# FILED

Ap ril 23, 1997 Cecil W. Crowson Ap pellate Cou rt Clerk JOHN KOHL & COMPANY, P.C., ) JO HN B . KO HL, III, and HELE N H. KOH L, ) Indi vi dua ll y, an d J OHN B. K OHL, III, ) TRUSTEE, a s Trustee

of the John K

ohl & ) Company, P.C. Profit Sharing Plan, ) ) Plaintiff s/Appella nts, ) Appeal No.

) 01-A-01-9609-CV-00421 v. ) ) Davidson

Circuit DEARBORN & EWING, a Tennessee ) No. 90C-1962 General Partnership, and ) DAN E. HU

FFSTUT TER, ) ) Defend ants/Appe

llees. )

COURT OF APPEALS OF TENNESSEE
MIDD LE S EC TION AT N AS HVILLE

APPEAL FROM THE CI RCUIT COURT FOR DAVI DSON COUNTY
AT NASHVIL

LE, TENNESSEE

THE HONORABLE TH OMAS W. BROTHERS, JUDGE

STEVEN C. D OUSE King & Ballow 1200 Noel Place 200 Four th Avenue , North Nashville, Tennessee 37219

ATTORNEY FOR PLAI

NTIFFS/APPEL

LANTS

JOHN BRANHAM KATHRYN BARNETT Branham & Day 150 Four th Avenue

North Suite 1910 Nashville, Tennessee 37219

ATTORNEYS FOR DEFENDANTS/APPELL EES

AFFIRMED I

N PART, REVERSED IN PART, AND REMANDED
SAMUEL L . LEWIS, JUDGE-2- 

## OPINION

This is an appea

l by pla inti ffs/app ell ant s, J oh n an d He len Koh l, f rom a decision of the David son Coun ty Circuit Cou rt. The trial cour t awarde d Plaintif

fs a total of $33,091.05 for the legal malpractice o f de fendants/a ppellees, Dearbor

n & Ewing and Dan E. Huffstutter, and held the rem ainder of Plaintiff

s' cla ims were barred by the statute of limitations. T he facts out of which this matter a rose are as follows.

Plaintiffs own a land surveying business. They retained Defenda

nts in 1983 to incorpora

te the busin e ss and to handle ot her corporate m atters. From 1983 to 1988, Huffstut

ter advise d Plaint

i ffs on many iss ues. He aided them

in the developm ent of a profit sharing plan (“the Plan”) and adm inistered the Plan unti l 1988. He also a

dvised Pla

intiffs in 1986 on how to finance t he purchase

of a buildin g for their business. Pursuant t

o this advice, Plaintiffs obtained a loan from Com merce UnionBan k. T he S ma ll Business A dminis tration co vered a po rtion of the loan. Huffstutter

advised Pl aintiffs th e Plan should purcha se all or a portion of t

he loan. He explained to Plaintiffs they needed to transfer funds from their IRA accounts i nto the Plan in

order to dothis, but stated the IRA withd rawals would not be

taxed.

In September 1988, Plaintiffs received a letter from the IRS inform ing them of the foll owing:

In our review of your tax return for 1986, it appears thatthe in come deductions, and credits you reported do not agree withthe amount s reported

to us on infor

matio n returns f

iled by the pay ers. (see attached page(s)). Please explain in a signed s tatem

ent wher e the am ounts are reported on your tax return. If the incom

e was not r

eported or

if the ded uct ion s or cred its were ove rst ated , ple ase exp lai n wh y. Plaintiffs responded t

o the lette r through their accountant, David Hinton. In October 1988, Robert E . Kolar

ich, Pla intiffs' attorney , wrote

Dearbor n & Ewing the

following letter: In our last dis cussion of Jo hn Kohl's a ccount wi th your

firm, i t was agreed that

you wo uld handle

the applic ation for a

n extension of his tax return, after which the file would be rem oved. Mr. Kohl intends to hire a new firm to handle his tax work, however, I understand that a new question has arisen wi th regard to his pensionand profit sharing p lans. Evidently, Mr. H uffstetter [sic]-3-

had advised tha

t th e funds held in

an IRA a

ccount coul d be transferredto the pensi on and profi t sharing account a nd the IRS is reviewi ng the tran saction. Please a dvise as towhen this issue may be resolve d so that the

files may be transfer

red. John Kohl next received a letter in August 1989 from Dearborn & E wing. The letter stated, in part, as follow s: “H owever, because t he Sales A greem

ent also loo ked to the status of Plan pa

rticipant s (as bene ficial ow ners of the Plan ), offi cers and shareholders of t he B orr owe r wh o ar e al so Pla n p art ici pan ts ma y cause the Plan's purchase of the SBA Loan to be questioned.”

Plaintiffs filed a c ompla

int against

Huffstut ter and D earborn & E wing on 1 May 19 90. The

compl aint alleg ed the following acts constituted legal malpractice: 1) advising Pl aintiffs the Plan sh ould acquir e all or a portion of t

he $250,000. 00 loan; 2) advising Plaintiffs they should transfer funds from

their IR A accounts into the Plan and the withdr

awals w ould no t be taxe d; and 3) advising Plaintiffs to make a $2,000 .00 voluntary

deductible

contributi on to the Pla n in 1986. D efendants answeredthe allega

tions and claim

ed Plainti ffs had f

ailed to mitigate their damages and the statute

of lim itations ba

rred their claim s. Plaintif fs moved to amend their compl aint

by addi ng a count re garding the negligent drafting and administration o f the Plan. The cour

t granted t

he mot ion.

Defenda nts filed a m otion for pa rtial sum mary judgm ent as to Plaintiffs ' cla ims to attorney's f

ees incur red in purs uit of the l itigation on 22 Jan uary 1 996. Defenda nts argued the

re was n o statutory , legal, or contra ctual basi s for

the recovery of the fees. The court

granted the motion, but noted that it made no determ ination as to the rem

ainder of Plain tiffs' claims “ including attorney's fees allegedly expended for correcti ve action resultin g from defendant s' neglig ence.”

Trial was held f

rom 29 April to 2 May 1996. Pla

intiffs sub mitte d a supplem ent to their expert witness statemen t o n 26 April 1 996. The supplem ent reflectedan upward change in the amount of damages for the lost value o f the funds transferredfrom

the IRA accounts. During the

trial, Plaintiffs moved

the court t

o
amen d their complaint to claim spec ial damages for the f ees paid toDearbor

n & Ewing for the

negligent work. The court denied the motion. The tr ial court also ruled thatit would onl y consi de r the exper t testimony consistent with the original expert-4-

witness sta temen ts a nd d epo sit ion s. As a res ult , the tri al co urt compl etel y disreg arded the supplem

ental expe

rt witne ss statem

ents of Sa

muel B utts, Pla

intiffs' expert. Fin all y, the trial

court rule d the testi mony of L arry Crabtre e, the a

ttorney who performed

or supervised

the corr ective w ork, was not admissible under Disciplinary Rule 5-10 1(B)(3).

The trial cour

t entered its final ord er on 22 May 1996. The order incorporated the trial court's findings of fact and conclusions of law m ade at the close of the parties' cases. As to the statute of lim itations defense, the trial courtreasoned as follow s: In this case, Mr. Kolarich wrote a letter on October

24, 1988 thatclearly points out there is some problem associate d with the roll over of I RA funds into the pension plan, it had been n ot iced, they w ere aw are of it , and it w as so sever e in his m

ind and Kohl's mind that they w ere going to ch ange law firm s and have someo ne else do t

heir tax w ork. They

had turned this over to their CPA. They were taki ng action s. They knew that they had received some injury

as a result of p otent ially erroneous advice they had receive d from

Mr. Huf fstutter and the De arborn & Ewi ng law fir m. An d t he Court f

inds that as of Octobe

r 24, 1988, the Kohls should have k

nown, if they w ere not

aware, they sh ould have kn own, as a reasonable person, that they had suffere d a legally cognizable

injury from the misconduct

of Mr. Huffstutter. And th erefore , any

action aga

inst him should have b een filed

i n relations hip to that rollover within one y ear. A n interest ing question is whether - - and therefor e, the c laims based upon th e rollovers are barr

ed. A question that's tied in with that is whether or not that bars any r ecovery . Does t

hat put them on notice as to the entire plan ? And I find th at it does not, This le tter is very spe cific. I t poin ts out that there are problems with the changing of m onie s from an IRA plan into a p ens ion pla n, p rofi t sh arin g pl an o nly. Itdoesn't ad dress the S BA loan or any oth er aspec t of the pla n, simply that specific item. And I think that it is clearly distinct enoughtha t it doe s no t ba r th eir fili ng s uit unt il t hey bec ame a ware of this, un der Mr. Kohl's te stimony, som etime shortly before he first went to King & Ballow i n Septem

ber of 1989, and this action wa s filed tim

ely - - in a ti mely manner for the other claim s. The court held

Defenda nts liable t

o Plaintif fs in the a

mount of $28,591.05 for advising Plaintif

fs the Pla n could purc hase a por

tion of the loan an d in the am

ount of $4,500.00 for negligently drafting and administering the Plan . The tr ial court a

lso1 In a fo ot no te to th ei r b ri ef , P la in ti ff s a rg ue th at th is co ur t s ho ul d n ot ap pl y Carvell

retroactively

to their case if Carvell

overruled prior precedent. I t is the opinion of this court that the supre me court did not ove

rrule itsearlier

decision s. Althoug

h the cour t directed that cou

rts should no longer use the term “irremediable injury ,” it did not expressly overrule or c riticize any of its earlier decisions. Moreover, the court did not attempt to provide definitions of the new -5- ruled that it wo uld have aw arded $30, 000.00 to Pl aintiffs for the lost earning power of the money w ithdrawn from the IRA accounts and $19,000.00 in attorney's fees had the statute of

limit ations not ba

rred the claim s relatingto the IR A rollove rs. Thereafter, Plai nti ffs file d a t imely n otice of appeal an d presente d the follow ing issues: I. Whether the trial court er red inholding that t

he statute of limit ations bar

red r ec overy for certain damages claim ed by Plaintiffs

. II. Whe ther the trial court erred in holding that Plaintiffs were not entitle d to recove r, as ge neral dam ages in a legal malpractic e action, fees paid for legal work that was negli gently

perform ed. III. Whether

the trial court er red i n gr anting a partial summar y judgment holding that Plaintiffs could not as amatt er of law rec over any

of the cost s of

prosecuti ng this action as consequential damages for legal malpractice. IV. Whether

erroneous evidentiary rulings by the trial court prejudiced the record on which the court assessed damages. We address all o f these iss ues below.

I. Statute of Limitations

Rece ntl y, the Tenne ssee Supr eme Court a ddressed the issue of when the statuteof lim

itations be gins to run in leg al malpractice act ions. Carv el l v . B ot to ms , 900 S. W.2d 23 , 28-30 (T enn. 1995) . The c ourt resta ted the tw o occurrenc e s necessary to begin the

running of t

he statute of lim itations an d modi fied them to avoid past c onfusion.

The first occurrence ne cessary to begin the

running of t

he statute is the plaintiff must suffer a

legally cognizable

or act ual in

jury as a r esul t of th e defen dant ’s negligen ce. Id. Prior to t he decision

in Carvell , judges, practitioners, and scholars used the term “ irremediable injury ” instead of legally cognizable or actual injury. See id. at 28. In Carvell , the sup reme c our t ch ang ed t he t ermin olo gy. 1 The sec on dterms. Thus, it seems the supreme court simply c hanged the terms to avoid the confusion caused by the word “ir

remediable.” It a

ppears the court’s previous decisions which used the term “irremediable injury ” may still be useful in deciding when a legally

cognizable or actual injury has occurred.

2 We could not find any direct evidence that Mr. Hinton charged Plaintiffs for his ser vices. Nevertheless, there is sufficient evidence in the record from which we can infer Plaintiffs compensated Mr. Hinton for his services. -6- occurrence necessary to begin the running of the statute o f lim itations is t

hat “ the p laintiff must ha ve known or

in the exer

cise of r easonable diligence

shoul d hav e known that this injury was caused by the defendant’s negligence.” Id. The court then elaborated on the knowledge requirement and adopted a holding from a m edical malpractice c ase. T

he court st ated: It i s not requir

ed that the

plaintiff actually know that t

he injury constitutes a breac h of the app ropriate legal standard in order to discoverthat hehas a ‘ right of ac tion’; th e plaintif f is deem ed to have discover ed th e right of action if h e is awa re of fa cts sufficie ntto put a

reasonab le person

on notice that he has suffered an injur y as a result of wrongful conduct. Id. at 29 (quoti ng Roe v. Je fferson , 875 S.W.2d 653, 657 (Tenn. 1994)).
Apply ing these requirements to this case, it is the opinion of this court that the statute of

limit ations had r

un on those clai ms re lated to the IRA rol lovers. In this case, the legally cogni zable or a ctual inj ury oc curred a

t the very latest when Plaintiffs began to incur expenses as a result of Defendants’ negligent advice. The e arlies t evidence of this in the

record is 19 October

1988. On t

his date, Plaintif

fs’ ac countant, David Hinton, w

rote a letter to the IRS i n response tothe IRS’ s request f or information. The IRS letter, quoted inan earlier portion of this opinion, explained that t he IRS had noticed a conflict between the amounts reported by Plaintiffs an d those amounts reported by pay ers. Mr. Hinton’s response stated: “ Please be advised thatthe retirement plan distributions were rolled over to the John Kohl Compa ny, P.C., Profit- Sharing Plan.” A s of the dat e of this letter or pos sib ly eve n earli er, Plaintiffs began incurring expenses directly related to Mr. Huf

fstutter’ s advice on the IRA rollove rs. 2 Thus, Plaintiffs were actually injured at that time.

Plaintiffs correct

ly stated that the injury elem ent is not m

et if it is contingent

on a th ird part y’s act ion s or if t her e is a mere p oss ibi lit y or p rob abi lit y of in jury.3 We note that our decision in this case does not mean that a plaintiff has to incur

monetary dama

ges in order for there to be a ctually injury . It just happens to be so in this case. -7- Caledonia Leasing a nd Equip. Co. v. Armstrong, All en , Braden, Goodman, McBride & Prewi

tt , 865 S.W .2d 10, 17 (Tenn. App. 1992). Relying on this case, Plaintiffs argue thatthe injur y wa s still incho ate in Oc tober 1988 because the IRS had not filed suit or issued a de ficiency statem ent and Pla

intiffs ha d not incurr

ed any attor ney’s fees or other damages. W e can not agree. Plaintiffs’ injuries w ere n o longercontingent o n a third par ty’ s actions or

speculati ve once they

began to inc ur expenses related to the negligence. 3 In addition, it is not nec essary for Plai ntiffs to have suffered all the injurious effects of Defendants’ neg ligen ce for th e statute t o begin running

. Security Bank & Trust Co. v. Fabricating, Inc. , 673 S.W .2d 860, 864-65 (Tenn. 1983).

Itis the opinio n of this court thatPlaintiffs had the requisite knowledge at the very latest on 24 October 1988. On that dat e, Jo hn K ola rich , Pla int iffs ’ att orn ey, wrotea letter. The letter clearl y demonst rates Mr. Kol arich knew t he IRS’s inve sti gationinvolved the rollover of funds into the Plan and Mr. Huffstutter had advised Plain tiffs ’ as to t he rol love rs. Mr. K olari ch’s knowledge is attributable to Plaintiff s. Moody v. M

oody , 681 S.W .2d 545, 54 6 (Tenn. 1984). It is not necessary for a plainti ff to know th e facts cons titute a cl aim for legal malpracti ce. Instead, a plaintiff on ly n eed s t o b e “a ware of facts sufficient to put a r easonable person on notice tha t he has suf

fered an injury as a resu lt of wro ngful conduct.” Carvell , 900 S.W. 2d at29 (quoting Roe v. Je fferson , 875 S.W .2d 653, 65 7 (Tenn. 1994)). I t is the opinionof this cour

t that the kn owledge t

hat the IR S was inve stigating a transa ction

recomm ended by an attorney w ithout reservation is sufficient to put a reas onabl e person on notice.

The statute of

limi tat io ns as t o an y cla ims resulting from the IRA rollovers began to run on 24 O ct ober 1988. As of that date, Plaintiffs had suffered an actual injury and had the

requisite knowledge . Plaint

iffs file d their complaint on 1 May 1990. The tria

l court cor rectly determ ined the sta

tute of limitations barred

Plaintif fs’ cla ims because they filed their com plaint more thanone ye ar afte r the caus e of action accrued. Tenn. Code Ann. § 28-3-104(a)(2) ( Supp. 1996).-8-

II. Damages

Plaintiff s’ second a nd third issues involve the different types of damages available in a legal malpractice a

ction. T his caseinvolves three different categories of attorney ’s fee s. The

first, initial fees, are those fees the plainti ff paid or agreed to pay to the negli ge nt defendant . The se cond, cor rective f ees, ar e those fe es the plaintiff incu rred t o corr ect th e error s creat ed by de fenda nt’s neglig ence. T he existence of corrective fees distinguishe s this case from a great m ajority of the ca ses. To explain, every

case does not include correct ive fees. For exam

pl e, whe n an attorney fails to f

ile a persona

l injury claim within the

statuteof limitations there are

no correct ive fees. The injured party has incurr

ed only the initial fees and has lost his

or her claim. Finally , the thir d categor y of f ees, lit igation fe es, are

those fee s paid

by the plaintiff

to prosecute

the m alpracti ce action

. It is Plaintiffs’ contention that they shouldbe able to recover both their initial fees and their litigation fees and atthe very least one o f the two.

A. Initial Fees

Plaintiffs prim arily

rely on Foster v. Duggin , 695 S.W .2d 526 (Tenn. 19 85), to support thei

r argum ent that they are

entitled tothe initial

fees and t

he litigati o n fees. Although the

specific facts of Foster are distinguishable from the present case, the general h olding of the case is useful. In Foster , thepla int iffs reta ine d an att orn ey, Mr. Duggin, on

a continge ncy fe e basis to represent them in a personal injury action. Mr. Duggin committed m alpractice when he failed t o file the compl aint withi n the statuteof lim

itations. As a re sult, the p laintiffs lost th eir claim. T his is the typical malpractice

scenario . In such a case, the succe ssful plaintiff is en titled to recover at the very least the value of the lost cla im. 7 Am

Jur. 2d Attorneys at Law§ 226 (1980).

The only issue before the Foster court was whether the trial court should have reduced t

he malpractice awa

rd by the fee Mr. Duggin would have received had he competently hand led the cas e. Foster , 695 S.W.2d at 526. The tr ial court concluded that Mr. Duggin was not entitled to a set off and the court of a

ppeals affirm ed. The supreme c ourt also agreed Mr . Duggin w as not entit led to a set

off and-9-

explained “the

burden of [ Mr. Dug gin’s] incom petence s houldnot be plac ed upon the innocent client” a nd the plaint

iffs “ should not be r

equired to assume the burden of twice paying for leg al represen tation.” Id. at 527. Thus, the plaintiffs recovered their initial fees in a rou ndabout way. See also Bruce v. Oli ve , No. 03A01-95 09-CV00310, 1996 WL 93580, at *5 (Tenn. App. 4 March 1996).
Although Foster was a co nt ingenc y fee case, t here is no r

eason why

the

same logic can not be applied in this case. The Plaintiffs in the present case are entitled to recover their initial fees with the exception tha t Defend ants receive “ credit for expenses which wer

e incurre d on behalf of [Plai ntiffs] which ul timat e ly benefitted [Plaintiff s].” Foster , 695 S.W .2d at 527. Defenda nts argue that allowing Plaintiffs to recover their initial fees ultimately allows them to receive free legal services because they will rec over both

the corrective fees and the initial fees. At first glance this argument appears logical, but this conclusion is not necessarily the result dictated by the case law. First , the cor rective f ees in this c ase are analogous tothe value o f the lost cla

im in Foster , that is, t

he dam ages dire ctly f

lowing fr om the malpractice. Second, the justi fication o f the supreme c ourt in Foster that a plaintiff “shoul d not

be required to assum

e the burden of twice

payingfor lega

l representation” refers to the paym ent of the init

ial fees a n d the litiga

tion fees. As is expl ained below , it is the op inion of thi s court tha

t Plaintif fs are not entitled totheir liti gation fee s. Thus, in the end Plaint

iffs are having to pay certain f

ees for t he work they

had hoped to h ave properly perform ed in 1983.
B. Litigation Fees

Plaint iffs argue tha

t Foster stands for the proposition that litigat io n expenses are rec overable as incide nt al d ama ges. Pla intiffs c ite the fol lowing sentence: “Th e additiona l fees ne cessary

to pursue this action a

re in the natur

e of incidental damages flowi ng from Mr. Dug gin’s br

each of c ontract. ” We c an not agree with Plai ntiffs’ argum

ent. Although the sta

tement seem s clear, a litera l applicat ion of the statem

ent is incon sistent

with the r est of the opinion. T o explain, the statem ent is inconsisten

t because if plaintiffs were able to recover their litigation expenses the

recover y of the initial

fees wo uld not be nec essary to ensure t

hat plainti ffs wer

e not “required to assum

e the burden of twice

payingfor lega

l representati on.” Id

.-10-

Moreover, in another por

tion of the o pinion, the

suprem e court dis cussed the

maj ority view and explai ned that the litigation f

ees “ are said to cancel

out any fees which

the plaintiff would have

owed the attorney had he perform ed competently. ” Id. It is clear that the sup reme

court inte nd ed to awar d the initial fees only. This is further evidenced by the fact tha

t the court limit ed its deci sion to a det

ermi nation of this issue onl y. Id. at 526. T

hus, it is t he opinion of

this court t

hat Foster does not sta

nd for the proposition t

hat a plain

tiff in a l egal m alpracti ce action may recover their litigation f

ees.

Itis further

the opinion of

this court t

hat Plaint iffs are not entitled totheir litigation fe e s. A party m

ay not recover attorney ’s fees absent a contractual agreem ent between the partie s or

a statuto ry provision

. Goings v. Aetna Cas. &Su r. Co. , 491 S.W .2d 847, 84 8 (Tenn. App. 1972). Attorney’s fe es are no more dam ages in a legal malpractice action than they are in a personal injurycase. Plaintiffs have failed to convince this court that Tennessee’s courts should treat legal mal pr actice claim s differ

ently t han all othe

r claim s.
C. Initial Fees as Special or General D amages

In addition

to determining that the law did not entitle Plaintiffs to recover the initial fe es, the t

rial cour t also determined the initial fees were special dam ages and denied Pla

intiffs’ request toame nd their co mplai nt to inc lude a cla im fo r the initial fees as s pecial da mage s. We

disagree and hold that

the initial

fees ar e
recover able as ge neral dam ages.

The supreme court has defined generaland special da mage s as follow s: “‘General damages a

re such a s naturally and necessaril y result fr om the wrong of injury compl ained of, while spe cial dam ages are such as naturally but

not necess arily result from the wrong or injury

complained of.’” Inland Container Corp. v. March , 529 S.W. 2d 43, 44 (Tenn. 1975) (quoting Caruthers, History of a Lawsuit §155 (8th ed. 1963)). Initial f

ees as dam

ages naturally r

esult from

legal malpracti ce. In a

ll malpractice

cases, the plaintiff has retained an attorney presum ably for a fee to perform c ertain services. If ma

lpractice occurs, the plaintiff may recover the fee which is a

natural pa

rt of the t ransacti on. Moreover, the recovery of a fee paid to a-11-

negligent attorney is necessary

to make the plaintiff

whole. Thus, the trial court erred when it determ

ined the ini tial fee s were s pecial da mage s.

III. Expert Testimony

A. Samuel But

ts
Followingour revie w of

this record we are of the opinion that the trial court did not err in

excluding portions of

the testim

ony of S amue l Butts, Plaintiffs’ expert witness. The trial court exc luded portio ns of Mr. Butts’ t estimony for

two rea sons: 1) Plaintiffs failed to seasona bly suppl emen

t his exper

t witness t

estimony and

2) the basis of his testim

ony lac ked trustw orthiness.

The trial cour

t has discr

etion to det

ermi ne the prope

r corre ctive act

ion for discovery abuses. This court will not disturb that determination unless the trial court abused it s discreti on. Lyle v. Exxon Corp ., 746 S. W.2d 69 4, 699 (T enn. 1988). In the instant case, Mr. Butts was deposedon 22 Sept ember 1995. Eight months later

on the Frida

y befo re the trial on Monday, Plaintiffs delivered a supplem ent to Mr. Butt s’s prior test

imony . The su

pplement substant

iall y alter ed his prior

opinions. During his deposition, Mr. Butts concurred with a dam age mem orandum of De cember 1992 that estim ated Plai ntiffs’ damages result ing from the “loss of use” of

funds to be $58,000.00. His supplement raised that amount significa

ntly. On the m

orning of trial, Plaintiffs produced another cal culation raising the dama ge cl aim to $124,668. 75. Mr. Butts was also of the opin ion i n his depo siti on th at $2 7,000 .00 in attor ney’s fees
were r easonable . His la

ter statement raised that

amount to $50,335. 91.

There are cer

tain fact ors for tr ial courts to c onsider when dete rmini ng appropria te sanctions f

or abu se of e xpert wit

ness discove

ry. These a

re: 1) the explanatio n given for

the abuse; 2) the im

portance of

the testim

ony; 3) the need f

or ti me to pre pare; and 4) the p ossibil ity of a contin uance. See id. The trial court entertained argum

ents from the partie s on the appl ication of these fa ctor s to th e admis sion of Mr . But ts’s tes timo ny. In regar d to the nee d for tim e to prepa

re to address this substantial leap in the expert’s opinion of damages, the trial court-12-

comm ented: “I a

m conc erned. It’s a

bout a $68,000 jump and it would surprise me, and it sounds like that’s a surprise to someone if they w ere not made awar e of thattill three days be fore tri al.” Co nsidering th e first f actor in Lyle , thetrial courtfound as follows: The Court find s that there is no justific ation for t

his unseason able response to a timely discovery response. The purpose of Rule 26 and the pur poses of sc heduling orders are to require that exper t witnesse s set fort

h their opinions withcertain sufficie nt clarit y that the op ponent s may have the opportunity

to prepar e to respon d to those opinions. Itis clear from the recor d in the instant

c ase that th e trial c ourt proper ly and f airly considered the Plaint

iffs’ proof and a

rguments regardin g the failu re to com ply wi th the discover y rules. Moreove r, t he trial c ourt did not exclude all of Mr. B utts’ tes timo ny, but held an appropriate sanction was the exclusion of those portions of Mr. Butt s’s testimony that exceeded his earlier discovery responses. We ar e of the opinion this w as not an ab use of the t rial cour t’s disc retion.

The trial cour

t had o t her reas ons for lim iting Mr. Butts’s testim

ony. T he trial court foun d the in creas ed damag es amoun t was co ntrar y to Mr. Bu tts’s original deposition

testim ony and seem

ed untr ustwort hy. T he c ou rt n ot ed: “I ha ve s ome
concerns over the

tru stw ort hin ess of Mr . But ts’ [ sic ] tes timo ny, specific ally de aling withthese calculations that were not even prep ared by

him tha t presum e individual s living to be 115 years old to the year 2056. Fra nkly some of those figures seem ed abs urd.” Tennesse e Rule of Evidence 703 provides : “T

he court sh all di sallo w testim ony in the for

m of a n opinion or inference

if the unde

r lying f acts or da

ta indicate lack of trustworthiness.”

Determ inations concerni ng the adm ission of ex

pert testi mony

are lef t to the soundd iscre tion of the trial court and will not be disturbed absent an abuse of that discretio n. Buchana n v. Harr is , 902 S.W.2d 941, 945 (T enn. App. 1995). In the instant case, the trial

court wa s afforde d the opportu nity to observeand conside r the testim ony offered by Mr. Butts over the co urse of two day s. Plaintiffs off ered no i ndication

that the c ourt’s f

inding of the

lack of tr

ustworthin ess was a

n arbitrar y exercise of discreti on. The cour

t did not abuse

its discretio n in striking portions of Mr. Butt s’s test

imony . Ther

efore, we are

of the opini on this issue is without m erit.-13-

B. Larry Crabtree

The trial court also excluded the testimony of Plaintiffs’ co-counsel, Larry Crabtree. Plaintiffs proposed to offer Mr. Crab tree’s testimony to explain and justify the fees charged by

King & Ba

llow to cor

rect def endants’ errors.

Cannon5 of the Code of Pro fes sional Conduct provides that “a lawyer shouldexercise independent professional judgmen t on beh alf of a clien t.” Disciplin ary R

ule 5-101(B ) ma

ndates: (B) A l awye

r shall not a

ccept em ploym ent in con te mplat

ed or pending litigation i f the law yer kn ows or i t is obvious tha t the lawyer or a law yer i n t he l awye r's fir m o ught to be c alled as a w itnes s, except tha

t the law yer m

ay unde rtake the emplo ym

ent and the lawye r or a lawye r in the lawye r's firm may te sti fy: (1) If the testimony

will relate solely to an uncontested ma tter. (2) If the te stimony wil l relate s olely t o a ma tter of f orma lity a nd there is no reaso n to believe tha t sub stantial e vidence w ill be offe red in o ppo sit ion to t he t est imon y. (3) If the testimony

will relate solely to the natureand value o f legal serv ices rend ered in t he c ase by t he lawyer or the lawyer's firm to the client. (4) As to any matter, i f refusal would work a substantial hards hip on the client because of the distinctive value of th e lawyer or the lawyer's firm as counsel in the particular case

. This rule embodies i mport ant public po licy c onsiderati ons and ultim ately protects clients. Ethical

Considera

tion 5-9 reco gni zes the cos ts t o a cl ien t whe n an att orn ey/ witness refuses to withdraw as counsel providing: “If a lawy er is both counse l and witness, the lawyer becom es moreeasily impea

chable for interest and thus may be a less effect

ive witne ss . Co nversely , the opposi ng counsel m ay be handicappe d in challeng ing the cre dibilit y of the lawyer . . . . An advocate who becom es a witness is in the unseemly and ineffe ctive pos ition of arguing t he advocat e’s own credibi lity.” Fi nal ly, Ethical

Considera

tion 5-10 m

andates: “

Where the questio n arises, doubt shouldbe r esolved in favor of the lawyer testif

ying an d against be comin g or continuing as an advoc ate.” These guid elines are cl ear. An attorn ey m ust steadf astly guard agai nst becom

ing both an ad

vocate an d a witnes s.

This court has held that tr

ial courts “have

a broad r ange of opti ons availab le to insulate tr

ials from ethical t ain t.” Hilton v. Crawford , No. 03 A01-9102CV 33,4 One rea son for th is conclu sion is that

the corr ective w ork neve

r rectif ied the pr oblems with the plan. As a result, Plaintiffs terminated the Plan on 19 April 1996. In addition, Defendants contend, in part, that King & B allow spent a great deal of time on project which they never completed. -14- 1991 WL 2618 72, at *3 ( Tenn. A pp. 13 De c. 1991). In Hilton , the cour t concluded : “[T ]hemer

e fact th at counsel is a potenti al witnes s is no t suff icient re ason for disqualific ation. It may

very well be, however, if counsel wish to become a witness the Trial Court might exclude their testim ony. . . .” Id.

Plaintiff s argue the

exception

contained in Disciplinary Rule 5-101( B)(3) applies to M r. Cr abt ree’s tes timo ny. We disagree. The issues which Mr. Crab tree’s testim ony would addr

ess are more involved than m erely stating the “nature

and value of legal services rendered.” In this ca se, Mr. Crabtre e’s tes timony would nec essarily address highly d

isputed issue s. 4 In other w ords, the testim ony and cross-ex amina

tion would involve

the appropr

iateness o f the cor

rective a ctions taken, the results of the correct ive actions ta

ken, alte rnative a ctions whi ch Plainti ffs could h ave taken, the cost of the cor rective a ctions, e stima

tes of the cost of alter native ac tions, the

propriety of the fees actually

incurred , and

so on. As explained b y the t rial cour t, this is not a
case where the testifying attorney simply lay s the foundation for the tri al court to make an awar d of attorn ey’ s fees.

Plain tiffs a lso argue t

he trial c ourt should ha

ve perm itted Mr. Crabtre e to testify because excluding his t

estimony wo rked a har

dship on Plaint iffs. The Sixt h Circuit has noted that “[a] self-inflicted inj ury is not a hardship.” General Mill Supply Co. v. SCA Servs., Inc ., 697 F.2d 704, 713 (6th Cir . 1982 ). Th e court in General Mill stated: Now they t

urn to t he United

States D istrict C ourt and sa y in effect: ‘Yes, judge, we know t hat the ca nons would ne ver allow [the atto rney] to repres ent Gene ral Mill i n an abuse of

process suit, and also be

its star w itness. But yo u can’t do anythi ng to us, because, knowing wh at was dow n the road, by our own de liberate actionwe created

a situation

where [ the attorney ] is indis pensable to Genera l Mill and his withdrawal a h ardship. So, jud ge, y ou’ll just have to swallow

it.

. . . [T]he duty

to withdraw is plainest when the need to be a witness is well known in advance. The canon woul d be absurd and indefens ible if it excus ed com pliance when the dependence of the cli ent on the lawyer had been c reated in

fact of the knowledge

that the de

pendence w ould be used to fru strate the-15-

enforce ment

of the canon. The term “hardship” i s c ertainly capable of rationa l interpre tation, of mean ing a situat ion the alleged victim

of the har

ds hip has not knowingly caused an d could not reasonable foresee. Id. at 714-15. After hearing the proffered Crabtre e testim

ony, t he trial c ourt found: “Thi s is exactly the type of situation that the DR 5- 101 is intended to address . It puts lawyers in the most un comfortable po sition t o be both advocate an d witness. This is not a situation

that was not unfores eeable. ” Attorneys can not be allowed t o create cli ent hard shi ps i n or der to f orc e th e co urt to a ccep t pr ohi bit ed t est imon y.

In addition, the trial court in this case specifically found Plaintiffs suffered

no su bs tan ti al h arm i n the excl usion of Mr. Crabtree’s testim ony. We a

gree. Plaintiffs had a n independent expert, Sam

uel Butts, who could ba se his opinion s abo u tthe ne cessi ty and re ason ablen ess o f the c orrec tive work u pon C rabtr ee’s represe ntations to him. Based upon the recor d , the tri al court di d not abuse i ts discretio n in excludingthe testimony of co-counsel La rry Crabtree fr

om the trial in this cause.

IV. Co nclusion

Itresults that the judgment of the trial court is affir med in part, r eversed i n part, and remanded. O n rem and, the t rial cour t sh all det ermi ne the appr opriate amount of theinitial fees payable to Plaintiffs as damages. Costs on appeal are taxed equally to Plainti ffs and D efendants

.

__________________ ____________

_ SAMUEL L. LEWIS, JUDGE

CONCUR:

_________________

_________________

___ BEN H . CANTREL

L, J.-16-

_________________

_________________

___ WILL IAM C. KOCH , JR., J.