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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: September 6, 2015

No Punitive Damages Without Fraudulent or Evil Motive and Outrage Associated with Crime

On August 28, 2015, Justice Kornreich of the New York County Commercial Division issued a decision in Emmet & Co., Inc. v. Catholic Health East, 2015 NY Slip Op. 25293, dismissing a claim for punitive damages, explaining:

Punitive damages are only permitted in cases where the wrong complained of is morally culpable, or is actuated by evil and reprehensible motives. It is not enough for the wrongdoing to be intentional; defendant must evince a high degree of moral turpitude and demonstrate such wanton dishonesty as to imply a criminal indifference to civil obligations. Mere commission of a tort, even an intentional tort requiring proof of common law malice, is insufficient; there must be circumstances of aggravation or outrage, or a fraudulent or evil motive on the part of the defendant. Thus, in order for punitive damages to be awarded, the plaintiff must demonstrate that the defendant’s conduct is intentional and deliberate, has fraudulent or evil motive, and has the character of outrage frequently associated with crime.

(Internal quotations and citations omitted) (emphasis added). The court went on to explain that those conditions were not met in this action, which was essentially a contract dispute “between highly sophisticated financial professionals who appear to have had a disagreement about complex issues without clear precedent to guide them.”

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