Case Summary

4035 An action for promissory fraud is based on breach of the duty to refrain from making false promises, so damages may not include profit that plaintiff would have derived from reselling property that the defendant fraudulently promised to sell plaintiff, since even without defendant's false promise to sell, plaintiff would not have acquired the property; for that reason, although under some circumstances punitive damages may be measured by their ratio to actual loss rather than to compensatory damages awarded, in a promissory fraud action, they may not be not be based on such lost profit; the amount of punitive damages awarded is presumed to violate due process only if its ratio to compensatory damages or actual losses exceeds ten to one to a significant degree; a ratio of punitive damages to compensatory damages or actual losses amounting to less than ten to one is not necessarily valid; in reducing damages for excessiveness, it is appropriate for the court to order absolute reduction to a particular sum, rather than conditional reduction with the alternative of a new trial subject to plaintiff's consent.

SIMON v SAN PAOLO U.S. HOLDING (Out of Pocket Comparison) 35 C4 1159 [See: Simon v San Paolo (RevGrtd) 113 CA4 1137, T/AT 1/04; BMW v Gore 517 US 559; State Farm v Campbell 538 US 408, T/AT 7/03]