Sheetz v. Bowles Rice McDavid Graff & Love

547 S.E.2d 256

209 W.Va. 318

SHEETZ, INC., Plaintiff, v. BOWLES RICE McDAVID GRAFF & LOVE, PLLC, et al., Defendants, v. Andrews & Wagner, Third-Party Defendant.

No. 28470.

Supreme Court of Appeals of West Virginia.

Submitted February 6, 2001.

Decided April 27, 2001.

Susan R. Snowden, Martin & Seibert, Martinsburg, Stephen D. Brown, George M. Gowen, Dechert, Price & Rhoads, Philadelphia, PA, Attorneys for Plaintiff.

Tammy A. Bittorf, Layva, Bittorf & Santa Barbara, Martinsburg, David L. Haber, Weinheimer, Schadel & Haber, Pittsburgh, PA, Attorneys for Third-Party Defendant.

Michael J. Farrell, Farrell, Farrell & Farrell, Huntington, Attorney for Defendants.

STARCHER, Justice:

In this case we answer four certified questions from a federal court. We hold that advice of counsel is not an absolute defense in an employment law case; that a defendant in a legal malpractice lawsuit is not barred from asserting a claim against another attorney who provided services to the plaintiff; that experts may testify in legal malpractice cases; and that the plaintiff in a state employment law case did not receive an illegal double recovery.

I. Facts & Background

The instant case is before this Court upon four certified questions from the United States District Court for the Northern District of West Virginia. These questions relate to issues arising in a federal civil case (under diversity jurisdiction) alleging legal malpractice. The federal legal malpractice case arises from the proceedings in a state court employment law civil case in which this Court issued an opinion in 1997. Vandevender v. Sheetz, Inc., 200 W.Va. 591, 490 S.E.2d 678 (1997) (per curiam) ("the Vandevender case").

In the Vandevender case, Ms. Cheryl Vandevender sued Sheetz, Inc., a Pennsylvania corporation ("Sheetz"), alleging that she had been terminated and subsequently retaliated against in violation of West Virginia's workers' compensation and human rights laws. A jury awarded Ms. Vandevender $130,066.00 in compensatory damages, $170,000.00 for noneconomic or emotional distress damages, and $2,699,000.00 in punitive damages.¹

In the federal legal malpractice case ("the instant case"), the plaintiff is Sheetz. Sheetz claims in the instant case that the jury in Vandevender awarded punitive damages (and that this Court did not on appeal strike the punitive damages award entirely) because, according to Sheetz, Sheetz's trial lawyer in Vandevender, and his law firm, Bowles, Rice, McDavid, Graff & Love PLLC (collectively, "Bowles"), committed legal malpractice in connection with the Vandevender case.

Bowles, then, is the defendant in the instant federal legal malpractice case. Bowles has denied committing any malpractice and asserts that Sheetz's conduct toward Ms. Vandevender was the proximate cause of Ms. Vandevender's receiving the punitive damages award in the Vandevender case. Bowles has also impleaded Sheetz's Pennsylvania law firm, Andrews & Wagner ("Andrews"), as a third-party defendant in the federal legal malpractice case. Bowles claims that if there has been any legal malpractice that caused or contributed to the punitive damages award in Vandevender, it was legal malpractice by Andrews in connection with the formulation, review, and approval of Sheetz's employment policies.

After substantial pre-trial proceedings in the federal case, the federal district court entered an order certifying four questions of law to this Court. The questions are as follows:

A. Is the advice of counsel defense an absolute bar to any claim for punitive damages in a wrongful termination of employment claim in West Virginia?

B. Do the doctrines of joint tortfeasor and right of contribution apply in the legal malpractice context of a client's predecessor law firm and successor law firm, each of whose respective conduct is separated by an intervening trial caused by the predecessor law firm's alleged legal malpractice?

C. Does West Virginia law allow the use of lawyers as experts in legal malpractice cases?

D. Is a plaintiff's own testimony of both an aggravation of a prior physical injury and emotional distress a "sufficient quantifiable measure" to sustain a verdict for both emotional distress and punitive damages or, must a plaintiff produce "substantial and concrete" evidence of serious physical injury to avoid application of the double-recovery preclusion?

The federal district court accompanied these questions with a statement of the case that we reproduce in a footnote.² The federal district court also included in the certified question order a brief discussion of each question and the court's proposed answer to the question. We include these discussions and answers in footnotes at the beginning of our discussion of each question.

II. Standard of Review

We have before us the record and briefs in the federal case, and the trial transcript and appellate briefs from the Vandevender case. The federal court's certified questions are matters of law that we address de novo. We recognize that the factual statements in the district court's certification order are not formal "findings of fact."

III. Discussion

A.

Advice of Counsel

The district court's first certified question is:

Is the advice of counsel defense an absolute bar to any claim for punitive damages in a wrongful termination of employment claim in West Virginia?³

We begin our discussion by recognizing the principle of law that this Court enunciated in Syllabus Point 3 of Powers v. Goodwin, 174 W.Va. 287, 324 S.E.2d 701 (1984):

Except for malicious prosecution suits, it is generally held that reliance on advice of counsel is not an absolute defense to charges that a person is acting unlawfully or negligently.

We further said in Powers:

It seems clear, though, that the party asserting this defense has the burden of showing that he: (1) made a complete disclosure of the facts to his attorney; (2) requested the attorney's advice as to the legality of the contemplated action; (3) received advice that it was legal; and (4) relied upon the advice in good faith.

* * *

However, acting under advice of counsel is not an absolute defense in other situations. In the contempt field, we have stated that it is not a defense, but may go to the mitigation issue.... This issue has been raised in suits involving violations of civil rights under 42 U.S.C.A. § 1983, which are treated as federal tort actions. Typical of most courts' approach in this area is this statement from Crowe v. Lucas, 595 F.2d 985, 992 (5th Cir.1979): "Reliance on advice of counsel does not serve as an absolute defense to a civil rights action. Rather, it is among the calculus of facts that a jury is to consider on the issue of good faith."

174 W.Va. at 291-292, 324 S.E.2d at 705-706. (Citations and footnotes omitted.)

The principles that we discussed in Powers can be found in many cases. For example, in Crowe v. Lucas, 595 F.2d 985 (5th Cir.1979), a civil rights action, the court held that a jury could conclude that any reliance that the defendants might have placed on advice of counsel did not necessarily remove the taint of malice that colored their acts toward the plaintiff. 595 F.2d at 992. In Crowe, the court also held that the advice of counsel was not a separate defense, but was rather among the "calculus of facts" that a jury could take into account in deciding whether to award punitive damages. Id.

In a wrongful eviction case, Town Ctr. Management Corp. v. Chavez, 373 A.2d 238, 245 (D.C.Ct.App.1977), the court similarly rejected a defendant's proposed use of the advice of counsel as an absolute defense to punitive damages. The court stated:

Appellant's contention amounts then to the assertion that one acting with legal advice, even if for an improper purpose, should be insulated from liability from punitive damages. We disagree. Acting after consulting an attorney does not necessarily preclude an award of punitive damages .... the [defendant's] consultation with its attorney was no more than one factor ... to consider.... [Emphasis in original, citations omitted.]⁴

Whether reliance upon the advice of counsel is successfully proven as a defense to the cause of action of malicious prosecution (or to a similar cause of action that is based on the wrongful use of the court system, like wrongful attachment)⁵—or, in the case of other causes of action, what weight and significance should be given to relevant evidence relating to the advice of counsel, is ordinarily a question for the finder of fact.⁶See Seaboard Oil v. Cunningham, 51 F.2d 321, 325 (5th Cir.1931). See also Tomasits v. Cochise Memory Gardens, Inc., 150 Ariz. 39, 41, 721 P.2d 1166, 1168 (App.1986) (in a wrongful disinterment case, circumstances relating to the defendant's reliance on the advice of counsel could go to show the defendant's negligence; the jury could consider these circumstances in considering punitive damages); Phillips v. Morrow, 210 Ala. 34, 97 So. 130, 132 (1923) (whether punitive damages are to be awarded if advice of counsel is claimed as a defense is a question for the jury); Bradford v. Lawrence, 208 Ala. 248, 94 So. 103, 104 (1922) (whether advice of counsel is a defense to an award of punitive damages in a malicious attachment case is ordinarily a jury question); Karow v. Student Inns, Inc., 43 Ill.App.3d 878, 882-887, 2 Ill.Dec. 515, 520-522, 357 N.E.2d 682, 687-89 (1976) (it was a jury issue in a malicious prosecution case whether the defendant had disclosed all facts clearly to counsel so as to establish the advice of counsel defense to false arrest); Trammell v. Ramage, 97 Ala. 666, 11 So. 916, 918 (1892) (the fact that the plaintiff acted with the advice of counsel did not foreclose the jury from considering punitive damages in an action for wrongful attachment). See also Holland v. Thacher, 199 Cal.App.3d 924, 926, 929, 245 Cal.Rptr. 247, 250, 252 (1988), a legal malpractice case where the alleged negligence of the plaintiff's...