Legal Malpractice Law Review : Professional Responsibility Case Summaries & Commentary : Bennett J. Wasserman : LegalMalpractice.com : Lawyer Malpractice & Legal Ethics

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Oliver v. Towns, 738 So.2d 798 (1999).

AL: Underlying personal injury action

Student Contributor: Farah Shahidpour

Facts: Client hired Attorney to represent her in a personal injury action after being involved in an automobile accident. She signed a contingency fee contract that provided for the Attorney to receive 40% of any settlement, in return for Attorney’s legal services. Attorney settled the case for $12,000. Client filed a legal malpractice action against Attorney alleging breach of contract, fraud, deceit, and misrepresentation. Attorney allegedly failed to inform Client of the settlement, cashed the settlement check without Client’s consent, and failed to transfer any of the settlement proceeds to Client. The trial court awarded Client $500,000 in compensatory damages and $1 million in punitive damages. Attorney made a motion that the judge recuse himself from the case and another motion for a thorough review of the damages and award for excessiveness. The trial court denied both motions. Attorney appeals.

Issue: Whether the trial court erred in refusing to review the question of excessiveness of the damages?

Ruling: Yes. Attorney properly challenged the amounts of compensatory and punitive damages. Under Ala. Code 1975 § 6-11-20, the court must address whether evidence supporting the punitive award is “clear and convincing.” The court has the duty “to require the trial courts to reflect in the record” the reasons for interfering with an award of damage, on the grounds of excessiveness, or refusing to do so. Hammond v. City of Gadsden, 492 So.2d 374 (Ala. 1986).

Lesson: The trial court must hold a hearing to determine whether a damages award is excessive, upon a timely motion including a request for a hearing on a claim that damages awards are excessive. On remand, the trial court will hold a hearing to consider whether the compensatory award is excessive, whether clear and convincing evidence supports a punitive award, and if so whether the punitive award is excessive.