A plaintiff in a malicious prosecution case with a demand for punitive damages is entitled to discovery of the defendant’s net worth, a Virginia circuit judge has ruled.
A defendant’s assets can be used as both a sword and shield in a punitives claim, so the plaintiff was entitled to discovery even though the defendant disclaimed any intent to use his financial picture to argue for a lesser award, the judge concluded.
The ruling this month from Hanover County Circuit Judge Patricia Kelly mirrors a decision two weeks earlier from Richmond Circuit Judge Clarence N. Jenkins Jr. Both judges concluded the defendants’ net worth was relevant to the plaintiffs’ claims for punitive damages.
Circuit judges have taken different views of the right to financial discovery based on interpretations of the burden of proof for seeking punitives. Several circuit judges have held that defendants can keep their finances out of court by giving up their right to use the information to defend against large punitive awards. The Supreme Court of Virginia has not addressed the issue yet.
Kelly’s three-page opinion from Aug. 6 is Brodie v. Baker (VLW 020-8-088). Jenkins’ decision came in a short order in Brooks v. Viola Leasing Inc.
The Brodie case arose from a dispute over possession of a Hanover County home, according to Richmond attorney John A. Merrick, who represents plaintiff Michelle Brodie.
A mortgage bank sold Brodie’s former home at foreclosure, despite her attempt to pay an arrearage and forestall the sale. The purchaser at foreclosure, Michael Baker, first told Brodie he might let her stay in the property as a renter. But he later swore out a criminal trespass charge and called officers who arrested Brodie at the property, Merrick said. Records show the arrest was Oct. 10.
The trespass charge was dismissed last year, according to online court records.
On Jan. 10, Brodie sued Baker for malicious prosecution and demanded punitive damages. She sent discovery requests seeking Baker’s net worth for the years 2017-2019. Baker objected and Brodie filed a motion to compel discovery.
Baker contended he did not plan to cite his personal net worth to argue he was unable to pay a punitive damages award. “Mr. Baker elects not to use that shield,” wrote Samuel T. Bernier of Roanoke in Baker’s brief opposing the motion to compel.
Bernier cited the 2014 opinion of Prince George County Circuit Judge W. Allan Sharrett in Lunt v. Prince George Cemetery Corp. and preceding cases in accord. Sharrett concluded it is the defendant’s burden to proffer net worth evidence, so the defendant controls whether the evidence is subject to discovery.
“Because Mr. Baker has made the tactical choice not to use the ‘ability to pay’ shield, evidence of his net worth is irrelevant and not discoverable,” Bernier wrote.
If Baker’s net worth were subject to discovery, the inquiry should be limited to assets that could be used to satisfy a judgment and the resulting disclosures should be covered by a protective order, Bernier added in his brief.
Merrick notched a win on the same issue just days before Kelly ruled in Brodie’s favor. In another malicious prosecution case brought by Merrick’s firm, a defendant was resisting a bid to discover financials.
Jenkins – the Richmond judge – decided the plaintiff’s discovery request seeking the defendant’s net worth and associated financial information “calls for relevant information and documents relating to plaintiff’s claim for punitive damages.”
Then Kelly – the Hanover judge – was persuaded after doing her own research on the issue.
“The Court finds that Defendant’s total net worth is an appropriate subject for discovery and orders the Defendant to give a full and complete answer to the propounded discovery,” Kelly wrote.
Kelly alluded to the sword-versus-shield analysis, saying Baker viewed the only proper use of a defendant’s financials is as a shield to fend off a ruinous punitive damages award. Brodie apparently argued that financial information also can be used as a sword to press for a higher award against a wealthy defendant.
Kelly gave Baker 21 days to answer an interrogatory and produce requested documents, but she also limited the discovery to assets which could be attached to satisfy any punitive award.
Neither Merrick nor Bernier offered comment on the ruling. The case is set for a jury trial in January.