Chapter 33  Legal Malpractice

§ 33.1 Generally

The Case: Chapman v. Bearfield, 207 S.W.3d 736 (Tenn. 2006).

The Basic Facts: Plaintiffs retained Defendant attorney to represent them in a medical malpractice action after the death of a family member. Plaintiffs became dissatisfied with Defendant's representation, eventually hiring new counsel and bringing a legal malpractice action against Defendant. 207 S.W.3d 736, 738 (Tenn. 2006).

The Bottom Line:

• "In Spalding v. Davis, 674 S.W.2d 710 (Tenn. 1984), the Court noted that '[t]he settled general rule in most if not all [United States] jurisdictions is that an attorney . . . may be held liable to his client for damages resulting from his failure to exercise [the] ordinary care, skill, and diligence . . . which is commonly possessed and exercised by attorneys in practice in the jurisdiction.' Id. at 714 (emphasis added). ^FN1 Twice since 1984, in Lazy Seven Coal Sales, Inc. v. Stone & Hinds, P.C., 813 S.W.2d 400, 405-06 (Tenn. 1991), and in Sanjines v. Ortwein & Assocs., 984 S.W.2d 907, 910 (Tenn. 1998), we repeated with approval, though without further elaboration or analysis, the Spalding formulation. However, none of these cases presented a good opportunity to define the term 'jurisdiction.'

  FN1  In Meadows v. State, 849 S.W.2d 748, 752 (1993), we overruled Spalding on grounds unrelated to the issue in this case."

  Id. at 739.
• "Since 1984, various panels of the Court of Appeals have been inconsistent in defining the 'jurisdiction' referenced in Spalding. On the one hand, two reported opinions of the Court of Appeals have linked the legal malpractice standard of care with the medical malpractice standard, which is governed by a statutory locality rule. ^FN2 See Underwood v. Waterslides of Mid-Am., Inc., 823 S.W.2d 171, 183 (Tenn. Ct. App. 1991) (finding that a professional's familiarity with 'the local standard of care is the exception rather than the rule,' with the principal exceptions being law and medicine); Cleckner v. Dale, 719 S.W.2d 535, 539 (Tenn. Ct. App. 1986) ('a lawyer's standard of care does not differ markedly from that of physicians or other professionals') (internal quotation marks and citations omitted). On the other hand, one intermediate appellate court panel understood 'jurisdiction' to mean 'Tennessee.' See Wood v. Parker, 901 S.W.2d 374, 379 (Tenn. Ct. App. 1995) ('[w]e find nothing . . . to show that defendant . . . deviated from the accepted standard of care for attorneys in Tennessee ') (emphasis added). In this case, the Court of Appeals, in its opinion below, also adopted a statewide professional standard of care.

  FN2 In unpublished opinions, three other Court of Appeals panels have interpreted 'jurisdiction,' either explicitly or implicitly, to mean a political subdivision of the state. See Logan v. Winstead, No. 03A01-9902-CV-00057, 1999 WL 538208, at *2 (Tenn. Ct. App. July 14, 1999) (crediting a defendant attorney's service as a district attorney general in the Third Judicial District and as an attorney in the county in which the case was heard as evidence of his awareness of the standard of care in his 'jurisdiction'); Davis v. Simpson, No. 1295, 1990 WL 16893, at *2 (Tenn. Ct. App. Feb. 27, 1990) (noting that a defendant attorney's 'qualifications and experience in domestic litigation in Knox County' helped inform his awareness of the professional standard of care); Anthony v. Felknor & Cunningham, No. 146, 1988 Tenn. App. LEXIS 601, at *8-9 (Tenn. Ct. App. Sept. 30, 1988) (holding, without analysis, that Spalding meant 'an attorney has the duty to use the care and skill ordinarily used by attorneys in the same or similar locality under similar circumstances')."

  Id.
• "We agree with the instant decision of the Court of Appeals. A 'jurisdiction' is '[a] geographic area within which political or judicial authority may be exercised.' [ Black's Law Dictionary 855 (7th ed. 1999)]; see also [ Webster's Third New International Dictionary 1227 (1993)] (defining jurisdiction as 'the limits or territory within which any particular power may be exercised'). This Court allows an attorney with a Tennessee law license to practice anywhere in the state. See [ Tenn. R. Sup. Ct. 7 § 1.05 (2006)] ('All persons admitted to the bar of Tennessee are . . . (i) officers of the courts of Tennessee, eligible for admission to practice in any court in this State . . . and (ii) subject to the duties and standards imposed from time to time on attorneys in this State.'). An attorney practicing in Tennessee, then, must exercise the ordinary care, skill, and diligence commonly possessed and practiced by attorneys throughout the state. Indeed, while there may be local rules of practice within the various judicial districts of our State, there are no local standards of care. There is only one standard of care for attorneys practicing in Tennessee: a statewide standard. By extension, an expert who opines in a legal malpractice case about an attorney's adherence to our professional standard of care must be familiar with the statewide professional standard of care." Id. at 739-40.
• "Bearfield argues that the medical malpractice locality rule should be extended to legal malpractice actions. However, the locality rule for medical malpractice is a creature of statute. See Tenn. Code Ann. § 29-26-115(a)(1) (Supp. 2005) (standard of care relates to 'the community in which the defendant practices or in a similar community'). Neither this Court nor the legislature has created a similar standard for the legal profession, and we decline to create one here." Id. at 741.
• "We also believe the adoption of a statewide professional standard of care for attorneys who practice law in Tennessee is good policy. Three concerns motivate our conclusion. First, if a local professional standard of care prevailed, plaintiffs might have difficulty proving their legal malpractice cases because local attorneys might not be willing to speak against their colleagues. See [3 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 19.5 (5th ed. 2000)]. Second, local variations in the standard of care could create an inefficient and inequitable morass of professional standards of care, reducing the likelihood that some attorneys would face malpractice claims while increasing the likelihood for others. See id. Finally, the emergence of the internet as a primary tool for legal research undercuts historical transportation and communications arguments favoring local variations in the standard of care. See Russo v. Griffin, 510 A.2d 436, 438 (Vt. 1986). We join those states which have accepted these and other rationales for maintaining a statewide standard of professional care for their attorneys. See, e.g., Brett v. Berkowitz, 706 A.2d 509, 517 (Del. Super. Ct. 1998); Kellos v. Sawilowsky, 325 S.E.2d 757, 758 (Ga. 1985); Fenaille v. Coudert, 44 N.J.L. 286, 289 (N.J. 1882); Little v. Matthewson, 442 S.E.2d 567, 570 (N.C. Ct. App. 1994), aff'd 455 S.E.2d 160 (N.C. 1995); Feil v. Wishek, 193 N.W.2d 218, 225 (N.D. 1971); Smith v. Haynsworth, Marion, McKay & Geurard, 472 S.E.2d 612, 614 (S.C. 1954); Russo v. Griffin, 510 A.2d 436, 438 (Vt. 1986); Cook, Flanagan & Berst v. Clausing, 438 P.2d 865, 866 (Wash. 1975); Moore v. Lubnau, 855 P.2d 1245, 1250 (Wyo. 1993)." Id. at 740.

Other Sources of Note: Wilson v. Pickens, 196 S.W.3d 198 (Tenn. App. 2005) (in a legal malpractice case a person has been injured where (1) there has been the imposition of a liability against him; (2) where he has suffered the loss of a legal right, remedy or interest; or (3) he has been forced to take some action or otherwise suffer some actual inconvenience, such as incurring an expense, as a result of defendant's negligent act).

§ 33.2 Assignment of Legal Malpractice Claims

The Case: Can Do, Inc. Pension and Profit Sharing Plan and Successor Plans v. Manier, Herod, Hollabaugh and Smith, 922 S.W.2d 865 (Tenn. 1996).

The Basic Facts: Plaintiffs, corporation and trustee for the corporation's only shareholder, brought a legal malpractice action that had been assigned to one of the plaintiffs by a bankruptcy trustee against defendant law firm. 922 S.W.2d 865, 866 (Tenn. 1996).

The Bottom Line:

• "We agree with the Indiana Supreme Court that in resolving the question of assignability of legal malpractice actions, public policy considerations, rather than the traditional survivability test, should guide the analysis. Indeed, it is particularly appropriate for this Court to examine the public policy considerations that bear upon this question as we have exclusive original jurisdiction over matters relating to the practice of law. Petition of Burson, 909 S.W.2d 768 (Tenn. 1995). Likewise, we conclude that resolution of the question should not turn on whether a claim for legal malpractice is classified as a breach of contract claim or a personal injury claim. Wagener v. McDonald, 509 N.W.2d 188, 190 (Minn. App. 1993). Rather than straining to fit the claim into a category, we think the better approach is to resolve the question on public policy grounds." Id. at 868.
• "We generally agree with the Goodley court and conclude that assignment of legal malpractice actions would both endanger the attorney-client relationship and commercialize legal malpractice lawsuits. We are particularly concerned that the relationship between an attorney and client remain a fiduciary relationship of the very highest character. As a result of that relationship, the attorney owes the client not only the duty to use skill, prudence and diligence in the rendition of services, but also the duty to act loyally towards the client and to maintain client confidences. [ Tenn. Sup. Ct. R. 8, Canons 4 and 5]. These rules and their enforcement by this Court protect the public, and a violation may result in disciplinary action, as well as a legal malpractice claim. See also Wagener v. McDonald, 509 N.W.2d at 191. Allowing free assignment would be a disservice to the public by compromising both the attorney's duty of loyalty and the duty of confidentiality, resulting in a weakened attorney-client relationship." Id. at 869.
• "Moreover, assignment would compromise the duty of confidentiality. Whenever an attorney is sued by a client for legal malpractice, the attorney is permitted to reveal confidential client information reasonably necessary to establish a defense. [ Tenn. Sup. Ct. R. 8, DR 4-101(C)(4)]. So long as the client brings the malpractice claim, the client has the power to drop the lawsuit to avoid the disclosure of embarrassing confidential communications. Id. Once a legal malpractice claim is assigned, however, the client loses control of the litigation. The assignee controls the claim and may have little or no concern for the client's sensitivities. The client could thereby be harmed and such disclosures would foster disrespect for the attorney-client relationship in general. Picadilly, Inc. v. Raikos, 582 N.E.2d at 343-44; Wagener v. McDonald, 509 N.W.2d at 192." Id.
• "Finally, in our view, the commercialization of legal malpractice claims that would be fostered by allowing assignment is inimical to the legal profession and the administration of justice. 'Unlike any other commercial transaction, the client-lawyer relationship is structured to function within an adversarial legal system. In order to operate within this system, the relationship must do more than bind together a client and a lawyer. It must also work to repel attacks from legal adversaries. Those who are not privy to the relationship are often purposefully excluded because they are pursuing interests adverse to the client's interests.' Picadilly, Inc. v. Raikos, 582 N.E.2d at 343-44. Assignment would undermine the fundamental structure and function of the relationship and create a risk of collusion that must not be countenanced. City of Garland v. Booth, 895 S.W.2d at 770; Wagener v. McDonald, 509 N.W.2d at 191. Accordingly, we conclude that considerations of public policy prohibit the assignment of legal malpractice claims in Tennessee." Id.

§ 33.3 Burden of Criminal Defendant as Plaintiff

The Case: Gibson v. Trant, 58 S.W.3d 103 (Tenn. 2001).

The Basic Facts: Plaintiff hired Defendant attorneys to represent him when he was arrested and charged on drug-related charges. After his attorney's convinced him to plead guilty and received a lengthy sentence, Plaintiff filed a malpractice action against Defendants. Plaintiff subsequently, and unsuccessfully, attempted to have his plea vacated. 58 S.W.3d 103, 105-107 (Tenn. 2001). 58 S.W.3d at 104.

The Bottom Line:

• "We begin our analysis by listing the elements of a malpractice claim. In order to make out a prima facie legal malpractice claim, the plaintiff must show (1) that the accused attorney owed a duty to the plaintiff, (2) that the attorney breached that duty, (3) that the plaintiff suffered damages, (4) that the breach was the cause in fact of the plaintiff's damages, and (5) that the attorney's negligence was the proximate, or legal, cause of the plaintiff's damages. See Lazy Seven Coal Sales, Inc. v. Stone & Hinds, 813 S.W.2d 400, 403 (Tenn. 1991); Horton v. Hughes, 971 S.W.2d 957, 959 (Tenn. Ct. App. 1998). As with any tort claim, the plaintiff has the burden of proving each of these elements. One way of framing the question presented in this case is whether the tort of legal malpractice requires any additional elements if the plaintiff is a criminal defendant who is suing the lawyer who represented him in the criminal case. Specifically, must a plaintiff prove – in addition to the five basic elements – that he obtained relief in a final post-conviction judgment? For a number of compelling reasons, we hold that a plaintiff in what courts often call a 'criminal malpractice' action must prove this additional element." Id. at 108.
• "As we have already explained, a criminal defendant who believes he has been wrongly convicted should seek redress through the post-conviction process, not through a legal malpractice action. Collateral estoppel provides that once he does seek such relief, and it is denied, he cannot thereafter bring a civil claim based on the same allegations brought before the post-conviction court. It seems to us that the first conclusion leads ineluctably to the second. If the criminal courts are the mechanisms our society relies upon to provide relief to wrongly-convicted defendants, it should not be that civil courts may ignore the results of the post-conviction process once it has concluded." Id. at 115.
• "Based on principles of equity, tort law, post-conviction law, and public policy, we hold that a criminal defendant must obtain post-conviction relief in order to maintain a legal malpractice claim against his defense lawyer. Since Gibson did not prevail in his post-conviction proceeding, we affirm the decision of the Court of Appeals, which affirmed the trial court's grant of summary judgment in favor of Trant and Cunningham." Id. at 116.

§ 33.4 Effect of Violation of Ethics Rules

The Case: Lazy Seven Coal Sales, Inc. v. Stone & Hinds, P.C., 813 S.W.2d 400 (Tenn. 1991).

The Basic Facts: A law firm was sued by its client for malpractice. An expert claimed that the law firm violated the Code of Professional Responsibility and, indeed, that was the sole basis for the negligence claim. 813 S.W.2d at 402-03.

The Bottom Line:

• "Mehler insists that the Code of Professional Responsibility is the standard of care in a legal malpractice suit and that proof of a violation of the Code is sufficient basis for liability. Mehler's position is that "a violation of the Code itself when coupled with testimony regarding the deleterious results thereof, are and should be sufficient upon which to predicate an action for legal malpractice in Tennessee." Id. at 403 (emphasis added).
• "The initial inquiry, whether the Code is the standard of care in an action based on negligence, is answered by the Code itself. The purpose of the Code is set forth in the Preliminary Statement, which includes the following:

  The Code is designed to be adopted by appropriate agencies both as an inspirational guide to the members of the profession and as a basis for disciplinary action when the conduct of a lawyer falls below the required minimum standards stated in the Disciplinary Rules.
  
  . . . .
  
  The Disciplinary Rules, unlike the Ethical Considerations, are mandatory in character. The Disciplinary Rules state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action …. The Code makes no attempt to prescribe either disciplinary procedures or penalties for violation of a Disciplinary Rule, nor does it undertake to define standards for civil liability of lawyers for professional conduct "

  Id. at 403- 04 (emphasis added by Court ).
• "The Court of Appeals properly held in this case that the Code of Professional Responsibility is not designed to create a private cause of action for infraction of disciplinary rules but is designed to establish a remedy solely disciplinary in nature." Id. at 405.
• "Even though, as set forth above, the Code does not define standards for civil liability, the standards stated in the Code are not irrelevant in determining the standard of care in certain actions for malpractice. The Code may provide guidance in ascertaining lawyers' obligations to their clients under various circumstances, and conduct which violates the Code may also constitute a breach of the standard of care due a client. However, in a civil action charging malpractice, the standard of care is the particular duty owed the client under the circumstances of the representation, which may or may not be the standard contemplated by the Code." Id.
• "Since the Code does not set the standard of care upon which an action for negligence can be based, expert testimony that a lawyer violated provisions of the Code is not sufficient evidence to present an issue of fact for the jury. Such testimony is not evidence of the degree of knowledge, skill, prudence, and diligence which is commonly possessed and exercised by lawyers practicing with regard to the same subject matter in that jurisdiction. The testimony of Professor Freedman and Mr. Walker did not establish the proper standard of care required in an action for professional malpractice. The Court of Appeals properly granted the appellee's motion for directed verdict on this ground." Id. at 407.

Other Sources of Note: Roy v. Diamond, 16 S.W.3d 783 (Tenn. App. 1999) (it was not an abuse of discretion for the trial judge to admit into evidence in a legal malpractice case the findings of fact and judgment in a disciplinary proceeding involving the subject incident; evidence of violation of disciplinary rules may be evidence of a violation of the standard of care).

§ 33.5 Limitation of Actions

The Case: John Kohl & Co. P.C. v. Dearborn & Ewing, 977 S.W.2d 528 (Tenn. 1998).

The Basic Facts: Plaintiff sued lawyer and law firm alleging that it received improper advice concerning certain business matters. 977 S.W.2d at 530.

The Bottom Line:

• "The statute of limitations for legal malpractice is one year from the time the cause of action accrues. Tenn. Code Ann. § 28-3-104(a)(2). When the cause of action accrues is determined by applying the discovery rule. Under this rule, a cause of action accrues when the plaintiff knows or in the exercise of reasonable care and diligence should know that an injury has been sustained as a result of wrongful or tortious conduct by the defendant. Shadrick v. Coker, 963 S.W.2d 726, 733 (Tenn. 1998); Stanbury v. Bacardi, 953 S.W.2d 671, 677 (Tenn. 1997)." Id. at 532.
• "In legal malpractice cases, the discovery rule is composed of two distinct elements: (1) the plaintiff must suffer legally cognizable damage - an actual injury - as a result of the defendant's wrongful or negligent conduct, and (2) the plaintiff must have known or in the exercise of reasonable diligence should have known that this injury was caused by the defendant's wrongful or negligent conduct. Carvell v. Bottoms, 900 S.W.2d 23, 28-30 (Tenn. 1995). An actual injury occurs when there is the loss of a legal right, remedy or interest, or the imposition of a liability. See LaMure v. Peters, 924 P.2d 1379, 1382 (N.M. App. 1996). An actual injury may also take the form of the plaintiff being forced to take some action or otherwise suffer 'some actual inconvenience,' such as incurring an expense, as a result of the defendant's negligent or wrongful act. See State v. McClellan, 85 S.W. 267, 270 (Tenn. 1905) ('[A negligent act] may not inflict any immediate wrong on an individual, but . . . his right to a remedy . . . will [not] commence until he has suffered some actual inconvenience. . . . [I]t may be stated as an invariable rule that when the injury, however slight, is complete at the time of the act, the statutory period then commences, but, when the act is not legally injurious until certain consequences occur, the time commences to run from the consequential damage. . . .'). However, the injury element is not met if it is contingent upon a third party's actions or amounts to a mere possibility. See Caledonia Leasing v. Armstrong, Allen, [865 S.W.2d 10, 17 (Tenn. Ct. App. 1992)]." Id.
• "The knowledge component of the discovery rule may be established by evidence of actual or constructive knowledge of the injury. Carvell, 900 S.W.2d at 29. Accordingly, the statute of limitations begins to run when the plaintiff has actual knowledge of the injury as where, for example, the defendant admits to having committed malpractice or the plaintiff is informed by another attorney of the malpractice. Under the theory of constructive knowledge, however, the statute may begin to run at an earlier date - whenever the plaintiff becomes aware or reasonably should have become aware of facts sufficient to put a reasonable person on notice that an injury has been sustained as a result of the defendant's negligent or wrongful conduct. Id. We have stressed, however, that there is no requirement that the plaintiff actually know the specific type of legal claim he or she has, or that the injury constituted a breach of the appropriate legal standard. Shadrick, 963 S.W.2d at 733. Rather, 'the plaintiff is deemed to have discovered the right of action if he is aware of facts sufficient to put a reasonable person on notice that he has suffered an injury as a result of wrongful conduct.' Carvell, 900 S.W.2d at 29 (quoting Roe v. Jefferson, 875 S.W.2d 653, 657 (Tenn. 1994)). 'It is knowledge of facts sufficient to put a plaintiff on notice that an injury has been sustained which is crucial.' Stanbury, 953 S.W.2d at 678. A plaintiff may not, of course, delay filing suit until all the injurious effects or consequences of the alleged wrong are actually known to the plaintiff. Shadrick, 963 S.W.2d at 733; Wyatt v. A-Best Company, 910 S.W.2d 851, 855 (Tenn. 1995). Allowing suit to be filed once all the injurious effects and consequences are known would defeat the rationale for the existence of statutes of limitations, which is to avoid the uncertainties and burdens inherent in pursuing and defending stale claims. Wyatt, 910 S.W.2d at 855." Id. at 532-33.
• "Applying these principles to the record before us, we are persuaded that the lower courts correctly found that the one-year statute of limitations had expired on those claims related to the rollover and contribution of individual retirement account funds to the plaintiffs' profit sharing plan. The plaintiffs suffered an actual injury for purposes of the discovery rule when they began to incur expenses, or at least had to take some action, as a result of the defendants' negligent advice. This would have been on October 19, 1988, when their accountant had to respond to the IRS's request for information after it noted a conflict between the amount reported by the plaintiffs on their tax returns and the amounts reported by payers. The plaintiffs' argument to the contrary notwithstanding, the fact that the IRS had not taken any formal action against the Kohls as of that date, such as filing suit against them or issuing a deficiency notice, is largely irrelevant because, as noted above, it was unnecessary for the plaintiffs to have suffered all the injurious effects or consequences of the defendants' negligence in order for the statute to begin running. Shadrick , 963 S.W.2d at 733; Wyatt, 910 S.W.2d at 855; Sec. Bank & Trust Co. v. Fabricating Inc., 673 S.W.2d 860, 864-65 (Tenn. 1983)." Id. at 533.
• "Regarding the discovery rule's knowledge requirement, we conclude that attorney Kolarich's letter of October 24, 1988 to Dearborn & Ewing demonstrates that the plaintiffs knew or should have known there was a potential problem with the rollover and contribution of retirement funds into their profit sharing plan, and that Huffstutter had advised the plaintiffs on these matters. Again, it was unnecessary for the plaintiffs to have been aware that there had been a breach of the appropriate legal standard in order to be deemed to have discovered their right of action, but needed only to be aware of facts sufficient to put them on notice that an injury had been sustained as a result of Huffstutter's advice. Shadrick, 963 S.W.2d at 734; Carvell, 900 S.W.2d at 29. Kolarich's letter establishes that the plaintiffs had notice of a problem with the rollover and contribution of retirement funds into their profit sharing plan, especially since the letter was sent on the heels of the letter to the Kohls by the IRS." Id.

Other Sources of Note: Bradson Mercantile, Inc. v. Crabtree, 1 S.W.3d 648 (Tenn. Ct. App. 1999) (extensive discussion of the development of the discovery rule in legal malpractice cases).

§ 33.6 Punitive Damages

The Case: Metcalfe v. Waters, 970 S.W.2d 448 (Tenn. 1998).

The Basic Facts: Defendant lawyer was sued for multiple violations of the standard of care in his handling of a personal injury case. He did not tell his clients the truth about the status of their case, saying, for instance, that it was still pending when in fact it had been dismissed. 970 S.W.2d at 499.

The Bottom Line:

• "In the present case, the Court of Appeals reversed the jury's award of punitive damages, finding that Waters' malpractice amounted to negligence and not intentional, fraudulent, malicious, or reckless conduct. The court further stated that Waters' conduct in concealing and lying about his malpractice, although 'egregious,' was not contemporaneous with the underlying malpractice and was therefore, under Hodges, relevant only to the amount of, but not the liability for, punitive damages. We disagree with both conclusions." Id. at 451.
• "A majority of jurisdictions have recognized that punitive damages may be proper in a legal malpractice case. [Annotation, Allowance of Punitive Damages Against Attorney For Malpractice, 13 A.L.R. 4th 95 (1982 & Supp. 1997)]; see also Elliott v. Videan, 791 P.2d 639, 644 (Ariz. Ct. App. 1989) ('punitive damages have historically been awarded against attorneys for legal malpractice'). As in any case involving punitive damages, however, the plaintiff must prove that the defendant engaged in the requisite culpable conduct. The Alabama Supreme Court has said, for instance, that "some showing of fraudulent, malicious, willful, wanton, or reckless behavior or inaction must be made to support a claim for punitive damages in a legal malpractice case." Boros v. Baxley, 621 So.2d 240, 245 (Ala. 1993). Other courts have used similar terms in describing the culpable conduct for an award of punitive damages in a legal malpractice case." Id. (footnote omitted).
• "We join these jurisdictions in recognizing that punitive damages may be awarded in a legal malpractice claim, provided the culpable conduct established in Hodges, supra, i.e., intentional, fraudulent, malicious, or reckless, is proven by clear and convincing evidence. In this regard, we disagree with the intermediate court's conclusion that Waters' conduct was merely negligent. In addition to failing to prosecute the Metcalfes' claim, Waters' failed to keep them informed about the status of their lawsuit, failed to prepare when the case was set for trial, failed to re-file the case properly after taking a nonsuit, failed to pay the filing fee, failed to issue summons properly, failed to appear when the case was set a second time for trial, failed to file a notice of appeal, and failed to take any actions in an effort to preserve the Metcalfes' right of appeal. Given Waters' repeated transgressions and callous disregard for the rights of his clients, there was overwhelming evidence from which the jury could find, at a minimum, reckless conduct, that is, conduct constituting a gross deviation from the applicable standard of care. See, e.g., Patrick v. Ronald Williams P.A., 402 S.E.2d 452, 460 (N.C. Ct. App. 1991) ('repeated course of conduct which constituted a callous or intentional indifference to the plaintiff's rights' stated a claim for punitive damages)." Id. at 451-52.
• "We also disagree with the conclusion that punitive damages were improper because Waters' malpractice was not contemporaneous with his efforts to lie about and conceal his wrongdoing. Although the Court of Appeals correctly observed that the concealment of wrongdoing is listed among the factors in Hodges that may be considered in determining the amount of punitive damages, nothing in Hodges precludes the factor from being considered with regard to a defendant's liability for punitive damages. Indeed, other factors listed among those for consideration with respect to the amount of punitive damages are also necessarily considered with respect to the threshold liability issue; for instance, the 'nature and reprehensibility of the defendant's wrongdoing.' Hodges, 833 S.W.2d at 901. A close reading of Hodges, in fact, indicates that only evidence of a defendant's net worth or financial condition is deemed inadmissible in determining a defendant's liability for punitive damages. Id. at 901-902." Id.
• "Finally, we believe that limiting consideration of a defendant's efforts to conceal his or her wrongdoing is inconsistent with the purpose of punitive damages: to punish egregious acts and deter others from committing the same or similar acts. As other courts have recognized, an attorney's concealment of wrongdoing and/or misrepresentations affecting the client's case relate directly to the punitive damages issue. See, e.g., Houston v. Surrett, 474 S.E.2d 39, 41 (Ga. Ct. App. 1996) ('an attorney's concealment and misrepresentation of matters affecting his client's case will give rise to a claim for punitive damages.'); Asphalt Engineers, Inc. v. Galusha, 770 P.2d 1180 (Ariz. Ct. App. 1989) ('the record also supports an inference that [the attorney] attempted to cover up his misconduct.'). In sum, the harm resulting from the original wrongdoing, as in the present case, may be exacerbated by intentional, fraudulent, malicious, or reckless efforts that prevent the plaintiff from taking immediate corrective action." Id.

Other Sources of Note: Roy v. Diamond, 16 S.W.3d 783 (Tenn. Ct. App. 1999) (punitive damages award affirmed against lawyer for malpractice in handling an estate); Jessup v. Tague, NO. E2002-02058-COA-R3CV, 2004 WL 2709203 (Tenn. Ct. App. Nov 29, 2004) (punitive damages not warranted in case arising out of family law matter).

§ 33.7 Recoverability of Attorney's Fees

The Case: John Kohl & Co. P.C. v. Dearborn & Ewing, 977 S.W.2d 528 (Tenn. 1998).

The Basic Facts: Plaintiff sued lawyer and law firm alleging that it received improper advice concerning certain business matters. 977 S.W.2d at 430.

The Bottom Line:

• "Turning to the issue of legal fees, we note that there are three categories of attorney's fees that may constitute damages resulting from legal malpractice: (1) 'initial fees' a plaintiff pays or agrees to pay an attorney for legal services that were negligently performed, (2) 'corrective fees' incurred by the plaintiff for work performed to correct the problem caused by the negligent lawyer, and (3) 'litigation fees,' which are legal fees paid by the plaintiff to prosecute the malpractice action against the offending lawyer. The trial court in this case correctly held that corrective fees were recoverable, and this ruling was not appealed. The trial court's ruling that initial fees were not recoverable was appealed, and the Court of Appeals properly reversed. Both lower courts agreed that the plaintiffs could not recover their legal fees in prosecuting the instant malpractice action. Relying upon Foster v. Duggin, 695 S.W.2d 526 (Tenn. 1985), the plaintiffs contend that this was error. They claim that attorney's fees should be assessed as part of their damages." Id. at 534.
• "In Foster, the plaintiffs retained the defendant as their attorney on a contingency fee basis to represent them in a personal injury action. The attorney failed to timely file the complaint, and the plaintiffs lost their claim. In the subsequent malpractice action against the attorney, the attorney sought to reduce the amount of the judgment against him by the amount of the fee he would have earned had he successfully prosecuted the original case. Thus, the issue before us in Foster was 'whether the defendant, an attorney liable for malpractice, is entitled to have the judgment against him reduced by the amount of the legal fee he contracted to receive for litigation he negligently conducted.' Foster, 695 S.W.2d at 526. We held that the attorney should be denied any credit for the contingency fee he would have received had he obtained a judgment for his clients. Id. at 527. Thus, the plaintiffs in Foster recovered initial fees in their malpractice suit. We made it clear that we were not awarding the plaintiffs their attorney's fees incurred in pursuing their malpractice claim. Id. at 527. Accordingly, the plaintiffs' reliance upon Foster for the notion that they are entitled to their litigation fees is misplaced." Id.
• "Although it is true that there is some authority for the proposition that a negligent attorney is responsible for the reasonable legal expenses incurred by a former client in prosecuting a legal malpractice action, see Bailey v. Pocaro & Pocaro, 701 A.2d 916, 919 (N.J. App. 1997), most jurisdictions that have considered the issue have adhered to the well-established American rule, which provides that attorney's fees may not be awarded to the prevailing party absent statutory authorization or an agreement between the parties so providing. See, e.g., Olson v. Fraase, 421 N.W.2d 820, 828-29 (N.D. 1988); Began v. Dixon, 547 A.2d 620, 624-25 (Del. Super. Ct. 1988); Whitney v. Buttrick, 376 N.W.2d 274, 281 (Minn. App. 1985); Stinson v. Feminist Women's Health Center, 416 So.2d 1183, 1185 (Fla. App. 1982); Sorenson v. Fio Rito, 413 N.E.2d 47, 51-53 (Ill. App. 1980). Tennessee courts have long adhered to the American rule, concluding that an award of attorney's fees as part of the prevailing party's damages is contrary to public policy. See, e.g., Pullman Standard v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985); Gray v. Boyle Inv. Co., [803 S.W.2d 678, 684 (Tenn. Ct. App. 1990)]; John J. Heirigs Constr. Co. v. Exide, [709 S.W.2d 604, 609 (Tenn. Ct. App. 1986)]; Pinney v. Tarpley, [686 S.W.2d 574, 581 (Tenn. Ct. App. 1984)]; Goings v. Aetna Casualty & Sur. Co., [491 S.W.2d 847, 848 (Tenn. Ct. App. 1972)]; Raskind v. Raskind, [325 S.W.2d 617, 625 (Tenn. Ct. App. 1959)]. We are not persuaded that legal malpractice claims should be made an exception to the rule. Without an agreement between the parties or a controlling statute, attorney's fees in legal malpractice suits, as in other litigation, may not be awarded. Accordingly, the lower courts properly declined to award the plaintiffs their legal fees incurred as a result of prosecuting this action." Id. at 534-35.

§ 33.8 Stay of Litigation Pending Plaintiff's Release From Jail

The Case: Logan v. Winstead, 23 S.W.3d 297 (Tenn. 2000).

The Basic Facts: Plaintiff was inmate convicted on drug-related charges. Plaintiff brought a malpractice suit against his defense attorney after his conviction and sought a stay of the proceedings while he served his sentence. 23 S.W.3d at 299-300.

The Bottom Line:

• "We granted review to determine under what circumstances an incarcerated plaintiff is entitled to have a civil action held in abeyance until he or she is released from custody." Id. at 299.
• "Instead, we hold that the decision of whether or not to stay civil proceedings for a prisoner is left to the discretion of the trial court. Acting on a case-by-case basis, the trial court must weigh the competing interests of the inmate's ability to present proof and the burden on the judicial system and the defendant in continuing the action. In reviewing a trial court's ruling on a motion for abeyance, appellate courts should employ an abuse of discretion standard of review. See Sanjines v. Ortwein, 984 S.W.2d at 909." Id. at 302.
• "One of the main factors to be considered by the trial court in considering a motion for abeyance is whether the inmate will be released from prison and able to appear in court within a reasonable amount of time from the filing of the suit. This determination will unmistakably vary from one case to the next. Besides the length of the prisoner's remaining sentence, other countervailing interests should be considered by the court, including the burden on the court in maintaining a docket on which such claims will remain for an extended period, and the inconvenience and impracticability of litigating a suit several years after its filing. Not only will prisoners have a more difficult time presenting proof if their cases are held in abeyance, but defendants have a right to have claims against them timely adjudicated. The longer a suit is held in abeyance, the more difficult it will be to try on its merits. Witnesses may move or pass away, memories will fade, and proof will become harder to obtain. It is in everyone's best interest - the court's, plaintiff's, and defendant's - to require the incarcerated litigant's suit to proceed, when reasonable under the circumstances. However we hasten to add that when a trial court denies a prisoner's request for an abeyance, it should, within its discretion, afford the prisoner sufficient time for filing briefs and motions and for conducting discovery. This is especially true when inmates are proceeding pro se. Trial courts should waive the time requirements of the Rules of Civil Procedure and set reasonable time restrictions in such instances.
  
  Many suits can be adjudicated on the pleadings. Motions to dismiss, motions for summary judgment, and other such pre-trial matters can be litigated by an inmate in custody. We recognize, as Mr. Logan points out, that a prisoner filing or rebutting a motion for summary judgment supported by an expert affidavit might have a more difficult task in obtaining an expert affidavit than would a litigant who is not incarcerated. In such instances trial courts should grant additional time to prisoners to prepare relevant filings, as the circumstances of the case direct. Nonetheless, we are of the opinion that an incarcerated litigant, acting pro se or having the benefit of an attorney, can prepare and support pre-trial motions. With the discretion of the trial court in granting necessary extensions of time, prisoners should be able to proceed in accordance with the Rules of Civil Procedure.
  
  Moreover, requiring incarcerated plaintiffs to prosecute civil claims will serve to eliminate the many frivolous actions by inmates that burden the court system. In order to spare defendants, potential witnesses and the courts the burden of having prisoners' civil actions held in abeyance for years, trial courts should be permitted to dispose of frivolous suits via pre-trial motions." Id. at 302-03.

Other Sources of Note: Bell v. Todd, 206 S.W.3d 86, 94 (Tenn. Ct. App. 2005) (holding that a standard similar to that which was applied in Logan to be employed to determine whether or not to grant Mr. Todd's motion to stay the civil proceedings pending the completion of his criminal trial).