December 5, 2016
In an opinion issued Friday, the Kentucky Court of Appeals considered the propriety of $5,500,000 in punitive damages awarded by a jury in a case involving purely economic damages. PBI Bank, Inc. v. Signature Point Condominiums LLC, 2013-CA-1874. The suit arose from a real estate development deal gone wrong, and it included claims of fraud, negligence, tortious interference, breach of contract, breach of the duty of good faith and fair dealing, and promissory estoppel. The jury awarded $1,515,000 in compensatory damages for the plaintiff's out-of-pocket business losses and lost business opportunities, as well as $5.5 million in punitive damages, for a ratio of slightly more than three to one. In reviewing the punitive damage award, the Court of Appeals considered the guideposts established by the U.S. Supreme Court in BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996). The Court of Appeals concluded that the punitive damage award was reasonable and upheld the jury verdict in total.