McCarter & English, LLP v. Jarrow Formulas, Inc.

Summary

The court held that a law firm cannot recover common-law punitive damages for a client's breach of a fee agreement unless it pleads and proves an independent tort for which punitive damages are available. The court adopted the majority approach because contract damages are primarily compensatory, whereas punitive damages punish and deter wrongful conduct, and it rejected a broader rule based solely on willful, malicious, or reckless breach. The certified question was answered accordingly, without disturbing existing insurance and surety exceptions.