The Recoverability of Emotional-Distress Damages in Legal-Malpractice Cases
Pre-Miranda, Iowa aligned itself closer to a majority of jurisdictions that disallowed emotional-distress awards in professional-negligence actions. For example, New York has a general prohibition against allowing plaintiffs to recover damages for emotional distress in legal-malpractice cases. In the recent case, Dombrowski v. Bulson, 971 N.E.2d 338 (N.Y. 2012), the New York Court of Appeals rejected a claim for nonpecuniary damages where the attorney’s malpractice in a criminal matter resulted in a conviction. After the plaintiff’s motion to vacate his conviction was denied, he brought a writ of habeas corpus. The plaintiff urged that the defendant-attorney failed to investigate or present evidence concerning an allegedly meritorious defense and failed to appropriately defend him by offering a weak cross-examination of witnesses. An evidentiary hearing was held at which the defendant-attorney justified his decisions in defending the case. The court ultimately held against awarding nonpecuniary damages:
We see no compelling reason to depart from the established rule limiting recovery in legal malpractice actions to pecuniary damages. Allowing this type of recovery would have, at best, negative and, at worst, devastating consequences for the criminal justice system. Most significantly, such a ruling could have a chilling effect on the willingness of the already strapped defense bar to represent indigent accused. Further, it would put attorneys in the position of having an incentive not to participate in post-conviction efforts to overturn wrongful convictions. We therefore hold that plaintiff does not have a viable claim for damages and the complaint should be dismissed in its entirety.
Id. at 340–41.
Iowa courts were similarly reluctant to impose nonpecuniary damages, although the state’s supreme court had at least taken a non-categorical approach prior to Miranda in assessing emotional damages. See Lawrence v. Grinde, 534 N.W.2d 414 (Iowa 1995) (vacating emotional-distress damages against bankruptcy attorney whose negligent mistake led to plaintiff’s arrest and trial because attorney negligence was too removed from distress, but noting such damages could be allowed if the client suffered a social stigma or malpractice was of personal nature). Accordingly, most defense counsel in a legal-malpractice suit who are faced with a claim for emotional distress are likely to have such claims dismissed either because such damages are categorically not permitted or the subject matter of the representation is not appropriate.
Yet, numerous courts have permitted awards of emotional-distress damages when the purpose of the attorney-client consultation has a transparent emotionally charged component as the Miranda opinion makes clear. See Wagenmann v. Adams, 829 F.2d 196, 221–22 (1st Cir. 1987) (holding emotional-distress damages are available under Massachusetts law when attorney negligence results in the client being clearly and “forcibly deprived of his liberty”); Holliday v. Jones, 264 Cal. Rptr. 448, 455–56 (Cal. Ct. App. 1989) (holding emotional-distress damages were warranted when plaintiff had been wrongfully convicted of a crime due to attorney’s mistake); Person v. Behnke, 611 N.E.2d 1350, 1353 (Ill. App. Ct. 1993) (recognizing a claim for noneconomic damages resulting from a plaintiff’s loss of custody and visitation of his children rooted in an attorney’s oversight); McEvoy v. Helikson, 562 P.2d 540, 542, 544 (Or. 1977) (holding non-client plaintiff could obtain emotional-distress damages when attorney negligence surrounding divorce and child-custody proceedings resulted in client fleeing overseas with child). New Jersey, where the author practices, limits legal-malpractice damages to “recompensing the injured party for his economic loss” with the exception of a showing of “severe and demonstrable” harm. In Lawson v. Nugent, 702 F. Supp. 91 (D.N.J. 1988), the attorney’s negligent representation in a criminal matter resulted in nearly two years of extra additional prison time for the plaintiff. There, the court noted that emotional-distress damages were warranted because the malpractice resulted in a loss of the plaintiff’s freedom and that distress was a foreseeable result of the negligence, i.e., what some may term a “loss of liberty” exception.
Thus, it is clear that these jurisdictions that justify emotional-distress damages in legal-malpractice cases do so because of the (1) sensitive nature of the subject matter often in conjunction with (2) direct actions taken by the attorney that would raise the likelihood of causing emotional harm. It was upon this foundation that the Iowa Supreme Court considered Miranda.
Making the Case for Emotional Damages
In Miranda, Klever Miranda and Nancy Campoverde were an Ecuadorian family who entered the United States without documentation in the 1990s. Mr. Miranda eventually obtained legal authorization to work but later lost that status. He desired to obtain citizenship status to remain in the United States.
After Miranda eventually received a removal order, his attorney Michael Said advised him and Campoverde to return to Ecuador and have their adult son Cesar sponsor them for citizenship based on “extreme hardship.” Despite Said’s assurances that the plan had a “99%” chance of being effective, Cesar was not actually qualified to sponsor them. The pertinent law only allowed a parent or a spouse to sponsor a citizenship request based on hardship. Said claimed at trial that he knew that Cesar was not an appropriate sponsor but claimed he had previously had luck with this type of plan (a claim that he could not corroborate with any documentation). When Cesar became a citizen after his parents left the country, he promptly filed the forms Said advised were required to sponsor his parents. The sponsorship applications were denied. Additionally, because Miranda and Campoverde left the United States voluntarily, they were barred from reentry into the country for 10 years pursuant to federal statute. As the court noted in one of the greater understatements in the opinion, the family was “distraught.” Among other sources of grief, the plaintiffs had one other child under the age of 18 who was a U.S. citizen and who remained in the country.
Miranda and Campoverde filed a legal-malpractice lawsuit against Said. At trial, the jury found that Said was negligent and awarded the plaintiffs $12,500 in economic damages for the attorney fees paid. The district court did not permit the plaintiffs’ claim for emotional distress to go forward, holding that they had not satisfied the legal standard for emotional-distress claims in negligence cases. The district court also did not allow their claim for punitive damages to proceed, holding that there was no evidence of willful, wanton, or reckless conduct. The Iowa Court of Appeals reversed on the emotional-distress and punitive-damages claims, and Said sought further review.
The Iowa Supreme Court began by explaining that emotional-distress damages in legal-malpractice actions in the state had evolved over time so that the court could now consider whether the particular subject matter underlying the contractual arrangement was one in which emotional distress was foreseeable and a “particularly likely result.” But forseeability was not the end-all. The court noted that when parties have a special relationship involving duties of a personal nature, a breach of said duties could result in severe emotional distress provided the harm is not excessively removed from the attorney’s conduct. In other words, the court recognized emotional-distress damages as being available when the kind of interest at issue was of sufficient importance as a matter of policy to merit protection from emotional injury and there was a nexus between the attorney’s actions and the alleged harm.
The court held that an immigration attorney has this precise type of special relationship with his or her clients at least based on the facts involving these plaintiffs. The court recognized that immigration proceedings involve a personal interest that justifies the imposition of a different measure of damages. Said understood the emotional component of his representation, and his negligence and/or recklessness was “doomed” to cause the separation of the family. Adding to the justification for imposition of both liability and punitive damages was Said’s futile pursuit of a plan of action for his client that had no basis in law (the “99%” promise was clearly hyperbole). The court was clear pursuant to Iowa law that Said’s transgressions crossed into the realm of a “personal” subject matter, and thus his gross negligence juxtaposed with the plaintiffs’ grief warranted a consideration of emotional-distress damages by the jury.
Read conservatively, Miranda may only apply to legal-malpractice claims in immigration law and perhaps only in those cases where the gross recklessness of an attorney, a la the knowingly false promises made by Mr. Said, leads to the separation of family members. In a more liberal reading, the Miranda decision merely carves out a new fact pattern exemplifying how familial distress may warrant the recovery of such damages in a legal-malpractice action in Iowa. But Miranda is notable more for what it does not represent than what it does. Lawyers who negligently handle their clients’ business or financial matters will not be exposed to nonpecuniary damages. Clients are inevitably disappointed when their lawsuit fails. Miranda does nothing for a majority of these plaintiffs.
That Miranda will begin a new trend to allow for mental anguish in all types of legal-malpractice claims is an overreaction. As Miranda expressly states regarding the attorney-client relationship, “not all contracts are created equal.” The Miranda plaintiffs’ emotional heartache cannot be superimposed on the disappointment of a plaintiff who did not recover in a premises-liability lawsuit, for example. The Iowa Supreme Court merely reinforced, rather than reinvented, the principle that a totally illegitimate legal decision undertaken by an attorney coupled with emotional hardship (familial separation, death, or loss of freedom) warrants at least a conversation on emotional damages.
In that sense, the Miranda standard does not threaten the practice of law but merely reminds attorneys that those who follow the methods allegedly used by attorneys such as Michael Said should brace themselves for harsher (even punitive) penalties. Had Said followed a legitimate plan for his clients and still failed in his objective, Miranda would have shadowed its predecessor Lawrence, 534 N.W.2d 414. Said was not punished by the court for a good-faith mistake in judgment. It’s that he failed to exercise any reasonable judgment at all when the emotional stakes were so high that justified the court’s decision to diverge from Lawrence and its progeny.
And lest we forget that attorneys are supposed to provide a service to clients, let us remember the plight of Miranda and Campoverde when their attorney failed them. Said may have been more mendacious than ignorant in his representation of his clients. Said promised his clients a chance to stay as a family when he knew that no law existed that supported his plan. He never discussed the possibility of deportation with his clients. The plaintiffs were forced to return to their homeland, which may subject them to an increased likelihood of poverty, depression, grief, and possibly even persecution (Miranda had once filed an asylum application). Said was hired for the very purpose of assisting the plaintiffs in avoiding the harsh consequences, including emotional consequences, that were inevitable if they were not permitted to stay in the country and be with their children. The severe emotional impact on the plaintiffs in this context was hardly trivial or even speculative. Miranda does not undermine the practice of law but infuses it with some much-needed integrity in a field where many attorneys are groomed to focus on the ends and not the means and otherwise lack any accountability.
That means for now, Google’s auto-fill should certainly recommend “Iowa is famous for . . . making good law.”
Keywords: professional liability litigation, emotional distress, legal malpractice, pecuniary damages
Saleel V. Sabnis is an associate at Goldberg Segalla in Philadelphia, Pennsylvania.