Q: Entity defendant vs Corporate defendant in context of punitive damages
How difference is defined between Entity defendant vs Corporate defendant in context of punitive damages?
A: A corporate entity means a corporation. A corporation is a type of entity. Other entities include LLC, partnership, trust.
A:
Under California law, there are some key differences between entity defendants and corporate defendants when it comes to punitive damages:
Entity Defendants:
- Entity defendants generally refer to individuals, partnerships, or other non-corporate business entities.
- For an entity defendant, California Civil Code Section 3294 allows punitive damages to be awarded if the plaintiff proves by clear and convincing evidence that the defendant engaged in oppression, fraud, or malice.
- The conduct of an entity defendant must be proven directly - their actions must meet the definitions of oppression, fraud or malice.
Corporate Defendants:
- A corporate defendant is a corporation or company.
- For a corporate defendant, punitive damages can only be imposed if an officer, director, or managing agent of the corporation either authorized or ratified the wrongful conduct, or was personally guilty of oppression, fraud, or malice.
- The plaintiff must show that the wrongful act was committed by an officer, director or managing agent acting on behalf of the corporation.
- Alternatively, the plaintiff must show that an officer, director, or managing agent had advance knowledge of the unfitness of an employee who committed the wrongful act and employed them with conscious disregard for the rights and safety of others.
So in summary, the key difference is that for a corporate defendant, the plaintiff must prove wrongful conduct at the level of officers, directors or managing agents, not just any employee. There is a higher bar to impose punitive damages on a corporation versus an individual or non-corporate entity. The policy reason is that a corporation itself cannot engage in oppression, fraud or malice - only individuals controlling the corporation can.
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