Supreme Court On Appeal from Superior Court, Franklin Unit, Civil Division Robert A. Mello, J.
Robert F. O’Neill and Navah C. Spero of Gravel & Shea PC, Burlington, for Plaintiff-Appellee.
Thomas F. Heilmann and William L. Gagnon of Heilmann, Ekman & Associates, Inc., Burlington, for Defendant-Appellant.
PRESENT: Reiber, C.J., Dooley, Skoglund, Burgess and Robinson, JJ.
¶ 1. This case involves a jury award of emotional distress and economic damages in a legal malpractice action. Defendant challenges the damages award on the grounds that emotional distress damages are not available in a legal malpractice case and that the award of economic damages equal to the amount plaintiff paid to settle the underlying case was improper because plaintiff failed to establish that the underlying settlement was reasonable. We reverse as to the award of emotional distress damages and affirm as to the economic damages award.
¶ 2. The facts of the underlying case that gave rise to this malpractice action are summarized in our three opinions involving that case. See Wetherby v. Vincent, No. 2007-276 (Vt. Mar. 26, 2008) (unpub. mem.); Wetherby v. Vincent, No. 2005-417 (Vt. Oct. 3, 2006) (unpub. mem.); Wetherby v. Vincent, No. 2004-014 (Vt. Sept. 1, 2004) (unpub. mem.) In May 2003, plaintiff Leland Vincent-then eighty-two-and his older sister signed a contract to sell their home for $52, 000 to buyers. Shortly before the scheduled closing, after plaintiff’s sister had died, plaintiff refused to go through with the sale. On July 31, 2003, buyers sued for specific performance on the contract. Defendant, attorney Douglas DeVries, represented plaintiff, the seller, who was the defendant in that suit and is now the plaintiff in this malpractice case against attorney DeVries.  Before filing any answer or counterclaim on plaintiff’s behalf, defendant DeVries filed a motion for summary judgment for plaintiff, arguing that the contract lacked specific terms and was unsupported by consideration. The day before the scheduled September 10, 2003 hearing on buyers’ attachment motion, the parties filed with the court a stipulation stating that the court could resolve the attachment issues as well as the merits on the basis of the parties’ summary judgment pleadings. Buyers filed a cross-motion for summary judgment arguing promissory estoppel, and defendant DeVries did not file a further response for plaintiff by the assigned deadline. The court granted summary judgment to buyers on October 3, 2003.
¶ 3. Defendant, on plaintiff’s behalf, subsequently filed an answer and a series of pleadings seeking relief from judgment and a denial of buyers’ summary judgment motion on the ground that plaintiff and his sister had been induced into signing the contract by buyers’ fraud and misrepresentation. In particular, plaintiff testified by affidavit that he was legally blind and that he signed the agreement only after buyers told him it was not an agreement to sell his property. The court ultimately reaffirmed its judgment for buyers on the ground that the parties’ stipulation authorizing the court to resolve the merits on the basis of the parties’ summary judgment pleadings precluded plaintiff from raising new legal issues at that stage. The court entered a judgment for specific performance for buyers and subsequently denied motions for relief from judgment filed on plaintiff’s behalf. This Court twice upheld the trial court’s rulings. See Wetherby v. Vincent, No. 2007-276 (Vt. Mar. 26, 2008) (unpub. mem.); Wetherby v. Vincent, No. 2004-014 (Vt. Sept. 1, 2004) (unpub. mem.).
¶ 4. In June 2008, on the eve of a hearing on buyers’ motion for the court to authorize a third party to execute a deed to transfer the property from Vincent to buyers, plaintiff, then represented by new counsel, entered into a settlement agreement with buyers that allowed him to keep his home. The agreement, which was contingent on approval by the superior court probate division because plaintiff was subject to a guardianship, required plaintiff to pay buyers $68, 000 plus $35, 000 “to reimburse [buyers] for [their] attorney’s fees and costs.” In exchange for these payments, the settlement provided that the superior court’s order requiring specific performance would be null and void.
¶ 5. Meanwhile, in May 2008, plaintiff brought this legal malpractice action against defendant, pointing to defendant’s failure to timely file an answer, affirmative defenses, or a counterclaim in the suit; defendant’s recommendation that plaintiff sign a stipulation that prevented plaintiff from raising defenses to buyers’ suit without informing him of the consequences; defendant’s failure to present appropriate defenses to the summary judgment motion; and defendant’s failure to inform plaintiff of filings and dispositive orders in the course of the litigation. The essence of plaintiff’s complaint is that defendant had notice of plaintiff’s limitations but failed to recognize and timely plead meritorious defenses to buyers’ specific performance action. Plaintiff also alleges that defendant committed malpractice in advising him not to accept a pre-suit settlement offer by the buyers that would have allowed him to rescind the contract to sell his house in exchange for $15, 000-considerably less than buyers ultimately required to allow plaintiff to keep his home. In his complaint against defendant, plaintiff sought “damages in an amount to be determined by the trier of fact together with costs and such other and further relief as the Court may deem fitting and proper.”
¶ 6. Defendant admitted to the facts underlying plaintiff’s claim that defendant breached a duty to plaintiff, and put to the jury the issues of causation and damages. That required plaintiff to conduct essentially a trial-within-a-trial to prove that if defendant had not represented plaintiff negligently in the litigation with the buyers, plaintiff would not have been ordered to convey his home to buyers in exchange for $52, 000. If plaintiff won on that issue, he could then prove the damages he suffered as a result of the breach.
¶ 7. In repeated motions before, during, and after trial, defendant strenuously argued that, as a matter of law, emotional distress damages are not available in a legal malpractice case such as this. Defendant also argued that because specific performance was the only remedy available under the contract plaintiff signed to sell his property to buyers, plaintiff was not at risk of a judgment for damages to buyers. Nor was plaintiff subject to any potential attorney’s fee award in connection with the judgment for specific performance that the court awarded to buyers. Given these facts, defendant argued, there was no evidence that it was reasonable for plaintiff to agree to a settlement requiring him to pay $103, 000 above and beyond the $52, 000 purchase price for the house that he forfeited by keeping the house. The settlement agreement was thus an improper basis for gauging plaintiff’s economic damages. Defendant filed motions for judgment as a matter of law on both of these issues, which the court denied.
¶ 8. The jury returned a verdict for plaintiff, awarding a total of $183, 000 in damages comprising $103, 000 in economic damages-representing what plaintiff paid to settle the underlying case and retain his home-and $80, 000 in emotional distress damages.
¶ 9. Defendant appeals, challenging the trial court’s denial of his motions for judgment as a matter of law on the issues of emotional distress and economic damages. We review a denial of a motion for judgment as a matter of law de novo, considering the evidence “in the light most favorable to the nonmoving party, excluding the effect of modifying evidence.” J.A. Morrissey, Inc. v. Smejkal, 2010 VT 66, ¶ 8, 188 Vt. 245, 6 A.3d 701. “Judgment as a matter of law is appropriate where there is no legally sufficient evidentiary basis for a reasonable jury to find for [the nonmoving] party on that issue. Thus, we will reverse the trial court's denial of a motion for judgment as a matter of law only where no evidence exists that fairly and reasonably supports the jury’s verdict.” Id. (quotations and citations omitted).
I. Emotional Distress Damages
¶ 10. On appeal, defendant reiterates his argument that, as a matter of law, emotional distress damages are not available in this legal malpractice case. We have never decided the question; 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 for legal malpractice. Fitzgerald v. Congleton, 155 Vt. 283, 292 n.7, 583 A.2d 595, 600 n.7 (1990). In Fitzgerald, we considered a legal malpractice claim against a lawyer who represented a mother in a case in which the State had alleged that her child was in need of supervision. As a result of the defendant lawyer’s negligent representation, the mother alleged, she lost custody of her child for a period of time. The mother filed her claim more than three years after discharging the lawyer, and the issue on appeal was whether the trial court erred by applying the three-year rather than the six-year statute of limitations and dismissing her legal malpractice claim. We concluded that to the extent that the mother sought damages for economic losses, her claim was governed by the six-year statute of limitations, but that her claim for damages for the emotional distress suffered as a result of defendant’s negligent representation was barred by the three-year statute of limitations. Id. at 293, 583 A.2d at 601. In arriving at the conclusion that emotional distress damages were injuries to the person subject to the three-year statute of limitations, we assumed without deciding that these damages were actually available in attorney malpractice, and we noted, “Absent physical contact, one may recover for negligently caused emotional distress only when the distress is accompanied by substantial bodily injury or sickness. Accordingly, one must show some physical effect of any claimed emotional injury-some bodily hurt-in order to prevail.” Id. (quotation omitted).
¶ 11. Our discussion in Fitzgerald reflected an assumption, at least for the purposes of our statute-of-limitations analysis, that the plaintiff could make a claim for emotional distress in connection with a malpractice action against her lawyer; but we did not expressly so hold, and did not define the contours or limitations of a claim for emotional distress damages in a legal malpractice case other than to state that notwithstanding the requirement of bodily hurt as a predicate to emotional distress damages, “we do not necessarily foreclose the possibility of allowing for emotional-distress damages absent physical manifestations under special circumstances where the nature of the tortious act guarantees the genuineness of the claim.” Id. at 292 n.7, 583 A.2d at 600, n.7.
¶ 12. In the limited number of cases before this Court regarding the availability of emotional distress damages for negligence in the absence of physical injury, we have reaffirmed this general rule. See Goodby v. Vetpharm, Inc., 2009 VT 52, ¶ 11, 186 Vt. 63, 974 A.2d 1269 (“We are not persuaded that a special exception to recover noneconomic damages for the loss of companion animals occasioned by negligence, damages not entirely distinct from human grief and anguish attending the negligent destruction of other personally important property, both sentient and nonsentient, should be undertaken outside of the legislative arena.”); Pearson v. Simmonds Precision Prods., Inc., 160 Vt. 168, 173-74, 624 A.2d 1134, 1137 (1993) (denying plaintiff recovery for emotional distress damages for employer’s negligent misrepresentation and negligent failure to disclose because only damages for ...