S.B. 206

1

PUNITIVE DAMAGES AMENDMENTS
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Lyle W. Hillyard
5 House Sponsor: Scott L Wyatt
6
7 LONG TITLE
8 General Description:
9 This bill makes clarifying amendments to the punitive damages statute.
10 Highlighted Provisions:
11 This bill:
12 . requires that a court enter a judgment for punitive damages on behalf of the injured
13 party and the state;
14 . changes the initial amount for the injured party from $20,000 to $50,000;
15 . sets priorities for collection of judgments and attorney fees and costs;
16 . specifies that the state may use all methods at its disposal to collect its judgment;
17 and
18 . makes technical changes.
19 Monies Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 None
23 Utah Code Sections Affected:
24 AMENDS:
25 78-18-1, as last amended by Chapter 48, Laws of Utah 2006
26
27 Be it enacted by the Legislature of the state of Utah:

28 Section 1. Section 78-18-1 is amended to read:
29 78-18-1. Basis for punitive damages awards -- Section inapplicable to DUI cases
30 -- Division of award with state.
31 (1) (a) Except as otherwise provided by statute, punitive damages may be awarded only
32 if compensatory or general damages are awarded and it is established by clear and convincing
33 evidence that the acts or omissions of the tortfeasor are the result of willful and malicious or
34 intentionally fraudulent conduct, or conduct that manifests a knowing and reckless indifference
35 toward, and a disregard of, the rights of others.
36 (b) The limitations, standards of evidence, and standards of conduct of Subsection
37 (1)(a) do not apply to any claim for punitive damages arising out of the tortfeasor's operation of
38 a motor vehicle or motorboat while voluntarily intoxicated or under the influence of any drug
39 or combination of alcohol and drugs as prohibited by Section 41-6a-502 .
40 (c) The award of a penalty under Section 78-11-15 or 78-11-16 regarding shoplifting is
41 not subject to the prior award of compensatory or general damages under Subsection (1)(a)
42 whether or not restitution has been paid to the merchant prior to or as a part of a civil action
43 under Section 78-11-15 or 78-11-16 .
44 (2) Evidence of a party's wealth or financial condition shall be admissible only after a
45 finding of liability for punitive damages has been made.
46 (a) Discovery concerning a party's wealth or financial condition may only be allowed
47 after the party seeking punitive damages has established a prima facie case on the record that
48 an award of punitive damages is reasonably likely against the party about whom discovery is
49 sought and, if disputed, the court is satisfied that the discovery is not sought for the purpose of
50 harassment.
51 (b) Subsection (2)(a) does not apply to any claim for punitive damages arising out of
52 the tortfeasor's operation of a motor vehicle or motorboat while voluntarily intoxicated or
53 under the influence of any drug or combination of alcohol and drugs as prohibited by Section
54 41-6a-502 .
55 [(3) (a) In any case where punitive damages are awarded, the judgment shall provide
56 that 50% of the amount of the punitive damages in excess of $20,000 shall, after an allowable
57 deduction for the payment of attorneys' fees and costs, be remitted by the judgment debtor to
58 the state treasurer for deposit into the General Fund.]

59 [(b) For the purposes of this Subsection (3), an "allowable deduction for the payment
60 of attorneys' fees and costs" shall equal the amount of actual and reasonable attorneys' fees and
61 costs incurred by the judgment creditor minus the amount of any separate judgment awarding
62 attorneys' fees and costs to the judgment creditor.]
63 [(c) The state shall have all rights due a judgment creditor until the judgment is
64 satisfied, and stand on equal footing with the judgment creditor of the original case in securing
65 a recovery.]
66 [(d) Unless all affected parties, including the state, expressly agree otherwise or the
67 application is contrary to the terms of the judgment, any payment on the judgment by or on
68 behalf of any judgment debtor, whether voluntary or by execution or otherwise, shall be
69 applied in the following order:]
70 [(i) compensatory damages, and any applicable attorneys fees and costs;]
71 [(ii) the initial $20,000 punitive damages; and]
72 [(iii) the balance of the punitive damages.]
73 (3) (a) In any case where punitive damages are awarded, the court shall enter judgment
74 as follows:
75 (i) for the first $50,000, judgment shall be in favor of the injured party; and
76 (ii) any amount in excess of $50,000 shall be divided equally between the state and the
77 injured party, and judgment to each entered accordingly.
78 (b) (i) The actual and bona fide attorney fees and costs incurred in obtaining and
79 collecting the judgment for punitive damages shall be considered to have been incurred by the
80 state and the injured party in proportion to the judgment entered in each party's behalf.
81 (A) The state and injured party shall be responsible for each one's proportionate share
82 only.
83 (B) The state is liable to pay its proportionate share only to the extent it receives
84 payment toward its judgment.
85 (ii) If the court awards attorney fees and costs to the injured party as a direct result of
86 the punitive damage award, the state shall have a corresponding credit in a proportionate
87 amount based on the amounts of the party's respective punitive damage judgments. This credit
88 may be applied as an offset against the amount of attorney fees and costs charged to the state
89 for obtaining the punitive damage judgment.

90 (c) The state shall have all rights due a judgment creditor to collect the full amounts of
91 both punitive damage judgments until the judgments are fully satisfied.
92 (i) Neither party is required to pursue collection.
93 (ii) In pursuing collection, the state may exercise any of its collection rights under
94 Sections 63A-3-301 et seq., 63A-8-201 et seq. and any other statutory provisions. Any
95 amounts collected on these judgments by either party shall be held in trust and distributed as
96 set forth in Subsection (3)(d)(iv).
97 (d) Unless all affected parties, including the state, expressly agree otherwise, collection
98 on the punitive damages judgment shall be deferred until all other judgments have been fully
99 paid. Any payment by or on behalf of any judgment debtor, whether voluntary, by execution,
100 or otherwise, shall be distributed and applied in the following order:
101 (i) to the judgment for compensatory damage and any applicable attorney fees and
102 costs;
103 (ii) to the initial $50,000 of the punitive damage judgment;
104 (iii) to any judgment for attorney fees and costs awarded as a direct result of the
105 punitive damages; and
106 (iv) to the remaining judgments for punitive damages. Any partial payments shall be
107 distributed equally between the state and injured party.
108 (e) After the payment of attorney fees and costs, all amounts paid on the state's
109 judgment shall be remitted to the state treasurer to be deposited into the General Fund.




Legislative Review Note
as of 2-8-07 3:46 PM

Office of Legislative Research and General Counsel