Punitive Damage Awards in North Carolina

By :Douglas A. Petho

The purpose of punitive damages is to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts. Punitive damages are available only if a defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:
(1) Fraud.
(2) Malice.
(3) Willful or wanton conduct.
(See N.C.G.S.§ 1D 15)
N.C.G.S.§1D 15 further provides that a claimant must prove the existence of an aggravating factor by “clear and convincing” evidence. Punitive damages awarded against a defendant are limited to three times the amount of compensatory damages or two hundred fifty thousand dollars ($250,000), whichever is greater. Any verdict for punitive damages in excess of the maximum will be reduced by the court to the maximum amount allowed by law. Furthermore, the court is required to state in a written opinion its reasons for upholding or disturbing the finding or award.