FILED

June 22, 1998

Cecil Crowson, Jr.

Appellate C ourt Clerk

IN THE SUPREME COURT OF TENNESSEE

AT JACKSON

 FOR PUBLICATION

 Filed: June 22, 1998

BILLIE J. METCALFE, )

JULIA M. METCALFE, and )

JOHNNY D. METCALFE, ) SHELBY CIRCUIT

)

Plaintiffs/Appellants, )

)

Vs. )

) HON. J. STEVEN STAFFORD,

) JUDGE

)

LARRY J. WATERS, )

)

Defendant, )

)

and )

)

CHARLES W. PRUITT, )

) No. 02S01-9704-CV-00027

Defendant/Appellee. )

For Appellants Metcalfe: For Appellee, Charles W. Pruitt:

R. Sadler Bailey Robert C. Rosenbush

C. Philip M. Campbell Millington, Tennessee

BAILEY & CLARKE 

Memphis, Tennessee

For Defendant, Larry J. Waters:

Paul E. Lewis

Millington, Tennessee

O P I N I O N

COURT OF APPEALS AFFIRMED 

IN PART AND REVERSED IN PART; 

REMANDED TO TRIAL COURT ANDERSON, C.J.
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We granted this appeal to determine whether the Court of Appeals erred in

reversing the jury’s verdict awarding punitive damages in this legal malpractice

action. The appeals court held that punitive damages were improper because the

defendant’s malpractice did not constitute intentional, fraudulent, malicious or

reckless conduct and because the defendant’s efforts to conceal his actions were

not contemporaneous with his malpractice. The court affirmed the jury’s verdict as

to liability, but reversed the jury’s verdict as to compensatory damages because it

was excessive. 

After our review of the record and applicable authority, we hold that as to

punitive damages, the evidence supported a finding that the defendant engaged in

intentional, fraudulent, malicious, or reckless conduct and that there is no

requirement that a defendant’s attempts to lie about or conceal his conduct must

be contemporaneous with the underlying malpractice. The judgment of the Court

of Appeals is therefore reversed in part and the jury’s verdict as to punitive

damages is reinstated. The case is remanded to the trial court for a new trial

solely on the issue of compensatory damages for the reasons expressed by the

Court of Appeals. 

BACKGROUND

In September of 1986, the plaintiff, Billie Metcalfe, was a passenger in a car

that was involved in a head-on collision with another automobile. Metcalfe, who

was age 16 at the time, suffered a broken leg, a concussion, facial cuts, and had to

have a pin surgically placed in her hip. She spent thirteen days in the hospital.

The plaintiff and her parents, Julia and Johnny Metcalfe, later hired the

defendant, Larry Waters, to represent them in connection with the accident. In

September of 1987, Waters filed a complaint against the driver of the vehicle Billie

Metcalfe had been riding in, the driver’s parents, and several other defendants. 
1

 The complaint also named Charles Pruitt and the law office of Pruitt & Waters as

defendants based on theories of respondeat superior and partnership liability. The jury found that

Pruitt and Waters w ere partners and that both were jointly and severally liable for the comp ensatory

dam ages. Th ese issue s are not before us in this appeal.

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The complaint was non-suited by Waters on March 15, 1990, because Waters was

not prepared on the day of trial. The complaint was re-filed on March 6, 1991;

however, Waters did not pay the filing fee, nor did he properly issue summons.

The complaint was dismissed by the trial court against some of the

defendants in December of 1992, due to the expiration of the statute of limitations. 

It was dismissed as to the remaining defendants on May 14, 1993, when Waters

failed to appear for the trial. Waters lied to the plaintiffs about the status of the

case for several months, telling them that it was still pending even though he knew

it had been dismissed. When he finally informed the Metcalfes that the case had

been dismissed, he did not state the reason for the dismissal but nevertheless told

them it was not worth appealing.

The Metcalfes initiated a legal malpractice suit against Waters.1 In his

amended answer to the complaint and in his testimony, Waters admitted that he

failed to apprise the plaintiffs of the status of their case, failed to adequately

prepare for trial, failed to refile the suit properly after taking a non-suit, failed to file

summons properly, failed to appear the second time the case was set for trial, and

failed to file a notice of appeal on behalf of the plaintiffs. Waters conceded that his

failure to inform the plaintiffs that the case had been dismissed was an intentional,

fraudulent, malicious, or reckless effort to conceal his mistakes. He nonetheless

denied that punitive damages were warranted.

At trial, the trial court directed a verdict for the plaintiffs on liability. The jury,

having been instructed on the law, returned a verdict that included $100,000 in

punitive damages against Waters. In approving the verdict, the trial court found
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that “the conduct of the defendant Waters in not keeping the plaintiffs informed

about the status of their case and of lying to the plaintiffs about the dismissal is the

gravamen of the punitive damage award.” The trial court also stressed that Waters

“did not take any action to set aside the dismissal of the case or to protect his

clients’ interests after the case was dismissed.”

In reversing the trial court, the Court of Appeals found that Waters’

malpractice amounted to negligent conduct and not intentional, fraudulent,

malicious or reckless conduct. Although the intermediate court also found that the

defendant’s effort to conceal his malpractice was “egregious,” it could not serve as

the basis for punitive damages:

[A]n award of punitive damages must be made on the

basis of the same conduct that warrants an award of

compensatory damages. In the case before us,

compensatory damages were awarded for the negligent

conduct of Waters in allowing the dismissal of the

underlying case. Subsequent to this negligent conduct,

Waters committed the egregious act of lying to the

Metcalfes about the dismissal of the case. Certainly,

his conduct after the dismissal of the case cannot be

condoned, but at the same time it is conduct that was

not included in the negligent act or acts that resulted in

the award of compensatory damages.

We granted the plaintiffs’ application for permission to appeal. 

ANALYSIS

This Court historically has recognized that “in an action of trespass the jury

[is] not restrained, in their assessment of damages, to the amount of the mere

pecuniary loss sustained by the plaintiff, but may award damages in respect of the

malicious conduct of the defendant, and the degree of insult with which the

trespass had been attended.” Wilkins v. Gilmore, 21 Tenn. 140 (1840)(emphasis

added). The purpose of such damages is not to compensate the plaintiff but to

punish the wrongdoer for conduct that is egregious and to deter others from
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engaging in similar conduct. Huckeby v. Spangler, 563 S.W.2d 555, 558 (Tenn.

1978).

In Hodges v. S. C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992), we traced the

history of our case law and determined that punitive damages are only available

where a defendant has acted either intentionally, fraudulently, maliciously or

recklessly. We explained:

A person acts intentionally when it is the person’s

conscious objective or desire to engage in the conduct

or cause the result. A person acts fraudulently when (1)

the person intentionally misrepresents an existing,

material fact or produces a false impression, in order to

mislead another or to obtain an undue advantage, and

(2) another is injured because of reasonable reliance

upon that representation. A person acts maliciously

when the person is motivated by ill will, hatred, or

personal spite. A person acts recklessly when the

person is aware of, but consciously disregards, a

substantial and unjustifiable risk of such a nature that

its disregard constitutes a gross deviation from the

standard of care that an ordinary person would exercise

under all the circumstances.

Id. at 901 (citations omitted). 

To achieve the twin purposes of punishment and deterrence, the

defendant’s conduct must be established by “clear and convincing” evidence. In

determining liability for punitive damages, evidence of the defendant’s financial

condition is inadmissible. Id. In determining the amount of punitive damages, the

following factors may be considered in a separate, bifurcated proceeding: the

defendant’s financial condition and net worth; the nature and reprehensibility of the

defendant’s conduct; the impact of the defendant’s conduct on the plaintiff; the

relationship of the defendant to the plaintiff; the defendant’s awareness of the

harm and motivation in causing the harm; the duration of the defendant’s

misconduct and whether the defendant attempted to conceal the conduct; the

expense the plaintiff has incurred in recovering any losses; whether the defendant
2

See, e.g., Hyatt Regency v. Winston & Strawn, 907 P.2d 506, 518 (Ariz. Ct. App. 1995)

(“aggra vated or o utrageo us con duct”); Orsini v. Larry Moyer Trucking, Inc., 833 S.W.2d 366, 368 (Ark.

1992)(w anton c onduc t; consc ious indiffe rence; m alice); Miller v. Byrne, 916 P.2d 566, 580 (Colo. C t.

App. 19 95)(“willful an d wanto n”); Ray-Mar Beauty College, Inc. v. Ellis Rubin Law Offices, 475 So.2d

718, 719 (Fla. Dist. C t. App. 198 5)(“gros s ma lpractice”); Hous ton v. Surr ett, 474 S.E.2d 39, 41 (Ga.

Ct. App . 1996)(“w illful miscon duct, m alice, fraud , wanton ness, o ppress ion”); Fitzgerald v. Walker, 826

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profited from the conduct, and if so, whether damages in excess of the profit are

necessary to deter future conduct; whether the defendant has been subjected to

previous punitive damage awards based upon the same wrongful act; and whether

the defendant made any effort to take remedial action or to offer a fair and prompt

settlement for the actual harm caused. Id. at 901-902 (emphasis added).

In the present case, the Court of Appeals reversed the jury’s award of

punitive damages, finding that Waters’ malpractice amounted to negligence and

not intentional, fraudulent, malicious, or reckless conduct. The court further stated

that Waters’ conduct in concealing and lying about his malpractice, although

“egregious,” was not contemporaneous with the underlying malpractice and was

therefore, under Hodges, relevant only to the amount of, but not the liability for,

punitive damages. We disagree with both conclusions.

A majority of jurisdictions have recognized that punitive damages may be

proper in a legal malpractice case. Annotation, Allowance of Punitive Damages

Against Attorney For Malpractice, 13 A.L.R. 4th 95 (1982 & Supp. 1997); see also

Elliott v. Videan, 791 P.2d 639, 644 (Ariz. Ct. App. 1989)(“punitive damages have

historically been awarded against attorneys for legal malpractice”). As in any case

involving punitive damages, however, the plaintiff must prove that the defendant

engaged in the requisite culpable conduct. The Alabama Supreme Court has said,

for instance, that “some showing of fraudulent, malicious, willful, wanton, or

reckless behavior or inaction must be made to support a claim for punitive

damages in a legal malpractice case.” Boros v. Baxley, 621 So.2d 240, 245 (Ala.

1993). Other courts have used similar terms in describing the culpable conduct for

an award of punitive damages in a legal malpractice case.2
P.2d 13 01, 1305 (Idaho 1 992)(“e xtrem e deviation from reason able stan dards o f condu ct”); Belford v.

McHale, Cook & Welch, 648 N.E.2d 1241, 1245 (Ind. Ct. App. 1995)(“malice, fraud, gross negligence,

or oppre ssivene ss”); McAlister v. Slosberg, 658 A.2d 658 (M e. 1995)(ma lice); Gautam v. DeLuca, 521

A.2d 13 43, 1347 (N.J. Su per. 198 7)(wan ton, reck less or m alice; cons cious w rongdo ing); but see Cripe

v. Leiter, 683 N.E.2d 516 (Ill. App. Ct. 1997)(discussing statute which precluded punitive damages for

attorney m alpractice ). 

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We join these jurisdictions in recognizing that punitive damages may be

awarded in a legal malpractice claim, provided the culpable conduct established in

Hodges, supra, i.e., intentional, fraudulent, malicious, or reckless, is proven by

clear and convincing evidence. In this regard, we disagree with the intermediate

court’s conclusion that Waters’ conduct was merely negligent. In addition to failing

to prosecute the Metcalfes’ claim, Waters’ failed to keep them informed about the

status of their lawsuit, failed to prepare when the case was set for trial, failed to refile the case properly after taking a nonsuit, failed to pay the filing fee, failed to

issue summons properly, failed to appear when the case was set a second time for

trial, failed to file a notice of appeal, and failed to take any actions in an effort to

preserve the Metcalfes’ right of appeal. Given Waters’ repeated transgressions

and callous disregard for the rights of his clients, there was overwhelming evidence

from which the jury could find, at a minimum, reckless conduct, that is, conduct

constituting a gross deviation from the applicable standard of care. See, e.g.,

Patrick v. Ronald Williams P.A., 402 S.E.2d 452, 460 (N.C. Ct. App.

1991)(“repeated course of conduct which constituted a callous or intentional

indifference to the plaintiff’s rights” stated a claim for punitive damages).

We also disagree with the conclusion that punitive damages were improper

because Waters’ malpractice was not contemporaneous with his efforts to lie about

and conceal his wrongdoing. Although the Court of Appeals correctly observed

that the concealment of wrongdoing is listed among the factors in Hodges that may

be considered in determining the amount of punitive damages, nothing in Hodges

precludes the factor from being considered with regard to a defendant’s liability for

punitive damages. Indeed, other factors listed among those for consideration with

respect to the amount of punitive damages are also necessarily considered with
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respect to the threshold liability issue; for instance, the “nature and reprehensibility

of the defendant’s wrongdoing.” Hodges, 833 S.W.2d at 901. A close reading of

Hodges, in fact, indicates that only evidence of a defendant’s net worth or financial

condition is deemed inadmissible in determining a defendant’s liability for punitive

damages. Id. at 901-902. 

Finally, we believe that limiting consideration of a defendant’s efforts to

conceal his or her wrongdoing is inconsistent with the purpose of punitive

damages: to punish egregious acts and deter others from committing the same or

similar acts. As other courts have recognized, an attorney’s concealment of

wrongdoing and/or misrepresentations affecting the client’s case relate directly to

the punitive damages issue. See, e.g., Houston v. Surrett, 474 S.E.2d 39, 41 (Ga.

Ct. App. 1996) (“an attorney’s concealment and misrepresentation of matters

affecting his client’s case will give rise to a claim for punitive damages.”); Asphalt

Engineers, Inc. v. Galusha, 770 P.2d 1180 (Ariz. Ct. App. 1989)(“the record also

supports an inference that [the attorney] attempted to cover up his misconduct.”). 

In sum, the harm resulting from the original wrongdoing, as in the present case,

may be exacerbated by intentional, fraudulent, malicious, or reckless efforts that

prevent the plaintiff from taking immediate corrective action.

CONCLUSION

We have concluded that the Court of Appeals erred in reversing the jury’s

verdict awarding punitive damages. There was clear and convincing evidence of

intentional, fraudulent, malicious, or reckless conduct on the part of Waters, and

there is no requirement that attempts to conceal be contemporaneous with the

original wrongdoing. The judgment of the Court of Appeals is therefore reversed in

part and the jury’s verdict as to punitive damages is reinstated. The case is

remanded to the trial court for a new trial solely on the issue of compensatory
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damages. Costs of this appeal are taxed to the defendant/appellee, Larry Waters,

for which execution may issue if necessary.

_________________________________

RILEY ANDERSON, Chief Justice

Concur:

Drowota, Birch, and Holder, JJ.

Reid, Sp.J.