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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY DESIGNATING THE EXISTING SECTIONS OF CHAPTER 38, TITLE 15 AS ARTICLE 1; BY ADDING ARTICLE 3, CHAPTER 38, TITLE 15 SO AS TO ENACT THE "SOUTH CAROLINA NONECONOMIC DAMAGES FOR CIVIL ACTIONS ACT OF 2005", TO PROVIDE DEFINITIONS OF THE TERMS "ACTUAL ECONOMIC DAMAGES" AND "NONECONOMIC DAMAGES", AND TO PROVIDE THAT A PREVAILING PARTY IN A CIVIL ACTION MAY RECOVER ACTUAL ECONOMIC DAMAGES AND NONECONOMIC DAMAGES NOT TO EXCEED THREE HUNDRED FIFTY THOUSAND DOLLARS; AND BY ADDING ARTICLE 5, CHAPTER 38, TITLE 15 SO AS TO ENACT THE "SOUTH CAROLINA PUNITIVE DAMAGES FOR CIVIL ACTIONS ACT OF 2005", TO PROVIDE DEFINITIONS OF THE TERMS "COMPENSATORY DAMAGES", "DEFENDANT", "FRAUDULENT", "MALICE", "PUNITIVE DAMAGES", AND "WILFUL OR INTENTIONAL CONDUCT", TO PROVIDE FOR THE APPLICATION OF THE ARTICLE TO ALL CLAIMS FOR PUNITIVE DAMAGES AND TO PROVIDE AN EXCEPTION; TO PROVIDE THAT PUNITIVE DAMAGES MAY BE RECOVERED ONLY IF CERTAIN AGGRAVATING FACTORS EXIST; TO PROVIDE THAT PUNITIVE DAMAGES MUST BE DETERMINED AND STATED SEPARATELY FROM COMPENSATORY DAMAGES; TO PROVIDE THAT PUNITIVE DAMAGES ARE LIMITED TO NOT EXCEEDING THREE TIMES THE AMOUNT OF COMPENSATORY DAMAGES OR THREE HUNDRED FIFTY THOUSAND DOLLARS, WHICHEVER IS LESS; AND TO PROVIDE PROCEDURES FOR DETERMINING WHETHER PUNITIVE DAMAGES MAY BE AWARDED.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The existing sections of Chapter 38, Title 15 are designated as Article 1.
SECTION 2. Chapter 38, Title 15 is amended by adding:
Section 15-38-310. This article may be cited as the 'South Carolina Noneconomic Damages for Civil Actions Act of 2005'.
Section 15-38-320. As used in this article, unless the context clearly requires otherwise:
(1) 'Actual economic damages' means objectively verifiable pecuniary damages arising from loss of earnings and earning capacity, loss of income, medical expenses and medical care, rehabilitation services, custodial care, burial costs, loss of use of property, costs of repair or replacement of property, costs of obtaining substitute domestic services, loss of employment, loss of business or employment opportunities, economic loss, and other objectively verifiable monetary losses.
(2) 'Noneconomic damages' means subjective, nonpecuniary damages arising from pain, suffering, inconvenience, physical impairment, disfigurement, mental anguish, emotional distress, loss of society and companionship, loss of consortium, injury to reputation, humiliation, other nonpecuniary damages, and any other theory of damages that is not based on objectively verifiable monetary losses, including, but not limited to, fear of loss, illness, or injury.
Section 15-38-330. Notwithstanding another provision of law except as specifically provided in this article, in a civil action to recover damages, except in an action on a medical malpractice claim as provided in Article 3, Chapter 32, Title 15, the prevailing party may be awarded compensation for:
(1) actual economic damages suffered by the party; and
(2) noneconomic damages suffered by the party not to exceed three hundred fifty thousand dollars."
SECTION 3. Chapter 38, Title 15 is amended by adding:
Section 15-38-510. This article may be cited as the 'South Carolina Punitive Damages for Civil Actions Act of 2005'.
Section 15-38-520. Subject to the provisions of this article, punitive damages may be awarded in a civil action to punish a defendant or to deter repetition of similar acts only for fraudulent or wilful or intentional conduct specifically intended to harm the party seeking recovery of punitive damages.
Section 15-38-530. As used in this article:
(1) 'Compensatory damages' means actual damages, including nominal damages.
(2) 'Defendant' means a party to a civil action, including a counter-defendant, cross-defendant, or third-party defendant, from whom another party seeks recovery of punitive damages.
(3) 'Fraudulent' means acts or conduct of a defendant taken with the specific intent to cause harm to a plaintiff and does not include constructive fraud unless the element of specific intent to cause harm to the plaintiff is present.
(4) 'Malice' means actual malice and the defendant's personal ill-will toward the plaintiff that activated or incited the defendant to perform the act or undertake the conduct resulting in harm to the plaintiff.
(5) 'Punitive damages' means extra-compensatory or exemplary damages awarded for the purposes set forth in Section 15-38-520.
(6) 'Wilful or intentional conduct' means the acts or conduct of a defendant taken or performed with malice and with the specific intent to cause harm to a plaintiff and does not include acts or conduct which are negligent or grossly negligent.
Section 15-38-540. (A) Except as provided in subsection (B), the provisions of this article apply to every claim for punitive damages, regardless of whether the claim for relief is based upon a statutory or common law right of action or based in equity. In an action subject to this chapter, in whole or in part, the provisions of this article prevail over another provision of law to the contrary.
(B) The provisions of this article do not apply to actions brought under the South Carolina Tort Claims Act, as provided for in Chapter 78, Title 15.
Section 15-38-550. (A) Punitive damages may be recovered only if the plaintiff proves that the defendant is liable for compensatory damages and that one of the following aggravating factors is present and is related to the injury for which compensatory damages are awarded:
(2) malice; or
(3) wilful or intentional conduct.
(B) The plaintiff must prove the existence of an aggravating factor by clear and convincing evidence.
(C) Punitive damages may not be recovered against a defendant solely on the basis of the defendant's vicarious liability for the acts of another. Punitive damages may be awarded against a defendant only if that defendant participated in the conduct constituting the aggravating factor giving rise to the punitive damages with the specific intent to harm the plaintiff or if, in the case of a corporation, the officers, directors, or managers of the corporation participated in or directed the conduct constituting the aggravating factor giving rise to the recovery of punitive damages with the specific intent to harm the plaintiff as provided in Section 15-38-520.
Section 15-38-560. A plaintiff shall elect, prior to judgment, between punitive damages awarded pursuant to the provisions of this article or another remedy available pursuant to another statute that provides for multiple damages.
Section 15-38-570. (A) In an action seeking an award of punitive damages, the trier of fact must determine and state the amount of punitive damages separately from the amount of compensatory damages.
(B) Punitive damages awarded against a defendant may not exceed three times the amount of compensatory damages or three hundred fifty thousand dollars, whichever is less. If a trier of fact returns a verdict for punitive damages in excess of the maximum amount specified pursuant to this subsection, the trial court shall reduce the award and enter judgment for punitive damages in the maximum amount.
(C) The provisions of subsection (B) may not be made known to the trier of fact through any means, including voir dire, the introduction of evidence, argument of counsel, or instructions to the jury.
Section 15-38-580. Upon motion of a defendant, the issues of liability for compensatory damages and the amount of compensatory damages, if any, must be tried separately from the issues of liability for punitive damages and the amount of punitive damages, if any. Evidence relating solely to punitive damages is not admissible until the trier of fact has determined that the defendant is liable for compensatory damages and has determined the amount of compensatory damages. The same trier of fact that tried the issues relating to compensatory damages must try the issues relating to punitive damages.
Section 15-38-590. In determining the amount of punitive damages, if any, awarded in a civil action, the trier of fact:
(1) shall consider the purposes of punitive damages, as provided for in Section 15-38-520; and
(2) may consider only evidence that relates to the following:
(a) the reprehensibility of the defendant's motives and conduct;
(b) the likelihood, at the relevant time, of serious harm or injury to the plaintiff;
(c) the degree of the defendant's awareness of the consequences of the fraudulent, wilful, or intentional acts or conduct;
(d) the duration of the defendant's conduct;
(e) the actual damages suffered by the plaintiff;
(f) concealment by the defendant of the facts or consequences of the defendant's conduct;
(g) the existence and frequency of similar past conduct by the defendant;
(h) whether the defendant profited from the conduct;
(i) the defendant's ability to pay punitive damages, as evidenced by the defendant's revenues or net worth.
Section 15-38-600. When reviewing the evidence regarding a finding by the trier of fact concerning liability for punitive damages in accordance with Section 15-38-550(A) or regarding the amount of punitive damages awarded, the trial court shall state in a written opinion its reasons for upholding or disturbing the finding or award. In doing so, the trial court shall address with specificity the evidence, or lack of evidence, as it bears on the liability for or the amount of punitive damages pursuant to the requirements of this article.
Section 15-38-610. A demand for punitive damages must be stated specifically in the complaint, except for the amount, and the aggravating factor that supports the award of punitive damages must be specifically provided. Upon motion by a defendant, the demand for punitive damages must be dismissed pursuant to Rule 12 of the South Carolina Rules of Civil Procedure if the court finds that the plaintiff has failed to plead the aggravating factor that supports the claim for punitive damages with specificity as required by this section. The amount of damages must be pled in accordance with applicable court rules."
SECTION 4. The Code Commissioner is authorized to change references to "chapter" in Article 1, Chapter 38, Title 15 to "article" as may be appropriate in accordance with the provisions of this act.
SECTION 5. The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION 6. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 7. This act takes effect upon approval by the Governor.
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