Michael R. Lied

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Appeals Court Discusses Evidence of Financial Status of Defendant Sued for Punitive Damages (Monday, July 9, 2012)

While not an employment case, Powers v. Rosine 2011 IL App (3d) 100070 is instructive. In Powers, the plaintiffs filed a complaint for injuries sustained in an automobile accident where Rosine drove under the influence.

Plaintiffs later filed an amended complaint seeking punitive damages, and filed a motion for leave to serve discovery to learn about Rosine's financial status.

The circuit court granted the plaintiffs' discovery request. Rosine's counsel, Umland, filed a motion, requesting a finding of contempt for failing to respond to the plaintiffs' request for supplemental discovery. The trial court found him in contempt, and Umland appealed.

The questions on appeal were whether the court abused its discretion when it compelled Rosine to answer discovery regarding his financial status, and when it found Umland in contempt for failing to do so.

The law allows two challenges to a defendant who contests an award of punitive damages, a constitutional challenge, and a challenge under the common law.

Punitive damages are intended to serve two purposes; to punish the wrongdoer and to deter that party and others from committing similar wrongs in the future.

To evaluate a claim of excessive punitive damages, Illinois courts consider a fact-specific set of circumstances, including: (1) the nature and enormity of the wrong committed by the defendant; (2) the defendant's financial status; and (3) the potential liability of the defendant.

The financial status of a defendant is relevant in a case where a fact finder may properly assess punitive damages. Because a defendant may appeal an award of punitive damages, evidence in the record of the defendant's financial status is necessary for the appellate court to properly review defendant's challenge.

The court of appeals refused to decide whether the financial status of a defendant is a relevant consideration under the constitutional inquiry, because that question was not presented.

The circuit court did not abuse its discretion when it permitted the plaintiffs to propound supplemental discovery. Accordingly, the court did not err in finding Umland in contempt.

Because the plaintiffs did not object, the appeals court granted Umland's request to vacate the contempt order.

· Michael R. Lied
· Howard & Howard Attorneys PLLC
· One Technology Plaza, 211 Fulton Street, Suite 600, Peoria, IL 61602
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· MLied@howardandhoward.com