may aim only for deterrence of a specific defendant. Judge Sapp-Peterson filed a dissenting opinion. The matter came to the Court on an appeal as of right and a limited grant of certification.
HELD: The Court agrees with the Appellate Division's analysis of the application of the Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -5.17, to the facts of this matter. It affirms substantially on the basis of the thorough and thoughtful majority opinion crafted by Judge Lefelt.
1. The Court addresses the additional issue raised by defendant in respect of the determination of its financial condition for purposes of the ability-to-pay assessment: i.e., whether financial condition should be measured at the time of the judgment or at the time of the wrongful conduct. The purpose of awarding punitive damages is "to punish for the past event and to prevent future offenses," and the award must be "fair and reasonable." Herman v. Sunshine Chem. Specialties, Inc., 133 N.J. 329, 338-339 (1993). (Pp. 4-10)
2. Although the Court has affirmed numerous punitive damage awards for which the defendant's wealth was assessed at the time of entry of the judgment, in recognition that that is the time that the wrongdoer must feel the sting of an appropriately sized punitive damage penalty, it also has recognized that it can be appropriate to consider the financial condition of the defendant at the time of the wrongful conduct. The Act anticipates a nuanced factual examination by the jury of a defendant, including measurement of the defendant's "financial condition," when assessing punitive damages. Upon retrial, the court should direct the jury that it may consider defendant's financial condition at the time of the wrongdoing and, further, that it may consider subsequent events concerning the corporation's financial condition, including its worth at the time of judgment. Such direction will assure that the dual purposes of punitive damages -- deterrence and punishment -- are fulfilled, while at the same time ensuring the award's reasonableness. (Pp. 10-14)
The judgment of the Appellate Division is AFFIRMED and matter is REMANDED for a new trial to determine the amount of punitive damages to be awarded.
The opinion of the court was delivered by: Justice LaVECCHIA
CHIEF JUSTICE RABNER and JUSTICES LONG, ALBIN, WALLACE, RIVERA-SOTO, and HOENS join in JUSTICE LaVECCHIA's opinion.
This case is before us for a second time on an appeal by defendant, Bob Ciasulli's Mack Auto Mall, Inc. See Tarr v. Bob Ciasulli's Mack Auto Mall, Inc., 178 N.J. 29 (2003). The issue this round is whether the Legislature, in enacting the Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -5.17 (Act), intended punitive awards to focus only on deterrence of the specific defendant that committed the wrongdoing as opposed to deterrence "of others" generally. Tarr v. Ciasulli's Mack Auto Mall, Inc., 390 N.J. Super. 557, 572 (App. Div.) (dissenting judge finding no clear legislative intent to preclude consideration of general deterrence when setting amount of punitive damages awards), certif. granted, 192 N.J. 72 (2007) (limiting certification to whether Act eliminated jury consideration of deterrence to others when defendant is no longer in business and is not subject to further deterrence).
The trial court held that general deterrence could be considered by the jury. Therefore, plaintiff argued in summation that the jury should award punitive damages to "send a message to deter this particular defendant and others," and the court charged the jury that it could enhance an award of punitive damages against defendant to deter others from wrongdoing similar to defendant's. The jury awarded plaintiff $85,000 in punitive damages. On appeal, however, the Appellate Division, in a divided opinion, reversed the punitive damages award. Id. at 570. The majority held that, in fixing the amount of a punitive damages award, a jury only may aim for deterrence of the specific defendant. Id. at 569. In reaching that conclusion, the Appellate Division majority examined the language of the Act and its legislative history, concluding "that while ...