MEMO TO:
Alexsei Demo US
RESEARCH ID:
#40007992aea7d6
JURISDICTION:
State
STATE/FORUM:
New York, United States of America
DEPARTMENT:
Not Applicable
ANSWERED ON:
July 22, 2022
CLASSIFICATION:
Remedies

Issue:

When punitive damages are awarded against a group of defendants, are the defendants jointly and severally liable for the punitive damages award?

Conclusion:

Punitive damages are in the nature of a penalty. Therefore, contribution among tortfeasors is not permissible. (Felice v. Delporte, 136 A.D.2d 913, 524 N.Y.S.2d 919 (N.Y. App. Div. 1988))

There can be no joint and several liability or contribution with regard to punitive damages.  (Staudacher v. City of Buffalo, 155 A.D.2d 956, 547 N.Y.S.2d 770 (N.Y. App. Div. 1989))

A lump sum verdict on punitive damages against all defendants is improper. (Staudacher v. City of Buffalo, 155 A.D.2d 956, 547 N.Y.S.2d 770 (N.Y. App. Div. 1989))

Despite the above, some New York courts have awarded punitive damages in favor of a plaintiff against multiple defendants on a joint and several basis.

In Licette Music Corp. v. A.A. Records, Inc., 601 N.Y.S.2d 297, 1993 N.Y. App. Div. LEXIS 8263 (N.Y. App. Div. 1st Dep't August 26, 1993), the New York Appellate Division, First Department, affirmed an order of the lower court that awarded compensatory and punitive damages against the defendants jointly and severally.

In the unpublished decision of Rubin v. Islamic Republic Iran, 2017 NY Slip Op 31876 (U) (N.Y. Sup. Ct. 2017), the New York Supreme Court, New York County, entered a judgment in favor of all plaintiffs against all defendants, jointly and severally, for punitive damages in the amount of $37 million.

Law:

In Smith v. Guli, 106 A.D.2d 120, 484 N.Y.S.2d 740 (N.Y. App. Div. 1985), the New York Appellate Division, Fourth Department, held that exemplary damages are in the nature of a penalty and therefore they are not subject to the principle of contribution (at 742):

In a Dram Shop Act action, the vendor of alcohol and the intoxicated tortfeasor are "subject to liability for damages for the same personal injury, injury to property or wrongful death" and accordingly, may claim contribution among themselves as to compensatory damages awarded to the injured party (CPLR 1401; Wood v. City of New York, 39 A.D.2d 534, 330 N.Y.S.2d 923; Anderson v. Comardo, 107 Misc.2d 821, 436 N.Y.S.2d 669). Exemplary damages awarded pursuant to the Dram Shop Act are in the nature of a penalty; hence, they are not subject to the principle of contribution (Mitchell v. The Shoals, Inc., 48 Misc.2d 381, 264 N.Y.S.2d 865, affd. 26 A.D.2d 78, 271 N.Y.S.2d 137, affd. 19 N.Y.2d 338, 280 N.Y.S.2d 113, 227 N.E.2d 21).

Similarly, in Felice v. Delporte, 136 A.D.2d 913, 524 N.Y.S.2d 919 (N.Y. App. Div. 1988), the New York Appellate Division, Fourth Department, held that because punitive damages are in the nature of a penalty, contribution among tortfeasors is not permissible (at 920):

The jury awarded plaintiff compensatory damages in the sum of $150,000. It also awarded punitive damages in the sum of $500,000, 60% ($300,000) of which was awarded against defendants Delporte and 40% ($200,000) of which was awarded against defendant Arcadia Management, Inc. In entering judgment on the verdict, however, the trial court erred in adjudging that defendants were jointly and severally liable for the full amount of the punitive damage award. Such damages are in the nature of a penalty and contribution among tortfeasors is not permissible (Smith v. Guli, 106 A.D.2d 120, 484 N.Y.S.2d 740).

In Staudacher v. City of Buffalo, 155 A.D.2d 956, 547 N.Y.S.2d 770 (N.Y. App. Div. 1989), the New York Appellate Division, Fourth Department, held that a lump sum verdict on punitive damages against all defendants is improper since there can be no joint and several liability or contribution with regard to punitive damages (at 771):

Plaintiff appeals from an order in which the trial court, sua sponte, set aside a jury verdict in plaintiff's favor and ordered a new trial. Plaintiff sued the City of Buffalo, its police department and five police officers for injuries he received following an altercation in front of a local tavern. The trial court properly set aside the verdict on its own initiative, notwithstanding defendants' failure to object or except to the charge. The court had inherent power to order a new trial in the interest of justice (see, CPLR 4404[a]; Micallef v. Miehle Co. Div. of Miehle-Goss Dexter, 39 N.Y.2d 376, 381, 384 N.Y.S.2d 115, 348 N.E.2d 571; Matter of DeLano, 34 A.D.2d 1031 1032, 311 N.Y.S.2d 134, affd 28 N.Y.2d 587, 319 N.Y.S.2d 844, 268 N.E.2d 642) and properly exercised it because one error in the charge was fundamental (see, Titlebaum v. Loblaws, Inc., 75 A.D.2d 985, 986, 429 N.Y.S.2d 91; DiGrazia v. Castronova, 48 A.D.2d 249, 251-252, 368 N.Y.S.2d 898). The immunity of a municipality from punitive damages does not extend to individual police officers (see, Sharapata v. Town of Islip, 56 N.Y.2d 332, 338, 452 N.Y.S.2d 347, 437 N.E.2d 1104; Carney v. City of Utica, 148 A.D.2d 927, 539 N.Y.S.2d 165). The charge and verdict sheet failed to separate the claims for punitive damages on each cause of action and for each defendant. A claim for punitive damages is not a separate cause of action but constitutes merely an element of a claim for damages on the underlying causes of action (see, Steinberg v. Monasch, 85 A.D.2d 403, 406, 448 N.Y.S.2d 200; Knibbs v. Wagner, 14 A.D.2d 987, 222 N.Y.S.2d 469). Moreover, a lump sum verdict on punitive damages against all defendants is improper since there can be no joint and several liability or contribution with regard to it (see, Felice v. Delporte, 136 A.D.2d 913, 524 N.Y.S.2d 919, lv. to appeal granted 72 N.Y.2d 829, 530 N.Y.S.2d 549, 526 N.E.2d 40; Smith v. Guli, 106 A.D.2d 120, 122, 484 N.Y.S.2d 740).

In the unpublished decision of Goldshmidt v. Gotlibovsky, 2016 NY Slip Op 30045 (U) (N.Y. Sup. Ct. 2016), the New York Supreme Court, New York County, noted that punitive damages are not subject to contribution among tortfeasors (at 4):

Further, Gotlibovsky does not have a viable claim for contribution against the Waldorf Defendants based on plaintiffs' claim against Gotlibovsky for punitive damages as courts have held that punitive damages are not subject to contribution among tortfeasors. See Felice vDelporte, 136 A.D.2d 913, 914 (4th Dept 1988) ("In entering judgment on the verdict, however, the trial court erred in adjudging that defendants were jointly and severally liable for the full amount of the punitive damage award. Such damages are in the nature of a penalty and contribution among tortfeasors is not permissible.") The cases cited by Gotlibovsky as support for his assertion that punitive damages are subject to contribution among tortfeasors are inapplicable here as they do not involve the apportionment of punitive damages but rather compensatory damages.

Despite the above decisions, some New York courts have awarded punitive damages in favor of a plaintiff against multiple defendants on a joint and several basis.

In Licette Music Corp. v. A.A. Records, Inc., 601 N.Y.S.2d 297, 1993 N.Y. App. Div. LEXIS 8263 (N.Y. App. Div. 1st Dep't August 26, 1993), the New York Appellate Division, First Department, affirmed an order of the lower court that awarded compensatory and punitive damages against the defendants jointly and severally (at 297-298):

 [*297]  Order and judgment, New York County (Felice Shea, J.) rendered May 20, 1992 and May 22, 1992, respectively, which, after a non-jury trial, inter alia, awarded plaintiffs compensatory and punitive damages against defendants, in the sum of $ 4,948,855.27, jointly and severally, unanimously affirmed, without costs.

[...]

The imposition of punitive damages, in the sum of $ 750,000 on both breach of contract and tort causes of actions with the provision for single recovery thereon, was appropriate in the circumstance (see, Airlines Reporting Corp. v Aero Voyagers, Inc., 721 F. Supp 579, 586).

In the unpublished decision of Rubin v. Islamic Republic Iran, 2017 NY Slip Op 31876 (U) (N.Y. Sup. Ct. 2017), the New York Supreme Court, New York County, entered a judgment in favor of all plaintiffs against all defendants, jointly and severally, for punitive damages in the amount of $37 million (at 4):

ORDERED that the Clerk is directed to enter a renewal judgment in favor of all plaintiffs against all defendants, jointly and severally, for punitive damages in the amount of $37 million, together with interest at the statutory rate from September 10, 2003.

Authorities:
Smith v. Guli, 106 A.D.2d 120, 484 N.Y.S.2d 740 (N.Y. App. Div. 1985)
Felice v. Delporte, 136 A.D.2d 913, 524 N.Y.S.2d 919 (N.Y. App. Div. 1988)
Staudacher v. City of Buffalo, 155 A.D.2d 956, 547 N.Y.S.2d 770 (N.Y. App. Div. 1989)
Goldshmidt v. Gotlibovsky, 2016 NY Slip Op 30045 (U) (N.Y. Sup. Ct. 2016)
Licette Music Corp. v. A.A. Records, Inc., 601 N.Y.S.2d 297, 1993 N.Y. App. Div. LEXIS 8263 (N.Y. App. Div. 1st Dep't August 26, 1993)
Rubin v. Islamic Republic Iran, 2017 NY Slip Op 31876 (U) (N.Y. Sup. Ct. 2017)