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First Substitute S.B. 155

Senator Lyle W. Hillyard proposes the following substitute bill:


             1     
PUNITIVE DAMAGES AMENDMENTS

             2     
2008 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Lyle W. Hillyard

             5     
House Sponsor: Kay L. McIff

             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          78B-8-201, as renumbered and amended by Laws of Utah 2008, Chapter 3


             26     
             27      Be it enacted by the Legislature of the state of Utah:
             28          Section 1. Section 78B-8-201 is amended to read:
             29           78B-8-201. Basis for punitive damages awards -- Section inapplicable to DUI
             30      cases -- 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 78B-3-108 regarding shoplifting is not
             41      subject to the prior award of compensatory or general damages under Subsection (1)(a) whether
             42      or not restitution has been paid to the merchant prior to or as a part of a civil action under
             43      Section 78B-3-108 .
             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 attorney fees and costs, be remitted by the judgment debtor to the
             58      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 attorney fees and costs" shall equal the amount of actual and reasonable attorney fees and
             61      costs incurred by the judgment creditor minus the amount of any separate judgment awarding
             62      attorney 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 attorney 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      Section 63A-3-301 et seq., Section 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)(e).
             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 judgment for attorney
             102      fees and 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.
             107          (e) Any partial payments shall be distributed equally between the state and injured
             108      party.
             109          (f) After the payment of attorney fees and costs, all amounts paid on the state's
             110      judgment shall be remitted to the state treasurer to be deposited into the General Fund.


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