Punitive damages against fiduciaries: leaving Hoppe behind and allowing punitive damages where equitable relief is sought, Part I.

• Author: Pankauski, John
• Position: Trial Lawyers Forum

Amajority of Florida courts have followed a rule that prohibits the award of punitive damages in cases in which plaintiff seeks equitable relief (the traditional rule). (1) Although arguments for the traditional rule have been soundly refuted, (2) Florida courts continue to rely on authority that, as argued below, should no longer be regarded as good law. (3) Courts refusing to award punitive damages frequently cite a historical distinction between law and equity courts (and legal and equitable causes) that is no longer valid and that has been rejected in favor of a more modern rule. (4) Some Florida courts, recognizing a modern trend, (5) have adopted a rule permitting punitive damages to be awarded even when a plaintiff seeks relief in equity (the modern rule). (6) The adoption of the modern rule has created a split in the Florida courts. (7) This article's thesis is that Florida should expressly adopt the modern rule to resolve the current split. This article is being published in two parts, the second coming out next month. In Part I, the authors consider Florida law, including the adoption of the modern rule by the Fourth District Court of Appeal. In Part II (to be published next month), the authors explain why they believe the traditional rule is wrong and conclude that punitive damages have been, are, and should be available for actions traditionally cognizable in equity, particularly in the fiduciary or probate setting.

Hoppe and the No Punitive Damages Rule

In the probate division, counsel arguing against the availability of punitive damages typically cite a line of cases that adheres to the traditional rule, i.e., Hoppe v. Hoppe, 370 So. 2d 374 (Fla. 4th DCA 1978), Santos v. Bogh, 298 So. 2d 460 (Fla. 3d DCA 1974), Lee v. Watsco, Inc., 263 So. 2d 241 (Fla. 3d DCA 1972), and RC #17 Corp. v. Korenblit, 207 So. 2d 296 (Fla. 3d DCA 1968). These decisions hold that absent statutory authority, a judge sitting as a trier of fact in an action formally cognizable in equity may not award punitive relief. (8) None, however, present any significant discussion of the traditional rule's rationale nor any response to the arguments cited by modern rule courts that expressly reject the traditional rule.

In Hoppe, for example, the court merely stated, "the law is clear in Florida that absent a statutory authority, ajudge sitting as a trier of fact in an action formally cognizable in equity may not award punitive damages." (9) In Insurance Field Services, Inc. v. White & White Inspection and Audit Service, Inc., 384 So. 2d 303 (Fla. 5th DCA 1980), the appeal court cited Hoppe and the traditional rule to deny a punitive claim, (10) but provided no further analysis. (11) In Lanman Lithotech, Inc. v. Gurwitz, 478 So. 2d 425 (Fla. 5th DCA 1985), rev. den., 488 So. 2d 830 (Fla. 1986), the court, citing the traditional rule and Hoppe, held punitive damages unavailable again without further analysis. (12) The case in which the traditional rule was announced as Florida law, Orkin Exterminating Co. v. Truly Nolen, Inc., 117 So. 2d 419, 422 (Fla. 3d DCA 1960), rev. den, 120 So. 2d 619 (Fla. 1960), however, does provide a fairly detailed rationale.

Orkin Exterminating--Florida Adopts the Traditional Rule

In Orkin, the question was whether it would be error for a court of equity to grant punitive damages absent statutory authorization. (13) The Orkin court cited a number of appellate courts that appeared by implication to have allowed punitive damages to be awarded by a chancellor, (14) but concluded they had not addressed the precise issue and, thus, that Florida had not decided whether punitive damages were available in cases in which plaintiff sought equitable relief. (15) It began its analysis as follows:

A historical background of the question of whether an equity court has the power to award punitive damages is ably set forth in Superior Construction Co. v. Elmo, 204 Md. 1, 102 A.2d 739, 104 A.2d 581, 48 A.L.R.2d 932, 947. A review of the authorities therein set out reveals that punitive damages originated in the law of England where the common conscience of the jury was the basis for the award of the additional amount beyond compensatory damages to the injured party. The weight of authority in this country is definitely against the right of a chancellor to award punitive damages in the absence of express statutory authority to do so. (16)

The Orkin court noted that denial to a chancellor of the right to award punitive damages was supported by two theories: first, a waiver theory that holds that by bringing the action in equity, plaintiff waives the right to punitive damages, and, second, that awarding punitive damages is incompatible with equitable principles. (17) The latter theory, the court noted, is frequently articulated as the view that "a court of equity is not an instrument for the punishment of an individual or for the exacting of vengeance."...