Opinion ID: 1700799
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Heading: Availability of Emotional Distress Damages in a Negligence Action

Text: As with his claim to reputation damages, Lawrence has presented his case based on the assumption that emotional distress damages, as a legal concept, are recoverable in negligence actions. We stated earlier in this opinion that under Iowa law the general rule is that in cases grounded in negligence, emotional distress damages are not recoverable unless accompanied by physical injury. An exception exists where the nature of the relationship between the parties is such that there arises a duty to exercise ordinary care to avoid causing emotional harm. Oswald, 453 N.W.2d at 639. Since no physical injury is alleged in the case at bar, a threshold issue is whether a bankruptcy attorney, in performing his or her duties, holds a duty to protect the client from emotional distress. Iowa courts have only recognized a duty to protect against emotional anguish in circumstances involving a contractual relationship for contractual services that carry with them deeply emotional responses in the event of breach. Id. A review of the circumstances of these Iowa cases demonstrates that we have only allowed recovery of emotional distress damages in situations which involve both a close nexus to the action at issue and extremely emotional circumstances. See the discussion of exceptions recognized by our decisions in Division IIIB. In addition to being an important factor for consideration in the determination of the existence of a duty, foreseeability is an important element in the establishment of causation. Barnhill, 300 N.W.2d at 106. Damages for emotional distress which arise out of acts which invade an interest protected by tort law are recoverable only if the claimed emotional distress naturally ensues from the acts complained of. Merenda v. Superior Court, 3 Cal.App.4th 1, 4 Cal. Rptr.2d 87, 89 (1992). We assign liability only for injuries an ordinary person should reasonably foresee as the consequences of the negligent act. Barnhill, 300 N.W.2d at 106. The majority view among American jurisdictions is that emotional distress is not a reasonably foreseeable consequence of and does not naturally ensue from an act of legal malpractice. Merenda, 4 Cal.Rptr.2d at 89, 91 (precedent runs strongly against recovery [of emotional distress damages] in cases of legal malpractice.); see also Smith v. Superior Court, 10 Cal.App.4th 1033, 13 Cal.Rptr.2d 133, 136 (1992); McClain v. Faraone, 369 A.2d 1090, 1092, 1094 (Del.Super.Ct.1977) (emotional distress resulting from loss of residential property was not natural and probable consequence of negligent title search); Maere v. Churchill, 116 Ill.App.3d 939, 72 Ill.Dec. 441, 444, 452 N.E.2d 694, 697 (1983) (Even though real estate is unique and the attorney-client relationship is a fiduciary one, we are unable to conclude that serious emotional disturbance is a particularly likely result of an attorney's breach of contract in his examination of title to real estate.). Only in special cases involving peculiarly personal subject matters do the majority of jurisdictions recognize that mental anguish may be a foreseeable damage resulting from attorney negligence. See, e.g., Oswald, 453 N.W.2d at 639; Selsnick v. Horton, 96 Nev. 944, 620 P.2d 1256, 1257 (1980). Lawrence's recognition of these rules and precedents inhibiting his ability to recover emotional distress damages in a negligence action leads him again to fashion his claim after the law of defamation. However, a factual disparity appears in trying to relate his case to a defamation case in that Lawrence's emotional distress claim is one step removed from the negligent act in preparing the bankruptcy petition. Were it not for the indictment by the federal government for fraud, there would have been no basis for Lawrence's claim. Although not correlative, the policy considerations we expressed in Millington v. Kuba, 532 N.W.2d 787 (Iowa 1995), are instructive here. In Millington, we affirmed the district court's granting of summary judgment to the defendants because the plaintiffs had failed to satisfy the physical injury requirement of the negligent infliction of emotional distress claim. There, the emotional distress arose out of the alleged wrongful cremation of the body of the plaintiffs' father. We also decided in Millington that a new exception to that requirement was not warranted. We declined to recognize a duty, as urged by plaintiffs, simply on the basis of the existence of a highly emotional relationship. Thus, the plaintiffs were too far removed from the defendants' alleged negligent conduct to cause the imposition of a duty on the defendants to exercise ordinary care to avoid causing emotional harm to the plaintiffs. Our court of appeals in Kunau v. Pillers, Pillers & Pillers, P.C., 404 N.W.2d 573 (Iowa App.1987), also refused an attempt to expand the application of the tort of negligent infliction of emotional distress. There, a lawyer's negligent procedure in handling a case caused its dismissal which prevented a trial on the merits. The court of appeals refused to recognize that the plaintiff was entitled to damages for negligent infliction of emotional distress ensuing from the lawyer's negligence. The Georgia court held in Hamilton regarding reputation damages that the defendant law firm was not liable when its legal advice regarding a company's commercial note program led to the board chairman's indictment for fraud and misrepresentation under the Georgia Securities Act. See Hamilton, 306 S.E.2d at 340-44. The court also held that in the absence of physical injury, wanton, voluntary, or intentional misconduct, damages for mental and physical strain or decreased earning capacity as well as reputation damages are not recoverable. Based on our precedents in this area of law and the reasoning of other courts on the subject, we believe that recognition of emotional distress damages as a result of the negligence of a bankruptcy attorney in completing bankruptcy forms would constitute a clear departure from the narrow circumstances in which emotional distress damages have previously been recoverable. A bankruptcy attorney's duty to competently manage the bankruptcy process is not `so coupled with matters of mental concern or solicitude, or with the feelings of the party to whom the duty is owed, that a breach of that duty will necessarily or reasonably result in mental anguish or suffering.' Oswald, 453 N.W.2d at 639 (quoting Taylor v. Baptist Medical Ctr., 400 So.2d 369, 374 (Ala. 1981)). Moreover, the claimed emotional distress is too far removed from the defendants' negligent conduct to cause the imposition of a duty and does not naturally ensue from the acts complained of. We therefore hold that the trial court erred as a matter of law in submitting the claim of severe emotional distress to the jury. Defendants' motion for judgment notwithstanding the verdict on this issue should have been sustained.