Legal Definitions - clearly erroneous

The term clearly erroneous refers to a specific standard of review used by appellate courts when examining decisions made by a lower court judge in a civil case. It applies specifically to a judge's findings of fact – that is, the judge's determination of what actually happened based on the evidence presented during a trial.

When an appeals court reviews a judge's factual finding under the "clearly erroneous" standard, it will only overturn that finding if it has a strong, definite conviction that a significant mistake has been made. This is a high bar to meet. Even if there was some evidence to support the original finding, the appeals court must be left with the firm belief that the trial judge's conclusion about the facts was fundamentally wrong or lacked substantial, credible support in the overall evidence presented.

The "clearly erroneous" standard acknowledges that the trial judge was present in the courtroom, observed witnesses, and heard testimony firsthand, which puts them in the best position to assess credibility and weigh the evidence. Therefore, appeals courts generally show deference to these factual findings. However, if the appeals court determines that the judge's factual finding is a clear error, unsupported by the evidence, or based on a clear misinterpretation of it, they have the authority to reverse that specific finding.

Here are some examples illustrating how the "clearly erroneous" standard applies:

• Example 1: Contract Dispute Over a Verbal Agreement

  Imagine a small business owner sues a supplier, claiming a breach of a verbal contract. The central factual dispute is whether a specific conversation occurred where the supplier promised a discounted price. The trial judge hears testimony from both the business owner and the supplier's representative. After weighing the evidence, including some supporting emails and the demeanor of the witnesses, the judge makes a factual finding that the verbal agreement was indeed made.

  The supplier appeals, arguing that the judge's finding about the verbal agreement was clearly erroneous. The appellate court reviews the trial transcripts and exhibits. If the appellate court concludes that, despite the business owner's testimony, there was no substantial or credible evidence to support the judge's finding, or if the judge's interpretation of the evidence was a clear and significant mistake, they might declare the finding "clearly erroneous." This would mean the judge's determination of that specific fact was a clear error, potentially leading to a reversal of the judgment.

• Example 2: Property Boundary Dispute

  Two neighbors are in a dispute over the exact location of their shared property line. The trial judge, after reviewing old survey maps, deeds, and hearing testimony from land surveyors and long-time residents, makes a factual finding that the boundary line runs precisely along a specific old fence line.

  One neighbor appeals, contending that the judge's finding regarding the boundary line is clearly erroneous. They present evidence from a more recent, highly accurate survey that places the boundary several feet away from the old fence, and argue the judge overlooked or misinterpreted this crucial expert evidence. The appellate court examines all the evidence presented at trial. If they are left with a "definite and firm conviction" that the trial judge made a mistake in determining the boundary – perhaps by misinterpreting the survey data or giving undue weight to less reliable historical accounts – they could find that factual determination "clearly erroneous." This would allow them to reverse that specific finding and potentially send the case back for a new determination of the property line.

• Example 3: Valuation in a Business Dissolution

  In a lawsuit to dissolve a business partnership, one of the key issues is the fair market value of the company's proprietary software. The trial judge, after considering expert valuations from both sides, financial statements, and testimony from the partners about the software's capabilities and market potential, determines its value to be $1.5 million.

  One partner appeals, arguing that the judge's valuation of the software was clearly erroneous. They point to recent industry sales of similar software and a pending licensing offer that strongly suggest the software is worth significantly more, claiming the judge relied on an outdated valuation method or ignored critical market data. The appellate court would meticulously review all the financial documents, expert reports, and testimony related to the software's valuation. If they find that the judge's $1.5 million figure is not supported by the substantial, credible evidence in the record, or if the judge clearly misunderstood or misapplied the valuation principles presented by the experts, they might deem that factual finding "clearly erroneous." This would indicate that the judge's determination of the software's value was a clear mistake, requiring the appeals court to reverse that specific finding and potentially order a recalculation.