Limits on Punitive Damages

Chapter 1D of the North Carolina General Statutes places some restrictions and limits on punitive damage claims in North Carolina. North Carolina General Statue 1D-15 reads as follows:

1. Punitive damages may be awarded only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:
2. Fraud.
3. Malice.
4. Willful or wanton conduct.
5. The claimant must prove the existence of an aggravating factor by clear and convincing evidence.
6. Punitive damages shall not be awarded against a person solely on the basis of vicarious liability for the acts or omissions of another. Punitive damages may be awarded against a person only if that person participated in the conduct constituting the aggravating factor giving rise to the punitive damages, or if, in the case of a corporation, the officers, directors, or managers of the corporation participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages.
7. Punitive damages shall not be awarded against a person solely for breach of contract. (1995, c. 514, s. 1.)
8. This statute applies to all types of injury cases where a claim for punitive damages may be made, including auto accidents, tractor trailer accidents, motorcycle accidents, bicycle accidents, pedestrian accidents, dog bites, product liability claims, assaults and more. The most common claim we see for punitive damages involves clients who are injured in auto accidents by drunk drivers.

However, we have handled several claims for injuries as a result of unprovoked assaults and even gunshots (victims of shootings).

A judge will instruct a jury to award punitive damages when the two following facts are determined:

1. The defendant is liable for compensatory damages for injury caused to another person; and
2. The defendant’s behavior included an aggravating factor such as:
3. Defendant’s fraud caused the injury;
4. Defendant acted with malice when he caused the injury; or
5. Defendant’s actions were wilful or wanton or careless or reckless when he injured the victim.

Again, the most notable cases we see involving a claim for punitive damages involves a drunk driver on the other side.