Appellate Courts Have Discretion To Set Scope Of New Trial On Remand—At Least Sometimes

by Fox Rothschild LLP
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Rule 59 is a powerful tool. A trial court has discretion to determine whether any one of the nine grounds in Rule 59(a) applies. The trial court then has discretion to select a remedy—a new trial in whole or in part. The trial court may not, however, grant a Rule 59(a) motion and then award something other than a new trial, like an increase in the amount of damages. That wouldn’t be a proper exercise of discretion. Instead, it would be an error of law for the trial court to give different relief than that allowed by the Rule.

But that’s exactly what happened in Justus v. Rosner, a case whose odd procedural posture led the North Carolina Supreme Court to issue three separate opinions wrestling with how to properly reverse and remand.

The majority thought it proper to affirm the Court of Appeals’ decision to reverse and remand for a new trial on damages only. This did not sit well with three justices, however. After all, the trial court never exercised its discretion to award any sort of new trial. Why should the appellate court exercise its discretion in the first instance to create its own preferred remedy—a partial new trial on damages on remand?  The dissenting justices thought the appellate court should be more circumspect: reverse the legal error, but give the trial court the opportunity in the first instance to award whatever type of new trial it thought appropriate.

The take-home lesson from Justus v. Rosner is not entirely clear. On the one hand, our appellate courts should—and usually do—allow a trial court to take a second stab at a discretionary determination if its first attempt was based on a misapprehension of law. On the other hand, our appellate courts regularly reverse trial courts’ denials of motions for new trial and remand for a new trial on a particular issue or on damages only. Is Justus limited to the rare case where a trial court grants a Rule 59 motion but fails to award a new trial?

Bad news: there’s no shortcut to understanding the impact of Justus v. Rosner. So we’ll take a deeper dive.

Background

Justus was a complex medical malpractice case that was tried before a jury over the course of two months in 2014. The plaintiff, on behalf of his deceased wife, asserted 15 different theories of negligence against his wife’s spinal surgeon, including that the physician had performed unnecessary and experimental surgeries without informed consent.

The jury returned a verdict finding the doctor and his practice liable for negligence. Although the jury concluded that Ms. Justus had suffered damages in the amount of $512,162.00, it reduced the verdict to $1 based on its conclusion that she had failed to mitigate her damages by seeking appropriate follow-up care.

Following the verdict, the plaintiff moved the Court to set aside or alter the judgment under Rule 59. The plaintiff conceded that Ms. Justus had not followed up with the surgeon, but noted that Ms. Justus had followed up with several other doctors afterwards.

The trial judge granted the Rule 59 motion under subsections (6) and (7), concluding that the jury’s verdict was tainted by passion or prejudice and that its damages award was not supported by the greater weight of the evidence. Specifically, the plaintiff had argued (and the judge agreed) that the defendants’ experts had given the misleading impression that Ms. Justus was required to return to the defendant surgeon himself for follow-up care. Accordingly, the trial court entered judgment for the full $512,162.00 and awarded the plaintiff costs.

The Court of Appeals affirmed the trial court’s decision in part, holding that the trial court had properly granted the Rule 59 motion. But, it remanded the case for the trial court to hold a new trial on the issue of damages. Judge Tyson dissented, finding that there were insufficient grounds to set aside the verdict.

The Supreme Court’s Review

The Supreme Court considered the appeal on the basis of the dissent and allowed discretionary review on other issues.

The majority concluded that: (1) the trial court did not abuse its discretion in concluding that the evidence relating to mitigation was insufficient to justify the $1 verdict, and (2) the Court of Appeals was within its authority to vacate the trial court’s amended judgment and order that a new trial be held only with respect to the issue of damages. As to the former, the majority reasoned (a) that the trial court relied on evidence that showed Ms. Justus had sought treatment from other doctors following her surgery and (b) that much of the alleged pain and suffering occurred before she allegedly failed to mitigate her damages, yet the jury reduced the verdict to a single dollar.

The latter conclusion was a primary source of disagreement among the justices. All seemed to agree that the trial court erred in amending the judgment because the only remedy contemplated by Rule 59 is a new trial. However, the majority concluded that the Court of Appeals had discretion to determine the scope of the new trial and was not required to remand it to the trial court for that decision, two justices concluded that the decision regarding the scope of the trial was the trial court’s to make, and one concluded that the trial court should be afforded the opportunity to reconsider the motion under the appropriate standard.

The Martin Dissent

Chief Justice Martin and Justice Jackson would have remanded it to the trial court to determine the scope of the new trial. Noting that “Rule 59 leaves the trial court in the best position to determine the scope of [a] new trial,” they cautioned that the appellate courts

“should be mindful of our appellate role, which in this instance means exercising restraint and reviewing the trial court’s discretion[] . . . [without substituting] our own discretion—or encourag[ing] the Court of Appeals to do so—to determine, in the first instance, the scope of the new trial.”

In particular, the justices relied on longstanding case law that when an appellate court “finds that a trial court’s ruling on a motion is based on a misapprehension of law, that ruling should be vacated or reversed and the case should be remanded to the trial court to decide the motion according to a proper understanding of the law.” They also felt that trial courts have an institutional advantage over appellate courts in the conduct of such fact-bound inquiries, noting that an abuse of discretion standard of review is applied precisely because the scope of the relief granted under Rule 59 is so closely linked to the decision whether to grant Rule 59 relief in the first place.

The Newby Dissent

Justice Newby would have gone even further, remanding the case to the trial court to reconsider the entire motion, concluding that “the proper remedy when the trial court proceeded under a misapprehension of law is for the appellate court to state the applicable law and remand the case to the trial court to determine the motion under the proper legal standard.” He noted that the jury verdict did not specify which of the 15 different theories it was relying upon in concluding that the defendant was negligent. He agreed with Judge Tyson’s conclusion that the trial court had “substitute[d] its judgment for that of the jury’s without knowing which theory or theories of negligence the jury’s verdict relies upon.” He also highlighted the fact that plaintiff did not object to the mitigation evidence and had significant input on the mitigation instruction. Based on these factors, he would have remanded the case to the trial court (1) to assess the evidence presented, (2) to determine whether any theory of negligence supported the jury’s damage assessment, and (3) to determine whether any evidence supported the jury’s mitigation decision (without re-weighing that evidence itself).

Furthermore, Justice Newby believed that if it were proper to remand for a new trial, the record may require a new trial on both liability and damages, noting:

“From the cold record, the majority makes these declarations: of the fifteen possible grounds for negligence, the jury found defendant liable on one particular ground, characterized by the majority as “perform[ing] unnecessary surgeries”; the majority’s selected theory of negligence required damages for pain and suffering; the amount of damages awarded by the jury does not include any amount for pain and suffering; and the jury based its mitigation decision solely on plaintiff’s failure to return specifically to [defendant] Rosner. To reach these conclusions, the majority isolates several lines of testimony that occurred over an almost two-month trial. Because the record does not indicate the theory on which the jury made its decision, our jurisprudence is clear that this Court should not substitute itself for the jury and ‘presume to know’ the theory upon which the jury relied.”

In response to the dissenting opinions, the majority concluded that there was no indication in the record that the applicable measure of damages would have varied under any of the fifteen theories.

Conclusion

Despite the end result, the takeaway here is probably not that the appellate court always gets to decide the scope of a new trial under Rule 59. The majority in fact cited the “unusual facts disclosed by the record here” in concluding that the Court of Appeals did not err in awarding a partial, rather than a full, new trial. It also noted that the trial court did not believe that the liability issue was tainted. Furthermore, Chief Justice Martin pointed out that the parties never raised the issue of whether an appellate court should substitute its own discretion to determine the scope of a new trial on a Rule 59 motion, which may have given the majority some comfort in letting the Court of Appeals’ decision stand.

Still, this is one opinion that you might want to dust off and re-read the next time you are crafting your request for relief on appeal.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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