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Unfair and Deceptive Acts and Practices: 12.4.2.3.2 Bad faith refusal to settle as precondition
In other states, multiple damages are triggered not by the seller’s intent to deceive but by the seller’s bad faith refusal to grant the injured consumer relief after the consumer notifies the merchant of the deception.
Unfair and Deceptive Acts and Practices: 12.4.2.3.3 Other preconditions to multiple damage awards
A few UDAP statutes trigger treble damages if the seller violates a UDAP rule or other clear standard.433 In Ohio, a dealer is liable for treble damages only if it violated a rule adopted under the state UDAP statute or a decision interpreting the statute that was made available for public inspection.434 The decision’s availability for public inspection is treated as a question of fact that must be proven by admissible evidence.435 The consumer mus
Unfair and Deceptive Acts and Practices: 12.4.2.3.4 Standards where multiple damages are discretionary
The Pennsylvania Supreme Court holds that, in light of the remedial purposes of the UDAP statute and the absence of any statutory language adopting common law punitive damages standards, treble damage awards “should not be closely constrained by the common-law requirements.”453 Courts should, however, review UDAP treble damage awards for rationality, focusing on the presence of intentional or reckless wrongful conduct, in which case treble damages are consistent with the statute’s remedial purposes.454
Unfair and Deceptive Acts and Practices: 12.4.2.3.5 Statutory standards as to the multiplier to be utilized
In some states, the multiple applied to actual damages will vary depending on certain conditions or on the court’s discretion.464 For example, actual damages may be doubled in some cases and trebled in others.
Unfair and Deceptive Acts and Practices: 12.4.2.4 Are Multiple Damages Available in Default Judgments?
Default judgments are subject to trebling just as litigated judgments are.469 It is wise to put a defendant on notice through the complaint that treble damages are being sought. Then, if there is a default judgment, there will not be an issue of unfair surprise to the defendant. The complaint should clearly allege any preconditions to multiple damages and include them in the prayer for relief.470
Unfair and Deceptive Acts and Practices: 12.4.2.5.1 Can UDAP multiple damages claims be forced into arbitration?
Whether an arbitration clause generally is enforceable is examined in another NCLC treatise, Consumer Arbitration Agreements.471 This subsection reviews whether a claim for UDAP treble damages raises special issues as to the arbitration agreement’s enforceability.
Unfair and Deceptive Acts and Practices: 12.4.2.6 Interrelation of Treble Damages with Other Awards
Treble damages are both exemplary and compensatory.
Unfair and Deceptive Acts and Practices: 12.4.2.7.1 Relationship to seller’s recovery in the same case
It is not always clear how to compute multiple damage awards. Should a consumer’s damage award be first trebled and then offset by the seller’s recovery in the same action, or should the offset occur before the consumer’s award is trebled?
Unfair and Deceptive Acts and Practices: 12.4.2.7.2 Calculation issues where there are multiple parties
If state law requires the amount one defendant pays to the plaintiff before trial to be deducted from the judgment awarded the plaintiff against another defendant, the settlement amount should be deducted after the damage award is trebled, not before.509 Where two parties are jointly and severally liable for the consumer’s damages, the court trebles the total, and does not have to separate the damages caused by each party.510 However, the maximum possible recovery is treble the actual damages, r
Unfair and Deceptive Acts and Practices: 12.4.2.7.3 What awards should be trebled?
A similar issue arises where a defendant such as an insurance company that owes the consumer money initially stonewalls, but finally pays the consumer prior to the entry of judgment on the UDAP claim. Then the defendant may claim that the amount to be trebled should not include that payment, but only any damage the consumer suffered because of the delay in payment.
Unfair and Deceptive Acts and Practices: 12.4.2.7.4 Emotional distress damages
Unless the UDAP statute explicitly provides otherwise, emotional distress awards should be subject to trebling, just like any other actual damages award. The Ohio Supreme Court held that emotional distress damages were “actual damages” that were subject to trebling under its UDAP statute.521 The decision contrasted emotional distress damages with statutory damages, which the decision implied could not be trebled.
Unfair and Deceptive Acts and Practices: 12.4.2.7.5 Should the amount of a cancelled or rescinded debt be trebled?
It is not uncommon in cases involving fundamental deception in a credit transaction for a court to order all consumer payments returned and cancellation of the remainder of the indebtedness to the creditor. An appellate court has considered whether both the amount paid and the amount canceled should be trebled.
Unfair and Deceptive Acts and Practices: 12.4.2.7.6 Prejudgment and postjudgment interest; other financing costs
Courts are split as to whether prejudgment interest should be trebled.531 A court has attempted to resolve this split with the following reasoning. Prejudgment interest should not be allowed on treble damages. But where prejudgment interest is authorized in calculating actual damages, that amount should be included in the actual damage award. This total award should then be trebled where appropriate.532
Unfair and Deceptive Acts and Practices: 12.4.2.8 Should the Jury Be Told That Actual Damages Will Be Trebled?
Some UDAP statutes mandate that actual damages be doubled or trebled.539 In these states, the question arises whether the jury should be told that the court will double or treble any actual damages that the jury finds.
Unfair and Deceptive Acts and Practices: 12.4.3.1 Are Punitive Damages Available Under a UDAP Statute?
Ten UDAP statutes explicitly authorize punitive damages.569 In addition, the Illinois UDAP statute authorizes the court to award any other relief it deems proper, and then restricts the circumstances under which punitive damages can be awarded against car dealers, necessarily implying that punitive damages are allowed as “other relief.”570 (The Illinois Supreme Court has held the special protection for car dealers unconstitutional.571) Some additio
Unfair and Deceptive Acts and Practices: 12.4.3.2 Common Law Fraud Punitive Damages Where UDAP Punitive Damages Not Available
If a UDAP statute does not authorize punitive damages, consumer attorneys should add common law fraud counts to their UDAP actions in appropriate cases and seek punitive damages under the common law fraud claim.576 There is no merit to the argument that the availability of UDAP remedies preempts common law tort claims or remedies.577 Consumers can recover actual damages and attorney fees under a UDAP claim and punitive damages under a tort claim.578
Unfair and Deceptive Acts and Practices: 12.4.3.3 Standards for Determining Whether UDAP Punitive Damages Should Be Awarded
Some UDAP statutes specify a standard for awarding punitive damages.579 Unless a UDAP statute specifies other standards, courts are likely to use a state’s common law fraud standards in determining whether UDAP punitive damages are appropriate in a particular case.580 In addition, some states have generally applicable statutes that set standards for punitive damages.581
Unfair and Deceptive Acts and Practices: 12.4.3.4 Need Consumer Prove Actual Damages?
An important UDAP issue is whether punitive damages can be awarded where the consumer has not proven actual damages.
Unfair and Deceptive Acts and Practices: 12.4.3.5.1 Are punitive damages authorized in arbitration?
The interrelationship of arbitration and punitive damages is similar to that between arbitration and multiple damages examined at § 12.4.2.5, supra.
Unfair and Deceptive Acts and Practices: 12.4.3.5.2 Advantages of seeking punitive damages in arbitration
If a UDAP statute provides for punitive damages, consumers should generally be able to seek such damages in an arbitration proceeding.604 Then the arbitrator should have wide discretion as to awarding such damages and the size of the award. When the consumer claims that such damages should be awarded, the consumer should impress upon the arbitrator the need for discovery from the defendant to show intent and that the challenged practice is part of a pattern of conduct.
Unfair and Deceptive Acts and Practices: 12.4.3.6.1 Constitutional limitations enunciated by the United States Supreme Court
While computation of punitive damages awards under state UDAP or other state law theories is fundamentally a state law issue, federal constitutional standards can limit the size of this award. These issues are discussed in detail in NCLC’s Automobile Fraud.608
Unfair and Deceptive Acts and Practices: 12.4.3.6.2 State statutory caps on punitive damages awards
In addition to the constitutional standards set by the Supreme Court, in many states there are statutory caps on punitive damages awards.629 These caps may apply to UDAP or fraud claims in some states, but not in others. For example, some caps apply only to product liability cases, while others apply to all civil actions.