Scognamillo v. Olsen, 87CA1489

• Decision Date: 01 February 1990
• Docket Number: No. 87CA1489,87CA1489
• Citation: 795 P.2d 1357
• Parties: Peter SCOGNAMILLO and Harry Faircloth, Plaintiffs-Appellees and Cross-Appellants, v. Robert E. OLSEN, individually and as partner of Olsen & Guardi; and Olsen & Guardi, a partnership, Defendants-Appellants and Cross-Appellees. . II
• Court: Colorado Court of Appeals

Page 1357

795 P.2d 1357

Peter SCOGNAMILLO and Harry Faircloth, Plaintiffs-Appellees and Cross-Appellants, v. Robert E. OLSEN, individually and as partner of Olsen &amp Guardi; and Olsen & Guardi, a partnership Defendants-Appellants and Cross-Appellees.

No. 87CA1489.

Colorado Court of Appeals, Div. II.

Feb. 1, 1990.

Rehearing Denied March 8, 1990.

Certiorari Denied Aug. 27, 1990.

O'Connor & Hannan, Paul G. Goss, Marianne K. Lizza, Denver, for plaintiff-appellee and cross-appellant Peter Scognamillo.

Radetsky & Shapiro, P.C., Jennifer L. Donaldson, Jay Stuart Radetsky, Denver, for plaintiff-appellee and cross-appellant Harry Faircloth.

Rothgerber, Appel, Powers & Johnson, James R. Everson, Mark Spitalnik, Joseph E. Kovarik, JoAnn L. Vogt, Denver, for defendant-appellant and cross-appellee Robert E. Olsen.

Hall & Evans, Edward H. Widmann, Barbara Green, Malcolm S. Mead, Denver, Whittman & McCord, Sherwin V. Wittman II, Colorado Springs, Whittman & McCord, Cynthia J. Hyman, Denver, for defendant-appellant and cross-appellee Olsen & Guardi, a partnership.

Opinion by Judge SMITH.

In this legal malpractice action, defendants, attorney Robert E. Olsen (Olsen) individually, and the law firm of Olsen and Guardi, appeal from a judgment entered on a jury verdict awarding plaintiff Peter Scognamillo, $200,187.49, and plaintiff Harry Faircloth, $615,052.40. Both plaintiffs cross-appeal a reduction in their judgments based on a finding of comparative negligence and the court's order reducing each verdict by $27,000. Plaintiff Faircloth also cross-appeals the trial court's order denying him prejudgment interest. We affirm.

The judgment at issue here arose from defendants' representation of plaintiffs in a federal district court action entitled Alling v. American Tool & Grinding (Alling). This case involved claims by five investors in American Tool and Grinding, a company formed by plaintiffs and several others to sell machine tool distributorships. The Alling investors brought claims against plaintiffs and others for fraud, breach of contract, and civil conspiracy in the sale of the distributorships. They sought recovery of both actual and punitive damages. Defendant Olsen represented all defendants named in the Alling case, including both plaintiffs here. That action was tried to the court in November 1981.

During the course of the Alling trial, the Alling investors offered to settle for $40,000 in cash plus a selection of inventory from American Tool and Grinding, or alternatively for $54,000 cash. Both of the plaintiffs here agreed to this offer. However, a third defendant (Volger) did not, and thus, no settlement was reached prior to the conclusion of trial.

In December 1981, after trial, Olsen and his firm, defendants here, withdrew as counsel for all of the Alling defendants. In June 1982, the Alling court entered its findings of fact and conclusions of law. It found each defendant to be part of a conspiracy to defraud and directed that judgment enter in favor of the Alling investors for $214,830 in actual damages and $849,020 in punitive damages. These damages were awarded jointly and severally against all Alling defendants.

Alling defendant Volger appealed this judgment. The United States Court of Appeals for the Tenth Circuit affirmed the judgment on compensatory damages, but reversed as to Volger as to the amount of punitive damages and remanded for a new determination. On remand, Volger's punitive damages were reduced to $300,000.

Scognamillo and Faircloth hired a different law firm to appeal the Alling judgment. However, that appeal was ultimately dismissed as having been untimely filed. Plaintiff Scognamillo subsequently entered into an agreement with the Alling investors releasing him from all claims, appeals, and judgments contingent upon his payment of $200,000.

In September 1983, Scognamillo and Faircloth filed this action against defendants (Olsen) seeking damages based on their claim that Olsen negligently represented them in the Alling case. The essence of plaintiffs' negligence claim was that Olsen had failed to evaluate properly and advise them of the full extent of their potential liability, and that Olsen had undertaken and continued representation of all three Alling defendants notwithstanding their divergent interests in the company, their personal animosities toward one another, as well as their conflicting views about settlement. They alleged, that, but for Olsen's negligence, they would have settled prior to entry of the Alling judgment. Plaintiffs claimed actual and compensatory damages in an amount equal to their liability under the Alling judgment or, in the case of Scognamillo, the amount for which he settled.

During a 30-day jury trial, conflicting testimony was presented by legal experts, plaintiffs, and defendant Olsen. At the conclusion of trial, the trial court instructed the jurors that, if they found for plaintiffs, they were to assess damages based on plaintiff Faircloth's liability for compensatory and punitive damages under the Alling judgment and plaintiff Scognamillo's settlement of the Alling judgment. The jury was also instructed to consider the issue of plaintiffs' contributory negligence.

After deliberation, the jury found in favor of plaintiff Faircloth in the amount of $1,133,735, with 59% negligence charged to Olsen and 41% to Faircloth. It found in favor of plaintiff Scognamillo in the amount of $275,948.60 with 74% negligence charged to Olsen and 26% to Scognamillo.

In granting one of the many post-trial motions, the trial court ordered a reduction in each plaintiff's verdict of $27,000. This represented half the amount of the Alling plaintiffs' settlement offer. It also denied a motion by plaintiff Faircloth for prejudgment interest. This appeal followed.

I.

Olsen contends that the trial court abused its discretion in granting plaintiffs' motion in limine to exclude, on grounds of relevancy, all evidence relating to the plaintiffs' failure to appeal the Alling judgment. Defendants' expert, if permitted to do so, would have testified that, in his opinion, had plaintiffs appealed, the judgment against them would have been reduced. Defendants argue that such testimony was substantially relevant to their claim that plaintiffs failed to mitigate their damages. We disagree.

Evidence is relevant only if it tends to make the existence of a fact that is of consequence to the resolution of an issue in the action more or less probable. Vialpando v. People, 727 P.2d 1090 (Colo.1986). The issue here is whether plaintiffs failed to mitigate their damages and should thus suffer a reduction in their claimed damages.

One claiming damages for negligence has the duty to take such steps as are reasonable under the circumstances to mitigate or minimize those damages. Any damages which result from a failure to take such reasonable steps cannot be awarded. Valley Development Co. v. Weeks, 147 Colo. 591, 364 P.2d 730 (1961).

In order for the trier of fact, in the context of this case, to find a failure to mitigate damages, it must first find that plaintiffs failed to take reasonable steps to perfect appeals from the Alling judgment. Only if this issue is resolved against plaintiffs does the issue of whether such appeal would probably have resulted in a reduction of plaintiffs' damages become relevant to the disposition of the case.

Here, there was no evidence, either offered or already in the case, which tended to prove that plaintiffs failed to take reasonable steps to perfect their appeals. Quite to the contrary, it was undisputed that they both employed a reputable law firm, on a timely basis, and instructed it to perfect the appeals. It is likewise undisputed that plaintiffs' appeals, although ultimately filed, were subsequently dismissed as untimely.

There is no evidence in the record, and none was offered, to show that plaintiffs, either by act or omission, were responsible for the failure of their counsel to file timely appeals. Thus, in the absence of such evidence, we must conclude, as a matter of law, that plaintiffs took every reasonable step necessary to perfect appeals of the adverse Alling judgment.

Based upon the foregoing, it is unnecessary for us to address the issue, which was raised and argued, of whether plaintiffs had a "duty" to appeal the adverse Alling judgment. Likewise, issues relative to the probable results of such appeals have no relevance to the disposition of the case. The trial court did not, therefore, err in excluding all evidence relative thereto.

II.

The defendants next contend that the trial court committed several errors with regard to plaintiffs' claim for damages. We find no error.

A.

Defendants first argue that the trial court erred in instructing the jury regarding the amount of damages to be awarded plaintiffs. We disagree.

The amount of damages is generally a question of fact, the resolution of which is vested in the finder of fact. Great Western Sugar Co. v. Northern Natural Gas Co., 661 P.2d 684 (Colo.App.1982), aff'd sub nom. KN Energy, Inc. v. Great Western Sugar Co., 698 P.2d 769 (Colo.1985). However, if the amount of damages is subject to mathematical computation, the trial court may properly compute and instruct the jurors as to the amount of damages they are to award. Baldwin v. Central Savings Bank, 17 Colo.App. 7, 67 P. 179 (1901).

Here, the trial court instructed the jurors that if they found in favor of plaintiffs, they were to award each plaintiff the amount he had paid or was required to pay to satisfy the Alling judgment. The trial court subsequently offset these awards based on, among other things, the plaintiffs' contributory negligence and the amount the plaintiffs would have paid if the Alling case had been settled on the terms to which plaintiffs were willing to agree. Defendants do not dispute these offsets. Thus, the sole issue raised by defendants' contention of error is the propriety of the...