Court: Supreme Court of Alabama; May 31, 2013; Alabama; State Supreme Court
Tommy Hand sued the Prattville law firm Howell, Sarto, and attorney William P. Roberts II under the Alabama Legal Services Liability Act (ALSLA) for alleged negligent representation in a personal injury case stemming from a September 15, 2004, automobile accident. Hand was injured when his truck was rear-ended by a vehicle driven by Julie Bennett, who was on-duty for the Montgomery Advertiser at the time. Hand retained the Howell firm, where Roberts, under the supervision of George Howell, filed a negligence claim against Bennett on September 11, 2006. However, the complaint did not name the Montgomery Advertiser or its parent company, Gannett, Inc., as defendants, despite Bennett's employment status at the time of the accident—this was based on George Howell's advice that it was unnecessary to include them.
The Howell firm calculated Hand's economic loss from the accident at $872,500 and entered settlement negotiations. Bennett's insurance company initially offered $25,000, but Roberts later discovered an additional $5 million coverage under a policy held by Gannett, Inc., and offered to settle for $1 million, which was rejected. Roberts left the Howell firm in August 2008, and while George Howell remained as Hand's attorney, his declining health hindered his ability to manage the case. Subsequently, Harold Howell sought assistance from Betty Love, who was brought in to help. In May 2009, during mediation, Hand made an initial settlement offer of $1,750,000 against Bennett. The trial court granted summary judgment in favor of the Howell firm and Roberts, leading to Hand's appeal, which was affirmed by the court.
All parties acknowledged that Travelers, representing Bennett, would primarily fund any settlement, initially offering $40,000, which was later raised to $125,000. Hand refused to accept less than $1,250,000 and left the mediation after pressure to lower his counteroffer. Following this, Harold Howell attempted to persuade Hand to resume negotiations but was unsuccessful. On May 16, 2009, Hand informed the Howell firm of his decision to terminate their attorney-client relationship, citing undue pressure on him and his wife. Hand retrieved his legal file on July 10, 2009, and subsequently consulted attorneys Frank Hawthorne and Randy Myers, who advised him that his case's value was reduced because the Montgomery Advertiser was not included as a defendant and that the statute of limitations barred adding it at that point. They prepared affidavits estimating the settlement value against the Montgomery Advertiser at $1,000,000 to $1,200,000. Despite this, they represented Hand, and after another mediation in November 2009, he settled for $625,000, with $25,000 from Bennett's insurance and $600,000 from Travelers. On January 13, 2010, Hand filed a legal malpractice suit against Roberts and the Howell firm, alleging they failed to name the Montgomery Advertiser as a defendant. The case moved to the Autauga Circuit Court, where Roberts and the Howell firm sought summary judgment, arguing that Hand's claims were barred by the statute of limitations, speculative in damages, and released under his settlement agreement. The trial court granted their motions on May 21, 2012, without detailing the rationale. Hand's motion to alter or vacate this judgment was denied, leading him to appeal. He contends the trial court erred in granting summary judgment, and the appellate court will review this de novo, assessing if there is a genuine issue of material fact and if the movants are entitled to judgment as a matter of law.
In the case of Hand v. Roberts and the Howell firm, the key issue is whether legal malpractice occurred due to the failure to name the Montgomery Advertiser as a defendant in Hand's lawsuit against Bennett. Hand claims this omission significantly reduced the value of his case, forcing him to settle for approximately half of its worth, leading to inadequate compensation for his economic damages and pain and suffering. He supports his allegations with affidavits from subsequent attorneys, asserting that the claim could have been valued at up to $1.2 million had the Advertiser been included.
Despite the absence of the Advertiser as a defendant, it was insured under a policy held by its parent company, Gannett, which also covered Bennett, allowing her to invoke this coverage during the proceedings. Consequently, Travelers provided legal counsel and financed the majority of the settlement reached with Hand. There is no evidence suggesting that additional insurance coverage would have been available if the Advertiser had been named.
Hand's argument rests on the assumption that a jury would have awarded a higher settlement against a "deep-pocket" defendant like the Advertiser compared to an individual like Bennett. However, the legal principle established in Alabama courts is that juries determine damages based solely on the evidence of injury, not the wealth or identity of the defendant. This principle is reinforced by prior case law, which emphasizes that damage awards should reflect the injury sustained rather than the financial status of the defendant. Thus, Hand's assertion fails to hold, as juries are presumed to follow the law in calculating damages based on the harm incurred.
The jury is instructed to consider various compensable elements in personal injury cases, including expenses for medical treatment, future care, lost time up to the verdict, potential future losses, and pain and suffering. These factors represent monetary losses or burdens due to the injury, for which the plaintiff deserves compensation. The wealth of the defendant or the plaintiff's poverty should not influence the jury's assessment of damages. Evidence regarding the defendant’s wealth is deemed highly prejudicial and inadmissible in court, as clarified by Alabama law, which ensures that corporations receive the same fair trial rights as individuals. The court has previously ruled against arguments that suggest different standards of justice for corporations compared to individuals, emphasizing that corporations are entitled to equal treatment under the law, as protected by the Fourteenth Amendment. Any references to corporations being "soulless" or lacking human attributes are objectionable and should be excluded from trial discussions.
Corporations are recognized as persons under the amendment, and a jury should apply the same standard of justice to the Montgomery Advertiser as it would to Bennett, without bias against the corporation. Settlement amounts in litigation are typically influenced by potential verdicts if the case went to trial. Accepting the argument that the inclusion of the Montgomery Advertiser as a defendant would lead to a higher settlement would imply an unjustified presumption of prejudice, which the court rejects. The document references the case Schenkel v. Monheit, where a plaintiff claimed that not including an employer as a defendant adversely affected his damages. The Pennsylvania court ruled that the tort remained the same regardless of the employer's inclusion, as liability would derive from agency principles rather than independent wrongdoing. This reasoning similarly applies to the current case, as the tort did not change with or without the Montgomery Advertiser as a party. The settlement was ultimately covered by the insurer of Bennett, and there is no evidence of prejudice from not naming the Montgomery Advertiser as a defendant. Furthermore, since the plaintiff was not unable to secure a meaningful settlement and the funds primarily came from a substantial insurance policy, it is speculative to assert that the settlement or potential jury verdict would have been higher had the Montgomery Advertiser been included as a defendant.
The Court reiterates its stance against speculating on a jury's reasoning for a verdict or what that verdict might have been in an untried case, specifically noting that it will not assume the jury's decision was based solely on evidence of malingering. A summary judgment was granted in favor of Roberts and the Howell firm in a legal malpractice claim brought by Hand, who alleged that the firm failed to maximize his injury claim by not including the Montgomery Advertiser as a defendant. The Court affirms this judgment, citing a lack of evidence to support the claim that naming the Advertiser would have led to a higher settlement. Hand's arguments regarding his settlement being less than his actual damages are dismissed, emphasizing that the decision to settle and not present evidence to a jury was ultimately Hand's own. The ruling is affirmed with some justices dissenting.
