C. [§ 1.27] Punitive Damages

• Jurisdiction: Maryland

C. [§ 1.27] Punitive Damages

The Court of Appeals has discussed the two types of damages available in Maryland:

Two types of damages can be recovered from a tortfeasor: compensatory damages and punitive damages. See Beall v. Holloway-Johnson, 446 Md. 48, 70-72, 130 A.3d 406 (2016). An award of compensatory damages is an "attempt to make the plaintiff whole again by monetary compensation." Id. at 70, 130 A.3d 406 (quoting Exxon Mobil Corp. v. Albright, 433 Md. 303, 414, 71 A.3d 30 (2013)). Compensatory damages "are not intended to grant to the plaintiff a windfall as a result of the defendant's tortious conduct. Thus, an award for compensatory damages must be anchored to a rational basis on which to ensure that the awards are not merely speculative." Id. (quoting Albright, 433 Md. at 414, 71 A.3d 30).

Punitive damages are designed to accomplish another goal entirely—to punish the wrongdoer for particularly egregious or heinous conduct and to deter others from following suit.

Anne Arundel Cty. v. Reeves, 474 Md. 46, 252 A.3d 921, 932 (2021).

To recover punitive damages in any tort action in Maryland, a specific demand for punitive damages must be made in the complaint. Scott v. Jenkins, 345 Md. 21, 37, 690 A.2d 1000, 1008 (1997). In addition, facts sufficient to show actual malice must be pled and proven by clear and convincing evidence. Scott v. Jenkins, 345 Md. at 38, 690 A.2d at 1008.

Punitive damages are "not available as a form of relief for breach of contract." Impac Mortg. Holdings, Inc. v. Timm, 245 Md. App. 84, 125, 226 A.3d 323, 348, cert. granted, 469 Md. 656, 232 A.3d 257 (2020), and aff'd, 474 Md. 495, 255 A.3d 89 (2021).

For a discussion of punitive damage law in Maryland, see Shabazz v. Bob Evans Farms, Inc., 163 Md. App. 602, 881 A.2d 1212, cert. denied, 390 Md. 92, 887 A.2d 656 (2005), where Judge Deborah Eyler wrote as follows:

Under Maryland common law, punitive damages represent, in essence, a civil fine. The purpose of punitive damages is "to punish the wrongdoer and to deter such conduct by the wrongdoer or others in the future." Punitive damages are not a means of recompensing the victim.

It is a well settled proposition in Maryland law that a cause of action does not exist for punitive damages alone. In Schloss v. Silverman, 172 Md. 632, 642, 192 A. 343 (1937), the Court observed, "compensation and punishment are different things, and it is generally held that punitive or exemplary damages cannot be recovered without proof of actual loss." Hence, a necessary condition for the recovery of punitive damages is an underlying award of compensatory damages. More specifically, "there must be a compensatory damages award foundation for each count of a complaint that provides a basis for punitive damages."

Shabazz, 163 Md. App. at 638-39, 881 A.2d at 1233-34 (citations omitted); see also Impac Mortg. Holdings, Inc. v. Timm, 245 Md. App. 84, 125, 226 A.3d 323, 346 (2020),cert. granted, 469 Md. 656, 232 A.3d 257 (2020), and aff'd, 474 Md. 495, 255 A.3d 89 (2021) ("[A] claim for punitive damages is not a standalone cause of action. It is part of a prayer for relief."); see also Harvey-Jones v. Coronel, 239 Md. App. 145, 164 n.4, 196 A.3d 36, 47 (2018) (citing Shabazz for the proposition that punitive damages are "to punish the wrongdoer"); Caldor, Inc. v. Bowden, 330 Md. 632, 625 A.2d 959 (1993); see Bowden v. Caldor, Inc., 350 Md. 4, 710 A.2d 267 (1998) (holding that an earlier holding (330 Md. 632, 625 A.2d 959) did not create a cap on a punitive damages award on remand).

In Maryland, a punitive damages award is permitted in a tort case only if the plaintiff has proved that the tortfeasor acted with actual (not implied) malice. Green v. Wills Group, 161 F. Supp. 2d 618 (D. Md. 2001); Frazier v. Castle Ford, Ltd., 430 Md. 144, 59 A.3d 1016 (2013) ("An award of punitive damages may be made in a case of fraud when the defendant acts with 'actual malice'—that is...