Today’s edition of
“Ask the SCOV” is about damages in legal malpractice cases.
A reader asks, “SCOV
. . . can a jury award damages for emotional distress in a legal malpractice
action?”
“It depends,” says
the SCOV, “But not in this case.”
This ain’t the first
time the underlying case has been to the SCOV.
The SCOV begins its analysis noting three previous unpublished decisions
regarding the underlying case.
We’ll make the
background as simple as possible. This is
a legal malpractice action. Prior to
this lawsuit, Defendant was Plaintiff’s lawyer.
The case was an action for specific performance in the sale of
Plaintiff’s home that arose after Plaintiff refused to sell his home according
to a purchase contract that he and his older sister had signed. Plaintiff’s older sister died between the
contract signing and the prospective closing date. Plaintiff was 82 at the time and legally
blind. Plaintiff ultimately had to pay a
significant sum—nearly twice the underlying contract’s purchase price—in order
to keep his home. Because Plaintiff was
under a guardianship, the probate court had to approve the settlement. Defendant was Plaintiff’s lawyer through this
last process.
The gist of
Plaintiff’s claim—without getting into all the gory procedural details—is that
Defendant screwed up handling the case—primarily in not filing an answer and
identifying affirmative defenses—such that Plaintiff was damaged.
Because Defendant
admitted to the underlying facts and a breach of duty, the trial was basically
a causation-and-damages affair.
Defendant repeatedly and “strenuously argued” that damages for emotional
distress were barred as a matter of law.
Defendant also argued that what Plaintiff paid to settle the underlying
case—and keep his home—was an improper measure of damages because the only
remedy was specific performance and Plaintiff had no risk of a judgment for
damages to buyers. Thus, Defendant
argued, there was no showing that it was reasonable for Plaintiff to pay $103K
to keep his home. Defendant filed
motions for judgment as a matter of law on both issues and the trial court
denied them.
The jury found for
Plaintiff and awarded damages, including the settlement amount plus $80K in
emotional distress damages. Defendant
appealed.
Regarding the
emotional distress damages claim, the SCOV notes, “We have never decided the
question [of whether emotional distress damages are available in a legal
malpractice case]; the closest we have come was a case relied upon by plaintiff
in which we suggested that under certain exceptional circumstances, emotional
distress damages might be available.”
Let me say right here
that this opinion is a legal-research tour de force. If you’re at all curious about damages in
negligent-infliction-of-emotional-distress claims, this is the Vermont opinion to read.
If you’re planning to write a law-review article on the same, start
here. That said, I’m just going to hit
the major points.
Negligently inflicted
emotional harm generally requires some physical manifestation of the distress
for damages to be awarded. As always,
there are a couple exceptions to that rule—mishandling of bodily remains and
negligent transmission of a message announcing death are the well-established
exceptions. The SCOV notes that the
rationale behind the no-physical-symptoms-no-recovery rule is less than
perfectly clear, but that some courts tend to be receptive to
emotional-distress damages when the reasons for restrictions on those damages
do not apply, or when the conduct complained of is particularly egregious. The SCOV notes that in some cases, when the
risk of emotional harm is readily apparent from the context, ordinary
negligence may give rise to damages for emotional distress.
In this case, the
SCOV considers the threatened loss of Plaintiff’s home insufficient to support
an award of emotional-distress damages.
As the SCOV puts it, the loss is “not of such a personal and emotional
nature that it would support an exception to the general rule disallowing
recovery of emotional distress damages in the absence of either physical impact
or substantial bodily injury or sickness.”
The SCOV does leave the door open for emotional-distress damages in a
legal malpractice setting, but in this case concludes that Plaintiff’s damages
are economic and reverses the award of emotional-distress damages.
The final question is
whether Plaintiff’s economic damages were proximately caused by Defendant’s
negligence and are reasonable under the circumstances. Although Plaintiff paid approximately twice
what the house was “worth” in order to keep it, the SCOV concludes that the
damages were reasonable.
The SCOV notes, “Ultimately,
the question of whether a settlement is reasonable is for the jury.” Plaintiff’s economic damages were based
solely on the $103K settlement Plaintiff entered into to void the court order and
allow him to remain in his house.
Plaintiff’s age, his impaired
vision, his desire to remain in his lifelong home, and the fact that the
probate court reviewed the settlement all contribute to the SCOV concluding
that the jury had enough evidence to find that the settlement was
reasonable.
The SCOV is careful
to note that just because the settlement was reasonable doesn’t mean that
Plaintiff was entitled to the entire settlement amount. But Defendant had an opportunity to challenge
the award and to paraphrase slightly, “The jury done what the jury done.”
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