THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
 TRIAL DIVISION
Cite as Elymore v. Walter,
9 FSM Intrm. 251 (Ponape 1999)

[9 FSM Intrm. 251]

JASON ELYMORE and
AMATO ELYMORE,
Plaintiffs,

vs.

PEDRONIO WALTER,
Defendant.

CIVIL ACTION NO. 1999-025

ORDER AND MEMORANDUM

Martin Yinug
Associate Justice

Decided:  November 9, 1999

[9 FSM Intrm. 252]

APPEARANCES:
For the Plaintiffs:        Ron Moroni, Esq.
                                     P.O. Box 1618
                                     Kolonia, Pohnpei FM 96941

For the Defendant:     Stephen V. Finnen, Esq.
                                     Law Offices of Saimon & Associates
                                     P.O. Box 1450
                                     Kolonia, Pohnpei FM 96941

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HEADNOTES
Civil Procedure ) Discovery; Torts ) Damages ) Punitive
     A defendant's financial condition is relevant to a punitive damages claim and a proper subject of discovery, if, under the applicable law, the defendant's financial condition has a bearing on the amount of punitive damages to be awarded.Elymore v. Walter, 9 FSM Intrm. 251, 253 (Pon. 1999).

Civil Procedure ) Discovery; Torts ) Damages ) Punitive
     If a defendant is found liable for punitive damages, a court cannot make an award having a meaningfully deterrent effect unless the court knows the extent of the defendant's wealth.  The greater or lesser the degree of defendant's wealth, the greater or lesser would be the amount of the punitive award, since a small award relative to overall wealth would not meaningfully deter, whereas a large award relative to overall wealth would be unduly onerous.  Elymore v. Walter, 9 FSM Intrm. 251, 253 (Pon. 1999).

Torts ) Damages ) Punitive
     Punitive damages are recoverable for tortious acts which involve actual malice or deliberate violence, or where the conduct involved is shown to be wanton, reckless, malicious and oppressive.  Elymore v. Walter, 9 FSM Intrm. 251, 254 (Pon. 1999).

Civil Procedure ) Discovery; Torts ) Damages ) Punitive
     A trial judge abuses his discretion when he denies a motion to compel production of financial information in a case where punitive damages are claimed, if the plaintiff submits factual support for the claim and the defendant fails to demonstrate good cause for a protective order preventing discovery; but the defendant is usually entitled to a protective order that the information only be revealed to the discovering party's counsel or representative, that demands be limited only to information needed to determine the defendant's present net worth, and that the information be sealed or otherwise restricted to use in the current proceeding only.  Elymore v. Walter, 9 FSM Intrm. 251, 254 (Pon. 1999).

Civil Procedure ) Discovery; Torts ) Damages ) Punitive
     A defendant facing a claim for punitive damages may be required to answer discovery concerning current net worth, but cannot be compelled to reveal his financial status for the previous five years.  The court may order plaintiffs' counsel not to divulge this information to anyone until such time as the court determines punitive damages liability, at which time the court will order what is to be done with the discovered information.  Elymore v. Walter, 9 FSM Intrm. 251, 254 (Pon. 1999).

[9 FSM Intrm. 253]

Civil Procedure ) Discovery
     A court may make such orders as justice requires to protect a party from undue burden or expense with respect to discovery sought from that party.  Elymore v. Walter, 9 FSM Intrm. 251, 254 (Pon. 1999).
 
*    *    *    *

COURT'S OPINION
MARTIN YINUG, Associate Justice:
     The court has received the Motion to Bifurcate Trial on Issue of Exemplary Damages and Motion for Protective Order, filed by defendant Pedronio Walter ("Walter") on October 6, 1999; and the Opposition to Motion to Bifurcate Trial/Opposition to Motion for Protective Order and Motion to Compel Discovery, filed by the plaintiffs on October 22, 1999.

     The motion to bifurcate the trial is denied.  The motion for a protective order is granted according to the terms set out below.  Plaintiffs' motion to compel discovery, to the extent inconsistent with the protective order, is denied.

     The complaint in this case consists of nine numbered paragraphs, and is not separated into causes of action, although it alleges more than one.  The allegations center around Walter's alleged conduct in using a baseball bat to break the windshield of a car belonging to Amato Elymore.  When Walter struck the windshield, plaintiff Jason Elymore was inside the car.  At a minimum, the complaint alleges common law assault as to Jason Elymore, and further alleges that Walter "without provocation, maliciously and violently assaulted Plaintiff [meaning Jason Elymore] with a baseball bat."  Complaint para. 5.  The prayer for relief seeks punitive damages, and at least as to Jason Elymore, the complaint alleges a prima facie case for punitive damages.  Primo v. Refalopei, 7 FSM Intrm 423, 435 (Pon. 1996).

     Walter's motion to bifurcate the trial and the motion for a protective order are interrelated, and go to plaintiffs' interrogatories and document production requests 6 though 9.  These interrogatories and production requests inquire into the nature and extent of Walter's wealth.  "A defendant's financial condition is relevant to a claim of punitive damages and a proper subject of discovery, if, under the applicable law, the defendant's financial condition has a bearing on the amount of punitive damages to be awarded."  23 Am. Jur. 2d Depositions and Discovery 41 (1983) (footnotes omitted).  Walter's financial standing is relevant.  If the defendant is found liable for punitive damages, the court could not make an award having a meaningfully deterrent effect unless the court knew the extent of the defendant's wealth.  The greater or lesser the degree of defendant's wealth, the greater or lesser would be the amount of the punitive award, since a small award relative to overall wealth would not meaningfully deter, whereas a large award relative to overall wealth would be unduly onerous.  With this as a given, Walter has not advised the court of anything in the law of this jurisdiction ) and the court is not otherwise aware of any such authority ) which dictates that defendant's financial standing would have no "bearing on the amount of punitive damages to be awarded."  Id.  The question is whether Walter's financial standing should be disclosed now, and on what terms.

     Walter contends that the court should bifurcate the trial, and that Walter's liability for punitive damages should be tried first.  Walter asserts that any discovery on the question of his wealth should only take place after the court has held him liable for punitive damages, and that in the absence of such a finding by the court discovery on the question of his wealth is inappropriate because premature.  To this end, Walter seeks a protective order to the effect that he need not respond to plaintiffs'

[9 FSM Intrm. 254]

interrogatories and production requests 6 through 9.  In response, plaintiffs cite the delay involved in having two trials, and rightly note that this court does not regularly sit in Pohnpei.  Plaintiffs contend that they have made out a prima facie case for punitive damages, and that Walter should be required to respond to the discovery as propounded.

     Punitive damages are recoverable for tortious acts which involve actual malice or deliberate violence, Primo v. Refalopei, 7 FSM Intrm. at 435 (citing Elwise v. Bonneville Constr. Co., 6 FSM Intrm. 570, 572 (Pon. 1994); Meitou v. Uwera, 5 FSM Intrm. 139, 146 (Chk. S. Ct. Tr. 1991)), or where the conduct involved is shown to be wanton, reckless, malicious and oppressive, Primo, 7 FSM Intrm. at 435 (citing Ngirmekur v. Municipality of Airai, 7 TTR 477, 488 (Pal. 1976)). Plaintiffs are quick to point out, quoting 23 Am. Jur. 2d Depositions and Discovery 41 (1983), that "a trial judge abuses his discretion when he denies a motion to compel production of financial information in a case where punitive damages are claimed, if the plaintiff submits factual support for the claim and the defendant fails to demonstrate good cause for a protective order preventing discovery."  Plaintiffs' celerity is selective, however; they do not quote the sentence immediately preceding the quoted one, which provides that

[t]he defendant is usually entitled to a protective order that the information only be revealed to the discovering party's counsel or representative, demands be limited only to information needed to determine the defendant's present net worth, and that the information be sealed or otherwise restricted to use in the current proceeding only.

Id.  This formulation provides an approach to the discovery question at hand which obviates the need for bifurcation and its attendant inefficiencies.

     Walter's net worth is the bottom line issue, so to speak, and interrogatory 9 and document production request 9 go to this question.  Interrogatory 9 is:  "State your net worth, and provide a list of each asset and liability and the approximate value of each, that you relied on to calculate your net worth."  Production request 9 is: "Provide any and all documents that contain any information regarding, or any reference to any of the facts provided in your answer to the proceeding interrogatory."  Interrogatories and production requests 6 through 8 seek essentially a subset of the information included in interrogatory and production request 9, and request the information for the past five years.  Since this case resulted from spontaneous events occurring in April of this year, the court can see no purpose in inquiring five years into Walter's financial past.  Interrogatories and production requests 6 though 8 are unduly onerous in this respect.  Walter need not answer them.

     A court may make such orders as justice requires to protect a party from undue burden or expense with respect to discovery sought from that party.  Pohnpei v. M/V Miyo Maru No. 11, 8 FSM Intrm. 281, 287 (Pon. 1998).  The court grants Walter's motion for a protective order along the following lines.  Walter will respond to interrogatory 9.  As to production request 9, Walter will provide the documentation which materially substantiates his present financial standing.  For documents which are periodic in nature, such as bank statements or financial statements, Walter will produce such documents for the year 1999.  Walter will also prepare a statement of his net worth, and show how he has arrived at his bottom line.  Walter and/or his counsel will provide this information to plaintiffs' counsel, who will not divulge this information to anyone until such time as the court determines Walter's punitive damages liability, at which time the court will order what is to be done with the discovered information.  Plaintiff's counsel, Mr. Ron Moroni, will insure the information remains undisclosed to anyone else while it is in his possession, absent further order of this court.
                                                                                                                                                                                                                                                                                                           
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