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Schmidt v. Coogan

The Washington Supreme Court issued a divided opinion in Schmidt v. Coogan, 2014 Wash. LEXIS 838, which will significantly impact future legal malpractice cases in Washington. The long-running and convoluted case presented two questions of first impression: (1) whether the elements of legal malpractice include the collectability of an underlying judgment; and (2) whether emotional distress damages are available in legal malpractice cases. Answering the first question, the Court adopted the growing trend to make the uncollectability of a underlying judgment an affirmative defense that negligent attorneys must plead and prove. Answering the second question, the Court held that the facts of the case did not support an award of emotional distress damages.

Teresa Schmidt slipped and fell while visiting a grocery store in 1995. She retained attorney Timothy Coogan to represent her in a claim against the store. Two days before the statute of limitations expired, Coogan filed a complaint naming the wrong defendant. He subsequently filed two amended complaints, but the trial court dismissed the case as time-barred. Schmidt filed a legal malpractice claim against Coogan, asserting claims for negligence and breach of contract. The case went to trial in November 2003 and the jury returned a verdict in favor of Schmidt. The trial court granted a new trial on damages only, finding Coogan had been denied a fair trial. The Court of Appeals affirmed the trial court’s order granting a new trial on damages.

In March 2010, Schmidt moved for leave to amend her complaint to add a claim for outrage/reckless infliction of emotional distress. The trial court denied the motion. During the second trial, Coogan challenged the availability of general damages in legal malpractice cases. After Schmidt rested her case in the damages-only trial, Coogan moved for judgment as a matter of law. The trial court denied the motion and the jury returned a verdict in favor of Schmidt in excess of $80k. Coogan appealed, arguing the trial court should have granted his motion. Schmidt cross-appealed, arguing general damages are available in attorney malpractice claims and that the trial court erred in denying her motion to amend. The Court of Appeals concluded that collectability was an essential component of damages that Schmidt failed to prove and reversed. The Supreme Court accepted review and reversed the Court of Appeals.

The Supreme Court first held that the burden of establishing collectability is not on the plaintiff. Rather, uncollectability is an affirmative defense that must be pled and proved by the defendant to mitigate or eliminate damages. The Court determined uncollectability may be a relevant inquiry because it relates to proximate cause and damages elements of legal malpractice. Although the majority of jurisdictions have traditionally placed the burden of proving collectability on the plaintiff, the Court noted the burden has shifted in recent years to reflect the important fiduciary relationship between client and attorney. The Court held that where Coogan failed to argue in either of the two trials that a judgment against the grocery store would be uncollectable or that collectability was an affirmative defense, the trial court did not err in denying his motion because Schmidt presented sufficient evidence of damages.

The Supreme Court then held that a plaintiff in a legal malpractice case may recover emotional distress damages when significant emotional distress is foreseeable from the sensitive or personal nature of the representation or when the attorney’s conduct is particularly egregious or intentional. In reaching its decision, the Court looked to the availability of emotional distress damages under other Washington claims and considered the rules developed in other jurisdictions. It then concluded the facts in this particular case did not warrant damages for emotional distress or an award of attorney fees.

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