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60-3701. Punitive and exemplary damages; separate proceeding for determination of amount; considerations; limitations; maximum amount of award; application limited. (a) In any civil action in which exemplary or punitive damages are recoverable, the trier of fact shall determine, concurrent with all other issues presented, whether such damages shall be allowed. If such damages are allowed, a separate proceeding shall be conducted by the court to determine the amount of such damages to be awarded.

(b) At a proceeding to determine the amount of exemplary or punitive damages to be awarded under this section, the court may consider:

(1) The likelihood at the time of the alleged misconduct that serious harm would arise from the defendant's misconduct;

(2) the degree of the defendant's awareness of that likelihood;

(3) the profitability of the defendant's misconduct;

(4) the duration of the misconduct and any intentional concealment of it;

(5) the attitude and conduct of the defendant upon discovery of the misconduct;

(6) the financial condition of the defendant; and

(7) the total deterrent effect of other damages and punishment imposed upon the defendant as a result of the misconduct, including, but not limited to, compensatory, exemplary and punitive damage awards to persons in situations similar to those of the claimant and the severity of the criminal penalties to which the defendant has been or may be subjected.

At the conclusion of the proceeding, the court shall determine the amount of exemplary or punitive damages to be awarded and shall enter judgment for that amount.

(c) In any civil action where claims for exemplary or punitive damages are included, the plaintiff shall have the burden of proving, by clear and convincing evidence in the initial phase of the trial, that the defendant acted toward the plaintiff with willful conduct, wanton conduct, fraud or malice.

(d) In no case shall exemplary or punitive damages be assessed pursuant to this section against:

(1) A principal or employer for the acts of an agent or employee unless the questioned conduct was authorized or ratified by a person expressly empowered to do so on behalf of the principal or employer; or

(2) an association, partnership or corporation for the acts of a member, partner or shareholder unless such association, partnership or corporation authorized or ratified the questioned conduct.

(e) Except as provided by subsection (f), no award of exemplary or punitive damages pursuant to this section shall exceed the lesser of:

(1) The annual gross income earned by the defendant, as determined by the court based upon the defendant's highest gross annual income earned for any one of the five years immediately before the act for which such damages are awarded; or

(2) $5 million.

(f) In lieu of the limitation provided by subsection (e), if the court finds that the profitability of the defendant's misconduct exceeds or is expected to exceed the limitation of subsection (e), the limitation on the amount of exemplary or punitive damages which the court may award shall be an amount equal to 1½ times the amount of profit which the defendant gained or is expected to gain as a result of the defendant's misconduct.

(g) The provisions of this section shall not apply to any action governed by another statute establishing or limiting the amount of exemplary or punitive damages, or prescribing procedures for the award of such damages, in such action.

(h) As used in this section the terms defined in K.S.A. 60-3401 and amendments thereto shall have the meaning provided by that statute.

(i) The provisions of this section shall apply only to an action based upon a cause of action accruing on or after July 1, 1987 and before July 1, 1988.

History: L. 1987, ch. 216, § 1; L. 1988, ch. 209, § 2; July 1.

Law Review and Bar Journal References:

"A Practitioner's Guide to Tort Reform of the 80's: What Happened and What's Left after Judicial Scrutiny," Jerry R. Palmer and Martha M. Snyder, 57 J.K.B.A. No. 9, 21, 27 (1988).

"Arbitration Agreements After Volt and Browning-Ferris," Leo P. Dreyer, 38 K.L.R. 667, 703 (1990).

"Punitive Damages in Wrongful Death Actions: How Will Kansas Respond?" Michael D. Moeller, 39 K.L.R. 199, 219 (1990).

"The Medical Malpractice Insurance 'Crisis': Did Kansas Tort Reform Really Work?" Bryan W. Smith, 31 W.L.J. 106, 117 (1991).

"Putting Punitive Damages in Perspective," Steven M. Dickson, J.K.T.L.A. Vol. XV, No. 3, 6, 7 (1992).

"A Primer on Punitive Damages in Kansas," Paul W. Rebein, 64 J.K.B.A. No. 9, 22, 23, 25 (1995).

"Automobile Collisions: Defendants Are Liable for Punitive Damages When They Are Driving Under the Influence of Alcohol at the Time of the Collision," Gary D. White, Jr., J.K.T.L.A. Vol. XX, No. 2, 12 (1996).

"The Kansas Uniform Fraudulent Transfer Act," Leon B. Graves, 68 J.K.B.A. No. 6, 34 (1999).

"The Effect of Kansas Tort Reform on Tomorrow's Asbestos Litigants: Robbing Peter to Pay Paul," Kevin Mark Smith, 39 W.L.J. 63 (1999).

"Trebling up on lawyer discipline," Ron Smith, 68 J.K.B.A. No. 10, 14 (1999).

"Survey of Kansas Tort Law: Part I," William E. Westerbeke and Stephen R. McAllister, 49 K.L.R. 1037 (2001).

"Cooper Industries, Inc. v. Leatherman and Its Affect on the Practice of Determining Punitive Damages in Kansas," Frederick J. Ernest, J.K.T.L.A. Vol. 25, No. 1, 8, 12 (2001).

"Twenty Years After Murphy v. City of Topeka: An Overview of Kansas Retaliatory and Public Policy Wrongful Discharge Law," Michael L. Matula, 72 J.K.B.A. No.2, 20 (2003).

"Why Punitive Damages Should Be a Jury's Decision in Kansas: A Historical Perspective," Ryan Fowler, 52 K.L.R. 631 (2004).

"Whose Award Is It Anyway?: Implications of Awarding the Entire Sum of Punitive Damages to the State," Kelly-Rose Garrity, 45 W.L.J. 395 (2006).

CASE ANNOTATIONS

1. Punitive damages awarded on claim of malicious prosecution; factors. Weathers v. American Family Mut. Ins. Co., 777 F.Supp. 879 (1991).

2. Award of punitive damages reversed, punitive damages must be determined pursuant to 60-3701. Gillespie v. Seymour, 250 K. 123, 145, 146, 823 P.2d 782 (1992).

3. Facts constituting clear and convincing evidence of wantonness or of a wanton act examined. Cerretti v. Flint Hills Rural Electric Co-op Ass'n, 251 K. 347, 366, 837 P.2d 330 (1992).

4. Remanded for determination whether evidence could reasonably support jury verdict for punitive damages. Fusaro v. First Family Mtg. Corp., 17 K.A.2d 730, 731, 732, 843 P.2d 737 (1992).

5. Jury instruction on purpose of punitive damages upheld. Weathers v. American Family Mut. Ins. Co., 793 F.Supp. 1002, 1006, 1027 (1992).

6. Incumbent on trial court to make sufficient findings of fact to afford meaningful appellate review. Gillespie v. Seymour, 253 K. 169, 173, 853 P.2d 692 (1993).

7. Clear and convincing evidence sufficient to support punitive damages award examined. Grove v. Orkin Exterminating Co., 18 K.A.2d 369, 372, 855 P.2d 958 (1993).

8. Whether allegations that employees conspired to defraud manufacturer stated claim for punitive damages examined. Deere and Co. v. Zahm, 837 F.Supp. 346, 352 (1993).

9. Constitutional and statutory challenges to punitive damage awards examined. Smith v. Printup, 254 K. 315, 316, 321, 866 P.2d 985 (1994).

10. Determination of defendant's profits for punitive damages purposes in fraud in trust action discussed. Gillespie v. Seymour, 255 K. 774, 775, 779, 782, 877 P.2d 409 (1994).

11. Whether material issue regarding whether employer ratified allegedly wanton conduct of employee precluded summary judgment examined. Rothwell v. Werner Enterprises, Inc., 859 F.Supp. 470, 476 (1994).

12. Whether theory defendant was negligent in supervision of independent contractor responsible for repossession supports imposition of punitive damages examined. Clark v. Associates Commercial Corp., 870 F.Supp. 1011, 1012 (1994).

13. Whether employer was immune from punitive damages based upon acts of comanager examined. Preston v. Income Producing Management, Inc., 871 F.Supp. 411, 414 (1994).

14. Whether punitive damages may be awarded in action to set aside fraudulent conveyance examined. Golconda Screw, Inc. v. West Bottoms Ltd., 20 K.A.2d 1002, 1008, 894 P.2d 260 (1995).

15. Failure of city to seek actual damages did not preclude city from receiving punitive damages for trespass. City of Shawnee, Kan. v. AT&T Corp., 910 F.Supp. 1546, 1563 (1995).

16. Trial court did not abuse discretion in awarding punitive damages based of fraud by silence claim. Ensminger v. Terminix Intern. Co., 102 F.3d 1571, 1573, 1576 (1996).

17. Corporation liable for punitive damages for tortious acts of managerial agent acting within scope of employment; 40-2,115 inapplicable. Flint Hills Rural Elec. Co-op Ass'n v. Federated Rural Elec. Ins. Corp., 262 K. 512, 513, 521, 523, 941 P.2d 374 (1997).

18. Subsection (d) conflicts with 40-2,115(a); public policy prohibits insurance coverage based on vicarious liability rule. Hartford Accident & Indem. Co. v. American Red Ball Transit Co., 262 K. 570, 584, 938 P.2d 1281 (1997).

19. Abuse of discretion required to set aside award if statute properly applied; trial court must make sufficient findings of fact. Smith v. Printup, 262 K. 587, 938 P.2d 1261 (1997).

20. When manufacturer's compliance with federal regulatory standards does not preclude punitive damages discussed. Brand v. Mazda Motor Corp., 978 F.Supp. 1382, 1393 (1997).

21. Sufficient evidence supported punitive damages award where defendants acted in willful, wanton or malicious manner. Hawkinson v. Bennett, 265 K. 564, 605, 962 P.2d 445 (1998).

22. Lack of evidence that defendant realized railroad crossing posed imminent danger precluded punitive damage award. Stewart v. Southeast Kansas R. Co., 24 F.Supp.2d 1142, 1148 (1998).

23. Retention of overpayment by bank subsidiary manager aware of overpayment warranted punitive damages award. Commerce Bank, N.A. v. Chrysler Realty Corp., 86 F.Supp.2d 1087, 1091 (1999).

24. Retention of overpayment warranted award of punitive damages. Commerce Bank, N.A., v. Chrysler Realty Corp., 183 F.Supp.2d 1318, 1321 (2002).

25. Material fact issue concerning whether defendants fraudulently induced plaintiffs to enter into agreements precluded summary judgment. Horizon Holdings v. Genmar Holdings, 241 F.Supp.2d 1123, 1126 (2002).

26. Award of punitive damages requires finding of willful or wanton conduct, fraud, or malice. Mynatt v. Collis, 274 K. 850, 57 P.3d 513 (2002).

27. Cited; employer not liable for punitive damages for acts of employees, exceptions discussed. Stallings v. Werner Enterprises, Inc., 598 F.Supp.2d 1203, 1214, 1215 (2009).

28. Claim for punitive damages not barred as a matter of law under facts of case. Pekarek v. Sunbeam Products, Inc., 672 F.Supp.2d 1161 (D. Kan. 2008).


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