Colo. Supreme Court ruling could increase punitive damages

A ruling by the Colorado Supreme Court could result in higher punitive damages for libel defendants in that state. In a decision released this week, the court clarified how interest rates will be factored into assessing punitive damages.

In Colorado, the law states that the amount of punitive damages awarded, referred to as "exemplary damages" in the statute, may not exceed the amount of compensatory damages awarded. The narrow issue the Supreme Court considered was whether the cap on exemplary damages should include interest accrued to the jury's compensatory damages award between the time of the injury and the time of judgment. In a defamation case involving a dispute between family members over the disposition of a deceased relatives will, the court of appeals had ruled that it did not, but the Supreme Court reversed.

In Dec. 2005, Donald Vickery died of cancer. Leading up Donald's death, tensions grew between his mother, sister, and wife, including disagreements over visitation, medical expenses, and property. What followed his death was a lengthy dispute over the proper disposition of Donald's will, according to an opinion written by the court of appeals.

Merry Gayle Vickery, Donald's sister and the defendant in the defamation case, challenged the validity of Donald's will and argued that certain pieces of personal property belonged either to her or to their mother, Evelyn Trumble. The court responsible for evaluating wills rejected Merry's challenges and held the will valid. Donald's wife Monica Vickery, the plaintiff, was named the beneficiary of a number of oil and gas properties that had, under a prior version of the will, been meant to go to Merry and Trumble, noted the opinion.

According to the court of appeals, Merry then wrote a serious of letters to 11 different recipients alleging that Monica, a sergeant with the Denver Police Department, had committed "murder, fraud, theft, and misuse of police authority." The recipients of the letters included the Colorado Attorney General's office, the Denver District Attorney's office, the Denver Police Internal Affairs office, the FBI, the Internal Revenue Service, the United States Department of Labor, and the Navajo Nation, the court of appeals wrote.

Letters accusing Monica of fraud were also sent to the companies that manage the oil and gas interests disputed in the will, according to the lower court opinion. Monica sued, alleging among other things that Merry had defamed her in the letters. After a 10 day trial, a jury agreed on the defamation claim and awarded both compensatory and exemplary damages.

Compensatory damages are intended to compensate the victim for damage done to them; exemplary, or "punitive" damages, "are intended to punish a wrongdoer and to set an example for others," the court of appeals wrote. They are "not to compensate the victim for harm done to him or her."

Justice Allison Eid dissented from the majority's opinion."If a jury assesses $100 in actual damages, and the court adds $10 in prejudgment interest to the actual damage award . . . exemplary damages would be capped at $110," she wrote. This amounts to interest paid on the exemplary damages, which is prohibited by Colorado law and prior cases of the Supreme Court, she wrote.

The case will be remanded to the trial court to assess damages in accordance with the Supreme Court's opinion.