Palmer v. Ted Stevens Honda, Inc

In Palmer v. Ted Stevens Honda, Inc. (1987) 193 Cal. App. 3d 530, the Court reversed a punitive damages award, holding that the trial court had committed reversible error in admitting evidence of defendant's litigation tactics "to prove bad faith, lack of probable cause, malice or oppression." ( Id. at p. 533.) The Court found that even though defendant's bad faith was an element of the underlying tort, there was no precedent for the proposition that "the very manner in which a defendant conducts its defense in the litigation can be further evidence of bad faith." ( Id. at p. 537) This court further found in Palmer that "one significant defect in such evidence is that it holds the client responsible for the attorney's litigation strategy. While much of what an attorney does in litigation is contractually binding on the client, where it is tortious the client is not vicariously liable merely for retaining the attorney who is an independent contractor. The client is insulated from tort liability for the attorney's litigation conduct on his or her behalf where 'there is no showing . . . of ratification or any other act by the client endorsing or approving the attorney's actions.' " ( Palmer, supra, 193 Cal. App. 3d at p. 539.) "Another problem with the admission of such evidence is that it fails 'to consider or accord any weight to the right of a defendant to defend itself. " ( Palmer, supra, 193 Cal. App. 3d at p. 540.) A defendant will be disabled from mounting a vigorous defense if litigation tactics are used as further evidence of bad faith. "Litigation," this court stated, "is governed by a different set of rules. It is for the law-and-motion judge and not the jury to assess whether a party should be penalized for bad faith discovery positions." (Ibid.)