Schmidt v. Coogan ( 2014 )

<3 OFI'ICE
.~ ........ ..-..~......-......
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
TERESA SCHMIDT, )
)
Petitioner, ) No. 88460-9
v. )
) En Bane
TIMOTHY P. COOGAN and DEBORAH )
COOGAN, and the marital community )
comprised thereof; and THE LAW ) Filed OCT 0 9 2014
-----------------
OFFICES OF TIMOTHY PATRICK )
COOGAN and all partners thereof, )
)
Respondents. )
)
WIGGINS, J.-This legal malpractice case presents two questions that we
have never before addressed. The first is whether the elements of legal malpractice
include the collectibility of an underlying judgment. Jurisdictions are split. We adopt
the growing trend to make the uncollectibility of an underlying judgment an affirmative
defense that negligent attorneys must plead and prove. The second is whether
emotional distress damages are available in legal malpractice cases. We hold that
the facts of this case do not support an award of emotional distress damages.
FACTS AND PROCEDURE
In December 1995, Teresa Schmidt slipped and fell while visiting a Tacoma
Grocery Outlet. She retained Timothy Coogan to represent her in a claim against the
store. On December 21, 1998, just days before the statute of limitations ran, Coogan
Schmidt v. Coogan et ux. et at., No. 88460-9
filed a complaint naming the wrong defendant. He subsequently filed two amended
complaints, but the trial court dismissed the case as barred by the statute of
limitations.
Schmidt then filed a complaint against Coogan, asserting claims for negligence
and breach of contract. The case went to trial in November 2003, and the jury returned
a verdict in favor of Schmidt in the amount of $32,000 for past economic damage and
$180,000 for noneconomic damages. The trial court granted a new trial on the issue
of damages only, finding that Coogan was denied a fair trial. Schmidt's counsel gave
an improper closing argument, and the damages were so excessive as to
unmistakably indicate that the verdict was the result of passion and prejudice. The
Court of Appeals affirmed the trial court's order granting a new trial on damages. 1
In March 2010, Schmidt moved for leave to amend the complaint to add a claim
for outrage/reckless infliction of emotional distress. She alleged that Coogan
harassed, intimidated, and belittled her when she raised the problem of the statute of
limitations before it expired. 2 During the 2003 trial, the jury was instructed to
determine general damages arising out of Coogan's conduct and malpractice. In the
second trial, however, Coogan challenged the availability of general damages in legal
1The Court of Appeals opinion followed our decision in Schmidt v. Coogan, 162 Wn.2d 488,
173 P.3d 273 (2007). In Schmidt, we held that Schmidt produced enough evidence of Grocery
Outlet's constructive notice of the dangerous condition to withstand a motion for judgment as
a matter of law. /d. at 492-93. Therefore, we reversed the Court of Appeal's holding that
Coogan should have been granted judgment as a matter of law and directed the court to
consider the remaining issues on appeal. /d.
2Schmidt worked at Coogan's law office for a portion of the time he was representing her.
Their relationship extended beyond a simple attorney-client relationship.
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malpractice cases. Because her counsel could not find settled authority either
affirming or denying the availability of emotional distress damages in Washington,
Schmidt sought to add a claim that encompassed the damages. The trial court denied
Schmidt's motion to amend. Schmidt also filed a motion for summary judgment on
the availability of general damages and a motion in limine. The court denied both
motions.
After Schmidt rested her case in the damages-only trial, Coogan moved for
judgment as a matter of law. He argued that collectibility was an essential element of
legal malpractice and that Schmidt presented no evidence that a judgment against
Grocery Outlet would have been collectible. The court denied the motion, and the jury
returned a verdict in favor of Schmidt for $83,733.16 plus interest.
Coogan appealed the jury verdict, arguing that the trial court should have
granted his motion for judgment as a matter of law. Schmidt cross appealed on the
ground that general damages are available in attorney malpractice claims and that the
trial court erred in denying her motion to amend the complaint. The Court of Appeals
concluded that collectibility was an essential component of damages that Schmidt
failed to prove, and it reversed the trial court's denial of Coogan's motion for judgment
as a matter of law. Schmidt v. Coogan, 171 Wn. App. 602, 604, 287 P.3d 681 (2012),
review granted, 177 Wn.2d 1019, 304 P.3d 115 (2013).
ANALYSIS
The primary questions before us are (1) whether collectibility is an element of
malpractice and (2) whether a plaintiff may recover emotional distress damages for
legal malpractice. These are questions of law, which we review de novo. Cost Mgmt.
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Servs., Inc. v. City of Lakewood, 178 Wn.2d 635, 641, 310 P.3d 804 (2013).
I. Collectibility
Our court has never addressed how the collectibility of an underlying judgment
intersects with the elements of legal malpractice. We hold that the burden of
establishing collectibility is not on the plaintiff-client. Rather, uncollectibility is an
affirmative def~nse that a defendant-attorney must plead and prove.
Uncollectibility may be a relevant inquiry because it relates to proximate cause
and damages elements of legal malpractice. The essential elements are:
"(1) The existence of an attorney-client relationship which gives rise to
a duty of care on the part of the attorney to the client; (2) an act or
omission by the attorney in breach of the duty of care; (3) damage to the
client; and (4) proximate causation between the attorney's breach of the
duty and the damage incurred."
Ang v. Martin, 154 Wn.2d 477, 482, 114 P.3d 637 (2005) (quoting Hizey v.
Carpenter, 119 Wn.2d 251, 260-61, 830 P.2d 646 (1992)). The measure of damages
is the "amount of loss actually sustained as a proximate result of the attorney's
conduct." Matson v. Weidenkopf, 101 Wn. App. 472, 484, 3 P.3d 805 (2000). If the
underlying judgment was uncollectible, for example, due to insufficient assets or
bankruptcy, the lost value of the judgment is not the proximate result of an attorney's
negligence. The client could not have collected the judgment even if the attorney used
reasonable care.
While U1e collectibility of an underlying judgment may be relevant, the great
weight of public policy considerations support our holding that uncollectibility is an
·affirmative defense. Traditionally, a majority of jurisdictions placed the burden of
proving collectibility on the plaintiff. See McDow v. Dixon, 138 Ga. App. 338, 339, 226
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S.E.2d 145 (1976); Whiteakerv. State, 382 N.W.2d 112, 114-15 (Iowa 1986); Jernigan
v. Giard, 398 Mass. 721, 723, 500 N.E.2d 806 (1986); Eno v. Watkins, 229 Neb. 855,
857, 429 N.W.2d 371 (1988). However, in more recent years, states have begun
departing from this rule and have placed the burden on the defendant-attorney. See
Power Constructors, Inc. v. Taylor & Hintze, 960 P.2d 20, 31 (Alaska 1998); Clary v.
Lite Machines Corp., 850 N.E.2d 423, 440 (Ind. Ct. App. 2006); Jourdain v. Dineen,
527 A.2d 1304, 1306 (Me. 1987); Teodorescu v. Bushnell, Gage, Reizen & Byington,
201 Mich. App. 260, 268, 506 N.W.2d 275 (1993); Hoppe v. Ranzini, 158 N.J. Super.
158, 171, 385 A.2d 913 (1978); Carbone v. Tierney, 151 N.H. 521, 533, 864 A.2d 308(2004); Kituskie v. Corbman, 552 Pa. 275,285, 714A.2d 1027 (1998).
The traditional approach rests primarily on the theory that it is consistent with
tort law: plaintiffs may recover only the amount that will make them whole (and not a
windfall), and the plaintiff must prove both proximate cause and injury. See Klump v.
Duffus, 71 F.3d 1368, 1374 (7th Cir.1995); McKenna v. Forsyth & Forsyth, 280A.D.2d
79, 84, 720 N.Y.S.2d 654 (2001 ). This approach overlooks major policy concerns.
First, the traditional approach unfairly presumes that an underlying judgment is
uncollectible when the record is silent. See Power Constructors, lnc., 960 P .2d at 31-
32. The presumption is unnecessary and requires a client to always prove the
opposite, even when there is no real question regarding solvency. Generally,
collectibility is an issue only after the client has established the existence of a fiduciary
relationship, the failure of the attorney to exercise due care, the attorney's negligence
resulted in losing a valid claim (i.e., proving the "case within a case"), and the amount
of the lost judgment. The need to establish collectibility is the result of an attorney's
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established malpractice atthis point in the trial. It is a burden created by the negligent
attorney . The presumption that a judgment would have been uncollectible places an
unfair burden on the wronged client.
Second, the negligent attorney is in as good a position, if not better, than the
client to discover and prove uncollectibility. If the underlying judgment would have
been uncollectible, the original attorney should have advised his client of this fact.
Failing to do so is negligent and, potentially, a breach of the attorney-client fiduciary
relationship. Here, Coogan undertook an investigation of whether the slip-and-fall
case was a good faith lawsuit when he represented Schmidt. Coogan testified by
deposition (in a statement not placed into evidence before the jury) that an insurance
company representative for Tacoma Grocery Outlet confirmed insurance coverage on
more than one occasion. This suggests that the attorney is in a better position than
the client to establish uncollectibility because the attorney has investigated the
underlying claim closer to the time of the accident.
Third, the traditional approach has the unfortunate effect of introducing
evidence of liability insurance into every legal malpractice case. The rules of evidence
and the case law generally prohibit introducing evidence of liability insurance in
negligence cases. See ER 411; Todd v. Harr, Inc., 69 Wn.2d 166, 168, 417 P.2d 945(1966) ("[T]he fact that a personal injury defendant carries liability insurance is entirely
immaterial, and the deliberate or wanton injection of this matter into the case by
plaintiff is ground for reversal."); Kappelman v. Lutz, 141 Wn. App. 580, 590, 170 P.3d
1189 (2007) ("[T]he fact that a defendant in a personal injury case carries -liability
insurance is not material to the questions of negligence and damages."). Our holding
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is more consistent with this rule by limiting introduction of evidence of liability
insurance to a subset of the cases, i.e., when an attorney raises uncollectibility as an
affirmative defense.
Fourth, a delay usually, if not always, ensues between the original injury and
the legal malpractice action. The delay may hinder the client's ability to gather
evidence of collectibility. Here, Schmidt fell in 1995 and nearly two decades later this
case is still unresolved. In that amount of time, companies may have failed,
ownerships changed, and other circumstances may have made evidence of
collectibility unavailable. It is unfair to place this burden on plaintiffs when the
attorney's negligence created the delay in the first place. See Kituskie, 552 Pa. at
283, 285.
Fifth, clients are further burdened because requiring them to prove collectibility
ignores the fact that judgments are valid for 10 years after entry in Washington and
may be renewed thereafter. See RCW 4.56.190; 28 MARJORIE DICK ROMBAUER,
WASHINGTON PRACTICE: CREDITORS' REMEDIES-DEBTORS' RELIEF§ 7.8 (1998 & Supp.
2014); see also Hoppe v. Ranzini, 158 N.J. Super. 158, 169-71, 385A.2d 913 (1978).
This is significant because people and entities have financial positions that change
over time. If a judgment would not have been immediately collectible against the
original defendant, it may have become collectible over time. Ignoring this reality
unfairly harms clients. It also seems to go against the guiding principle in tort law,
which '"is to make the injured party as whole as possible through pecuniary
compensation."' 16 DAVID K. DEWOLF & KELLER W. ALLEN, WASHINGTON PRACTICE:
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TORT LAW AND PRACTICE § 6:1, at 259 (2013) (quoting Shoemake ex ref. Guardian V.
Ferrer, 168 Wn.2d 193, 198, 225 P.3d 990 (201 0)).
Sixth, placing the burden of disproving collectibility on the negligent attorney
acknowledges the important fiduciary relationship between client and attorney. See
1-/oppe, 158 N.J. Super. at 171. The traditional approach places every burden on the
client. Our holding is more balanced. It requires the client to prove the existence of
a fiduciary relationship, that the attorney did not exercise proper care, that this
negligence caused the loss of a judgment, and the amount of that loss. If the
wrongdoer believes the lost judgment amount could not have been collected from
original defendant, the burden is on him or her to establish the fact as an affirmative
defense.
After weighing these policy concerns, we conclude that the plaintiff-client does
not bear the burden of establishing collectibility. Rather, a negligent attorney may
raise uncollectibility as an affirmative defense to mitigate or eliminate damages.
Coogan did not argue in either of the two trials that a judgment against Grocery
Outlet would be uncollectible. Nor did he argue that collectibility was an affirmative
defense. He argued in an oral motion for judgment as a matter of law only that
Schmidt presented no evidence of collectibility, and the judge did not err in denying
his motion because Schmidt presented sufficient evidence of damages. Therefore,
we reverse the Court of Appeals. Coogan is not entitled to a third trial concerning
whether he may prove the affirmative defense.
The concurrence argues that we should not address the merits of Coogan's
collectibility argument for two reasons: it was not raised in the first trial and Coogan
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invited the error when he successfully moved at the second trial to exclude evidence
of Coogan's malpractice insurance policy. While we are sympathetic with the
unfairness of allowing Coogan to raise this issue for the first time after the case had
been pending for several decades and after multiple appellate reviews, we address
the issue because it is important and in order to provide guidance on legal malpractice
cases in the future.
Our appellate rules allow us to decline to address on appeal issues
inadequately raised at the trial court, but they do not require us to decline
consideration of such issues. RAP 2.5(a) ("The appellate court may refuse to review
any claim of error which was not raised in the trial court." (emphasis added)). Our
rules also encourage us to decide cases on the merits, not on procedural flaws. RAP
1.2(a) ("These rules will be liberally interpreted to promote justice and facilitate the
decision of cases on the merits. Cases and issues will not be determined on the basis
of compliance or noncompliance with these rules except in compelling circumstances
where justice demands[ subject to timeliness exceptions not relevant here].")
The concurrence would also decline to address collectibility on the ground of
invited error, reasoning that Coogan succeeded in excluding evidence that the grocery
store was insured-.thus providing an asset making any judgment collectible-and
then arguing that Schmidt failed to present any evidence of collectibility. Coogan's
argument to exclude evidence of insurance was inconsistent with his argument that
Schmidt was required to prove collectibility, but it did not lead to invited error because
the trial court did not decide whether collectibility was an element of legal malpractice.
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Instead, the trial court held that collectibility was outside the scope of the remanded
trial on damages.
The issue of collectibility was extensively briefed by the parties in almost
every brief filed here and in the Court of Appeals. The issue is of first impression in
Washington State, and we granted review in order to address it. Making collectibility
an element of a legal malpractice claim would be a major change in litigating these
cases in Washington. While we respect the differing opinion of the concurrence, this
was an appropriate case in which to exercise our discretion to resolve the issue.
II. Damages
Schmidt also argues that the trial court and the appellate court denied her right
to recover emotional distress damages and attorney fees. The measure of damages
is the "amount of loss actually sustained as a proximate result of the attorney's
conduct." Matson, 101 Wn. App. at 484. We hold that the plaintiff in a legal
malpractice case may recover emotional distress damages when significant emotional
distress is foreseeable from the sensitive or personal nature of representation or when
the attorney's conduct is particularly egregious. However, simple malpractice
resulting in pecuniary loss that causes emotional upset does not support emotional
distress damages. Here, the nature of representation was not sensitive nor was
Coogan's conduct particularly egregious. We hold that Schmidt is not entitled to
attorney fees.
Because no Washington case has settled whether emotional distress damages
are available in a legal malpractice action, we look to the availability of emotional
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distress damages under other Washington claims and consider the rules developed
in other jurisdictions.
We begin by analyzing the availability of emotional distress damages in
Washington. When emotional distress is the sole damage resulting from negligent
acts, our court is cautious in awarding damages. See Bylsma v. Burger King Corp.,
176 Wn.2d 555, 560-61, 293 P.3d 1168 (2013). Originally, we adopted a general rule
of "no liability for mental distress" when a "defendant's actions were negligent and
there was no impact to the plaintiff .... " Hunsley v. Giard, 87 Wn.2d 424, 432, 553
P.2d 1096 (1976). However, we departed from this rule and now allow recovery when
a plaintiff's emotional distress is "within the scope of foreseeable harm ... , a
reasonable reaction given the circumstances, and . . . manifest by objective
symptomatology." Bylsma, 176 Wn.2d at 560.
Our reluctance to award emotional distress damages absent an impact in
negligence cases contrasts starkly to emotional distress damages for intenJional torts.
"From early in its history, this court has allowed recovery for damages for mental
distress ... when the defendant's act was willful or intentional." Hunsley, 87 Wn.2d
at 431; see Kloepfel v. Bokor, 149 Wn.2d 192, 201, 66 P.3d 630 (2003) (intentional
infliction of emotional distress); Birchler v. Castello Land Co., 133 Wn.2d 106, 116,
942 P.2d 968 ( 1997) (violation of the timber trespass statute); Cagle v. Burns & Roe,
Inc., 106 Wn.2d 911, 914-18, 726 P.2d 434 (1986) (wrongful discharge in violation of
public policy). We have also allowed emotional distress damages in a variety of other
statutory and common law tort claims. See Chuang Van Pham v. Seattle City Light,
159 Wn.2d 527, 533-38, 151 P.3d 976 (2007) (Washington Law Against
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Discrimination, ch. 49.60 RCW); Bergerv. Sonneland, 144 Wn.2d 91, 112-·13, 26 P.3d
257 (2001) (medical malpractice under chapter 7.70 RCW based on unauthorized
disclosure by a physician of confidential information); Whaley v.Dep't of Soc. &Health
Servs., 90 Wn. App. 658, 674, 956 P.2d 1100 (1998) (breach of professional duty by
a day care provider); Price v. State, 114 Wn. App. 65, 71-74, 57 P.3d 639 (2002)
(wrongful adoption). With the increasing availability of emotional distress damages,
we see no reason to categorically preclude the damages in attorney malpractice
actions.
We now turn to the issue of when emotional distress damages are available for
attorney negligence. To determine whether emotional distress damages are
compensable, we should consider the foreseeability of emotional distress. See
Hunsley, 87 Wn.2d at 435 ("The element of foreseeability plays a large part in
determining the scope of defendant's duty."). In Bylsma, we noted that the court has
allowed emotional distress damages in cases concerning "emotionally laden personal
interests, and [when] emotional distress was an expected result of the objectionable
conduct .... " 176 Wn.2d at 561 (emphasis added). The nature of the parties'
relationship is also relevant to foreseeability of emotional distress damages. See
Price v. State, 114 Wn. App. 65, 71-74, 57 P.3d 639 (2002). In Price, the Court of
Appeals stated:
The availability of emotional distress damages depends on
whether the parties had a relationship that preexisted the defendant's
breach of duty. If the parties lacked a preexisting relationship, and the
defendant's breach was negligent rather than intentional, emotional
distress damages are available only if the plaintiff proves "objective
symptomatology." If the parties had a preexisting relationship, the
availability of emotional distress damages turns generally on the
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characteristics of the particular relationship. If the relationship was
primarily economic, emotional distress damages may not be available.
If the relationship was not primarily economic, emotional distress
damages may be available.
/d. at 71 (footnotes omitted). The relationship in Price was between an adoption
agency and prospective adoptive parents. /d. at 73. The Court of Appeals held that
the relationship was "not merely economic, and a reasonable person standing in the
defendant's shoes would easily foresee that its breach is likely to cause significant
emotional distress." /d.
Other jurisdictions consider the foreseeability of emotional distress when
deciding whether to award emotional distress damages. See RESTATEMENT (THIRD)
OF THE LAW GOVERNING LAWYERS § 53 cmt. g at 393 (2000) ("General principles
applicable to the recovery of damages for emotional distress apply to legal-
malpractice actions. In general, such damages are inappropriate in types of cases in
which emotional distress is unforeseeable. Thus, emotional-distress damages are
ordinarily not recoverable when a lawyer's misconduct causes the client to lose profits
from a commercial transaction, but are ordinarily recoverable when misconduct
causes a client's imprisonment.").
Many jurisdictions do not allow emotional distress damages for legal
malpractice unless there has been an intentional act, egregious conduct, or physical
injury. See Vincent v. De Vries, 2013 VT 34,193 Vt. 57 4, 72 A. 3d 886, 894-95. Other
courts allow recovery when a '"lawyer is contracted to perform services involving
deeply emotional responses in the event of a breach."' /d. at 894-95 (quoting Miranda
v. Said, noted at 820 N.W.2d 159, 2012 WL 2410945, at *4 (Iowa Ct. App. 2012)).
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This has included cases in which "legal malpractice [led] to a loss of liberty or of one's
child, as contrasted with purely pecuniary loss." /d. at 895.
For example, a Florida court created a narrow exception to its impact rule for
certain legal malpractice claims. Rowell v. Holt, 850 So. 2d 474 (Fla. 2003). The
exception applies when a harm is grievous and foreseeable. See id. at 478-81. The
, court held that a plaintiff could recover emotional distress damages when he "had
been wrongfully arrested and confined" and had given his attorney the documents
necessary to "secure his immediate release .... " /d. at 479. The attorney did not
give the documents to the "judge as the judge had specifically instructed," and a
lengthy period of wrongful confinement resulted. /d. at 479-80. The rule was narrow:
The instant case does not simply involve negligence arising from
insufficient preparation, incomplete investigation, legal ineptitude, or any
other subjective indicia of a lawyer's performance. To obtain his client's
release, [petitioner's] attorney ... needed only to deliver, transmit, or
hand over to the judge the document which he had been provided and
which he held in his hands.
/d. at 481. The exception created by the Florida court follows the national trend of
allowing emotional distress damages when the attorney's actions are particularly
egregious and the harm is both great and foreseeable.
Having examined Washington law and explored the rule in other jurisdictions,
we hold that emotional distress damages are available for attorney negligence when
emotional distress is foreseeable due to the particularly egregious (or intentional)
conduct of an attorney or the sensitive or personal nature of the representation. Here,
the facts do not warrant damages for emotional distress. Schmidt experienced a
pecuniary loss when Coogan negligently failed to perfect her personal injury lawsuit,
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and this lawsuit compensates her for that loss . Additionally, the subject matter of the
litigation was not particularly sensitive: she did not lose her freedom and Coogan's
actions were not egregious. Therefore, we affirm the trial court's rulings concerning
the availability of general and emotional distress damages.
The dissent misreads our opinion and accordingly expends considerable
energy defeating an imaginary straw man. The dissent accuses us of "[i]nsisting that
emotional distress damages require a showing that the attorney's actions were
'particularly egregious,"' dissent at 1. 3 We have quite clearly said that egregious
action is one way of establishing a claim for emotional distress damages: "emotional
distress damages are available for attorney negligence when emotional distress is
foreseeable due to the particularly egregious (or intentional) conduct of an attorney or
the sensitive or personal nature of the representation." Supra p. 14; accord supra p.
10. In other words, egregious action is sufficient, but not necessary.
The dissent urges that the attorney-client relationship should lead us to
conclude that emotional distress damages are available without proof of physical
impact or objective symptomatology. Dissent at 3. Nothing in this opinion requires
either impact or symptomatology.
The dissent criticizes our characterization of Schmidt's harm as primarily
pecuniary, citing testimony from the underlying trial. /d. This is another misreading of
3 We do not understand the dissent's accusation that our opinion "discounts the special nature
of the attorney-client relationship and relies on a faulty analogy between attorney malpractice
claims and negligent infliction of emotional distress ... claims involving strangers." Dissent
at 1. Unlike the dissent, we have considered out-of-state authorities and a leading treatise on
lawyers, all analyzing this very issue in the context of lawyering. It is the dissent that ranges
far afield of the attorney-client relationship.
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our opinion. Two types of emotional distress damages are involved here: Schmidt's
emotional distress caused by her underlying injury and Schmidt's emotional distress
caused by defendant-attorney Coogan. The emotional distress damages at issue in
this appeal are the emotional distress damages caused by Coogan, not the damages
caused by her fall in the grocery store. The dissent cites only to emotional distress
caused by the grocery store fall, which does not support a conclusion that it is
foreseeable that Coogan's malpractice might cause emotional distress damages to
Schmidt. /d.
The dissent argues that we should analogize legal malpractice claims against
attorneys to insurance bad faith cases in order to determine the recoverability of
emotional distress damages. /d. This argument places the cart before the horse in
that we have never before addressed the availability of emotional distress damages
for insurance bad faith, and the dissent cites only one case asserting without analysis
that emotional distress damages are recoverable for insurance bad faith. See dissent
at 5 (citing Miller v. Kenny, 180 Wn. App. _, 325 P.3d 278, 293 (2014) (citing
Anderson v. State Farm Mut. Ins. Co., 101 Wn. App. 323, 333, 2 P.3d 1029 (2000))).
Anderson simply cites to Coventry Assocs. v. American States Insurance Co., 136
Wn.2d 269, 961 P.2d 933 (1998). Neither Miller nor Anderson actually analyzes
emotional distress damages. They simply say that insurance bad faith is a tort, and
therefore emotional distress damages are available. Miller, 325 P.3d at 293;
Anderson, 101 Wn. App. at 333. Coventry simply says that general tort damages are
available for insurer bad faith. 136 Wn.2d at 285. In other words, the dissent relies
on three bad faith cases that fail to analyze the availability of emotional distress
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damages in the context of insurance bad faith, and that say nothing about legal
malpractice.
Moreover, attorney malpractice differs considerably from insurer bad faith. 4 We
have not articulated a sufficiently narrow definition of insurance bad faith to use it as
a model to determine attorney malpractice. See, e.g., Tank v. State Farm Fire & Cas.
Co., 105 Wn.2d 381, 386, 715 P.2d 1133 (1986) ("an insurer must deal fairly with an
insured, giving equal consideration in all matters to the insured's interests"); Smith v.
Safeco Ins. Co., 150 Wn.2d 478, 484, 78 P.3d 1274 (2003) ("To succeed on a bad
faith claim, the policyholder must show the insurer's breach of the insurance contract
was 'unreasonable, frivolous, or unfounded"' (quoting Overton v. Canso!. Ins. Co., 145
Wn.2d 417, 433, 38 P.3d 322 (2002))); Beset v. Viking Ins. Co. of Wisconsin, 146
Wn.2d 730, 737, 49 P.2d 887 (2002) ("The[se] principles ... do not depend on how
an insurer acted in bad faith. Rather, the principles apply whenever an insurer acts in
bad faith, whether by poorly defending a claim under a reservation of rights, refusing
to defend a claim, or failing to properly investigate a claim." (citations omitted)).
Additionally, insurance bad faith does not constitute a single body of law; it "derives
from statutory and regulatory provisions, and the common law." St. Paul Fire & Marine
Ins. Co. v. On via, Inc., 165 Wn.2d 122, 128, 196 P.3d 664 (2008). Insurance bad faith
4 The negligence basis for attorney malpractice and the bad faith standard are distinct
theories of liability. Coventry, 136 Wn.2d at 280 (noting that "an insured is not entitled
to base a bad faith or [Consumer Protection Act, chapter 19.86 RCW] claim against
its insurer on the basis of a good faith mistake"); First State Ins. Co. v. Kemper Nat'/
Ins. Co., 94 Wn. App. 602, 612, 971 P.2d 1133 (1999) ("the plaintiff is entitled to a jury
verdict on theories of either neglige·nce or bad faith, independent of each other
because a party may fail to use ordinary care yet still not act in bad faith" (footnote
omitted)).
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claims are often brought under common law, the Insurance Fair Conduct Act (ch.
48.30 RCW), and the Consumer Protection Act (ch. 19.86 RCW). Each of these
causes of action offers unique remedies. See RCW 19.86.090 (attorney's fees
available for Consume·r Protection Act claims); RCW 48.30.015(2) (treble damages
available for Insurance Fair Conduct Act claims); Wash. State Physicians Ins. Exch.
& Ass'n v. Fisons Corp., 122 Wn.2d 299, 318, 858 P.2d 1054 (1993) (emotional
distress damages unavailable for Consumer Protection Act claims). Importing
insurance bad faith standards into the arena of attorney malpractice will only cause
confusion. The analogy between insurance bad faith and attorney malpractice must
await a fuller exploration than either the dissent or the parties have offered.
Schmidt also argues that plaintiffs in legal malpractice claims should recover
the cost of obtaining the malpractice award. She argues that it is within the scope of
foreseeability that a client will incur additional attorney fees, expert fees, and other
costs when an attorney commits malpractice. Schmidt offers no case law to support
her position. In fact, our case law does not support an award of attorney fees in
attorney malpractice cases. Perez v. Pappas, 98 Wn.2d 835, 845, 659 P.2d 4 75
(1983) (Our court rejected the client's argument that "a defendant is always liable for
attorney fees when a lawsuit results from the defendant's breach of fiduciary duties."
We held that the trial court properly refused to award attorney fees.); Shoemake v.
Ferrer, 143 Wn. App. 819, 830-31, 182 P.3d 992 (trial court abused its discretion by
awarding attorney fees to the injured client), aff'd on different grounds, 168 Wn.2d
193, 225 P.3d 990 (201 0); Kelly v. Foster, 62 Wn. App. 150, 153-55, 813 P.2d 598(1991) (trial court did not abuse its discretion when it denied attorney fees). Attorney
18
Schmidt v. Coogan et ux. eta/., No. 88460-9
fees are not awarded to plaintiffs in other tort cases, including other forms of
malpractice. See Cosmo. Eng'g Grp., Inc. v. Ondeo Degremont, Inc., 159 Wn.2d 292,
296-97, 149 P.3d 666 (2006) ("The general rule in Washington, commonly referred to
as the 'American rule,' is that each party in a civil action will pay its own attorney fees
and costs. This general rule can be modified by contract, statute, or a recognized
ground in equity." (citations omitted)); Jaramillo v. Morris, 50 Wn. App. 822, 826-27,
750 P.2d 1301 (1988) (court reversed attorney fee award because the claims
concerned professional negligence/malpractice and were not a violation of the
Consumer Protection Act). It would be anomalous to award attorney fees in this
context but not in other tort cases.
The facts in Shoemake are similar to the facts of our case. The Shoemakes
were seriously injured in a car accident, they hired an attorney to represent them, and
the attorney failed to perfect the lawsuit before the statute of limitations ran. 143 Wn.
App. at 821. The case was initially dismissed, but the attorney convinced the court to
reinstate the claim. /d. at 821-22. He failed to appear for the scheduled trial, and the
court dismissed the Shoemakes' complaint. /d. at 822. The attorney never told the
Shoemakes about the events; instead, he lied to them for years. !d. The trial court
awarded the Shoemakes attorney fees, but the Court of Appeals reversed the award.
/d. at 823, 832. It rejected the argument that an injured client was entitled to attorney
fees in a "malpractice action based on their breach of fiduciary duty claims."
Shoemake, 143 Wn. App. at 830. "Attorney fees may be awarded only if authorized
by contract, statute, or a recognized ground in equity." /d. The court concluded that
"breach of fiduciary duty by a lawyer is not a recognized equitable ground upon which
19
Schmidt v. Coogan et ux. eta/., No. 88460-9
to award attorney fees under Washington law, the trial court erred in [awarding
attorney fees]." /d. The Court of Appeals also noted, '"Washington courts have not
recognized the ordinary legal malpractice action as one in which attorney's fees can
be recovered as part of the cost of litigation."' /d. at 832 (quoting Kelly, 62 Wn. App.
at 155). We denied review of the attorney fee award issue while accepting review of
other issues. Shoemake, 168 Wn.2d at 197.
The approach taken by the court in Shoemake follows the rule as sefout in the
Restatement:
Like other civil litigants, the winning party in a malpractice action
ordinarily cannot recover its attorney fees and other expenses in the
malpractice action itself, except to the limited extent that the jurisdiction
allows the recovery of court costs. The rule barring fee recovery has
exceptions, which may be applicable in a malpractice action in
appropriate circumstances. For example, many jurisdictions allow
recovery of attorney fees against a plaintiff or defendant that litigates in
bad faith.
RESTATEMENT (THIRD) OF LAW GOVERNING LAWYERS § 53 cmt. fat 392-93. We hold
that plaintiffs in legal malpractice cases are not automatically entitled to attorney fees.
None of the remaining issues presented by Schmidt are errors or merit
discussion. 5
5 The trial court did not err when it denied Schmidt's motion to amend to add a claim for
outrage/reckless infliction of emotional distress. The Court of Appeals held, "[T]he trial court
did not abuse its discretion in denying Schmidt's motion to amend her complaint because she
sought to amend the complaint only after an undue delay and an amended complaint would
have worked an undue hardship on Coogan's defense." Schmidt, 171 Wn. App. at 611-12.
The court noted that the amendment wa·s proposed "well over a decade after the alleged
infliction of emotional distress occurred, and well after the first trial established Coogan's
liability for negligence in failing to comply with the statute of limitations .... " /d. at 612.
Allowing the amendment "would have broadened the trial's scope and forced Coogan to
reformulate his defense strategies." /d. We agree. It was not an error to deny the motion to
amend.
20
Schmidt v. Coogan et ux. eta!., No. 88460-9
CONCLUSION
We reverse the Court of Appeals and affirm the trial court's judgment. We hold
that the uncollectibility of an underlying judgment is an affirmative defense to legal
malpractice that defendant-attorneys must plead and prove. We also hold that the
trial court properly denied emotional distress damages because Coogan's actions
were not particularly egregious, nor was the subject matter personal.
21
Schmidt v. Coogan et ux. eta/., No. 88460-9
WE CONCUR.
22
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
No. 88460-9
FAIRHURST, J. (concurring)-! agree with the lead opinion that the Court
of Appeals should be reversed. However, I believe it is unnecessary and improper
for this court to hold that collectibility is an affirmative defense under the facts of
this case. 1 Rather than fashion new rules of law, I would simply affirm the trial
court's denial of Timothy P. Coogan's motion for judgment as a matter of law. I
would hold Coogan could not raise collectibility in the damages only trial because
Coogan ( 1) failed to expressly raise collectibility as an issue in the first jury trial and
(2) sought to exclude insurance evidence from the damages only trial.
This case has a long and tortured history. The events began almost 20 years
ago when Teresa Schmidt slipped and fell at a Tacoma grocery store on December
23, 1995. In January 1996, Schmidt retained attorney Coogan to handle her personal
injury suit against the store. In 2000, Schmidt filed this attorney malpractice suit
against Coogan for his failure to perfect her claim. In 2003, a jury entered a verdict
against Coogan for $32,000 in past economic damages and $180,000 for
1
Also under the facts of this case emotional distress damages are not available.
1
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
noneconomic damages. Coogan moved for a new trial, remittitur, and
reconsideration, claiming Schmidt failed to prove the grocery store had notice of the
hazardous condition, a necessary element of the underlying claim. The trial court
granted a new trial on the issue of damages only on the basis that Coogan was denied
a fair trial.
Specifically, the court found that a new trial on damages was warranted
because (1) Schmidt's counsel improperly promoted awarding punitive damages
during closing arguments to the jury, (2) the damages were so excessive as to
unmistakably indicate that the verdict must have been the result of passion and
prejudice, (3) the verdict for noneconomic damages was not supported by the
evidence, and (4) the trial court improperly allowed the lack of Schmidt's insurance
testimony to be presented during the course of trial.
Both parties appealed the trial court's decision. Schmidt v. Coogan, noted at
134 Wn. App. 1055, 2006 WL 2556633. Schmidt claimed the trial court erred in
overturning the jury's damage award. 2006 WL 2556633, at* 1. Coogan claimed
Schmidt failed to prove the elements of her underlying claim. !d. The Court of
Appeals agreed with Coogan, reversing and remanding the case for dismissal. !d.
On appeal, this court reversed the Court of Appeals decision, holding there was
sufficient evidence to support the jury's verdict with respect to the underlying slip
2
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
and fall. Schmidt v. Coogan, 162 Wn.2d 488, 492, 173 P.3d 273 (2007). The court
remanded for consideration on the remaining issues. I d. at 493.
On remand, the Court of Appeals affirmed the trial court order granting a new
trial limited to the issue of damages. Schmidt v. Coogan, noted at 145 Wn. App.
1030, 2008 WL 5752059. The Court of Appeals found that the trial court did not
abuse its discretion in granting a new trial on damages only because Schmidt proved
no factual basis for the jury's award of $32,000 for past economic damages. 2008
WL 5752059, at* 1. The Court of Appeals mandated the case back to the trial court
for a new trial on damages. I d.
On remand for the damages only trial, Coogan sought to confine Schmidt's
damages to "what [Schmidt would] have gotten in her claim against the Grocery
Outlet" if Coogan had done his job properly. Verbatim Report of Proceedings
Motion in Limine (Aug. 20. 201 0) at 21. Pretrial, Coogan never directly briefed or
argued the issue of collectibility. Coogan alleges he raised collectibility in a motion
contesting Schmidt's motion for summary judgment on the issue of general damages
by discussing Lavigne v. Chase, Haskell, Hayes & Kalamon, PS, 112 Wn. App. 677,
50 P.3d 306 (2002) and by quoting and attaching an 86 page article in support of his
motion in limine on the issue of general damages.
3
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
Neither reference was focused on collectibility. Coogan was arguing that
Schmidt's damages should be limited to actual damages. During the pretrial
proceedings, Coogan never directly stated that collectibility was a necessary element
of Schmidt's case. To the contrary, Coogan affirmatively moved for and the trial
court granted a motion in limine that excluded a reference to the grocery store's
msurance.
The first time Coogan expressly raised collectibility was in an oral motion to
dismiss following the completion of Schmidt's case-in-chief during the damages
only trial. 3 Verbatim Tr. of Proceedings (Aug. 25, 2010) at 503-04. His counsel
stated:
One element in a legal malpractice case is proof that if, in fact,
the lawyer had done a better job and there would have been a better
result, that they actually wouldn't have been able to collect on that
result. In other words, collectability is an essential element of the
plaintiffs case.
There has been no evidence presented in this case, none
whatsoever, as to whether or not even if Mr. Coogan had handled this
case right, even if Mr. Coogan had taken it to a jury trial and got a
verdict for Ms. Schmidt that that verdict would have been collectible.
That is an essential element of their case, they put on no proof;
therefore, dismissal is warranted.
!d. at 504.
The trial court then asked Coogan's counsel whether collectibility is an
element of malpractice or a component of damages. !d. at 507. Counsel responded:
4
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
Element two, proximate cause is what I'm talking about here.
They're still going to have to prove proximate cause of damages. And
in this context, [Schmidt] has to prove that but for his negligence, she
would have faired [sic] better. An element of that concept and that goes
to the value of the underlying claim. An element of that concept is the
plaintiffs burden of proof collectability.
Id. The trial court denied the motion to dismiss, finding that collectibility was
outside the scope of the damages only trial: "[T]his case is not about any element of
malpractice other than damages and proximate cause as it relates to damages. If there
was a question as to collectability, that should have been addressed at the first trial.
This trial is about damages only." Id. at 508.
In August 2010, the jury returned a verdict in favor of Schmidt for $3,733.16
in past economic damages and $80,000.00 in noneconomic damages. Coogan
moved for judgment as a matter of law and for a new trial on the basis that Schmidt
failed to prove collectibility, an essential element of a legal malpractice claim. The
trial court denied the motions.
Coogan appealed, claiming the trial court erred by denying his motion for
judgment as a matter of law. The Court of Appeals reversed the trial court's denial
of Coogan's motion for judgment as a matter of law and remanded for dismissal of
Schmidt's claim. Schmidt v. Coogan, 171 Wn. App. 602, 611,287 P.3d 681 (2012).
The court first determined Coogan preserved the issue of collectibility for appeal,
5
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
reasoning collectibility is a component for damages. !d. at 609. Further, the court
held that Schmidt failed to prove collectibility. Id. at 611.
I believe the trial court properly denied Coogan's motion for judgment as a
matter of law. First, Coogan did not expressly raise collectibility as an issue in the
first trial. He raised it when this case was almost 15 years old and after there had
been multiple appellate reviews. If collectibility was an issue, it should have been
raised during the first jury trial. If collectibility had been argued successfully in the
first trial, there would have been a defense verdict and the case would have been
over. I would hold, as the trial court did, that the claim of collectibility had no place
in the damages only trial.
Second, collectibility was not at issue in the damages only trial because during
pretrial proceedings Coogan moved to exclude evidence of the grocery store's
insurance. To support the exclusion of insurance information, among other exhibits,
Coogan reasoned,
a number of these exhibits are now irrelevant given the fact that this
case is now limited to a new trial on the issues of damages only. In
other words, any exhibit submitted by the plaintiff that relates to
liability should be excluded as generally being irrelevant ... as well as
unduly confusing and prejudicial.
Resp't's Mot. for Recons. (of Court of Appeals decision, filed Nov. 16, 2012), App.
at 22. Specifically, Coogan objected to "Exhibit 1. Cover of Coogan's file
6
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
regarding Ms. Schmidt; this exhibit is objected to on the grounds that it clearly
depicts the words 'Safeco' on its cover thus inappropriately references insurance
which as discussed above is inadmissible." Id. Schmidt demurred, and the trial
court granted the motion in limine.
Coogan's motion in limine evidences that at the beginning of the damages
only trial, he did not consider insurance relevant. However, insurance would be
relevant if collectibility was an issue. Under the invited error doctrine, Coogan
waived the right to complain of the fact that Schmidt did not present any evidence
of collectibility. The invited error doctrine prohibits a party from setting up an error
in the trial court and then complaining about it on appeal. In re Pers. Restraint of
Tortorelli, 149 Wn.2d 82, 94, 66 P.3d 606 (2003). Here, Coogan moved to exclude
the exact type of evidence that he later claimed Schmidt had to present in order to
prevail in her case.
I would reverse the Court of Appeals and hold that collectibility was not at
issue in the damages only trial because it was not raised during the first jury trial and
Coogan invited error by moving to exclude evidence of insurance during the
damages only trial. Although there may be unanswered questions about
collectibility, this case is not the proper vehicle to decide them.
7
Schmidt v. Coogan, No. 88460-9
Fairhurst, J. (concurring)
~(!
qmy~¢P.-r,
8
Schmidt v. Coogan, et ux., et al.
No. 88460-9
STEPHENS, J. (dissenting)-The attorney-client relationship is vital to the
functioning of our justice system. The lead opinion erodes the trust that is central
to this relationship by erecting artificial barriers to a client's ability to fully recover
damages against a negligent attorney. Insisting that emotional distress damages
require a showing that the attorney's actions were "particularly egregious," lead
opinion at 14, the lead opinion discounts the special nature of the attorney-client
relationship and relies on a faulty analogy between attorney malpractice claims and
negligent infliction of emotional distress (NIED) claims involving strangers. It
would make more sense to analogize attorney malpractice claims to tort claims in
other fiduciary contexts more closely resembling the attorney-client relationship.
Because such damages should be allowed, where proved, I respectfully dissent. 1
The lead opinion begins its analysis by discussing claims between strangers
and noting that historically, Washington courts were cautious to award emotional
1
I agree with the lead opinion that collectability is an affirmative defense, not an
element of every plaintiff-client's case. Lead opinion at 4. This dissent addresses only
the issue of emotional distress damages in attorney malpractice cases.
Schmidt v. Coogan, et ux., et al., 88460-9 (Stephens, J. Dissent)
distress damages. Lead opinion at 9. This reasoning relies on the refrain that "a
negligent act should have some end to its legal consequences." Hunsley v. Giard,
87 Wn.2d 424, 435, 553 P.2d 1096 (1976). But, Washington has moved away
from the reasoning of Hunsley and allows recovery "when a plaintiffs emotional
distress is 'within the scope of foreseeable harm ... , a reasonable reaction given
the circumstances, and ... manifest by objective symptomology. "' Lead opinion
at 11 (alterations in original) (quoting Bylsma v. Burger King Corp., 176 Wn.2d
555, 560, 293 P.3d 1168 (2013)).
As the lead opinion acknowledges, there are numerous circumstances where
the State's interest in protecting members of the public supersedes any reluctance
to recognize valid emotional distress and does not require a physical impact or
"objective symptomology." Lead opinion at 10-11 (citing Chuang Van Pham v.
Seattle City Light, 159 Wn.2d 527, 533-38, 151 P.3d 976 (2007) (emotional
distress damages available for ethnic and race discrimination under Washington's
Law Against Discrimination, ch. 49.60 RCW); Berger v. Sonneland, 144 Wn.2d
91, 113, 26 P.3d 257 (2001) (emotional distress damages available for medical
malpractice); Whaley v. State, 90 Wn. App. 658, 674, 956 P.2d 1100 (1998)
(emotional distress damages for breach of professional duty by a day care
provider)). These situations reveal a common thread justifying the imposition of
liability for emotional distress: a special relationship based on trust. When such a
special relationship exists,
-2-
Schmidt v. Coogan, et ux., et al., 88460-9 (Stephens, J. Dissent)
[i]t is not merely economic, and a reasonable person standing in the
defendant's shoes would easily foresee that its breach is likely to cause
significant emotional distress. It will support emotional distress damages
without proof of physical impact or objective symptomatology.
Price v. State, 114 Wn. App. 65, 73, 57 P.3d 639 (2002). In Price the court held
that emotional distress damages were available against an agency that negligently
facilitated a wrongful adoption. We should recognize that the attorney-client
relationship is similarly a special relationship.
Instead, the lead opinion places a new restriction on plaintiffs alleging legal
malpractice: they must prove the attorney's negligence was "particularly
egregious." Lead opinion at 9. "Egregious" means "[e]xtremely or remarkably
bad." BLACK'S LAW DICTIONARY 629 (10th ed. 2014). The lead opinion provides
no additional guidance on how plaintiffs might show this. Yet, the lead opinion
holds as a matter of law that Coogan's actions were not egregious. Lead opinion at
14-15. Coogan failed to file a personal injury lawsuit against the correct defendant
before the statute of limitations ran. Schmidt repeatedly inquired about the case,
and Coogan ridiculed her for not trusting him. These actions look "remarkably
bad" to me.
The lead opinion also characterizes Schmidt's harm as primarily pecuniary,
though her testimony at trial suggested that her personal injury has materially
affected every aspect of her life. Id. at 15-16; Pet'r's Suppl. Br. App. at 22-36.
The authorities the lead opinion cites to draw a dividing line between negligence
that foreseeably causes emotional distress and negligence that produces only
economic losses do not support cutting off Schmidt's emotional distress damages.
-3-
Schmidt v. Coogan, et ux., et al., 88460-9 (Stephens, J. Dissent)
Lead opinion at 12-13 (citing Vincent v. DeVries, 2013 VT 34, 193 Vt. 574, 72
A.3d 886, 894-95 (2013); RESTATEMENT (THIRD) OF THE LAW GOVERNING
LAWYERS § 53 cmt. g (1998)). Rather, they speak to commercial transactions or
purely pecuniary losses. A personal injury involves much more. As the Court of
Appeals recognized in Price, emotional distress damages are appropriate when
negligence occurs in the context of a relationship preexisting the defendant's duty,
i.e., within a special relationship. Price, 114 Wn. App. at 71.
There is a significant difference between the relationship of a tortfeasor and
a bystander and between an attorney and a client. While a negligent driver might
.
not foresee that his negligent driving will cause emotional distress to a stranger, an
attorney handling a personal injury case can foresee that negligent performance
might cause emotional distress to the client. Our NIED rule anticipates the
tortfeasor/bystander scenario, and applies in the particular situation where a
plaintiff "observ[es] an injured relative at the scene of an accident after its
occurrence and before there is substantial change in the relative's condition or
location." Hegel v. McMahon, 136 Wn.2d 122, 132, 960 P.2d 424 (1998). I do not
see why the lead opinion chose to analogize this situation to the present case,
where an attorney, who owes specified fiduciary duties to a client, violates those
duties and causes both financial and emotional harm to the client.
A far better analogy is to torts involving special relationships. Consider, for
example, insurance bad faith, which involves a quasi-fiduciary relationship. "An
action for bad faith handling of an insurance claim sounds in tort." Safeco Ins. Co.
-4-
Schmidt v. Coogan, et ux., et al., 88460-9 (Stephens, J. Dissent)
of Am. v. Butler, 118 Wn.2d 383, 389, 823 P.2d 499 (1992). "Claims of insurer
bad faith 'are analyzed applying the same principles as any other tort: duty, breach
of that duty, and damages proximately caused by any breach of duty."' Mut. of
Enumclaw Ins. Co. v. Dan Paulson Constr., Inc., 161 Wn.2d 903, 916, 169 PJd 1
(2007) (quoting Smith v. Safeco Ins. Co., 150 Wn.2d 478, 485, 78 P.3d 1274(2003)). Emotional distress damages are recognized in this context based on the
relationship of trust between the insurer and insured. As the Colorado Supreme
Court explained:
[I]nsurance contracts are unlike ordinary bilateral contracts. First, the
motivation for entering into an insurance contract is different. Insureds
enter into insurance contracts for the financial security obtained by
protecting themselves from unforeseen calamities and for peace of mind,
rather than to secure commercial advantage. Second, there is a disparity of
bargaining power between the insurer and the insured; because the insured
cannot obtain materially different coverage elsewhere, insurance policies
are generally not the result of bargaining.
Goodson v. Am. Standard Ins. Co. of Wis., 89 P.3d 409, 414 (Colo. 2004) (citations
omitted); see also Miller v. Kenny, 180 Wn. App. 722, 802, 325 P.3d 278 (2014)
(explaining that tort damages for insurance bad faith in Washington include
emotional distress damages).
Many of the same characteristics are equally prominent in the attorney client
relationship. People turn to attorneys to help them recover after calamities occur.
People hire attorneys for the peace of mind that comes from having the assistance
of a professional, rather than facing a lawsuit alone. Attorneys inherently have
more bargaining power than their clients when entering into a contract for service,
-5-
Schmidt v. Coogan, et ux., eta!., 88460-9 (Stephens, J. Dissent)
if for no other reason than such contracts are legal documents; laypeople hire
attorneys primarily because they need assistance to understand the legal
consequences of events and documents.
These considerations appear in this case as well. Schmidt suffered
significant injuries from an unexpected slip and fall at a grocery store. Lead
opinion at 1; Pet'r's Suppl. Br. App. at 12-34. These injuries interfered with her
relationships and work. Pet'r's Suppl. Br. App. at 12-34. She sought legal counsel
because she needed professional assistance in order to bring her claims. Id. at 40-
41. Coogan prepared a contingency fee arrangement without any bargaining with
Schmidt. Id. at 39-40. There is no evidence in the record to suggest that Schmidt
had a realistic chance of finding a substantially different arrangement with another
attorney. See Goodson, 89 P.3d 409. And, Schmidt continued relying on Coogan
because she trusted him. Pet'r's Suppl. Br. App. at 55. Certainly the relationship
between attorney and client here was no less one of trust than the insurer/insured
relationship. The lead opinion offers no justification for cutting off the emotional
distress damages in this true fiduciary relationship when an insured would be
entitled to pursue such damages against a negligent insurer in a quasi-fiduciary
relationship.
In the end, the lead opinion's rule rests on the wrong analogy, that ofNIED
claims between strangers. It reflects nothing more than a judicial determination
that emotional distress damages are unforeseeable in this context. The proffered
rationale for erecting a barrier to recovery is the lead opinion's conclusion that
-6-
Schmidt v. Coogan, et ux., eta!., 88460-9 (Stephens, J. Dissent)
Schmidt suffered merely a "pecuniary loss" and that the subject matter of her
personal injury suit "was not particularly sensitive" because "she did not lose her
freedom and Coogan's actions were not egregious." Lead opinion at 14. Given
that other classes of fiduciaries and quasi-fiduciaries do not receive the special
protections that attorneys do under the lead opinion's rule, I find this unsatisfying.
The special relationship between attorneys and their clients should not shield
attorneys whose malpractice foreseeably causes emotional distress. Rather, the
special relationship should allow for greater recovery because of the greater harm
that a negligent attorney may inflict upon a trusting client. I respectfully dissent.
-7-
Schmidt v. Coogan, et ux., et al., 88460-9 (Stephens, J. Dissent)
'-~42
~«{7
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