Court Opinion

ID: 5113202
Source: CourtListenerOpinion
Date Created: 2021-10-02 17:29:33.207022+00
Date Added: 2024-06-11T08:21:41.497355
License: Public Domain

VENTERS, J.,
Concurring, in part, and Dissenting, in part.
While I concur with the Majority in the elimination of the physical impact rule and in requiring the use of the suit-within-a-suit method for trying legal malpractice claims, I disagree with its decision to the extent that it insulates lawyers from liability for the negligent destruction of a client’s claim for punitive damages. The Majority sees conflict between KRS 411.184 and KRS 411.165 where, in this case, none exists. As explained below, KRS 411.184 is plainly not implicated in the issue of whether Osborne may assert a claim for lost punitive damages. And more specifically, KRS 411.165 states a clear legislative policy that negligent lawyers must be held responsible for all of the damages sustained by the client. The Majority opinion defeats that policy with the mistaken notion that Osborne seeks to hold Keeney vicariously liable for Quesen-berry’s gross negligence. Therefore, I respectfully dissent.
The Majority incorrectly holds that, because KRS 411.184(2) prohibits recovery of punitive damages from anyone but “the defendant from whom such damages are sought,” Osborne’s claim against Keeney for “lost punitive damages ” is barred. The Majority errs because Osborne does not seek to impose punitive damages upon Keeney for Quesenberry’s conduct. That aspect of her complaint is not a claim for punitive damages; it is a claim for compensatory damages. There is a tremendous conceptual difference between the claim Osborne had for “punitive damages” against Quesenberry and her claim against Keeney for “lost punitive damages.” The former was truly a claim for punitive damages; the latter is clearly a claim for compensatory damages.
Osborne’s claim for punitive damages against Quesenberry was a vested property right that she owned and it had economic value, just as her house had value. Because of Keeney’s professional negligence, the value of that claim, like her claim for the damage to her house, was lost; the value of the punitive damage claim was reduced to $0.00. Plainly, under KRS 411.184, Osborne would have no right to recover from anyone for Quesenberry’s alleged gross negligence or recklessness. But she does not seek recovery for Ques-enberry’s conduct — she’s already lost that opportunity because of Osborne’s negligence. Her present claim is to be compensated for the destruction of her right to assert a punitive damage claim. That is purely a claim for compensatory damages *25that does not implicate KRS 411.184. It is simply a part of her lawsuit to recover what she lost financially when Keeney neglected to pursue her cause of action. If successful, Osborne’s claim would not punish Keeney for Quesenberry’s misconduct. Rather, it would compensate Osborne for the economic harm she sustained due to Keeney’s own negligent conduct. And that is exactly what KRS 411.165 says must happen. KRS 411.165(1) mandates that the negligent lawyer “shall be liable to the client for all damages and costs sustained by reason [of his professional negligence];” (emphasis added) not just some of the damages, all of the damages. That includes, by definition, the financial damage Osborne suffered when her punitive damage claim against Quesenberry was, like her house, destroyed. It is what she would have had but for her lawyer’s negligence. It is intended to provide recompense for what she lost, not to punish Keeney (or anyone) in Quesenberry’s stead.
Perhaps the issue gets confused because of the way we ascertain the extent of her economic loss. The value of the lost claim can be determined a number of ways, and I agree with the Majority that the fairest way is the trial-within-a-trial approach. But in using that approach, we must not lose sight of what is truly on trial. If her suit was successful, Keeney would not be adjudged to be responsible for the negligent destruction of Osborne’s house or for the medical expenses, and mental anguish she suffered because of that ordeal. Kee-ney would be liable for the damages that naturally flowed from his own acts or omissions. Obviously, those damages include the value of her lost claims for the damage to her house and her belongings, her medical expenses, and the value of her lost claim for mental anguish and distress. But they also include the economic loss caused by the destruction of her punitive damage claim, which was separately destroyed by Keeney’s negligence just as surely as her house was by Quesenberry’s negligence. The trial-with-in-the-trial does not substitute Keeney as the party-defendant in the place of Quesenberry. It is simply the method that we have chosen to determine the value of those losses sustained by Osborne because of Keeney’s negligence.
The Majority gives significant weight to the historical underpinnings of punitive damages, that is, to deter and punish the wrongdoer. While that observation, concerning the historical roots of punitive damages, is unassailable, it is not relevant to the issue under review. The issue we consider is not punitive damages per se; rather the issue we review is lost punitive damages caused by professional negligence.
In summary, KRS 411.184 does not apply because Osborne’s claim does not seek to punish Keeney for what Quesenberry did. Her claim is to be compensated for the financial loss she sustained because of Keeney’s inaction. KRS 411.165 requires us to hold the lawyer responsible to the client for all of the damages the client sustained by reason of his negligence. It makes no exception for damages caused when a lawyer destroys the client’s claim for punitive damages. It follows that when an opportunity to recover punitive damages is lost because of professional negligence, the damage cannot properly be categorized as “punitive damages”; rather, the lost damages are transformed into, and correctly categorized as, compensatory damages. Therefore, KRS 411.184(2) is irrelevant to our review of this issue, and accordingly, I dissent.
SCOTT, J., joins.