Adams v. Murakami

In Adams v. Murakami (1991) 54 Cal.3d 105, the Supreme Court held "meaningful" evidence of a defendant's financial condition is necessary to sustain an award of punitive damages and the burden rests on the plaintiff to introduce such evidence. (Id. at pp. 108-109.) Absent the evidence, there is no way to determine whether an award is disproportionate to the defendant's ability to pay, and therefore excessive. (Id. at p. 109.) Adams was a personal injury case in which no "financial evidence of any kind" was introduced at trial. (Adams, supra, 54 Cal.3d at p. 116, fn. 7.) The California Supreme Court held an award of punitive damages cannot be sustained on appeal unless the record contains meaningful evidence of a defendant's financial condition, and the burden is on the plaintiff to introduce evidence of the defendant's financial condition. (Id. at pp. 108-109.) Case law already has rejected the argument that Murakami applies to statutory penalties. Rich v. Schwab (1998), held Murakami does not apply to penalties assessed under Civil Code section 1942.5, subdivision (f), for a retaliatory rent increase, and the issue of the defendant's financial condition is simply a matter for the defendant to raise in mitigation. (63 Cal.App.4th at pp. 816-817.)