Limine: Net Worth: Defendant's Worth: Punitives Damage

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Limine: Net Worth: Defendant's Worth: Punitives Damage

Postby Administrator » Mon Sep 29, 2014 10:46 pm

The Court will not exclude broad categories of evidence in a vacuum without context. Moreover, contrary to Plaintiff's claim that such documentation is irrelevant, Defendant's net worth may be taken into account when deciding punitive damages. See State Farm Mut. Auto. Ins. v. Campbell, 538 U.S. 408, 428, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).
Wharton v. Preslin,
Slip Copy, 2009 WL 1850085, S.D.Ohio, June 26, 2009 (NO. 2:07-CV-1258)


In addition to these two specific challenges to Elkin's testimony, Wyeth argues that his entire testimony should be stricken because under *718 State Farm v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), and BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), the introduction of evidence regarding Wyeth's net worth is unconstitutional. As stated previously, Tex. Civ. Prac. & Rem.Code § 41.011(a)(6) provides that the net worth of the defendant is a relevant factor when determining punitive damages. Wyeth's argument in this respect comes from an overly broad reading of State Farm and Gore. The main point of Wyeth's confusion on the issue stems from the fact that it attempts to read State Farm and Gore as placing restrictions on the admissibility of evidence. However, neither State Farm nor Gore addressed the factual question of what amount of punitive damages can be awarded; rather, these cases imposed a gatekeeping function on the trial court to limit as a matter of law the amount of punitive damages awarded....It is true that both Gore and State Farm warn that the “presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses, particularly those without strong local presences.” Id. at 417, 123 S.Ct. 1513 (quoting Honda Motor Company v. Oberg, 512 U.S. 415, 432, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994)) (emphasis added). However, neither case requires the exclusion of such evidence. In fact, the State Farm majority cited Justice Breyer's concurring opinion from Gore in which he wrote, “[Wealth] provides an open-ended basis for inflating awards when the defendant is wealthy.... That does not make its use unlawful or inappropriate; it simply means that this factor cannot make up for the failure of other factors, such as ‘reprehensibility,’ to constrain significantly an award that purports to punish a defendant's conduct.” Campbell, 538 U.S. at 427-28, 123 S.Ct. 1513 (quoting Gore, 517 U.S. at 591, 116 S.Ct. 1589 (Breyer, J., concurring)) (emphasis added); see also Horney v. Westfield Gage Company, Inc., 77 Fed.Appx. 24, 35 (1st Cir.2003) (“Nothing in [ State Farm ] stands for the proposition that the burden should not be placed on the defendant to decide whether to submit evidence of its financial condition so that it may limit the punitive damages award.”); Lowry's Reports, Inc. v. Legg Mason, Inc., 302 F.Supp.2d 455, 461 (D.Md.2004) (allowing evidence of the defendant's net worth).
Burton v. Wyeth-Ayerst Laboratories Div. of American Home Products Corp., 513 F.Supp.2d 708 N.D.Tex.,2007

Defendant GLC has filed a motion in limine to bar testimony concerning GLC's net worth. Dkt. # 253. GLC argues that evidence of its net worth is irrelevant, even on the question of punitive damages. GLC cites State Farm Mutual Ins. Co. v. Campbell, 538 U.S. 408 (2003), for the proposition that wealth may not be considered in assessing punitive damages. Campbell does not so hold. The Supreme Court merely stated in Campbell that “[t]he wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award.” Id. at 427. The Supreme Court specifically cited its previous decision in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), and Justice Breyer's concurring opinion in that case, which noted that consideration of a defendant's wealth is neither unlawful nor inappropriate. Campbell, 538 U.S. at 527-28. The Court cannot conclude from this discussion that the wealth of a defendant is no longer relevant on the issue of punitive damages. GLC's motion (Dkt.# 253) is denied.
E.E.O.C. v. GLC Restaurants, Inc., Not Reported in F.Supp.2d, 2007 WL 30269 D.Ariz.,2007

As to the first point, MedCap and Papworth argue that evidence of a defendant's net worth is necessary to impose punitive damages; DVIBC argues that after State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408 ( State Farm ), evidence of a defendant's net worth or ability to pay is not relevant to determining the amount of punitive damages. All are wrong. The United States Supreme Court has prescribed three “guideposts” for determining whether punitive damages are unconstitutionally excessive: “(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.” ( State Farm, supra, 538 U.S. at p. 418; see BMW of North America, Inc. v. Gore (1996) 517 U.S. 559, 575.). In Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1185, the California Supreme Court affirmed a defendant's financial condition remains, after State Farm, an “essential factor” in setting the amount of punitive damages and “[d]ue process does not preclude a state from using punitive damages for the purposes of deterrence.” The court explained, “[b]ecause a court reviewing the jury's award for due process compliance may consider what level of punishment is necessary to vindicate the state's legitimate interests in deterring conduct harmful to state residents, the defendant's financial condition remains a legitimate consideration in setting punitive damages.” ( Ibid.) The court declined to define the relationship between financial condition and the guideposts established in State Farm for deciding whether an award of punitive damages is unconstitutionally excessive. ( Id. at p. 1186.) The court noted a defendant's financial condition may combine with high reprehensibility and low compensatory damages to justify an extraordinary ratio between compensatory and punitive damages. ( Ibid.) Or, the court noted, in cases with large compensatory damage awards, the level of deterrence may be “limited” and, hence, evidence of a defendant's financial condition may be of less importance. ( Id. at pp. 1186-1187.). *9 Contrary to DVIBC's assertion, State Farm does not alter California law requiring punitive damages to be proportionate to the defendant's ability to pay. (See Boeken v. Philip Morris, Inc. (2005) 127 Cal.App.4th 1640, 1697.) Contrary to MedCap and Papworth's assertion, the California Supreme Court has declined to adopt net worth, or any particular standard, for measuring a defendant's ability to pay punitive damages. ( Adams v. Murakami (1991) 54 Cal.3d 105, 116, fn. 7 [“Various measures of a defendant's ability to pay a punitive damages award have been suggested. Defendant in this case contends the best measure of his ability to pay is his net worth.... We decline at present, however, to prescribe any rigid standard for measuring a defendant's ability to pay”].) Indeed, “[n]et worth is too easily subject to manipulation to be the sole standard for measuring a defendant's ability to pay.” ( Zaxis Wireless Communications, Inc. v. Motor Sound Corp. (2001) 89 Cal.App.4th 577, 582.). DVIBC submitted MedCap's balance sheet as of October 31, 1999, MedCap's general ledger as of December 31, 1999, and a statement of Papworth's net worth as of August 27, 1998. This evidence showed MedCap had nearly $25 million in assets and Papworth had a net worth of $2,790,685 as of several years before trial. The defendant's financial ability to pay a punitive damages award must be measured as of the time of trial. ( Rufo v. Simpson (2001) 86 Cal.App.4th 573, 621; see also Marriott v. Williams (1908) 152 Cal. 705, 710; Washington v. Farlice (1991) 1 Cal.App.4th 766, 777; Zhadan v. Downtown Los Angeles Motor Distributors, Inc. (1979) 100 Cal.App.3d 821, 839.) Because the financial evidence submitted by DVIBC did not reflect MedCap's and Papworth's ability to pay the punitive damages at the time of trial, the punitive damages award cannot stand. ( Robert L. Cloud Associates, Inc. v. Mikesell (1999) 69 Cal.App.4th 1141, 1153.). Relying on Richmond v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869, 879, MedCap and Papworth assert DVIBC waived its ability to recover punitive damages by not formally requesting them during trial. The issue in Richmond v. Dart Industries, Inc. was whether the plaintiffs could assert a theory of recovery for the first time on appeal, not whether plaintiffs had been awarded damages at trial they did not request. DVIBC preserved its ability to recover punitive damages by requesting them in its cross-complaint against MedCap and Papworth. We reverse the punitive damages and remand for a retrial on the issue of the amount of punitive damages.
DVI Business Credit Corp. v. Medcap Credit Co., LLC, Not Reported in Cal.Rptr.3d, 2006 WL 418691 Cal.App. 4 Dist.,2006. February 23, 2006 [SHEPARDIZE THIS AS SOME PART WAS OVERRULED]

The Court also notes the recent reiteration of the Supreme Court that “ ‘[p]unitive damages pose an acute danger of arbitrary deprivation of property. Jury instructions typically leave the jury with wide discretion in choosing amounts, and the presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses, particularly those without strong local presences.’ ” State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 1520, 155 L.Ed.2d 585 (2003)(quoting Honda Motor Co. v. Oberg, 512 U.S. 415, 432, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994)). Thus, the use of a defendant's net worth as a factor in assessing punitive damages may be in doubt. See also State Farm, 123 S.Ct. at 1531 n. 2 (Ginsburg, J., dissenting).
Hayes v. Wal-Mart Stores, Inc., 294 F.Supp.2d 1249 E.D.Okla.,2003


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1. Wharton v. Preslin,
Slip Copy, 2009 WL 1850085, S.D.Ohio, June 26, 2009 (NO. 2:07-CV-1258)

...aspect of Plaintiff's motion in limine. 10. Defendant's Net Worth Plaintiff seeks to preclude Defendant from introducing documentation of Defendant's net worth at the time of the accident. Plaintiff specifically objects to Defendant's designation of documentation of Defendant's net worth on the grounds that such disclosure is insufficient, vague, and uncertain. Federal Rule of Civil Procedure 26(a)(1) provides...

...to support its claims or defenses.” Fed. R. Civ. Pro. 26(a)(1) (A)(i) If Defendant wishes to present evidence of his net worth, Defendant must pursuant to Rule 26(a)(1) and other discovery rules have provided Plaintiff with a copy of, and the description or location of, the documentation of his net worth so that Plaintiff can have an opportunity to prepare adequately for trial. Plaintiff's objection does not state that nondisclosure occurred...

...documents “may not have been disclosed.” (Doc. # 33, at 3 (emphasis added). ) The Court will not exclude broad categories of evidence in a vacuum without context. Moreover, contrary to Plaintiff's claim that such documentation is irrelevant, Defendant's net worth may be taken into account when deciding punitive damages. See State Farm Mut. Auto. Ins. v. Campbell, 538 U.S. 408, 428, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) Plaintiff further objects that the documentation of Defendant's......


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Tag to Print 2 2. La Baw v. Campbell,
Not Reported in Cal.Rptr.3d, 2009 WL 325547, Nonpublished/Noncitable (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115), Cal.App. 4 Dist., February 11, 2009 (NO. E043366)

...thus insufficient for a reviewing court to evaluate Peterson's ability to pay $75,000 in punitive damages” Here, there was little evidence presented regarding Campbell's net worth. In fact, the only evidence presented was that he did not own his house, he owned a car, and he had a law practice. He...

...did have about $10,000 in cash and stocks but also stated that his debts exceeded his assets. There is no evidence of his liabilities. What Evelyn fails to recognize is that it was her burden to prove defendant's net worth, and she presented no evidence that defendant had any net worth. Although she argues the jury could reasonably assume that defendant would make money in his law practice, there simply is no evidence that he would continue to practice or his current worth. Based on the only evidence before this court, an award......


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Tag to Print 3 3. AVCO Corp., Textron Lycoming Reciprocating Engine Div. of AVCO Corp. v. Interstate Southwest, Ltd.,
251 S.W.3d 632, Tex.App.-Hous. (14 Dist.), November 01, 2007 (NO. 14-05-00860-CV)

...could not have been transferred to ISW from IFI by the assignment? [4] Did ISW fail to introduce legally sufficient evidence that Lycoming knowingly made any false, material representations of fact to ISW or IFI? [5] Did ISW fail to introduce legally sufficient evidence that Lycoming had a “duty to disclose” facts to ISW or IFI in this arms-length commercial relationship? [6] Even assuming Lycoming owed a duty to disclose, did ISW fail to introduce legally sufficient evidence that Lycoming fraudulently breached any such duty by knowingly concealing material facts with intent to defraud ISW or IFI? [7] Did ISW fail to introduce legally sufficient evidence of justifiable and detrimental reliance, especially given that IFI's chairman said he did not believe Lycoming's statements that IFI's overheating...

...ISW's “fraud” claims really disguised-and legally baseless-inchoate malicious prosecution claims? [11] Did ISW fail to introduce legally sufficient evidence to show, by “clear and convincing” evidence, that anyone at Lycoming acted with fraud or malice that would justify the extraordinary remedy of punitive damages? [12] Did ISW fail to introduce legally sufficient evidence that a Lycoming “vice-principal” engaged in, knowingly authorized or approved fraudulent or malicious conduct? [13] Is ISW's punitive damage...

...involves a reasonable, genuine disagreement regarding the cause of the crankshaft failures? [19] Did the trial court erroneously exclude from evidence the FAA report that analyzes the crankshaft failures at issue and concludes that IFI's overheating during forging, not a design defect, was the root cause of the failures? [20] Did the trial court erroneously exclude other evidence that would have shown Lycoming's good faith state of mind and demonstrated the integrity and thoroughness of its investigation and conclusions about the cause of the crankshaft failures, including evidence that one of Lycoming's competitors-Teledyne-experienced similar failures and determined that overheating was a cause of the failures of its crankshafts? [21] Did the trial court erroneously exclude evidence, including Lycoming's stipulation, that Lycoming was not seeking and would never seek indemnity from ISW? [22] Did the trial court's......


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Tag to Print 4 4. Grefer v. Alpha Technical,
965 So.2d 511, 2002-1237 (La.App. 4 Cir. 8/8/07), La.App. 4 Cir., August 08, 2007 (NO. 2002-CA-1237)

...BMW of North America, Inc., v. Gore, the U.S. Supreme Court's decision in State Farm Mutual Automobile Insurance Company v. Campbell, we conducted a de novo review of the jury's exemplary damage award. Our findings as a result of that de...

...misconduct and not to lawful or unrelated causes. See Cooper Industries, 532 U.S. at 441, 121 S.Ct. at 1688 In Campbell , the Utah Supreme Court justified a punitive award of $145 million in a case in which the plaintiff was awarded...

...nor proportionate to the wrong committed, and it was an irrational and arbitrary deprivation of the property of the defendant. Campbell, 538 U.S. at 429, 123 S.Ct. at 1526. While the Court declined to impose a bright-line ratio which punitive......


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Tag to Print 5 5. Whitney Nat. Bank v. Air Ambulance ex rel. B & C Flight Management, Inc.,
Not Reported in F.Supp.2d, 2007 WL 1643218, S.D.Tex., June 04, 2007 (NO. CIV.A.H-04-2220)

...the renewal and extension of the prior outstanding loans. Under Texas law, exemplary damages are recoverable when clear and convincing evidence shows that the harm is the result of fraud. Tex. Civ. Prac. & Rem.Code § 41.003(a) (Vernon 1997). Texas...

...concerned; and (5) the extent to which such conduct offends a public sense of justice and propriety; and (6) the net worth of the defendant. Id. at § 41.011(b); see also Federal Nat'l. Mortg. Ass'n. v. Okeke, 2006 WL 355241...

...Motors I, L.P. v. Chapa, 212 S.W.3d 299, 308 (Tex.2006) (citing State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) Considering all the factors, Whitney Bank is awarded......


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Tag to Print 6 6. Burton v. Wyeth-Ayerst Laboratories Div. of American Home Products Corp.,
513 F.Supp.2d 708, N.D.Tex., April 05, 2007 (NO. CIVA399CV-0305G-ECF)

...two specific challenges to Elkin's testimony, Wyeth argues that his entire testimony should be stricken because under State Farm v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) , and BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) , the introduction of evidence regarding Wyeth's net worth is unconstitutional. As stated previously, Tex. Civ. Prac. & Rem.Code § 41.011 (a)(6) provides that the net worth of the defendant is a relevant factor when determining punitive damages. Wyeth's argument in this respect comes from an overly...

...stems from the fact that it attempts to read State Farm and Gore as placing restrictions on the admissibility of evidence. However, neither State Farm nor Gore addressed the factual question of what amount of punitive damages can be awarded; rather...

...at 422-23, 123 S.Ct. 1513. It is true that both Gore and State Farm warn that the “presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses, particularly those without strong local......


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Tag to Print 7 7. E.E.O.C. v. GLC Restaurants, Inc.,
Not Reported in F.Supp.2d, 2007 WL 30269, D.Ariz., January 04, 2007 (NO. CV05 618 PCT DGC)

...agrees. GLC's motion (Dkt.# 252) is granted. Defendant GLC has filed a motion in limine to bar testimony concerning GLC's net worth. Dkt. # 253. GLC argues that evidence of its net worth is irrelevant, even on the question of punitive damages. GLC cites State Farm Mutual Ins. Co. v. Campbell, 538 U.S. 408 (2003) , for the proposition that wealth may not be considered in assessing punitive damages. Campbell does not so hold. The Supreme Court merely stated in Campbell that “[t]he wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award.” Id. at 427. The Supreme Court...

...Justice Breyer's concurring opinion in that case, which noted that consideration of a defendant's wealth is neither unlawful nor inappropriate. Campbell, 538 U.S. at 527-28 The Court cannot conclude from this discussion that the wealth of a defendant is no......


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Tag to Print 8 8. U.S. Commodity Futures Trading Com'n v. Calvary Currencies LLC,
437 F.Supp.2d 453, Comm. Fut. L. Rep. P 30,256, D.Md., June 07, 2006 (NO. CIV.A. DKC 2004-1021)

...likely to be owned or incurred, by the individual.”FN 14 7 U.S.C. § 1a(12)(A)(xi) There is undisputed evidence that eleven of Defendants' customers were not “eligible contract participants” because they did not have the requisite assets.FN 15 As noted, customers Robert Bryant, John Campbell, Robert Dinsmore, Mark Elmore, John Hawk, Roger Holbrook, Richard Koenig, Michael Larson, Alfred Pulido, Peter Singh, and Timothy Winters, each reported on his Calvary account applications that his net worth was under $5 million.FN 16 [ FN14.] “Eligible contract participants” also include entities, such as financial institutions, insurance companies, investment companies......


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Tag to Print 9 9. Hecht, Solberg, Robinson, Goldberg & Bagley v. Superior Court,
137 Cal.App.4th 579, 40 Cal.Rptr.3d 446, 06 Cal. Daily Op. Serv. 2074, 2006 Daily Journal D.A.R. 2901, Cal.App. 4 Dist., March 09, 2006 (NO. D047185)

...569-572, 121 Cal.Rptr.2d 317, reviewing case law, Lally v. Kuster (1918) 177 Cal. 783, 788, 171 P. 961; Campbell v. Magana, supra, 184 Cal.App.2d at p. 754, 8 Cal.Rptr. 32; Walker v. Porter (1974) 44 Cal.App.3d 174...

...respond in damages, as opposed to proof of same. Garretson, supra, at pp. 573-574, 121 Cal.Rptr.2d 317.) Admissible evidence on collectibility can include information about the basic solvency of the defendant in the underlying case, as shown by its assets, net worth or available proceeds from investments. DiPalma, supra, 27 Cal.App.4th 1499, 1509, 33 Cal.Rptr.2d 219.) [6] In the case......


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Tag to Print 10 10. DVI Business Credit Corp. v. Medcap Credit Co., LLC,
Not Reported in Cal.Rptr.3d, 2006 WL 418691, Nonpublished/Noncitable (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115), Cal.App. 4 Dist., February 23, 2006 (NO. G033280)

...and (2) DVIBC waived the right to recover punitive damages. As to the first point, MedCap and Papworth argue that evidence of a defendant's net worth is necessary to impose punitive damages; DVIBC argues that after State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408 State Farm evidence of a defendant's net worth or ability to pay is not relevant to determining the amount of punitive damages. All are wrong. The United States......


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Tag to Print 11 11. Wischer v. Mitsubishi Heavy Industries America, Inc.,
279 Wis.2d 4, 694 N.W.2d 320, 2005 WI 26, Wis., March 18, 2005 (NO. 01-0724, 01-1031, 01-2486)

...a constitutional analysis under Trinity Evangelical Lutheran Church v. Tower Insurance Co.,FN 11 State Farm Mutual Automobile Insurance Co. v. Campbell,FN 12 and BMW of North America, Inc. v. Gore.FN 13 For example, was MHIA entitled to offer evidence of its net worth for the jury to consider in deciding the amount of punitive damages? What effect does the secret settlement agreement between......


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Tag to Print 12 12. JLRB Associates v. Livingston,
Not Reported in Cal.Rptr.3d, 2005 WL 237201, Nonpublished/Noncitable (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115), Cal.App. 4 Dist., January 20, 2005 (NO. D042738, D043800)

...against Livingston at those times. JLRB also asserts that it was not until a 2002 debtor's exam of CLE principal Campbell that it discovered that Livingston had decided to leave CLE months before substituting his professional corporation MTL for himself on the lease and that he had misrepresented the worth of that corporation to JLRB. However, Livingston presented evidence that he informed JLRB that he was leaving to work for MOA “well before” the second addendum was executed, and...

...alleged misrepresentation of the worth of MTL, counsel for JLRB in 1992 accused the partners of having “misrepresented their respective net worth, the value of the partnership, and so on,” and at that time asserted that it would pursue the partners individually......


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Tag to Print 13 13. Bardis v. Oates,
119 Cal.App.4th 1, 14 Cal.Rptr.3d 89, 04 Cal. Daily Op. Serv. 4710, 2004 Daily Journal D.A.R. 6431, Cal.App. 3 Dist., May 28, 2004 (NO. C043040)

...a four-to-one ratio would yield a punitive damages award of only $660,000, less than 1 percent of Oates's net worth according to the evidence most favorable to the judgment. (See fn. 9, ante. When compared to the magnitude of the misconduct, such a figure would be tantamount to a slap on the wrist. We are mindful of Campbell's admonition that the wealth of a defendant will not by itself compensate for a lack of other factors. However, we......


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Tag to Print 14 14. Skibniewski v. American Home Products Corp.,
Not Reported in F.Supp.2d, 2004 WL 5628157, W.D.Mo., April 01, 2004 (NO. 99-0842-CV WFJG)

...Damages Disproportionate to Plaintiff's Actual Damages Wyeth states that the Supreme Court in State Farm Mutual Automobile Ins. Co. v. Campbell, 123 S.Ct. 1513 (2003) made it clear that it is impermissible to award punitive damages based on injuries or wrongs...

...damages in an amount which is disproportionate to the individual's compensatory damages. Thus, Wyeth states that the following types of evidence should be excluded: 1) statements concerning the number of persons other than plaintiff who used the products at issue; 2...

...income, or profit from the sale of the products at issue to persons other than plaintiff; 3) statements concerning Wyeth's net worth, market capitalization or other measurements of alleged wealth; 4) statements concerning any alleged intentional or unintentional wrongdoing by Wyeth with......


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Tag to Print 15 15. Hayes v. Wal-Mart Stores, Inc.,
294 F.Supp.2d 1249, E.D.Okla., November 13, 2003 (NO. 03-CIV-208-WH)

...arbitrary deprivation of property. Jury instructions typically leave the jury with wide discretion in choosing amounts, and the presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses, particularly those without strong local presences.’ State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 1520, 155 L.Ed.2d 585 (2003) (quoting Honda Motor Co. v. Oberg, 512 U.S. 415, 432, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994) Thus, the use of a defendant's net worth as a factor in assessing punitive damages may be in doubt. See also State Farm, 123 S.Ct. at 1531 n......


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Tag to Print 16 16. Vittorio DIMASO, Rosanna Dimaso, Plaintiff, v. FORD MOTOR COMPANY, et. al., Defendants.,
Not Reported in S.E.2d, 2003 WL 22850075, Ga.Super., October 21, 2003 (NO. 99-A-6172-6)

...plaintiffs from arguing that the jury should “send a message” or act as the “conscience of the community.” As to evidence of Ford's overall financial condition, net worth or wealth and of its sales outside Georgia, the court has carefully considered the opinions in State Farm Mut. Auto. Ins. Co., v. Campbell , 123 S. Ct. 1513 (2003) BMW of North America v. Gore , 517 U.S. 559 (1996) ; and White v. Ford Motor...

...decisions, the court holds that in the second phase of the bifurcated trial on punitive damages plaintiffs may not introduce evidence of defendant's net worth, wealth or financial condition generally. On the issue of the amount necessary to “punish, penalize or deter” defendant in terms of O.C.G.A. § 51-12-5.1 (c) , plaintiffs are limited to evidence of defendant's gross revenues, profits, and sales of the subject vehicle model within Georgia and to similar matters relating to......


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Tag to Print 17 17. Hollock v. Erie Ins. Exchange,
2002 WL 1265695, 54 Pa. D. & C.4th 449, Pa.Com.Pl., January 07, 2002 (NO. 6790-C OF 1999)

...Hollock, Erie's own policyholder, and the financial condition of the defendant. This court notes that Erie did not introduce any evidence to contradict the testimony of plaintiff's economist, Jonathan Cunitz, as to Erie's net income, surplus (net worth). This court notes that the net worth (surplus) of Erie averaged $4.8 billion from 1996 through 2000, and the amount of punitive damages being awarded is miniscule to Erie's surplus. Pennsylvania law provides that “net worth” of the defendant is to be considered in determining the amount of punitive damages to be awarded to deter future conduct. Given the vast net worth of Erie, the court finds that a lesser award would not have the deterrent effect which forms the basis for...

...handling has fallen on deaf ears. See Martin v. National Grange, no. 2000 0527 (Centre Cty., November 15, 2000) , and Campbell v. State Farm, Supreme Court Utah no. 981564. (103) This court awards plaintiff attorneys' fees in the amount of $162,952......


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Tag to Print 18 18. Corrigan v. C.I.R.,
T.C. Memo. 1994-31, 1994 WL 19093, 67 T.C.M. (CCH) 2024, T.C.M. (RIA) 94,031, 1994 RIA TC Memo 94,031, U.S.Tax Ct., January 26, 1994 (NO. 11187-89)

...FN14. Many opinions, leading with Holland v. United States, 348 U.S. 121 (1954) , have stressed the importance of establishing opening net worth with “reasonable certainty”. In United States v. Giacalone, 574 F.2d 328 (6th Cir.1978) , the Court of Appeals dealt with a criminal fraud net worth case in which the Government's net worth computation showed “Cash on Hand” as an item, but had a dash next to that item at each of the...

...since the dashes added nothing to the totals they must be treated as zeroes. He points out that the government's evidence showed numerous cash purchases by the defendant and his wife, thus proving the existence of cash. Since no cash was shown on the statement, it cannot reflect accurately or with “reasonable certainty” the opening net worth figure for each year, he contends. This argument is fallacious. The entire thrust of the case was that the cash...

...taxable income received in that year, not from cash on hand at the beginning of the year. The government witness Campbell conceded that the defendant possessed some cash, but testified that the dashes represented an unknown, presumably constant amount and were similar to “X” in an algebraic equation. The defendant is a “professional gambler” (appellant's reply brief, pp. 4 & 42). Campbell testified that the net worth statement assumed the existence of a “bankroll” of cash which remained approximately the same throughout the period covered. However, he asserted that as a constant it did not affect the accuracy of the net worth statement. Though we have found no case precisely on point we conclude that the use of dashes did not invalidate......


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Tag to Print 19 19. U.S. v. Walker,
896 F.2d 295, 71A A.F.T.R.2d 93-3417, 90-1 USTC P 50,084, C.A.8 (Mo.), February 09, 1990 (NO. 88-2610, 89-1035)

...would be considering this factor in sentencing Randall Walker. In light of this finding, the court concluded that no further evidence was necessary. Over the objection of Mr. Bradshaw the district court then invited the bankruptcy counsel for C-66, Mr. Cary Myers, as well as counsel for the Employees of Campbell Sixty-six Express, Inc., Mr. Tim Sear, to state their opinions as to whether the Walkers should be required to...

...to C-66 or its employees. Mr. Sear argued that as a direct result of the Walkers' conduct the company's net worth was reduced from $18 million in 1981 to $4 million in 1985. While acknowledging the legal uncertainty in seeking restitution......


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Tag to Print 20 20. Krapf v. U.S.,
17 Cl.Ct. 750, 64 A.F.T.R.2d 89-5576, 89-2 USTC P 9448, Cl.Ct., July 20, 1989 (NO. 187-85T)

...them, and do not bind the trier of fact, whose responsibility it is to determine value from all of the evidence, expert or otherwise. Helvering v. National Grocery, 304 U.S. 282, 58 S.Ct. 932, 82 L.Ed. 1346 (1938) Gloyd v. Commissioner, 63 F.2d 649, 650 (8th Cir.1933) Campbell v. United States, 661 F.2d 209, 228 Ct.Cl. 661 (1981) The court will address these traditional approaches because at least one, the net worth approach, parallels the court's analysis of the 1980 Pierce sale. In estimating the value of Mr. Krapf's gift, the defendant......


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21. Bauer v. C.I.R.,
T.C. Memo. 1987-190, 1987 WL 40258, 53 T.C.M. (CCH) 571, T.C.M. (P-H) P 87,190, 1987 PH TC Memo 87,190, U.S.Tax Ct., April 09, 1987 (NO. 18477-83)

...petitioner understated his taxable income for each of the years 1978, 1979, and 1980 in the amounts determined by the net worth method of reconstruction of income. The Commissioner may prove the existence and amount of unreported income by any method that...

...opinion, clearly reflect the taxpayer's income. Sec. 446(b); see Holland v. United States, 348 U.S. 121, 130-132 (1954) Campbell v. Guetersloh, 287 F.2d 878, 880 (5th Cir. 1961) Davis v. Commissioner, 239 F.2d 187, 189 (7th Cir. 1956) , affg. a Memorandum Opinion of this Court. The use of the net worth method has long been an acceptable method of proving income. Holland v. United States, 348 U.S. at 131; Cefalu v...

...issue a Memorandum Opinion of this Court; Harper v. Commissioner, 54 T.C. 1121, 1129 (1970) Generally, errors in the Commissioner's net worth computation do not destroy such presumption and do not shift the burden of going forward with the evidence to the Commissioner. George v. Commissioner, 338 F.2d 221, 223 (1st Cir. 1964) , affg. on this issue a Memorandum......


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Tag to Print 22 22. Campbell v. U. S.,
228 Ct.Cl. 661, 661 F.2d 209, 48 A.F.T.R.2d 81-5962, 81-2 USTC P 9676, Ct.Cl., September 23, 1981 (NO. 47-78)

...earnings that followed in its wake. No less a concern was the substantial addition to debt and resulting deficit in net worth that the Campbell purchase would bring about. The taxpayer also points to the testimony of one of its witnesses to the effect that...

...for these securities, to the extent any existed, was confined to the so-called “sophisticated investor”. From all of this evidence, then, the taxpayer argues that the Unitec notes were so commercially unattractive as to represent mere promises to pay rather......


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Tag to Print 23 23. Campbell v. U.S.,
1981 WL 11490, 48 A.F.T.R.2d 81-5068, 81-1 USTC P 9450, Ct.Cl. Trial Div., May 20, 1981 (NO. 47-78)

...earnings that followed in its wake. No less a concern was the substantial addition to debt and resulting deficit in net worth that the Campbell purchase would bring about. The taxpayer also points to the testimony of one of its witnesses to the effect that...

...for these securities, to the extent any existed, was confined to the so-called ‘sophisticated investor’. From all of this evidence, then, the taxpayer argues that the Unitec notes were so commercially unattractive as to represent mere promises to pay rather......


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Tag to Print 24 24. Candela v. U.S.,
635 F.2d 1272, 47 A.F.T.R.2d 81-386, 80-2 USTC P 9839, C.A.7 (Wis.), December 04, 1980 (NO. 80 1077)

...of Wisconsin, Robert W. Warren, J., in their action for refund of assessed deficiencies. The Court of Appeals, William J. Campbell, Senior District Judge, sitting by designation, held that: (1) record was sufficient to support finding by district court that taxpayers failed to overcome determination by Commissioner of Internal Revenue of tax deficiencies, but (2) Commissioner, who used net worth method to establish tax deficiencies, failed to establish by clear and convincing evidence that alleged deficiencies were result of fraud, as required to be entitled to recovery following expiration of three-year period......


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Tag to Print 25 25. Matter of Charter of Sec. Bank, Gillette,
616 P.2d 1273, Wyo., September 16, 1980 (NO. 5292)

...necessary to a disposition of this appeal: “II. ”FINDINGS OF FACT “1. That Gillette, Wyoming, is the county seat of Campbell County, Wyoming, and the retail and commercial service center for a large area of northeast Wyoming. Campbell County and Gillette, in particular, have experienced steady growth of population, businesses and industry as they relate to mineral and...

...with prospects of continued growth. “5. That the feasibility study submitted by Bickert, Browne, Coddington and Associates, Inc., indicates that Campbell County had experienced a population growth of 152.7% between the 1960 and 1970 censuses and that the population of Campbell County has doubled again since 1970. Employment has been increasing at a 21.7% rate annually and per capita income is approximately $9,096, making Campbell County the highest per capita income county in Wyoming. In addition, natural resources in the county, in particular, coal, oil, gas and uranium, are prevalent. “6. That the evidence adduced at the hearing indicates that the Security Bank of Gillette, Gillette, Wyoming, is being formed for no other purpose...

...30,000 shares outstanding and subscribed and would pay $1,008,100 for the shares subscribed. Commerce Bank Shares, Inc., has a present net worth of $6.3 million as of June 30, 1979, and a consolidated earnings of $900,000 annually. The two Wyoming banks......


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Tag to Print 26 26. Campbell v. Campbell,
586 S.W.2d 162, Tex.Civ.App.-Fort Worth, July 26, 1979 (NO. 18078)

...ordered to pay attorney's fees for both parties totaling $20,490.00 and all court costs. The community estate had little net worth. There was evidence that not all of the bills had been discovered and that many of the community debts were incurred by Campbell. There was also evidence that Mrs. Campbell's parents loaned her money to support herself and pay bills for the period of several months after Campbell left the country and before she obtained any funds as a result of the court order making her the temporary...

...this cause is proper and correct under the facts of this case and the law” It is plain from the evidence that the community estate had little net worth. Therefore, if the trial judge found that either of the spouses had little earning capacity or ability, or the children...

...or there were other equities to adjust, the only resource available was separate personal property, which the record shows only Campbell possessed in any appreciable amount. See Fuhrman v. Fuhrman, supra. As to Campbell's contention that these notes were worth approximately......


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Tag to Print 27 27. Coleman v. C.I.R.,
T.C. Memo. 1979-139, 1979 WL 3223, 38 T.C.M. (CCH) 605, T.C.M. (P-H) P 79,139, 1979 PH TC Memo 79,139, U.S.Tax Ct., April 10, 1979 (NO. 7028-72, 5113-72)

...burden of proof. We are aware of the dangers inherent in proving fraud by understatements of income computed by the net worth method. See Holland v. United States, 348 U.S. 121 (1954) Mazzoni v. Commissioner, T.C. Memo. 1970-37 affd 451 F...

...not be imputed or presumed and mere suspicion is insufficient to sustain a finding of fraud. See, e.g., Carter v. Campbell, 264 F.2d 930, 935 (5th Cir. 1959) Nor will we infer unreported income merely from increases in net worth and then infer fraud from that unreported income, thereby piling inference upon inference. Mazzoni v. Commissioner, supra; see also Logan...

...same time, a repeated failure to report income over the years, including income reflected by increases in net wroth, is evidence of fraud, if unexplained and sufficiently extensive. Lee v. United States, 466 F.2d 11 (5th Cir. 1972) Schwarzkopf v......


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Tag to Print 28 28. Carr v. C.I.R.,
T.C. Memo. 1978-408, 1978 WL 3079, 37 T.C.M. (CCH) 1695, T.C.M. (P-H) P 78,408, 1978 PH TC Memo 78,408, U.S.Tax Ct., October 11, 1978 (NO. 5681-75)

...to the additions to tax herein, we recognize that respondent has the burden of proving fraud by clear and convincing evidence. Section 7454(a); Rule 142(b), Rules of Practice and Procedure of this Court; Foster v. Commissioner, 487 F.2d...

...insufficient. Estate of Mazzoni v. Commissioner, 451 F.2d 197 (3d Cir. 1971) affg T.C. Memo. 1970-37 Carter v. Campbell, 264 F.2d 930, 935 (5th Cir. 1959) And this precludes a finding of fraud based simply on the petitioners' failure to carry their burden of proof that they did not have unreported income as shown in respondent's net worth calculations. Nevertheless, since fraud can seldom be established by direct proof, it may be based upon circumstantial evidence and reasonable inferences drawn from the evidence. See Stone v. Commissioner, 56 T.C. 213, 224 (1971) Otsuki v. Commissioner, 53 T.C. 96, 106 (1969) Estate of Mazzoni......


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Tag to Print 29 29. King v. C.I.R.,
T.C. Memo. 1978-351, 1978 WL 3028, 37 T.C.M. (CCH) 1469, T.C.M. (P-H) P 78,351, 1978 PH TC Memo 78,351, U.S.Tax Ct., September 07, 1978 (NO. 6032-76)

...to the additions to tax herein, we recognize that respondent has the burden of proving fraud by clear and convincing evidence. Section 7454(a): Rule 142(b), Rules of Practice and Procedure of this Court; Foster v. Commissioner, supra; Green v...

...not be imputed or implied and mere suspicion of fraud is insufficient. Estate of Mazzoni v. Commissioner supra; Carter v. Campbell, 264 F.2d 930, 935 (5th Cir. 1959) And this precludes a finding of fraud based simply on the petitioners' failure to carry their burden of proof that they did not have unreported income as shown in respondent's net worth calculations. Nevertheless, since fraud can seldom be established by direct proof, it may be based upon circumstantial evidence and reasonable......


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Tag to Print 30 30. Estate of Simkins v. C.I.R.,
T.C. Memo. 1978-338, 1978 WL 3016, 37 T.C.M. (CCH) 1388, T.C.M. (P-H) P 78,338, 1978 PH TC Memo 78,338, U.S.Tax Ct., August 28, 1978 (NO. 3216-74)

...failed to keep adequate records of a substantial source of income. See Holland v. United States, 348 U.S. 121 (1954) Campbell v. Guetersloh, 287 F.2d 878 (5th Cir. 1961) Harbin v. Commissioner, 40 T.C. 373 (1963) Respondent ‘is not compelled...

...another issue 572 F.2d 193 (9th Cir. 1977) cert. denied -- U.S. -- (1978) The mere fact that petitioners present a net worth analysis corresponding to reported income does not require us to ignore evidence of substantial amounts of unreported income especially where, as here, petitioners have dealt largely in cash. Shades Ridge Holding Co......


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Tag to Print 31 31. U.S. v. Giacalone,
574 F.2d 328, 41 A.F.T.R.2d 78-1247, 78-1 USTC P 9350, C.A.6 (Mich.), April 07, 1978 (NO. 77-5074)

...government charged that the defendant understated his taxable income by substantial amounts in each of the indictment years. The government's evidence consisted primarily of a recomputation of the defendant's taxable income by “the net worth plus nondeductible expenditures method.” (Government summary witness Robert Campbell, Tr. 9635). Under this method the government seeks to compute taxable income by determining a taxpayer's net worth (excess of assets at cost over liabilities) at the end of each year plus his nondeductible expenditures during the year. The difference between this figure and the net worth at the beginning of the year is treated as the taxable income received during the year. The government must show that it has ruled out the existence of nontaxable funds as the source of expenditures or increases in net worth. See United States v. Taglianetti, 398 F.2d 558, 562 (1st Cir. 1968) aff'd 394 U.S. 316, 89 S.Ct. 1099...

...303 (1969) United States v. Goichman, 407 F.Supp. 980, 986 (E.D.Pa.) aff'd 547 F.2d 778 (3d Cir. 1976) The net worth method was approved by the Supreme Court for use in income tax prosecutions in Holland v. United States, 348 U.S...

...since the dashes added nothing to the totals they must be treated as zeroes. He points out that the government's evidence showed numerous cash purchases by the defendant and his wife, thus proving the existence of cash. Since no cash was shown on the statement, it cannot reflect accurately or with “reasonable certainty” the opening net worth figure for each year, he contends. This argument is fallacious. The entire thrust of the case was that the cash......


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Tag to Print 32 32. Sporck v. C.I.R.,
T.C. Memo. 1978-79, 1978 WL 2784, 37 T.C.M. (CCH) 378, T.C.M. (P-H) P 78,079, 1978 PH TC Memo 78,079, U.S.Tax Ct., February 27, 1978 (NO. 3087-75)

...burden of proof. We are cognizant of the dangers inherent in proving fraud by understatements of income computed by the net worth method. See Holland v. United States, supra; Mazzoni v. Commissioner, T.C. Memo. 1970-37, affd 451 F.2d 197 (3d...

...not be imputed or presumed and mere suspicion is insufficient to sustain a finding of fraud. See, e.g., Carter v. Campbell, 264 F.2d 930, 935 (5th Cir. 1959) Nor will we infer unreported income merely from increases in net worth and then infer fraud from that unreported income, thereby piling inference upon inference. Mazzoni v. Commissioner, supra.FN 6 At the same time, a repeated failure to report income over the years, including income reflected by increases in net worth, is evidence of fraud, if unexplained and sufficiently extensive. Lee v. United States, 466 F.2d 11 (5th Cir. 1972) Schwarzkopf v......


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Tag to Print 33 33. Wallace v. C.I.R.,
T.C. Memo. 1976-219, 1976 WL 3409, 35 T.C.M. (CCH) 954, T.C.M. (P-H) P 76,219, 1976 PH TC Memo 76,219, U.S.Tax Ct., July 13, 1976 (NO. 1191-73, 4829-74)

...Revenue Service, she was aware of the requirements regarding the proper filing of Federal income tax returns. Revenue Agent Donald Campbell, in or about September 1971, contacted petitioner relative to the examination of her return forms for the years 1968 and...

...requested petitioner to furnish books and records relative to her operation of the beauty shop. Petitioner refused to furnish Agent Campbell any such books and records. Petitioner at no time made any such books and records available. Agent Campbell thereupon proceeded to compute petitioner's taxable income by the net worth method, due to the absence of petitioner's books and records. His computation was based on information secured from numerous third...

...record, for the years 1970, 1971, and 1972. Subsequently, in preparation for trial, the parties prepared a computation by the net worth method, covering all five years, which has been introduced into evidence as Joint Exhibit 42-AP. The assets, liabilities, depreciation reserves, nondeductible personal expenditures, and nontaxable sources of funds included in......


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Tag to Print 34 34. Logan v. C.I.R.,
T.C. Memo. 1976-143, 1976 WL 3337, 35 T.C.M. (CCH) 646, T.C.M. (P-H) P 76,143, 1976 PH TC Memo 76,143, U.S.Tax Ct., May 06, 1976 (NO. 3959-68, 3657-72)

...be imputed or presumed and a mere suspicion is insufficient to sustain a finding of fraud. See, e.g., Carter v. Campbell, 264 F.2d 930, 935 (5th Cir. 1959) Nor should we infer unreported income merely from increases in net worth and then infer fraud from that unreported income, thereby piling inference upon inference. Peter Mazzoni, supra. On the other hand, a consistent failure to report income over the years, including income reflected by increases in net worth, is evidence of fraud, if unexplained and sufficiently extensive. Lee v. United States, 466 F.2d 11 (5th Cir. 1972) Schwarzkopf v......


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Tag to Print 35 35. North Portland Lumber Co. v. G. L. Pine Co., Inc.,
265 Or. 617, 510 P.2d 565, Or., June 01, 1973

...to plaintiff as well as 100,000 feet of ‘stickers' purportedly belonging to plaintiff. The Circuit Court, Grant County, J. R. Campbell, J., rendered judgment awarding both general and punitive damages, and defendant appealed. The Supreme Court, Tongue, J., held that defendant's...

...was a profit and loss statement showing net earnings for current period and was not a balance sheet depicting defendant's net worth, notwithstanding that trial court's reasons for excluding statement may have been its misbelief that defendant was not entitled to offer evidence that it was not wealthy until plaintiff had offered evidence of defendant's wealth. In addition, the Court held that evidence supported award for conversion of ‘stickers.’ Affirmed. West Headnotes [1] 115 Damages 115IX Evidence 115k 164 Admissibility 115k 181 k......


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Tag to Print 36 36. Estate of Beck v. Commissioner of Internal Revenue,
56 T.C. 297, U.S.Tax Ct., May 03, 1971 (NO. 4999-66, 858-66-861-66)

...Tax Returns, and Sources Thereof As corroboration of the understatements of income for the taxable years involved obtained by the net-worth approach, respondent used the ‘specific item’ method of proof. This latter method simply consists of evidence of particular or specific amounts of taxable income received by the taxpayer during a particular tax period, with evidence that the taxpayer did not include such amounts in his tax return for such period, together with evidence concerning the taxpayer's knowledge of the omission and his intent and willfulness in attempting to avoid payment of tax by the omission. The respondent, of course, is not limited to the net-worth or the specific-item methods of proof, but may offer both. There is no restriction on the method or theories...

...his views that unreported income exists provided they are reasonably calculated to disclose the presence or absence of unreported income, Campbell v. Guetersloh, 287 F.2d 878, 880 (C.A. 5, 1961) See also Kenney v. Commissioner, 111 F.2d 374-375......


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Tag to Print 37 37. Mazzoni v. C.I.R.,
T.C. Memo. 1970-37, 1970 WL 2125, 29 T.C.M. (CCH) 104, 29 T.C.M. (CCH) 624, T.C.M. (P-H) P 70,037, 1970 PH TC Memo 70,037, U.S.Tax Ct., February 10, 1970 (NO. 4823-67, 4824-67)

...that the burden of proving fraud is upon the respondent and he must satisfy this burden by clear and convincing evidence. See, e.g., Jacob D. Farber, supra; Luerana Pigman, supra Fraud will not be imputed or presumed and mere suspicion is insufficient to sustain a finding of fraud. See, e. g., Carter v. Campbell , 264 F. 2d 930, 935 (C.A. 5, 1959) At the same time, it is axiomatic that direct proof of fraud...

...28 T.C. 54, 57-58 (1957) At the same time, we should not infer unreported income merely from increases in net worth and then infer fraud from that unreported income, thereby piling inference upon inference. Cf. Valetti v. Commissioner , 260 F. 2d...

...316 (C.A. 5, 1956) Nevertheless, the consistent failure to report substantial amounts of income over a period of years is evidence of fraud. Schroeder v. Commissioner , 291 F. 2d 649 (C.A. 8, 1961) , affirming a Memorandum Opinion of this Court; Schwarzkopf......


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Tag to Print 38 38. Mladinich v. C.I.R.,
T.C. Memo. 1969-185, 1969 WL 1182, 28 T.C.M. (CCH) 926, T.C.M. (P-H) P 69,185, 1969 PH TC Memo 69,185, Tax Ct., September 15, 1969 (NO. 3151-63, 3152-63, 3153-63, 3409-63)

...to the original net worth statement are correct and proper. CONCLUSIONS OF LAW 1. Although the Commissioner's determination of the net worth of taxpayers is presumed to be correct, the burden of proving fraud, by clear and convincing evidence, is on the government. Carter v. Campbell, 264 F.2d 930; Goldberg v. Commissioner, 239 F.2d 316; Breland v. United States, 323 F.2d 492. The burden of proving by a preponderance of the evidence that the Commissioner's underlying assessments (the new worth statement) to be erroneous is on the plaintiffs. Carter v. Campbell, supra; Goldberg v. Commissioner, supra; Breland v. United States, supra; and Snell Isle, Inc. v. Commissioner, 90 F.2d 481...

...Section 7422(e) of the Internal Revenue Code of 1954. That is, the government must prove by clear and convincing evidence that some part of any understatement of federal income taxes on the return of the plaintiffs was due to a...

...taxpayers, to avoid the payment of the additional tax assessed by the government, must prove by a preponderance of the evidence that the Commissioner's determination of any underpayment was erroneous. 2. It is the finding of this Court that the defendant has shown by clear and convincing evidence that the understatement of taxes by the plaintiffs on their 1956 income tax return was a willful attempt to evade......


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Tag to Print 39 39. Baglivo v. C.I.R.,
T.C. Memo. 1960-229, 1960 WL 967, 19 T.C.M. (CCH) 1281, T.C.M. (P-H) P 60,229, 1960 PH TC Memo 60,229, Tax Ct., October 27, 1960 (NO. 62457, 62458)

...the years alleged or that the automobile was acquired in 1951. Mortgages By far the greatest asset item on respondent's net worth schedule is the mortgages item. Respondent has revised this item on the basis of a schedule of mortgages (Schedule S...

...petitioner's accountant. Sakim's schedule, consisting of 89 itemized mortgages, was prepared from information supplied by the two real estate men, Campbell and Cortese. Some data was supplied by petitioner's attorney, Leonard DeNote, and some by petitioner himself. Petitioner knew of the...

...Service in an attempt to reconcile petitioner's stand on the mortgages with that of respondent. The schedule was received in evidence, petitioner's only objection being that it was a confidential communication. We accept the facts as set forth in Schedule S......


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Tag to Print 40 40. Wheeler v. Holland,
120 F.Supp. 383, 54-1 USTC P 9270, 45 A.F.T.R. 1968, N.D.Ga., March 02, 1954 (NO. CIV. 4599)

...of settlement mutually satisfactory to the taxpayer and to the Government. The tax was recomputed on the basis of a net worth computation. In February 1951 the Government conferee submitted to Wheeler's chief accountant, Lyle Campbell, a set of figures which produced the liability shown on the Form 870. The basic disagreement between the taxpayer's representatives and the Government in the use of the net worth method resulted from different estimates of Wheeler's net worth at the beginning of the taxable period. Both taxpayer's and the Government's computations are admittedly not perfect. In light of...

...the years 1942-1947 showed a liability of approximately $2,000) but denies that he should be assessed penalties. From the evidence it cannot be said that the computation, which was the basis for the Form 870, was so arbitrary, capricious or......



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Concerning this case listed above:
The Court will not exclude broad categories of evidence in a vacuum without context. Moreover, contrary to Plaintiff's claim that such documentation is irrelevant, Defendant's net worth may be taken into account when deciding punitive damages. See State Farm Mut. Auto. Ins. v. Campbell, 538 U.S. 408, 428, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).
Wharton v. Preslin,
Slip Copy, 2009 WL 1850085, S.D.Ohio, June 26, 2009 (NO. 2:07-CV-1258)
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Here, defendant sought to introduce evidence of its own net worth...apparently to suggest that it was not a wealthy defendant.
_
David A. Szwak
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416 Travis Street, Suite 1404, Mid South Tower
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