Jackson v. Johnson

5 Cal. App. 4th 1350, 7 Cal. Rptr. 2d 482, 92 Daily Journal DAR 5825, 92 Cal. Daily Op. Serv. 3682, 1992 Cal. App. LEXIS 568

• Court: California Court of Appeal
• Decided: April 29, 1992
• Docket: B048506
• Status: Published

Opinions

Opinion

WOODS (Fred), J.

We hold that a legal malpractice complaint alleging only simple negligence and a “0 dollars” actual damages verdict cannot support an award of punitive damages.

Factual and Procedural Background

Kinsey Jackson (respondent) began working for Aireo Welding Products on June 1, 1976. He filled and tested gas cylinders. By 1982 he was a lead man earning $9.85 an hour. In April 1982 respondent was trying to acquire a class I driver’s license to transport hazardous materials. But on June 22, 1982, respondent was terminated by Aireo Welding Products and later that year the company “shut down.”

On about December 23, 1982, respondent’s application to Aireo Industry & Gases (Aireo) for a bulk liquid driver position, paying $12 an hour, was rejected.

On January 6, 1983, respondent filed a discrimination charge with the California Department of Fair Employment & Housing (F.E.H.A.) claiming Airco’s December 23, 1982, rejection of his job application was racially motivated.

On January 20, 1983, respondent withdrew his F.E.H.A. discrimination charge against Aireo.

Around February 1, 1983, respondent and Charles B. Johnson, appellant, met in appellant’s law office. They agreed to a retainer of $500.¹ Respondent gave appellant $200 in cash.

On November 22,1983, appellant filed on respondent’s behalf an employment discrimination complaint against Aireo. The complaint was based upon Airco’s December 23, 1982, rejection of respondent’s application for a bulk liquid driver position. Appellant made no effort to serve the complaint.

During the next three years the relationship between appellant and respondent consisted of an exchange of letters.² In them appellant demanded the $300 retainer balance and indicated he would do nothing until he received it. Respondent variously promised to pay the $300, denied $300 was owed, and demanded copies of his file.

On Saturday, December 13, 1986, respondent telephoned appellant and demanded to pick up his file the next day. On Sunday, December 14, 1986, appellant gave respondent his case file.

More than six months later, on May 19, 1987, appellant informed respondent that unless he proceeded with the action the presiding judge of the superior court would dismiss the case.

About a month and a half later, on July 9, 1987, the superior court dismissed respondent’s complaint against Aireo. (Code Civ. Proc., § 583.210.³)

On November 20, 1987, respondent filed the instant action, a legal malpractice complaint. Appellant answered. On July 27, 1988, respondent filed a superseding complaint, a first amended complaint, alleging not only a legal malpractice cause of action but also one for deceit. Appellant answered.

At the conclusion of a trifurcated jury trial—the description of which we defer to the Discussion portion of this opinion—respondent was awarded $20,000 punitive damages.

Discussion

1. Appellant contends the jury erred in finding that he entered into a retainer agreement with respondent.

The evidence of an attorney-client relationship between appellant and respondent was in conflict. Considering our disposition of appellant’s other contentions, it suffices to state, without elaboration, that substantial evidence supports the jury’s finding such a relationship existed. (Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429 [45 P.2d 183]; 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 281, p. 293.)

2. Appellant contends that a complaint alleging only simple negligence cannot support an award of punitive damages.

Respondent’s initial pleading, the November 20, 1987, complaint, alleged a single cause of action, legal malpractice, and prayed for actual damages and costs. No punitive damages were requested.

Respondent’s next pleading, the July 27, 1988, first amended complaint, contained two causes of action. The first, legal malpractice, was unchanged from the now-superseded complaint. The second cause of action was for deceit: Respondent there alleged that appellant knowingly and fraudulently misrepresented he was diligently prosecuting respondent’s discrimination lawsuit. The prayer which was expressly restricted to the second cause of action, deceit, requested compensatory damages in excess of $50,000, costs, and “[f]or punitive damages on plaintiff’s deceit claim only in the amount of $500,000.00.”

Respondent’s final change in his pleading occurred after jury selection but before opening statements. He then withdrew his second cause of action, deceit,⁴ and its prayer appendage. (Evid. Code, §§ 452, 459.)

Thus, by the commencement of trial, the issues were framed by a pleading which alleged a single prayerless cause of action.⁵ That cause of action contained seven paragraphs. Only two characterized appellant’s conduct, as follows:

“4. Defendants[⁶] and each of them, failed to exercise reasonable care, skill and diligence in so representing plaintiff, and negligently failed to commence such action within the period required by law, and the applicable statute of limitations by filing suit. In addition, defendants and each of them negligently failed to inform plaintiff the action had to be filed within any statutory period.

“5. Defendants and each of them, failed to exercise reasonable care, skill and diligence in so representing plaintiff, and negligently lost the right to sue on November 22, 1986, on the three year time period for service in the matter of Jackson v. Aireo.”

Simple negligence, no more, was alleged. Such an allegation falls far short of the “oppression, fraud, or malice” required by Civil Code section 3294.⁷ Simple negligence cannot support an award of punitive damages. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 895 [157 Cal.Rptr. 693, 598 P.2d 854]; Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 632 [102 Cal.Rptr. 815, 498 P.2d 1063]; Grieves v. Superior Court (1984) 157 [203 Cal.Rptr. 556]; Oakes v. McCarthy (1968) 267 Cal.App.2d 231, 264 [73 Cal.Rptr. 127]; McDonnell v. American Trust Co. (1955) 130 Cal.App.2d 296, 298-301 [279 P.2d 138].)

Appellant’s contention is correct.

3. Appellant contends that the punitive damage award is invalid because by its “0 dollars” actual damages verdict, the jury exonerated him of legal malpractice.

Although appellant’s previous contention is dispositive of this appeal, we believe it useful to briefly consider this additional contention.

In essence the argument is this: an element of malpractice is actual loss; the jury found there was no actual loss; since punitive damages are only ancillary to a valid cause of action (Civ. Code, § 3294), the punitive damages award is invalid.

a. Elements of legal malpractice tort

“The elements of a cause of action in tort for professional negligence are: (1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional’s negligence. [Citations.] [f] If the allegedly negligent conduct does not cause damage, it generates no cause of action in tort. [Citations.] The mere breach of a professional duty, causing only nominal damages, speculative harm, or the threat of future harm—not yet realized does not suffice to create a cause of action for negligence.” (Budd v. Nixen (1971) 6 Cal.3d 195, 200 [98 Cal.Rptr. 849, 491 P.2d 433], italics added; see Pete v. Henderson (1954) 124 Cal.App.2d 487 [269 P.2d 78, 45 A.L.R.2d 58]; see also Smith v. Lewis (1975) 13 Cal.3d 349, 361 [118 Cal.Rptr. 621, 530 P.2d 589, 78 A.L.R.3d 231].)

Thus, without “actual loss or damage” there is no tort.

Illustrative is Harris v. Smith (1984) 157 Cal.App.3d 100 [203 Cal.Rptr. 541]. Harris was injured by a driver who had been drinking. Harris hired a lawyer who sued that driver and others. But the lawyer did not sue a deputy sheriff (or his employer, the county) who had stopped the driver 20 minutes earlier, examined the driver, and released him. When it was too late to sue the deputy sheriff (or county) Harris hired a second lawyer to sue the first. A nonsuit was affirmed because, the county being without liability, Harris had suffered no damage.

Even closer to the instant facts is Campbell v. Magana (1960) 184 Cal.App.2d 751 [8 Cal.Rptr. 32]. Campbell was injured when the door of an incinerator, being displayed on the sidewalk by Cherry Hardware Company, fell on her foot. She retained lawyers to sue the hardware store. Due to the negligence of her attorneys to prosecute her lawsuit within five years, it was dismissed. She then sued her attorneys. The trial court found that her attorneys had been negligent but rendered judgment for them because, having no cause of action against Cherry Hardware Company, their negligence caused her no actual loss.

b. The jury found there was no actual loss

The trial court instructed the jury concerning: burden of proof and preponderance of evidence (BAJI No. 2.60), when plaintiff is entitled to recover (BAJI No. 3.00), that plaintiff must prove damages resulting from attorney negligence (BAJI No. 6.37.5), compensatory damages (BAJI No. 14.00), loss of earnings (BAJI No. 14.11), pain and suffering (BAJI No. 14.13), lost personal property (BAJI No. 14.21), and nominal damages.⁸ It did not give BAJI No. 16.00 or otherwise require the jury to make special findings concerning negligence, proximate damage, or the total dollar amount of damages.

Instead, the trial court merely provided the jury with two verdict forms. The “defense” form (“We . . . find for the defendant. . . and against the plaintiff . . .”) only had to be signed and dated. The plaintiff form (“We . . . find for the Plaintiff . . . and against the Defendant . . . and assess damages in the sum of_”) required not only a date and signature but the insertion of a particular dollar amount.

During the second day of deliberations, at 11:40 a.m., the jury asked the trial court this question: “Must we as a jury decide if Jackson vs. Aireo was winable or not winable in order to determine negligence or malpractice in this action Jackson vs. Johnson.”

Although the record on appeal does not contain the trial court’s answer to this question, we assume the trial court merely reiterated applicable, previously read, instructions.⁹

About three hours later, at 3 p.m., the jury returned their verdict. Instead of reading it, the court ordered it sealed. Phase two then commenced with the court reading BAJI No. 14.72.1 (1989 rev.), requiring the jury to determine whether or not “oppression” or “malice” had been proved. Since such findings would be pointless if the sealed verdict was in defendant’s favor, the court further told the jury that “if the jury has found in favor of the defendant, the jury will have to make no findings.”

The jury resumed deliberations. Not surprisingly, 15 minutes later they asked the court this question: “If monetary damages were not awarded, do we need to reach a verdict on the additional issue of malice and oppression.”

In order to answer the question the court unsealed the verdict. It read: “We . . . find for the Plaintiff . . . and against the Defendant . . . and assess damages in the sum of 0 dollars.” It was dated and signed by the foreman. Over appellant’s objection, the trial court then answered the jury’s question, “Yes, you do have to make findings.”¹⁰

The trial court erred. It is plain the jury had by its verdict determined two dispositive issues. One, appellant had been negligent. That is, he was respondent’s attorney, as such he had a duty of care, and he had breached that duty by failing to timely serve Aireo with the complaint, thus causing the dismissal of the Jackson v. Aireo lawsuit. Thus, the verdict “for” plaintiff. Two, if the Jackson v. Aireo lawsuit had not been dismissed respondent would have lost and therefore appellant’s negligence had caused him no actual damages. Thus, the: “assess damages in the sum of 0 dollars.”

There can be no mistake that the jury understood the need to determine if respondent would have won an undismissed Jackson v. Aireo lawsuit. They perceptively and explicitly asked the trial court this very question.

Nor was there any mistake about the consequences of a respondent win. The trial court exhaustively instructed the jury about damages, lost wages, earning capacity and earnings. It was a simple matter to calculate the value of a $12 an hour job (bulk liquid driver) less what respondent earned without that job: e.g., $804.13 in 1983; $7,513.47 in 1984.

Whether evidence that respondent failed to obtain his class I driver’s license until February 10, 1986, over three years after he applied for the Aireo bulk liquid driver position, caused the jury to determine respondent would have lost his lawsuit against Aireo, cannot be determined. That they did so determine cannot be doubted.

The jury having determined that one of the elements of malpractice, actual damages, had not been established, the punitive damages award is invalid.

c. Clark v. McClurg and its progeny

We have no occasion to apply, construe, or “revise” Clark v. McClurg (1932) 215 Cal. 279 [9 P.2d 505, 81 A.L.R. 908]. Unlike Clark, the instant jury did not leave blank the actual damages assessment. Nor, as in Clark which concerned libel per se, may actual damages be presumed.

These two distinctions were held dispositive by the California Supreme Court in Mother Cobb’s Chicken T., Inc. v. Fox (1937) 10 Cal.2d 203 (Mother Cobb’s Chicken). A trial court, satisfied the plaintiff had proved unfair competition, found no actual damages but awarded $500 punitive damages. The Supreme Court reversed.

Just as Mother Cobb’s Chicken is consistent with Clark v. McClurg, Finney v. Lockhart (1950) 35 Cal.2d 161 [217 P.2d 19] is consistent with both. There a $1 actual damages award supported a $2,000 punitive damages award. Since Finney, the California Supreme Court has not considered Clark v. McClurg.

Only one Court of Appeal decision requires comment: James v. Public Finance Corp. (1975) 47 Cal.App.3d 995 [121 Cal.Rptr. 670]. In a wrongful garnishment action, the plaintiff sought $271.99 actual damages (to avoid a fourth garnishment which might cost him his job, plaintiff took a week off, losing a week’s wages), $10,000 for emotional distress, and $50,000 punitive damages. The jury returned a plaintiff’s verdict with “$0” general damages and $1,750 punitive damages.

The Court of Appeal upheld the punitive damages award only by “liberally constru[ing]” the jury’s verdict to mean that their $1,750 award was not solely for punitive damages but was partly for general damages.

This “liberal construction” is a euphemism for nullification. There was no suggestion of mistake or ambiguity in the verdict. The jury, after listening to conflicting testimony, including plaintiff’s account of a lost $271.99 week’s wages, found “$0” actual damages. The James Court of Appeal simply nullified the jury’s finding.

The transparency of its nullification is illustrated by this rhetorical question it asked: “Must it therefore be that the jury’s verdict in favor of the appellant was nullified merely because the digit that the forelady inserted in the blank space for general damages in the form with which she was provided was a zero?” (47 Cal.App.3d at p. 999.)

One might as well ask whether an accused must be freed “merely because ... the forelady inserted [three little letters] in the blank space” before the word “Guilty,” the letters: N-o-t.

James, which fails to cite or consider Mother Cobb’s Chicken, is wrongly decided and we decline to follow it.

Disposition

The judgment is reversed. Costs on appeal are awarded to appellant.

Lillie, P. J., concurred.

1 Apparently there was no written retainer agreement. None is claimed and the record does not contain one.

2 On February 27, 1984, there was a perfunctory personal contact, with respondent obtaining a “To Whom It May Concern” letter.

3 The section requires that the complaint be served within three years after it is filed.

4 The trial court, accordingly, did not instruct the jury concerning the deceit cause of action.

5 At oral argument we asked counsel to explain the giving of punitive damage instructions. Respondent stated he had made an oral motion to add a punitive damages prayer to the complaint and the trial court had granted the motion. Appellant, who referred to his “extensive notes,” unequivocally denied such a motion had been made or granted, contrary to the dissent’s claim that appellant “was not sure.”

Notwithstanding the dissent’s laments, appellant provided a legally permitted appellate record. Although respondent could have augmented this record, he did not do so. Nor has this court chosen to augment the record. Nor, we might add, has respondent ever claimed that an augmented record would cure the subject defects.

The dissent characterizes as a “critical factual element” respondent’s utterly unsubstantiated claim, flatly denied by appellant, that he made an oral, during-trial motion to append a punitive damage prayer to his simple negligence complaint. We regard such a claim as neither “critical” nor “factual.”

6 The plural only refers to Does 1 through 20.

7 In pertinent part the section provides: “(a) In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”

8 The court gave this special instruction: “Nominal damages are properly awarded where there is no loss or damage to be compensated but where the law still recognizes a technical invasion of a plaintiff’s rights or a breach of defendant’s dut[y] owed to the plaintiff.”

9 The record does reflect the question was answered and the record contains all court-given instructions.

10 The jury then returned a verdict finding “oppression” but not “malice.” Thereafter, the third phase commenced. Respondent called appellant and elicited his earnings, savings, property holdings, debts and net worth. In sum, appellant had practiced law for 40 years, had for a few years earned $40,000 a year but had recently suffered two heart attacks and was now winding down his practice, currently he earned $15,000 a year, owned no real property, stocks, bonds, or certificates of deposit (CD’s), had one $2,000 IRA, owned a 1983 Chevette and two inoperable junk cars, had a $3,500 checking account and a $5,000 credit card debt; he had 11 children, had put one through medical school and another through law school. His estimated net worth was $9,000. At 5:25 p.m., after 14 minutes of deliberation, the jury returned their third verdict assessing appellant $20,000 in punitive damages.