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STRESS OF LITIGATION IS NOT COMPENSABLE GENERALLY.

 
1. RULE

 

“ ‘Litigation stress’…is legally non-compensable." Ortega v. Pajaro Valley Unified Sch. Dist. (1998) 64 Cal. App. 4th 1023, 1060-1061.

 

“Thus when appellant alleges that he will incur additional expense and attorney's fees and suffer mental distress because he will have to disprove the proposed affirmative defense, he raises no issue of compensable damages. These types of damages are not normally compensable. It has always been understood in our system that attorney’s fees and the mental stress of litigation are burdens which the parties must ordinarily bear themselves.”  Maccharles v. Bilson (1986) 186 Cal. App. 3d 954

 2. RATIONALE (Reason for the Rule)

 
 “… this is one of the prices a free society pays for its adversary system of justice (Ortega at page 1060). 

 
See, for example, Pacific Gas & Electric Co. v. Bear Sterns & Co. (1990) 50 Cal. 3d 1118; I (1990) 50 Cal. 3d 205; Moore v. Conliffe (1994) 7 Cal. 4th 634; Rubin v. Green (1993) 4 Cal. 4th 1187

 

The rule is based on the litigation privilege found at Civil Code 47(b)(2) which states that: 

 

"47.  A privileged publication or broadcast is one made…(b) In any…(2) judicial proceeding…"

 

All litigation is stressful by its very nature.  Without such limitation, practically all lawsuits would assert damages for "litigation stress."

 
3. EXCEPTION TO RULE

 
Mental and emotional distress suffered as a result of an underlying legal proceeding that was unnecessary or wrongful (Examples: insurance “bad faith” [e.g. wrongful failure to settle claim] or “malicious prosecution” [as an exception to the litigation privilege].


 

BAD FAITH:

 

In Jarchow v. Transamerica Title Ins. Co. (1975) 48 Cal. App. 3d 917, 948-949, indirectly held that emotional distress due to litigation was recoverable in a bad faith case context ( “… plaintiffs … experienced emotional distress (e.g., loss of sleep, anxiety, worry, tension and nervousness) because of concern over the litigation necessitated by Transamerica’s … bad faith, and the attorney's fees incurred therein” and “by the traumas attendant to the bringing of the present lawsuit.”

 

 

MALICIOUS PROSECUTION:

 

"The malicious commencement of a civil proceeding is actionable because it harms the individual against whom the claim is made, and also because it threatens the efficient administration of justice. The individual is harmed because he is compelled to defend against a fabricated claim which not only subjects him to the panoply of psychological pressures most civil defendants suffer, but also to the additional stress of attempting to resist a suit commenced out of spite or ill will, often magnified by slanderous allegations in the pleadings."  Bertero v. National General Corp.(1974) 13 Cal. 3d 43, 50-51.


 A malicious prosecution harms the individual who is the defendant in the action. (Crowley v. Katleman (1994) 8 Cal. 4th 666, 677; Bertero v. National General Corp. (1974) 13 Cal. 3d 43, 50). It "compel[s]" him "to defend against a fabricated claim." ( Bertero at p. 50). It thereby forces him to incur the "cost of defen[se]," including "attorney's fees." (Id. at p. 51.) It "subjects him to the panoply of psychological pressures most . . . defendants suffer," resulting in "mental or emotional distress." (Id. at pp. 50-51.) But it also "subjects him . . . to the additional stress of attempting to resist a suit commenced out of spite or ill will, often magnified by slanderous allegations in the pleadings," resulting in "injury to his reputation or impairment of his social and business standing in the community." (Ibid.)

 

See Brennan v. Tremco (2001) 25 Cal. 4th 310

 
4. SUMMARY:

The distinguished Judge Learned Hand reputedly said that:

" 'as a litigant, I should dread a lawsuit beyond almost anything else short of sickness and of death.' "

Merenda v. Superior Court (1992) 3 Cal.App.4th 1, 11 

But, as stressful as litigation and trial may be, generally such stress is not compensable as damages.


Disclaimer: The information provided in this article is informational, only. The subject matter and applicable law is evolving and/or in state of change.  This article is based on California law.  The article merely summarizes legal statutes and/or case law and makes no guarantee of the accuracy of such summary.  No legal advice is given and no attorney/client or other relationship is established or intended.  The information provided is from general sources, and I cannot represent, guarantee or warrant that the information contained in this website is accurate, current, or is appropriate for the usage of any reader. It is recommend that readers of this information consult with their own counsel and not rely on any information on this website.


Author: Matthew B. Tozer Esq.

Coopyright 2013

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