Carolyn Bruce and husband, John David Bruce v. Robert Olive and Sandra G. Olive, Individually and D/B/A Olive and Olive, P.C.

IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT KNOXVILLE
FILED
_______________________________________________

CAROLYN BRUCE and husband, March 4, 1996
JOHN DAVID BRUCE,
Cecil Crowson, Jr.
Plaintiffs-Appellants, Appellate C ourt Clerk

Vs. C.A.No. 03A01-9509-CV-00310
Knox Circuit No. 3-278-94
ROBERT OLIVE AND SANDRA G.
OLIVE, Individually and d/b/a
Olive and Olive, P.C.,

Defendants-Appellees.
___________________________________________________________________________

FROM THE KNOX CIRCUIT COURT

THE HONORABLE WHEELER ROSENBALM, JUDGE

Lynn M. Lauderback of Kingsport
For Plaintiffs-Appellants

R. Franklin Norton, Geoffrey D. Kressin,
Norton & Luhn, P.C., of Knoxville
For Defendants-Appellees

REVERSED IN PART, AFFIRMED IN PART AND REMANDED

Opinion filed:

W. FRANK CRAWFORD,
PRESIDING JUDGE, W.S.

CONCUR:

BRUCE.OPN
ALAN E. HIGHERS, JUDGE

DAVID R. FARMER, JUDGE

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 This is a legal malpractice case. Plaintiffs, Carolyn Bruce, and husband,

John David Bruce, appeal from the order of the trial court granting summary

judgment to defendants, Robert Olive and Sandra G. Olive, individually and

d/b/a Olive & Olive, P.C..

Plaintiffs' complaint alleges that in June, 1989, Carolyn Bruce entered into

a contract with defendant, Robert S. Olive, of Olive & Olive, P.C., thereby

retaining defendants to represent her in a harassment and discrimination suit

(underlying litigation) against her employer, State Farm Mutual Automobile

Insurance Company. The contract provided that Ms. Bruce would pay Olive &

Olive $90.00 per hour for legal representation, and that she would be

responsible for expenses incurred. The contract was subsequently amended to

provide for a reduced hourly rate and a contingency fee to the attorneys.

The complaint avers that Olive filed a complaint on behalf of Ms. Bruce

in the Knox County Chancery Court, and that the case proceeded to trial. The

trial lasted thirty-six days and involved the introduction of over seven hundred

exhibits into evidence. At the conclusion of the trial, judgment was entered for

State Farm, and the costs were assessed against Ms. Bruce. Plaintiff avers that

she was advised that she would succeed on appeal, and on the advice of

defendants, the chancery court judgment was appealed to the Court of

Appeals. The complaint avers that plaintiff paid the defendants $20,320.00 to

purchase the forty-nine volume trial transcript in order to file the record on

appeal. The trial record was filed in the Court of Appeals on February 18, 1993,

and the Court of Appeals entered an order directing plaintiff-appellant to file

an abridged record with the appellant's brief on or before March 22, 1993. The

complaint further avers that the defendant attorneys failed to timely file the

abridged record and brief as required, but they sought and obtained two

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extensions of time within which to file the abridged record and brief.

Subsequently, in May, 1993, defendants filed with the Court of Appeals a third

motion for extension of time to file the record and brief. This third motion was

denied by order dated May 25, 1993. Subsequently, the appellee in the

underlying appeal moved to dismiss the case for failure to file the brief, and the

case was dismissed by order entered on November 1, 1993. Application for

Permission to Appeal to the Supreme Court was denied. Plaintiffs aver that

defendants were negligent and breached their contract with plaintiffs by failing

to timely file the brief and abridged record thereby causing the dismissal of the

appeal. Plaintiffs seek recovery of court costs and other expenses and legal

fees that were paid to the defendants. Plaintiffs also seek damages for pain,

suffering, aggravation of pre-existing medical condition, mental anguish, loss of

consortium, and punitive damages.

Defendants' answer denies the material allegations of the complaint,

denies that the defendants were negligent or that they breached any

contractual duty, and denies that negligence or a breach of any contractual

duty on their part caused any damages to plaintiff. The answer also alleges that

plaintiffs are barred from recovery, because the plaintiffs were fifty percent or

more at fault in causing any of their alleged losses, injuries, and damages.

Defendants filed a motion for summary judgment on the ground, inter

alia, that plaintiffs suffered no damages as a result of any alleged acts or

omissions on the part of defendants, because the appeal of the underlying

litigation would have been unsuccessful as a matter of law.

The plaintiffs responded to the motion for summary judgment with, inter

alia, the affidavit of John M. Foley, a practicing attorney in Knox County,

Tennessee. In his affidavit, Mr. Foley states that the defendants' failure to timely

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file the appellants' brief and the abridged record in the underlying litigation

constituted a deviation from the accepted standard of care for attorneys

practicing in Knox County. The Response to the Motion for Summary Judgment

also asserts that the very fact that the defendants stated in their motion for

summary judgment that the appeal in the underlying litigation would have

failed as a matter of law, proves that the defendant attorneys had knowledge

at the time the appeal was filed that the appeal was meritless. The plaintiffs'

response further asserts that there are genuine issues of material fact as to

whether the defendants acted negligently by failing to file the abridged record

and the appellant's brief.

The trial court granted the defendants' motion for summary judgment,

because plaintiffs failed to produce any evidence that the plaintiffs would have

been successful in their appeal of the underlying litigation. The court noted that

plaintiffs represented to the court that they cannot prove error in the underlying

litigation. The court held that without proof that the underlying appeal would

have been successful, the plaintiffs could not prove that they suffered any

damages as a result of the defendants' alleged negligence and therefore,

summary judgment was appropriate.

Plaintiffs have appealed and present two issues for review. As stated in

their brief, those issues are:

Whether the trial court erred in granting defendant's
motion for summary judgment in this case because
there are numerous genuine fact issues regarding
defendant's negligence and plaintiff's damages
suffered as a result of that neglect.

Whether the trial court erred in failing to apply the
doctrine of judicial estoppel in favor of plaintiffs to
justify overruling defendant's motion for summary
judgment.

A trial court should grant a motion for summary judgment only if the

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movant demonstrates that there are no genuine issues of material fact and that

the moving party is entitled to judgment as a matter of law. Tenn.R.Civ.P. 56.03;

Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993); Dunn v. Hackett, 833 S.W.2d 78, 80

(Tenn. App. 1992). The party moving for summary judgment bears the burden

of demonstrating that no genuine issue of material fact exists. Byrd, 847 S.W.2d

at 210. When a motion for summary judgment is made, the court must consider

the motion in the same manner as a motion for directed verdict made at the

close of the plaintiff's proof; that is, "the court must take the strongest legitimate

view of the evidence in favor of the nonmoving party, allow all reasonable

inferences in favor of that party, and discard all countervailing evidence." Id. at

210-11. In Byrd, the Tennessee Supreme Court stated:

Once it is shown by the moving party that there is no
genuine issue of material fact, the nonmoving party
must then demonstrate, by affidavits or discovery
materials, that there is a genuine, material fact dispute
to warrant a trial. [citations omitted]. In this regard,
Rule 56.05 provides that the nonmoving party cannot
simply rely upon his pleadings but must set forth
specific facts showing that there is a genuine issue of
material fact for trial.

Id. at 211. (emphasis in original).

The summary judgment process should only be used as a means of

concluding a case when there are no genuine issues of material fact, and the

case can be resolved on the legal issues alone. Id. at 210 (citing Bellamy v.

Federal Express Corp., 749 S.W.2d 31, 33 (Tenn. 1988)). Summary judgment is not

to be used as a substitute for a trial of genuine and material factual issues. Byrd,

847 S.W.2d at 210 (citing Blocker v. Regional Medical Ctr., 722 S.W.2d 660, 660-61

(Tenn. 1987)). Where a genuine dispute exists as to any material fact or as to the

conclusions to be drawn from those facts, a court must deny a motion for

summary judgment. Byrd, 847 S.W.2d at 211 (citing Dunn, 833 S.W.2d at 80).

6 BRUCE.OPN
 To recover in a legal malpractice suit, a plaintiff must show: (1) the

employment of an attorney, (2) neglect by the attorney of a reasonable duty,

and (3) damages resulting from such neglect. Sammons v. Rotroff, 653 S.W.2d

740, 745 (Tenn.App. 1983). "The burden of proving that damages resulted from

the negligence of an attorney . . . in connection with the prosecution or defense

of a suit rests upon the client and usually requires the client to demonstrate that,

but for the negligence complained of, the client would have been successful

in the prosecution or defense of the action in question." Gay & Taylor, Inc. v.

American Cas. Co. of Reading, PA, 381 S.W.2d 304, 306 (Tenn. App. 1963).

There is no dispute that defendants were employed to represent plaintiff,

Carolyn Bruce. John Foley's affidavit, at the very least, creates a genuine issue

of material fact as to whether defendants were guilty of negligence. The

remaining issue is whether damages resulted from such neglect. That is, whether

the defendants' failure to timely file the brief and abridged record caused the

plaintiffs to incur damages. Generally, the plaintiffs must demonstrate that the

appeal of the underlying litigation would have been successful, and that upon

trial after remand they would have obtained a recovery. See Commercial Truck

& Trailer Sales v. McCampbell, 580 S.W.2d 765, 770 (Tenn. 1979); Ables v. Lockett,

Slovis & Weaver, No. 03A01-9402-CV-0074, 1995 Tenn. App. Lexis 9 (Tenn. App.

W.S. January 10, 1995). The defendants' negligence must have been the factual

and proximate cause of the plaintiffs' damages. Gay & Taylor, Inc. v. American

Casualty Co. of Reading, PA, 381 S.W.2d 304, 306 (Tenn. App. 1963). In effect,

the plaintiffs bringing the malpractice action must prove a case within a case.

Once the defendants moved for summary judgment, the plaintiffs failed

to produce any evidence whatsoever which would indicate that the underlying

appeal would have been successful. On the contrary, the position of the

7 BRUCE.OPN
plaintiffs is that the underlying appeal would have in fact been unsuccessful.

At the hearing on the summary judgment motion, the plaintiffs specifically

stated that they were not complaining of any error by the chancellor in the

underlying trial, they were simply attempting to recover damages for the

defendants' negligence in failing to timely file the brief and record. In their brief

the plaintiffs also state that proving the underlying appeal would have been

successful would be an impossible burden, given the voluminous record.

Although plaintiffs do not seek the damages they sought to obtain in the

underlying litigation, they do seek recovery for the expenses incurred in the

aborted appeal, as well as damages for pain, suffering, mental anguish, and

punitive damages.

We first address the plaintiffs' tort claims for pain, suffering, mental

anguish, loss of consortium, and aggravation of a pre-existing medical

condition, all of which the plaintiffs allege were produced as a result of the

defendants' failure to prosecute the appeal. Historically, it has been the general

rule in Tennessee that a plaintiff is not entitled to damages where the

defendant's negligence causes mental anguish, without accompanying

physical injury or physical consequences, or without other independent basis for

tort liability. Laxton v. Orkin Exterminating Co., Inc. 639 S.W.2d 431, 433 (Tenn.

1982). Tennessee courts have recognized certain exceptions to the

manifestation of physical injury requirement. See Laxton, 639 S.W.2d. at 433-34.

The Laxton court noted that Tennessee courts have been extremely liberal in

allowing recovery for mental disturbance and have allowed recovery even in

cases where the injury was "slight." Id. at 433.

In Camper v. Minor, No. 03S07-9502-CV-00013 (Tenn. Jan. 29, 1996), our

Supreme Court, in abolishing the "physical injury rule" stated: "[W]e conclude

8 BRUCE.OPN
that the rule shall no longer be used to test the validity of a prima facie case of

negligent infliction of emotional distress." Id., slip op. at 20. The Court continued:

This negative conclusion logically raises its positive
counterpart: what is required to make out a prima
facie case? After considering the strengths and
weaknesses of the options used in other jurisdictions,
we conclude that these cases should be analyzed
under the general negligence approach discussed
above. In other words, the plaintiff must present
material evidence as to each of the five elements of
general negligence -- duty, breach of duty, injury or
loss, causation in fact, and proximate, or legal, cause
Kilpatrick v. Bryant, 868 S.W.2d 594, 498 (Tenn. 1993);
Bradshaw v. Daniel, 854 S.W.2d 865, 869 (Tenn. 1993) --
in order to avoid summary judgment. Furthermore, we
agree that in order to guard against trivial or
fraudulent actions, the law ought to provide a
recovery only for "serious" or "severe" emotional injury.
Burgess v. Superior Court (Gupta), 831 P.2d 1197, 1200
(Cal. 1992); St. Elizabeth Hosp. v. Garrard, 730 S.W.2d
649, 653 (Tx. 1987). A "serious" or "severe" emotional
injury occurs "where a reasonable person, normally
constituted, would be unable to adequately cope
with the mental stress engendered by the
circumstances of the case." Rodrigues v. State, 472
P.2d 509, 520 (Haw. 1970); Paugh v. Hanks, 451 N.E.2d
759, 765 (Ohio 1983); Plaisance v. Texaco, Inc., 937
F.2d 1004, 1010 (5th Cir. 1991); Prosser and Keeton on
the Law of Torts, § 54, at 364-65, n.60. Finally, we
conclude that the claimed injury or impairment must
be supported by expert medical or scientific proof.
See Leong v. Takasaki, 520 P.2d 758, 766-67 (Haw.
1974)("the plaintiff should be permitted to prove
medically the damages occasioned by his mental
responses to defendant's negligent act").

Id., slip op. at 20-21.

In the case at bar, plaintiffs submitted in opposition to the motion for

summary judgment, the affidavit of Dr. Michael L. Pool, a psychiatrist. Dr. Pool's

affidavit states that he commenced seeing Carolyn Bruce in March, 1989, that

her diagnosis was major depressive disorder, that she continues to suffer from this

disorder, and that she "showed dismay" upon losing the underlying case in the

chancery court. He states that "her dismay subsided to some extent after legal

9 BRUCE.OPN
counsel appealed the unfavorable decision . . . ." The affidavit states that Ms.

Bruce "was quite distraught after the denial of her appeal." Dr. Pool opines that

Ms. Bruce's medical condition deteriorated upon her learning of the dismissal of

her appeal in this Court and the Supreme Court, and that her previous medical

condition was aggravated. He further opined that the denial of her appeal was

personally devastating to her and caused her to endure mental suffering.

From this affidavit, it appears that Dr. Pool is testifying that the loss of the

underlying case in the trial court and the ultimate loss of the appeal was the

cause of the aggravation of Ms. Bruce's condition. This affidavit indicates that

if Ms. Bruce had lost the appeal after it was properly handled, she would have

been in the same mental condition; therefore, the attorneys' alleged

negligence in allowing the appeal to be dismissed was not the proximate cause

of Ms. Bruce's injuries. There is nothing to indicate that Ms. Bruce's "emotional

injuries" were caused by her attorneys' alleged negligence or that she would not

have suffered these injuries if the appellate court had heard the appeal and

affirmed the dismissal of the underlying litigation. The trial court properly

granted summary judgment on plaintiffs' claims for pain, suffering, mental

anguish, aggravation of a pre-existing medical condition, and loss of

consortium.

Plaintiffs' complaint also alleges a breach of contract. The attorney-client

relationship creates a contract that the attorney will prosecute a client's action

with reasonable skill and diligence. Hillhouse v. McDowell, 219 Tenn. 362, 410

S.W.2d 162 (1966). A lawyer is an agent of his client. "It is universally recognized

that an agent stands in a fiduciary relationship to his principal and is under a

duty to be careful, skillful, diligent and loyal in the performance of his principal's

business and that for a failure so to act he subjects himself to liability to his

10 BRUCE.OPN
principal for any damages naturally and proximately flowing from the breach

of duty." Gay & Taylor, Inc. v. American Cas. Co. of Reading, PA, 281 S.W.2d 304,

306 (Tenn. App. 1963).

In the case at bar, plaintiffs contracted with defendants for defendants

to obtain appellate review of the trial court's decision in the underlying litigation.

The plaintiffs did not get that review because of defendants' breach of the

contract. That is, defendants' promised to perform and in return the plaintiffs

monetarily compensated the defendants and incurred expense to furnish the

tools for defendants' performance (such as the transcript of the proceedings).

The fees paid and expenses incurred by the plaintiffs constitute damages

naturally flowing from the breach of the contract for appellate review.

We have found no Tennessee authority precisely on point, but in Foster v.

Duggins, 695 S.W.2d 526 (Tenn. 1985), our Supreme Court held that a judgment

obtained against an attorney for malpractice in failing to timely file a

negligence action was not required to be reduced by the contingent fee the

attorney would have received if he had obtained a recovery in the underlying

litigation. The Court stated:

[T]he plaintiffs have had to incur additional legal fees
to pursue this malpractice action, and they should not
be required to assume the burden of twice paying for
legal representation. By taking into account the legal
fees which plaintiffs have incurred in pursuing this
malpractice action we are not, as Mr. Duggin argues,
awarding the plaintiffs their attorney fees. The
additional fees necessary to pursue this action are in
the nature of incidental damages flowing from Mr.
Duggin's breach of the contract. See Winter v. Brown,
365 A.2d 381, 386 (D.C. App. 1976).

Id. at 527.

In the case at bar, the expenses incurred by Ms. Bruce to pursue the appeal in

the underlying case were damages flowing from a breach of the contract and

11 BRUCE.OPN
must be determined upon proper proof.

We next address plaintiffs' claim for punitive damages. It is well settled

that actual damages are a prerequisite to recovery of punitive damages.

Cullum & Maxey Camping Center, Inc. v. Adams, 640 S.W.2d 22 (Tenn. App.

1982). It is equally well settled that punitive damages are not recoverable in a

contract action. Johnson v. Woman's Hospital, 527 S.W.2d 133 (Tenn. App. 1975).

The only damages which the plaintiffs are entitled to in this action are damages

resulting from the defendants' breach of contract. The plaintiffs are not entitled

to any damages based upon their tort claims, therefore, they are not entitled to

any punitive damages against the defendants.

Finally we reach the plaintiffs' issue regarding judicial estoppel. The

plaintiffs argue that the defendants should be estopped from asserting that the

underlying appeal would have been unsuccessful, because the defendants, by

filing the Motion to Late File Brief and Abridged Transcript in this Court and an

Application for Permission to Appeal to the Supreme Court, represented that the

underlying appeal had merit and should not have been dismissed by this Court.

The plaintiffs argue that the defendants swore to a state of facts in a former

judicial proceeding (that is, that the appeal had merit), and that they are now

attempting to contradict that state of facts in a later judicial proceeding.

Plaintiffs assert that defendants should be estopped from asserting that the

underlying appeal would have failed as a matter of law.

Generally, a litigant is not allowed to take an inconsistent position in

judicial proceedings. Stearns Coal & Lumber Co. v. Jamestown Ry. Co., 141

Tenn. 203, 206 S.W. 334 (1918). In Stearns, the Court stated:

While the law of judicial estoppel is ordinarily applied
to one who has made oath to a state of facts in a
former judicial proceeding which in a later
proceeding he undertakes to contradict, yet it is

12 BRUCE.OPN
 frequently applied, where no oath is involved, to one
who undertakes to maintain inconsistent positions in a
judicial proceeding. Stamper v. Venable, 117 Tenn.,
557, 97 S.W., 812.

141 Tenn. at 206.

We have no Tennessee cases addressing the precise issue of whether an

attorney, in defending a malpractice action, may take a position inconsistent

with the position that he took on behalf of his client. However, a somewhat

analogous situation was involved in Carvell v. Bottoms, 900 S.W.2d 23 (Tenn.

1995). Carvell dealt with a statute of limitations question in a malpractice case

and addressed the question of when the cause of action for malpractice

accrued. Plaintiffs advanced the argument that to require the client to bring a

malpractice action against an attorney before the appeal in the underlying

case was concluded, would have the effect of forcing the client to take

inconsistent positions on the same issue in different lawsuits. Plaintiffs argued that

while they were defending a breach of warranty suit and arguing that their

attorney properly drafted a warranty deed, they should not have to, at the

same time, file suit against the attorney alleging malpractice due to negligent

drafting of the deed. The plaintiffs argued that they could not bring the

malpractice aciton until the conclusion of the underlying case, because they

would be judicially estopped from taking contrary positions on the same issue

in different lawsuits. Our Supreme Court, in answering this contention, stated:

At first blush, these contentions appear to be valid.
However, the policies undergirding judicial estoppel --
that of preventing a party from gaining an unfair
advantage by taking inconsistent positions on the
same issue in different lawsuits -- is manifestly absent
where a client seeks to defend its attorney's actions
against the claims of a plaintiff while simultaneously
protecting its own right to recover against the attorney
in the event that the client is held liable. Therefore, we
conclude that the judicial estoppel rule does not
apply in this situation.

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 Although we conclude that the rule is not
technically applicable, we nevertheless realize that
having to maintain inconsistent positions in different
lawsuits is somewhat anomalous.

900 S.W.2d at 30.

We believe the same principles should apply to an attorney defending his

actions in a malpractice case. We agree with the plaintiffs that by instituting the

appellate process, the defendant attorneys represented that the appeal had

merit. However, it should be noted that the attorneys made this representation

as advocates, not party litigants.

The order of the trial court granting summary judgment is reversed insofar

as it applies to the breach of contract action. The order is affirmed in all other

respects, and the case is remanded for further proceedings consistent with this

opinion. Costs of the appeal are assessed one-half to plaintiffs and one-half to

defendants.

____________________________________
W. FRANK CRAWFORD,
PRESIDING JUDGE, W.S.

CONCUR:

_________________________________
ALAN E. HIGHERS, JUDGE

________________________________
DAVID R. FARMER, JUDGE

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