Opinion
C.A. No. 98C-06-299 SCD.
November 1, 1999.
Dear Counsel:
The issue is whether plaintiffs must make a prima facie showing of evidence sufficient to support an award of punitive damages, or whether it is sufficient to show a factual basis for such an award, in order to justify discovery of defendants' financial information.
Defendants have filed a motion for a protective order in response to plaintiffs' requests for detailed financial information. This civil action charges one or more of the defendants with intentional infliction of emotional distress, conversion, interference with right to burial/abuse of corpse and civil conspiracy, arising from the intentional murder of Anne Marie Fahey. Defendant Thomas Capano has been convicted of Murder First Degree. The other defendants are implicated in conduct occurring after the crime.
State v. Capano, Del. Super., Cr. A. No. 97-11-0720, Lee, J. (March 16, 1999) (Mem. Op.)
Fahey-Hosey, et al. v. Capano, et al., C.A. No. 98C-06-299, Del Pesco, J. (Aug. 31, 1999) (Mem. Op.); Fahey-Hosey, et al. v. Capano, et al., C.A. No. 98C-06-299, Del Pesco, J. (Sept. 28, 1999) (Letter Op.)
Defendant Louis J. Capano, Jr. and the Corporate defendants filed a motion for a protective order pursuant to Superior Court Civil Rule 26(c). Defendants Gerard Capano and Thomas Capano subsequently joined this motion. Defendants argue that any discovery as to their financial information is inappropriate at this time because plaintiffs have not established a prima facie case for punitive damages. Instead, defendants argue that discovery at this time must be limited to the merits of the case to see if a basis for punitive damages exists. Defendants also argue that the discovery requested by the plaintiffs is excessively broad.
Prima facie case is defined as ". . . (2) the plaintiff's burden of producing enough evidence to permit the fact-trier to infer the fact at issue (citation omitted)." A DICTIONARY OF MODERN LEGAL USAGE (2nd ed. 1995).
Plaintiffs argue that a prima facie case for punitive damages is not required, and that an adequate factual basis to support liability for punitive damages is provided in State v. Capano. Plaintiffs assert that defendants have shown no factual basis for their contention that the discovery requested will annoy, embarrass, or oppress.
State v. Capano, Del. Super., Cr. A. No. 97-11-0720, Lee, J. (March 16, 1999) (Mem. Op.)
Superior Court Civil Rule 26(b)(1) provides for discovery of any non-privileged matter relevant to claims and defenses at issue. Evidence of defendant's financial situation is relevant where the jury may award punitive damages. Bryan v. Thos. Best Sons, Inc., Del. Super., 453 A.2d 107 (1982) (citing Lock v. Schlepper, Del. Super., C.A. No. .79-MY113, Stiftel, J. (July 7, 1980)).
In order for information on a defendant's financial condition to be discoverable, plaintiff must demonstrate a factual basis that punitive damages may be awarded. Bryan v. Thos. Best Sons, Inc. involved a contract dispute where plaintiffs alleged "reckless indifference" in the complaint and sought punitive damages on those grounds. Defendant was served with interrogatories regarding its financial condition and sought a protective order. The order was granted until plaintiffs could demonstrate through discovery that there was a factual basis for punitive damages. Specifically, the court held that "[u]ntil plaintiffs lay a factual foundation establishing that it is reasonably likely that a triable issue as to defendant's liability for punitive damages exists, they may not discover the requested financial information." Id. at 108 (citations omitted, emphasis added). The court went on to state "this decision should not be read as requiring that a prima facie showing as to the right to punitive damages be made in every case in which such damages are sought." Id. at 109.
Walbert v. C.F. Schwartz Motor Co., Inc., Del. Super., C. A. No. 85C-OC-19, Ridgely, J. (March 31, 1987) (ORDER), involved allegations of common law fraud and consumer fraud. Plaintiff served interrogatories on defendant requesting financial information. Defendant moved for a protective order alleging that plaintiff failed to show good cause for the discovery. Relying on Bryan, the court allowed the financial discovery, holding that although the facts of the case were in dispute, plaintiff "demonstrated that it [was] reasonably likely that a triable issue as to defendant's liability for punitive damages existed."
In Bradley v. A. C. S. Co., Inc., Del. Super., C. A. No. 84C-MY-145, Taylor, J. (Nov. 7, 1989) (ORDER), defendants attempted to rely on Bryan for the proposition that "no inquiry can be made into their financial condition unless a prima facie showing has been made that plaintiffs have a right to recover punitive damages." The court held that Bryan only requires that plaintiffs demonstrate a factual basis, not make a prima facie showing.
Both parties in this case rely on Bryan, however the case has been misconstrued by the defendants. Bryan does not require a prima facie showing of punitive damages before discovery on financial information is allowed in this case. Some factual basis for punitive damages is required, but plaintiffs have met that burden. As previously noted in this Court's decision on the defendants' motion to dismiss, the essential facts of this claim are undisputed. There is in this case a "factual foundation establishing that it is reasonably likely that a triable issue as to defendant[s'] liability for punitive damages exists. . . ."
Bryan, 453 A.2d at 108.
However, this Court has the discretion to limit the extent of the discovery. Superior Court Civil Rule 26(c) states:
Upon motion by a party . . . and for good cause shown, the Court may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) That the discovery not be had; . . . (4) that certain matters not be inquired into, or that the scope of the discovery be limited to certain matters. . . .
Limitations on the scope of discovery are appropriate at this stage of the proceedings.
The defendant's motion is GRANTED as to all pending discovery. Instead, defendants Louis J. Capano, Jr., Gerard Capano, and Thomas Capano are directed to provide this Court, in camera, with all financial statements prepared for lending institutions during the calendar years 1995 through 1998 inclusive, within thirty (30) days. The documents are to be filed under seal, along with affidavits verifying their authenticity. If no such document(s) exists, a sworn statement to that effect must be filed.
SO ORDERED.
Very ruly yours,
Susan C. Del Pesco