Punitive Damages in Indiana

What are punitive damages?

Punitive damages are a creature of common law and have been allowed for under certain circumstances by Indiana’s legislature under Indiana law. Cheatham v. Pohle, 789 N.E.2d 467, 471 (Ind. 2003); Ind. Code §§ 34-51-3-0.2 to 34-51-3-6. While the purpose of compensatory damages is to make a plaintiff whole and otherwise value a plaintiff’s injury, punitive damages serve to deter and punish wrongful activity and behavior. Cheatham, 789 N.E.2d at 471.

What is the standard for obtaining an award of punitive damages in Indiana?

The facts supporting an award of punitive damages must be established by clear and convincing evidence, as opposed to a preponderance of the evidence standard. Id.; Ind. Code § 34-51-3-4. Plaintiffs must show by clear and convincing evidence that a defendant acted with malice, fraud, gross negligence (better termed willful and wanton misconduct), or oppressiveness, which was not the result of a mistake of fact or law, mere negligence, or other human failing. Wohlwend v. Edwards, 796 N.E.2d 781, 784 (Ind. Ct. App. 2003). We have written previously about the possibility that punitive damages could be awarded against a serial texting driver. And, unlike a plaintiff’s claim for compensatory damages, juries are not required to award punitive damages even if the facts that might justify an award are found. Cheatham, 789 N.E.2d at 472.

Can the legislature limit the types of claims in which punitive damages are available in Indiana?

Yes. Under Indiana law, punitive damages, while recoverable, are subject to restrictions as set forth by Indiana’s legislature, which has the authority to modify, restrict or eliminate punitive damages. Pohle, 789 N.E.2d at 472. Indiana’s legislature has eliminated punitive damages in some cases, as is the case in wrongful death claims and in claims against governmental entities. See, e.g., Durham ex rel. Estate of Wade v. U-Haul Int’l, 745 N.E.2d 755, 757 (Ind. 2001) (excluding punitive damages under the general wrongful death statute); Ind. Code § 34-23-1-2 (excluding punitive damages in adult wrongful death actions); Ind. Code § 34-13-3-4 (“A governmental entity or an employee of a governmental entity acting within the scope of employment is not liable for punitive damages.”)

What limits are placed on the recovery of punitive damages in Indiana?

Under Indiana’s current punitive damages law, punitive damages are capped at the greater of (1) three times the amount of compensatory damages or (2) fifty thousand dollars ($50,000). Ind. Code § 34-51-3-4. The law also contains an allocation of the money received in payment of a punitive damages award, with the person to whom punitive damages are awarded receiving only twenty-five percent (25%) of the punitive damages award with seventy-five percent (75%) of the punitive damages award going to the Indiana Treasurer of State to deposit such funds into the violent crime victims compensation fund established by Indiana Code § 5-2-6.1-40. Ind. Code § 34-51-3-6. Under the law, juries are not to be advised of either the limit on punitive damages or the way in which the money received in payment of a punitive damages award is to be allocated. Ind. Code § 34-51-3-3. The Indiana Supreme Court has upheld Indiana’s current punitive damages law against constitutional challenge in Cheatham v. Pohle, 789 N.E.2d 467 (Ind. 2003) and State v. Doe, 987 N.E.2d 1066 (Ind. 2013) (dealing with a lawsuit against clergymen for sexual abuse).

Has the Indiana Legislature considered changing Indiana’s law of punitive damages recently?

Indiana legislators in the most recent session proposed changes to Indiana’s punitive damages law, which included more of the punitive damages award allocation going to claimants, allowing a jury to be advised of the allocation requirements, and higher limits in cases involving sexual misconduct. However, the proposed legislation did not ultimately pass. Considering the restrictions in place to recover punitive damages in Indiana, Indiana injury lawyers and their injured victims must weigh the pros and cons of pursuing punitive damages, which in many cases can be cost-prohibitive.