From the Circuit Court of Montgomery County, Tennessee. The Honorable Joe C. Loser, Jr., Judge
The opinion of the court was delivered by: Highers
Betty Rey brought this legal malpractice action in the Circuit Court at Montgomery County against the defendant, John J. Hestle. The case was heard before a jury which returned a verdict in favor of the plaintiff for $38,000. The trial court subsequently granted the defendant's motion for a remittitur or in the alternative for a new trial and remitted the jury award so that the plaintiff would receive $15,000. The plaintiff has appealed from the trial court's order granting the remittitur.
In April of 1988, the plaintiff and Elizabeth Riley opened a day care business in Clarksville, Tennessee. In March of 1988, the plaintiff and Ms. Riley executed a promissory note with Dominion Bank of clarksville in the amount of $255,000, secured by plaintiff's personal residence, certain items of personal property, and the building in which the business was to operate. A short time after the day care business had begun, plaintiff discovered that Ms. Riley was stealing money from the business. The plaintiff, upon discovering this, retained the defendant to represent her in excluding Ms. Riley from the business. The parties agreed that the defendant was to do all acts necessary to get Ms. Riley out of the business. In this regard, the defendant drew a dissolution agreement through which the plaintiff was to obtain control of the day care business and also the defendant was to have Ms. Riley convey her interest in the real estate business property to the plaintiff by a quitclaim deed.
On May 5, 1988, Ms. Riley signed the dissolution agreement agreeing to convey her entire interest in the business to the plaintiff in exchange for $6,300. Ms. Riley was to have quitclaimed the property over to plaintiff before receiving the $6,300, however, the defendant allowed Ms. Riley to receive the funds without first having Ms. Riley execute a quitclaim deed. Ms. Riley did not subsequently sign the quitclaim deed but instead had her son sign the deed pursuant to a power of attorney.
In March of 1989, Dominion Bank advised the plaintiff that unless certain matters pertaining to the quitclaim deed were cleared up they would be unable to renew her loan. The Bank took the position that in order for the plaintiff to have clear title to the loan collateral, Ms. Riley needed personally to sign the quitclaim deed. The loan became due in March of 1989, and the Bank decided not to renew the loan with the plaintiff. In June of 1989, the Bank instituted foreclosure proceedings against the plaintiff to satisfy the note.
Prior to the foreclosure proceedings, the defendant instituted an action on behalf of the plaintiff in the Chancery Court at Montgomery County to have the plaintiff adJudged as the sole owner of the property which Ms. Rey was to quitclaim to the plaintiff pursuant to the dissolution agreement. On June 9, 1989, the Chancellor entered a decree granting the plaintiff a fee simple absolute in the day care property. This decree became final on July 9, 1989, and on July 12, 1989, a modification agreement and a new promissory note were executed between Dominion Bank and the plaintiff. The Bank terminated the foreclosure proceedings against the plaintiff upon the signing of the new agreement and note.
On August 2, 1989, the plaintiff filed a complaint in the Circuit Court at Montgomery County against the defendant claiming that he negligently failed to obtain the deed from Ms. Riley pursuant to the dissolution agreement At trial, the plaintiff attempted to recover damages for mental suffering and anguish as a result of the problems caused by the defendant's negligence, lost earnings from her business due to the fact that her attention was diverted from her business affairs while attempting to deal with the problems caused by the defendant's negligence, attorney's fees incurred in the foreclosure proceeding instituted by the Bank, additional interest and fees charged by the Bank on the renewed loan, damages as a result of a loss of credit rating due to the Bank's filing of a foreclosure proceeding, and damages caused by the failure of the defendant to require Ms. Riley to fulfill all of the terms of the dissolution agreement.
During the trial, the defendant stipulated as to liability. At the Conclusion of the plaintiff's proof, the trial court granted the defendant's motion for a directed verdict holding that the plaintiff was not entitled to recover damages for any mental or emotional injuries or lost business profits she may have suffered due to the defendant's negligence. The jury returned a verdict in favor of the plaintiff for $38,000. The trial court entered its final judgment on February 19, 1991. On February 25, 1991, the plaintiff filed a motion for a new trial, claiming that the trial court erred in directing the verdict on the issue of the availability of damages for mental distress and lost business profits. On February 15, 1991, the defendant filed a motion for a new trial or in the alternative for a remittitur claiming that the trial court erred by failing to grant his motion in limine regarding mental and emotional anguish and loss of business profits and by failing to instruct the jury that it had directed a verdict in favor of the defendant on the plaintiff's claim for damages for mental and emotional distress and loss of business profits. The trial court, in an order dated June 7, 1991, granted the defendant's motion for a new trial or in the alternative for a remittitur and ordered that there be a new trial on the issue of damages only unless, within fifteen days the plaintiff accept a remittitur of the verdict to $15,000.
The plaintiff accepted the trial court's remittitur under protest and has appealed the trial court's judgment to this Court pursuant to T.C.A. § 20-10-102(a). The plaintiff argues on appeal that the trial court erred by remitting the jury award because the amount of damages awarded by the jury is supported by the evidence admitted by the trial court as well as by evidence which was wrongfully excluded by the trial court when the trial court granted the defendant's motions for a directed verdict.
Our review of the trial court's decision to remit the jury's verdict is governed by T.C.A. § 20-10-102(6). Under that section, we are to use the standard of review provided for in Rule 13(d) of the Tennessee Rules of Appellate procedure applicable to decisions of the trial court sitting without a jury. T.R.A.P. Rule 13(d) provides that our review of findings of fact by the trial court is de novo upon the record of the trial court, accompanied by a presumption of correctness of the finding, unless the evidence preponderates otherwise.
In reviewing trial court decisions remitting a jury verdict, the role of the appellate courts is to determine whether the trial court's adjustments were justified, giving due credit to the jury's decision regarding the credibility of the witnesses and due deference to the trial court's prerogatives as thirteenth juror. Burlinson v. Rose, 701 S.W.2d 609, 611 (Tenn. 1985). The appellate courts customarily conduct a three-step review of a trial court's adjustment of a jury's damage award. First, we examine the reasons for the trial court's actions since adjustments are proper only when the trial court disagrees with the amount of the verdict. Second, we examine the amount of the suggested adjustment since adjustments that "totally destroy" the jury's verdict are impermissible. Third, we review the proof of damages to determine whether the evidence preponderates against the trial court's adjustments. Long v. Mattingly, 797 S.W.2d 889 (Tenn. App. 1990).
Applying this test to the instant case, we must first examine the reasons for the trial court's decision to grant the remittitur. In the trial court's memorandum and order granting the defendant's motion for a remittitur, the trial court states only that a remittitur is appropriate because the verdict is excessive. Thus, the trial court gives us no guidance as to why it believed that a remittitur was appropriate in this case. Therefore, we are unable to apply the first prong of the test from Long.
Applying the next step, we must determine whether the amount of the remittitur suggested by the trial court totally destroys the jury's verdict. The jury awarded the plaintiff $38,000 in compensatory damages, which the trial court remitted to $15,000. The trial court's remittitur leaves the plaintiff with approximately 40% of the amount of the verdict originally awarded by the jury. In light of the evidence presented by the plaintiff at trial as to the damages she suffered because of the plaintiff's negligence, ...