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Oliver v. Towns3/10/2000
Patricia Towns hired lawyer Beatrice Oliver to represent Towns in regard to a personal-injury claim. The claim was settled for $12,000. Towns and Oliver had a contingency-fee contract by which Towns was to receive 60% of the settlement ($7,200), with Oliver receiving 40% as her fee. Towns never saw the settlement check, because Oliver forged Towns's endorsement and kept the entire $12,000 for herself.
Towns sued Oliver to recover funds received by Oliver for Towns but not remitted to Towns. The court entered a default judgment against Oliver. It awarded Towns $500,000 in compensatory damages to compensate for money she should have received and for the mental anguish she claimed to have suffered. The court also awarded punitive damages of $1 million. Oliver moved for a hearing to review the question whether Towns had presented clear and convincing evidence supporting the award of punitive damages and the question whether the compensatory and punitive awards were excessive. The trial court denied her motion. Oliver then appealed to this Court, which affirmed the denial of Oliver's motion to set aside the default judgment, but reversed the order denying Oliver a hearing on the question of excessiveness of damages. Oliver v. Towns, 738 So. 2d 798 (Ala. 1999). This Court remanded with instructions for the trial court to hold a hearing to determine whether the amount of compensatory damages and the amount of punitive damages were excessive. In addition, we also instructed the trial court to address the issue whether the $250,000 cap on punitive damages set out in Ala. Code 1975, ยง 6-11-21, would apply to this case.
On remand, Towns moved to reduce the amount of punitive damages from $1 million to $249,000. The trial court proceeded with the hearing. After the hearing, the trial court in effect granted Towns's motion and reduced the punitive damages to $249,000, but left the compensatory award unchanged.
Oliver has appealed again. She contends that the trial court erred in granting Towns's motion to reduce the punitive damages because, she argues, both the punitive award and the compensatory award are still excessive.
We first address the issue whether the $500,000 compensatory award was excessive. The actual financial loss claimed in this case was $7,200. Therefore, we must conclude that the court awarded $492,800 for Towns's mental anguish. This Court has worked diligently over the past few years to formulate a consistent law regarding the amount of damages that can be awarded for mental anguish. See Kmart Corp. v. Kyles, 723 So. 2d 572 (Ala. 1998), and Foster v. Life Ins. Co. of Georgia, 656 So. 2d 333 (Ala. 1994).
In Kyles, a case involving a malicious prosecution, this Court held that the jury had abused its discretion in awarding compensatory damages of $100,000, of which $90,000 was for mental anguish, because " he only evidence of Kyles's alleged mental suffering was her husband's testimony that she cried on one occasion -- when she telephoned him to say that she had been arrested." Kyles, 723 So. 2d at 577-78.
Foster involved a plaintiff who "had been paying over a fifth of her monthly income to an insurance company for a worthless policy." Foster, 656 So. 2d at 337. Foster's out-of-pocket loss was $2,468.60 in premiums and $95 in medical bills. Id. at 336. This Court reduced the award of compensatory damages from $250,000 to $50,000 because the only evidence presented in support of the claim for mental-anguish damages was the plaintiff's "bare assertion that the discovery of fraud affected her `a lot' and that she sued two months after the mental anguish and emotional distress began." Id. at 337.
Both Kyles and Foster i
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