Cheryl C. Moore, M.D. v. Charles W. Grau, Esq. & a.
Cheryl C. Moore, M.D. v. Charles W. Grau, Esq. & a.
Opinion
The plaintiff, Cheryl C. Moore, M.D., appeals an order of the Superior Court ( McNamara , J.) granting summary judgment to the defendants, Charles W. Grau, Esquire and Upton Hatfield, LLP, on the plaintiff's claims for legal malpractice, violation of the New Hampshire Consumer Protection Act, RSA ch. 358-A (2009 & Supp. 2017), and entitlement to an accounting and forfeiture of fees. We reverse and remand.
The following facts are taken from the trial court's orders in this case and from undisputed documentary evidence contained in the record. The plaintiff, a pathologist, was a member of Young & Novis, P.A. (Y & N), along with her partner, Dr. Glenn Littell. Y & N provided pathology services to the intervenor, Wentworth-Douglass Hospital (WDH), until WDH elected to terminate Y & N's services, effective February 28, 2010. Prior to that date, an attorney acting on Y & N's behalf - Gregory Wirth - solicited trial counsel for a potential wrongful termination suit against WDH. Grau, an attorney at Upton Hatfield, responded, and, on October 23, 2009, the plaintiff retained Grau and his firm.
Wirth continued to represent the plaintiff and Littell with respect to their exit from WDH. In that capacity, Wirth emailed Grau to inquire what documents or information he might need for the anticipated lawsuit. Grau responded with a list of documents and records he wanted the plaintiff and Littell to "take." Wirth forwarded Grau's response to the plaintiff and Littell on February 10, 2010.
On February 28, the termination date for Y & N's services, the plaintiff allegedly permitted her husband, Dr. Thomas Moore, to access Y & N computers connected to WDH's network. The plaintiff's husband and Littell then downloaded confidential documents and destroyed certain electronic data.
WDH sued the plaintiff, her husband, and Littell (the CFAA defendants) in federal court (the CFAA litigation), claiming violations of the Computer Fraud and Abuse Act (the CFAA).
See
*275 In August 2012, the parties reached a tentative settlement. During negotiations preceding the tentative settlement, the CFAA defendants were jointly represented by Grau and Upton Hatfield, along with Wirth. In mid-August, however, the plaintiff hired a separate attorney, Peter Callaghan, to represent her in finalizing the settlement.
On September 20, 2012, the plaintiff executed a settlement agreement (the Settlement Agreement) to which WDH, Y & N, Littell, and the plaintiff's husband were also parties. The Settlement Agreement resolved all claims and counterclaims in the pending litigation and contained the following provision regarding future suits (Paragraph 4):
All Parties represent that no future lawsuits will be filed against any third parties arising from the former relationship between WDH and the [CFAA defendants]. All Parties represent that they have fully disclosed to the other Parties any disclosures or complaints filed with any state, local or federal law enforcement or administrative agency, any accrediting organization, Board, professional organization or other entity of any kind that regulates, oversees, credentials, accredits or has enforcement authority over any party (collectively, "Agencies") and hereby represent that they have no basis to make any further such disclosures or complaints and shall not make such disclosures or complaints to any Agencies.
In Paragraph 3 of the Settlement Agreement, however, WDH specifically acknowledged that the agreement did not prohibit the CFAA defendants from continuing to pursue a pending lawsuit against their insurance company.
In March 2013, the plaintiff commenced the instant lawsuit against the defendants, alleging legal malpractice, violation of the Consumer Protection Act, and entitlement to an accounting and forfeiture of fees. WDH intervened in the action. The defendants moved for summary judgment on several grounds, including that the Settlement Agreement barred the suit. The trial court granted summary judgment on that basis, concluding that the plaintiff's claims against the defendants in the instant action "originate or grow out of or flow from her relationship with WDH," and, therefore, fall within the prohibition of Paragraph 4 of the Settlement Agreement. Having determined that the Settlement Agreement barred the suit, the court found it unnecessary to address the defendants' remaining arguments or to decide a pending motion to quash. The plaintiff unsuccessfully moved for reconsideration, and this appeal followed.
On appeal, the plaintiff argues, among other things, that the trial court erred in granting summary judgment to the defendants because the plaintiff's legal malpractice claims do not "arise from" her relationship with WDH and, therefore, do not fall within the terms of Paragraph 4. Our standard of review is well-settled:
In reviewing the trial court's grant of summary judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. If our review of that evidence discloses no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, we will affirm the grant of summary judgment. We review the trial court's application of the law to the facts de novo .
Pike v. Deutsche Bank Nat'l Trust Co.
,
"Generally, parties are free to settle a case on any terms they desire and
*276
that are allowed by law."
Poland v. Twomey
,
"Generally speaking and subject to exception, a party is not released unless named in the release."
Balamotis v. Hyland
,
We note that Paragraph 4 reads as a covenant not to sue, rather than a release.
See
Stateline Steel Erectors v. Shields
,
Paragraph 4 does not specifically name Grau or Upton Hatfield, but broadly purports to cover "future lawsuits ... against any third parties arising from the former relationship between WDH and the [CFAA defendants]." In arguing that Paragraph 4 does not cover the instant action, the plaintiff first looks to the phrase "arising from." She asserts that "[w]hile it could be argued that [her] claims might have a remote 'relation to' the former pathology contract between WDH and Y & N, it cannot plausibly be argued that this action 'arises from' that former contractual relationship."
Although we have not construed the language "arising from" as used in a contract,
cf
.
Merrimack School Dist.
,
The defendants contend that phrase is even broader than set forth above, arguing that "this Court and the First Circuit have defined 'arising from' as 'originating from, growing out of, flowing from,
incident to or having connection with
.' " (Emphasis added.) The quoted definition, however, is from a First Circuit case applying Maine law in the specific context of insurance policies.
Penn-America Ins. Co. v. Lavigne
,
The "Y" in Paragraph 4 is "the former relationship between WDH and the [CFAA defendants]." The plaintiff asserts that the instant suit arises not from that relationship, but rather, from the relationship between herself and the instant defendants. We agree.
In New Hampshire, legal malpractice is a tort essentially sounding in negligence.
See
Witte v. Desmarais
,
As the foregoing implies, an action for legal malpractice "is a claim ... for liability 'unique to and arising out of the rendition of professional services.' "
Virsen v. Rosso, Beutel, Johnson, Rosso
,
In light of these distinctions, numerous courts have concluded, on various grounds, that settlement of the underlying action does not, as a matter of law, bar suit against an attorney for malpractice during that underlying action.
See, e.g.
,
King
,
While the issue before us is not whether settlement with WDH bars the instant action as a matter of law, but whether this action falls within the terms of Paragraph 4 of the Settlement Agreement, we believe that the legal principles upon which the foregoing cases rest are dispositive. The issue before us is analogous to that presented in
Lujan v. Healthsouth Rehabilitation Corp.
,
The Supreme Court of New Mexico reversed, "conclud[ing] that the general release executed by Lujan does not purport to bar her claims against a successive tortfeasor *279 whose liability is limited to an injury enhancement arising out of the subsequent malpractice ." Id . The court noted that the issue before it was "whether Healthsouth falls within the category of 'other person' who together with [the other motorist] may be 'jointly or severally liable' to Lujan for injuries arising out of the January 1990 accident ." Id . at 1027. The court reasoned:
It is ... true that "but for" the accident, [Lujan's son] would not have been subject to Healthsouth's treatment. Nevertheless, factually, [the son's] separate enhanced injury was caused by the alleged negligence of Healthsouth in March 1990 .... Thus from the perspective of Healthsouth, the would be "other person," its liability for the enhanced injury suffered by [the son] arises solely from its alleged negligence and not the January 1990 accident.
Id . at 1031. The court ultimately concluded that "the language 'arising from the January 27, 1990, automobile accident' is ... simply insufficient to alert Lujan that [the other motorist] was bargaining for the release of Healthsouth in addition to her own release." Id . at 1032. Accordingly, it held that "Healthsouth does not fall within the category of 'other person' liable for injuries arising out of the January 1990 ... accident." Id .
We similarly construe the Settlement Agreement here. As noted above, legal malpractice - a separate and distinct claim against an independent and successive tortfeasor,
see, e.g.
,
King
,
The defendants, nevertheless, raise a number of counterarguments. First they assert that the plaintiff's brief fails to address two facts that the trial court found to be undisputed: (1) she had independent counsel prior to executing the Settlement Agreement; and (2) she acknowledged, in Paragraph 14 of the agreement, that she executed it "knowingly, voluntarily and without undue influence or duress." Neither of these facts, however, undermines the conclusion we reached above. The plaintiff is neither challenging the validity of the Settlement Agreement, "collateral[ly] attempt[ing] to go behind the previous settlement,"
Becker
,
*280 The defendants next assert that the plaintiff erroneously "attempts to create a dispute between the meaning of 'arising from' and 'arising out of' as if the terms are specific terms of art in contractual construction to be understood completely divorced from the factual context in which the terms are used." The defendants contend that "[t]he undisputed factual context surrounding ... execution of the Settlement Agreement" substantiates the trial court's finding that the plaintiff's claims "arise from" her former relationship with WDH. (Bolding omitted.) Specifically, they assert that both the plaintiff and WDH intended the Settlement Agreement to effect a "complete, permanent divorce from each other" after "bitter and long-standing" litigation. "To that end," the defendants argue, "in the Settlement Agreement, [the plaintiff] specifically disclaimed interest in bringing, and relinquished her ability to bring, other lawsuits that could embroil WDH."
When interpreting a written agreement, we give the language used by the parties its reasonable meaning, considering the circumstances and the context in which the agreement was negotiated, and reading the document as a whole. Absent ambiguity, the parties' intent will be determined from the plain meaning of the language used in the contract. We judge the intent of the parties by objective criteria rather than the unmanifested states of mind of the parties.
State v. Collyns
,
Construing the Settlement Agreement as a whole in the context of the "bitter and long-standing" litigation between WDH and the CFAA defendants, we do not doubt that the parties sought a "complete, permanent divorce from each other ." (Emphasis added.) That intent is manifest in the agreement's following recital:
WHEREAS, the Parties mutually desire to compromise, settle, buy complete peace from, and terminate any and all known and unknown disputes, claims, controversies, demands, actions, causes of action, and litigation as exist between them including any damages, costs, expenses, and/or injuries in order to avoid the nuisance, time, and expense of further litigation ....
(Emphases added.) The defendants do not contend that they are parties to the Settlement Agreement and, in fact, in arguing that they are "third parties" for purposes of Paragraph 4, they specifically assert that they "cannot be deemed a party to the Settlement Agreement." Nor, contrary to the defendants' argument, did the plaintiff "relinquish[ ] her ability to bring[ ] other lawsuits that could embroil WDH." Rather, she relinquished her ability to bring other lawsuits "arising from the former relationship between WDH and the [CFAA defendants]," which, as we concluded above, the instant lawsuit is not. To the extent that WDH may have desired also to protect itself from becoming "embroil[ed]" in litigation between the plaintiff and the instant defendants, that "unmanifested state[ ] of mind,"
For its part, WDH argues that if the plaintiff is permitted to maintain this lawsuit, WDH "will lose the entire benefit of its bargain in entering into the Settlement Agreement," which was to "end
all
litigation involving WDH on the one hand, and [the CFAA defendants] on the other, regardless of whether the signatories to the Settlement Agreement were named parties to existing or future litigation." WDH seeks support in
Watkins v. Bailey
,
The issue before us, however, is not application of judicial estoppel but contract interpretation, and, therefore,
Watkins
is inapposite. We know of no legal principle that would permit us to allow "additional considerations,"
ibr.US_Case_Law.Schema.Case_Body:v1">id
The defendants further argue "the fact that permission to pursue [a] declaratory judgment action [against an insurer] was specifically negotiated by the parties to the Settlement Agreement, and that no other exceptions to [P]aragraph 4's language were negotiated," supports the trial court's decision. The specific provision to which the defendants refer is Paragraph 3 of the Settlement Agreement, which provides:
Pending Declaratory Judgment Action . WDH acknowledges that [the CFAA defendants] are engaged in litigation in the case of Young & Novis Professional Association v. The Travelers Indemnity Company and Charter Oak Fire Insurance [Company] , 2011-0418, currently pending before the New Hampshire Supreme Court and agrees that this Agreement does not limit [the CFAA defendants'] right to pursue such action.
The defendants contend that "[t]his pending declaratory judgment action arose from [the plaintiff's] relationship with her insurance carrier and under [her] current interpretation, it would not need to have been disclosed to or approved by WDH in the Settlement Agreement as an exception to [P]aragraph 4." Accordingly, the defendants assert, the inclusion of Paragraph 3 in the Settlement Agreement undermines the plaintiff's interpretation of Paragraph 4.
The plaintiff disagrees, arguing that the defendants' "assertion misleadingly conflates the separate provisions of the WDH Settlement Agreement addressing pending and future lawsuits." We agree. Because Paragraph 4 is, by its terms, a covenant not to bring future lawsuits, we reject the defendant's characterization of Paragraph 3 as a negotiated "exception" or "carve-out" to Paragraph 4. A pending action would not fall under Paragraph 4, and, therefore, would not need to be excepted from it. Conversely, to the extent that the dispositions of pending cases are provided for in separate paragraphs of the Settlement *282 Agreement, the failure to include a provision for the instant litigation is, as the plaintiff argues, of no "interpretive significance ... because this action was not pending ."
WDH contends that other provisions of the Settlement Agreement - requiring dismissal of the CFAA litigation, acknowledging the settlement of a lawsuit by the CFAA defendants against a former WDH employee, and reserving WDH's "right to respond to a then pending Office of Civil Rights Investigation initiated by [the plaintiff]" - further demonstrate, in conjunction with Paragraphs 3 and 4, the parties' intent to "end all litigation," and "prohibit[ ] any future lawsuits[,] with one caveat," namely, the pending declaratory judgment action. While we agree that the Settlement Agreement, read as a whole, evinces the intent to systematically and comprehensively address both pending and future litigation, we disagree that it evinces the intent to end all pending and future litigation. In successive paragraphs, the agreement: (1) requires that one pending suit (the CFAA litigation) be dismissed; (2) acknowledges that another suit has already settled; (3) agrees that another pending suit may be maintained; (4) represents that certain future suits will not be brought; and (5) reserves WDH's right to participate in a pending administrative investigation. We conclude that the Settlement Agreement addresses each proceeding, or class of proceedings, separately, and, rather than evincing a blanket prohibition, carefully spells out whether and in what manner the parties may engage in each proceeding. Accordingly, we do not find WDH's argument persuasive.
The defendants next argue that the trial court's finding that the present case " 'arises out of' the former relationship between WDH and the [CFAA] defendants is evidenced by the fact that to meet her burden of proof in the present case, the Plaintiff must try a 'case within the case.' " As the defendants correctly note, "[t]o establish proximate causation in a legal malpractice case, a plaintiff must demonstrate what result should have occurred if the lawyer had not been negligent."
Yager v. Clauson
,
We have determined, after examining the nature of the instant action, that it does not fit within the terms of Paragraph 4. The manner in which the plaintiff must prove her case does not alter the nature of the action itself, and therefore, the defendant's argument does not persuade us. As noted in Virsen :
Although the underlying claim upon which the legal malpractice action is based must be examined to ascertain whether the respondent-attorney did indeed breach an alleged duty to his client, the prayer for relief in this action is against the attorney and not against the settlement itself or the parties thereto.
Virsen
,
"Having determined that [Paragraph 4 of the Settlement Agreement] does not, by its terms, cover [the instant action against] the defendant[s] ... we conclude that it does not support the trial court's grant of summary judgment."
Balamotis
,
Reversed and remanded .
HANTZ MARCONI, J., concurred; KISSINGER, J., superior court justice, specially assigned under RSA 490:3, concurred.
Reference
- Full Case Name
- Cheryl C. MOORE, M.D. v. Charles W. GRAU, Esquire & A.
- Cited By
- 2 cases
- Status
- Published