I read on the Verizon forum that the problem seems to be with the stock email client, the developers are aware and will address it in the update (whenever that will be).
Why is there no answer to this since even 2010? I didn't have the issue on my first Droid motorola phone. I have it now on my DroidMAXX. There must be a setting or something to change. Today I added the words containing the apostrophe in my personal dictionary. I will see if that takes care of at least those words. Very very embarassing when you're responding to business email!