Punitive Damages for Corporate Resolution to Borrow Money

In Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal. App. 3d 381 [202 Cal. Rptr. 204], the court affirmed a punitive damages verdict against a corporation based in part on a corporate resolution to borrow money. It said a corporate resolution to borrow "serves as an indicator of the continuing health and viability of a business." ( Id. at pp. 385, 391, 202 Cal. Rptr. 204.) In Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc., supra, 155 Cal. App. 3d 381, the court affirmed a punitive damages award against a corporate car dealer for a single fraudulent sale of a car with a turned-back odometer. The award was 17.5 percent of the dealer's net worth. Despite the fact that this fraction exceeded the fraction in previous cases it surveyed, the court affirmed, noting "[t]here is nothing in the financial data presented which suggests the award will unduly interfere with or hamper Kearny Mesa's future operations." ( Id. at p. 391.)