UPDATES & ANALYSIS

Iowa Supreme Court Allows Claim for Emotional Distress Damages to Proceed in Legal Malpractice Action

by Amanda Atherton | July 22, 2013

By Amanda Atherton

Last Friday, in Miranda v. Said, the Iowa Supreme Court ruled by a vote of 5-1 (Justice Mansfield recused) that emotional distress damages may be available in legal malpractice cases.

Klever Miranda, Nancy Campoverde, and their fourteen-year-old son Cesar Miranda are an Ecuadorian family who entered the United States without documentation and later sued their immigration attorney, Michael Said, for malpractice. After Klever received a removal order, Said advised him and Nancy to return to Ecuador and have Cesar sponsor them for citizenship based on the extreme hardship of being separated. Despite Said’s assurances that the plan was essentially foolproof, Cesar was not actually qualified to sponsor them, as only a parent or spouse may sponsor a citizenship request based on hardship. Said admitted he knew this when he advised them. He claimed he had been successful with the same plan numerous times in the past, but was unable to provide documentation supporting this. Additionally, because Klever and Nancy left the United States voluntarily, they were barred from reentry for 10 years. As the Court noted, the family was distraught.

At trial, the jury found Said was negligent and awarded the plaintiffs $12,500 in economic damages for the attorney fees paid Said. The district court did not permit their claim for emotional distress to go forward, holding that they had not satisfied the legal standard for emotional distress claims in negligence cases. The district court also did not allow their claim for punitive damages to proceed, holding there was no evidence of willful, wanton, or reckless conduct. The Iowa Court of Appeals reversed on the emotional distress and punitive damages claims, and Said sought further review.

The Court, Chief Justice Cady writing, began by explaining that emotional distress damages are generally not available in Iowa in the tort context unless the defendant acted intentionally or the plaintiff suffered physical harm. The law, it held, does not impose a general duty not to cause mental or emotional distress. The Court then noted an exception where “matters of mental concern or solicitude” are involved and the parties have a special relationship involving established duties, breach of which is likely to result in severe emotional distress. In other words, emotional distress damages are available when “the kind of interest invaded is of sufficient importance as a matter of policy to merit protection from emotional impact.”

The Court held that an immigration attorney has this type of  special relationship with his clients, quoting the U.S. Supreme Court on the emotional distress that can arise in immigration matters: “The impact of deportation upon the life of an alien is often as great if not greater than the imposition of a criminal sentence.” It also noted that Said was well aware of the “emotional component” of his relationship with the Mirandas and Campoverde. The Court was careful to explain that this holding was reached under the special-relationship exception, and did not alter the general rule that emotional distress damages are not available in negligence cases.

The Court also held plaintiffs could proceed with their claim for punitive damages on remand, finding the evidence supported a finding that Said acted at least recklessly when he offered advice he knew was not legally sound.

Justice Waterman dissented, believing no sufficient reason existed for failing to apply Iowa’s previous holding, in a case for legal malpractice involving bankruptcy advice that resulted in the client being indicted for bankruptcy fraud, that emotional distress damages were not available. Justice Waterman would have held that the circumstances of this case did not fall within the exception for “extremely emotional circumstances.” He also noted the potential “access-to-justice” problems raised by this decision, including fewer attorneys choosing to practice immigration law and increased rates associated with additional malpractice insurance. Justice Waterman would also have affirmed the district court’s holding that punitive damages were not permitted in this case.

The Court’s analysis draws some distinctions between legal services of an economic nature and those of a personal nature, indicating that the former would not support claims for emotional distress. However, the Court declined to draw any bright-line rules about the types of legal malpractice actions in which a claim for emotional distress may be viable. This leaves open the question of how far this exception will be extended in the future, particularly in family law, which undoubtedly involves matters of a personal nature.

Tags: Iowa Supreme Court Opinions