Estate of Diana Lykos Voutsaras v. Gary L Bender ( 2019 )

STATE OF MICHIGAN
COURT OF APPEALS
ESTATE OF DIANA LYKOS VOUTSARAS, by FOR PUBLICATION
KATHLEEN M. GAYDOS, Personal January 3, 2019
Representative, 9:05 a.m.
Plaintiff-Appellant,
and
SPIRO VOUTSARAS,
Plaintiff,
v No. 340714
Ingham Circuit Court
GARY L. BENDER, RICHARD A. LC No. 16-000263-NM
CASCARILLA, LINDSAY NICOLE DANGL,
VINCENT P. SPAGNUOLO, and MURPHY &
SPAGNUOLO P.C.,
Defendants,
and
KENNETH M. MOGILL, MOGILL POSNER &
COHEN, KERN G. SLUCTER and GANNON
GROUP, P.C.,
Defendant-Appellees.
Before: SWARTZLE, P.J., and SAWYER and RONAYNE KRAUSE, JJ.
RONAYNE KRAUSE, J.
Plaintiff, the Estate of Diana Lykos Voutsaras (“Estate”) appeals as of right the trial
court’s order granting summary disposition in favor of defendants Kenneth M. Mogill, Mogill
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Posner & Cohen, Kern G. Slucter, and Gannon Group P.C., (“Mogill defendants”).1 This appeal
arises in relevant part out of the Estate’s action against the Mogill defendants for professional
malpractice in their services as expert witnesses. The trial court held that a party’s own expert
witnesses, regardless of any duty to their client, are shielded by witness immunity. We hold that
licensed professionals owe the same duty to the party for whom they testify as they would to any
client, and witness immunity is not a defense against professional malpractice. Therefore, we
reverse and remand.
I. STATEMENT OF FACTS
The underlying litigation involved the foreclosure of a commercial mortgage and note
made by Diana and Spiro Voutsaras and held by Gallagher Investments (“Gallagher”). The
Voutsarases hired the law firm defendants2 to represent them in the foreclosure proceedings.
The Voutsarases, on the advice of the law firm defendants, filed a counterclaim against
Gallagher and a third party claim against some of the principal actors involved with Gallagher
for malpractice. The law firm defendants then hired the Mogill defendants to provide litigation
support and ultimately serve as expert witnesses at trial. Kenneth Mogill was considered to be a
preeminent authority on legal ethics in the state of Michigan, and Slucter and Gannon Group
were experts in the field of real estate brokerage and best practices in the field. Ultimately the
law firm defendants informed the Voutsarases that their litigation strategy was bound to fail and
the trial court granted summary disposition against the Voutsarases.
Diana Voutsaras passed away in January of 2015, and the Estate then brought the present
action against the law firm defendants and the Mogill defendants. The Estate claimed that the
law firm defendants failed to advise it of a favorable settlement offer and that the law firm
defendants deliberately concealed the fact that the Estate’s claims were frivolous in order to
drive up their costs prior to trial. The Estate claimed that the Mogill defendants breached their
duty to the estate by failing to properly investigate the facts required to formulate their opinions,
failing to understand the applicable standards, and failing to provide a competent professional
opinion. Noting that the ability to sue one’s own expert witnesses was an issue of first
impression in Michigan, the trial court engaged in a broad reading of prior witness immunity
standards and granted summary judgment to the Mogill defendants on that theory. This appeal
followed.
II. PRESERVATION AND STANDARD OF REVIEW
A. PRESERVATION OF THE ISSUE
1
On October 2, 2017, Ingham Circuit Court Judge Matthew J. Stewart entered a stipulated order
of dismissal following a settlement agreement between plaintiff Kathleen Gaydos, as the
personal representative of the estate of Diana Voutsaras, and defendants Gary Bender, Richard
Cascarilla, Lindsay Dangle, Vincent Spagnuolo and Murphy & Spagnuolo P.C. (collectively “the
law firm defendants”), who were Diana and Spiro Voutsaras’ attorneys in the underlying
litigation.
2
See footnote 1.
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An issue is preserved for appellate review if raised in the trial court and pursued on
appeal. Peterman v Dep’t of Natural Resources, 446 Mich. 177, 183; 521 NW2d 499 (1994).
Plaintiff argued that whether a party may sue his or her own expert witness was an issue of first
impression in Michigan and that the trial court should follow caselaw from sister state courts on
that matter. The trial court agreed that this issue was an open question in Michigan but
determined that defendant Mogill was entitled to witness immunity because that doctrine is
broadly construed and because the policy considerations underlying the doctrine would be
advanced by its application in this case. The issue is preserved.
B. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision to grant summary disposition.
Bowden v Gannaway, 310 Mich. App. 499, 503; 871 NW2d 893 (2015). A court may grant
summary disposition under MCR 2.116(C)(7) “because of . . . immunity granted by law . . . ” “A
party may support a motion under MCR 2.116(C)(7) by affidavits, depositions, admissions, or
other documentary evidence.” Maiden v Rozwood, 461 Mich. 109, 119; 597 NW2d 817 (1999).
This Court also reviews de novo the applicability of legal doctrines, Husted v Auto-Owners Ins
Co, 213 Mich. App. 547, 555; 540 NW2d 743 (1995), aff’d 459 Mich. 500 (1999), and claims of
immunity, Denhof v Challa, 311 Mich. App. 499, 510; 876 NW2d 266 (2015).
III. ARGUMENT
A. DUTY OF AN EXPERT WITNESS WHO IS A LICENSED
PROFESSIONAL
Plaintiff claims that defendants owed to it a legal duty and that they breached that duty.
Duty is “the legal obligation to conform to a specific standard of conduct in order to protect
others from unreasonable risks of injury.” Lelito v Monroe, 273 Mich. App. 416, 419; 729 NW2d
564 (2006). As will be discussed further, our decision in this matter is limited to a claim of
professional malpractice, which “arises from the breach of a duty owed by one rendering
professional services to a person who has contracted for those services … predicated on the
failure of the defendant to exercise the requisite professional skill.” Broz v Plante & Moran,
PLLC, ___ Mich App ___, ___; ___ NW2d ___ (2018) (Docket No. 340381, slip op at p 4).
“Generally, to state a claim for malpractice, a plaintiff must allege (1) the existence of a
professional relationship, (2) negligence in the performance of the duties within that relationship,
(3) proximate cause, and (4) the fact and extent of the client’s injury.” Id. at ___ (slip op at p 5).
The trial court granted summary disposition to defendants based solely on witness
immunity. Defendants now argue on appeal that, regardless of witness immunity, plaintiff has
failed to show that defendants owed a legal duty to plaintiff. “An issue not addressed by the trial
court may nevertheless be addressed by the appellate court if it concerns a legal issue and the
facts necessary for its resolution have been presented.” Sutton v City of Oak Park, 251 Mich
App 345, 349; 650 NW2d 404 (2002). We are not satisfied that this record presents us with the
facts necessary to resolve this issue. Nevertheless, we presume for the sake of argument that
defendants are subject to claims for professional malpractice by plaintiff and breached their
professional duties to plaintiff. However, we do not decide those questions, and we leave for the
trial court to determine in the first instance whether, in fact, defendants owed or breached a legal
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duty to plaintiff. We address only whether defendants are immune from liability related to that
duty, if any.
B. WITNESS IMMUNITY AS A DEFENSE TO MALPRACTICE
1. MICHIGAN CASE LAW
Defendants and the trial court rely on our Supreme Court’s opinion in Maiden, 461 Mich.
at 109, for the proposition that all witnesses enjoy total immunity for any relevant testimony
provided during judicial proceedings. Our Supreme Court observed that “the duty imposed on a
witness is generally owed to the court, not the adverse party,” so a breach of that duty “does not
give rise to a cause of action in tort by the adverse party.” Id. at 133-134. Our Supreme Court
continued:
[W]itnesses who testify during the course of judicial proceedings enjoy quasi-
judicial immunity. This immunity is available to those serving in a quasi-judicial
adjudicative capacity as well as “those persons other than judges without whom
the judicial process could not function.” 14 West Group’s Michigan Practice,
Torts, § 9:393, p. 9–131. Witnesses who are an integral part of the judicial
process “are wholly immune from liability for the consequences of their
testimony or related evaluations.” Id., § 9:394, pp. 9-131 to 9-132, citing Martin
v Children’s Aid Society, 215 Mich. App. 88, 96; 544 NW2d 651 (1996).
Statements made during the course of judicial proceedings are absolutely
privileged, provided they are relevant, material, or pertinent to the issue being
tried. See Martin v Children’s Aid Society, supra; Rouch v Enquirer & News, 427
Mich. 157, 164; 398 NW2d 245 (1986); Meyer v Hubbell, 117 Mich. App. 699,
709; 324 NW2d 139 (1982); Sanders v Leeson Air Conditioning Corp, 362 Mich.
692, 695; 108 NW2d 761 (1961). Falsity or malice on the part of the witness does
not abrogate the privilege. Sanders, supra. The privilege should be liberally
construed so that participants in judicial proceedings are free to express
themselves without fear of retaliation. Id. [Maiden, 461 Mich at 134.]
We find Maiden only partially applicable, for several reasons.
First, the policy considerations in Maiden were clearly focused on the freedom witnesses
must have to give damaging testimony without any fear of possible reprisal. We agree with
defendants and the trial court to the extent that such policy considerations extend beyond
witnesses who are formally or functionally adverse. In other words, any witness called by any
party enjoys immunity based on the substance of that witness’s testimony or evidence.
Therefore, to the extent plaintiff may assert that the Mogill defendants gave testimony that was
unfavorable to plaintiff, such assertions unambiguously run afoul of the witness immunity
doctrine in Michigan. However, whether witness immunity protects the Mogill defendants from
giving professionally incompetent testimony, which might or might not be favorable, was clearly
not a matter considered by the Maiden court. As our Supreme Court recently explained, to
derive a rule law from the facts of a case “when the question was not raised and no legal ruling
on it was rendered, is to build a syllogism upon a conjecture.” People v Seewald, 499 Mich. 111,
121 n 26; 879 NW2d 237 (2016).
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Additionally, the witness immunity doctrine at issue in Maiden addresses only actual
testimony. That immunity necessarily extends to any other materials or evidence prepared by the
witness for the intended benefit of the court. See Denhof v Challa, 311 Mich. App. 499, 511-520;
876 NW2d 266 (2015). Nevertheless, plaintiff’s complaint appears to allege that the Mogill
defendants provided expert opinions for the benefit of plaintiff or plaintiff’s attorneys, in
addition to intended expert testimony for the court. Furthermore, plaintiff alleges that the Mogill
defendants not only provided incompetent opinions, but failed to undertake reasonable skill and
care in forming those opinions. As discussed, we have already established that the Mogill
defendants owed plaintiff a duty of professional care; plaintiff essentially alleges a perfectly
ordinary claim of legal malpractice, asserting that the Mogill defendants breached that duty of
professional care.
To the extent plaintiff’s claims rest on the Mogill defendants having provided damaging
testimony or evidence intended for consideration by the trial court, the Mogill defendants are
clearly protected by the doctrine of witness immunity. However, we find nothing in Maiden, or
any other Michigan case law, suggesting that any other claim of professional malpractice by a
client is precluded merely because the professional was expected to provide expert testimony.
We decline to parse which particular claims in this matter are immunized. We hold only that the
Mogill defendants are not absolutely immunized from professional malpractice claims where
they already owed a duty of professional care, merely because part of their retention included the
provision of expert testimony.
2. OTHER JURISDICTIONS
Although not binding, authority from other jurisdictions may be considered for its
persuasive value. Abela v Gen Motors Corp, 469 Mich. 603, 607; 677 NW2d 325 (2004). We
have considered the extra jurisdictional case law provided to us by the parties, and we find, on
balance, that the most persuasive precedent supports our conclusion above.
In Briscoe v LaHue, 460 U.S. 325; 103 S. Ct. 1108; 75 L. Ed. 2d 96 (1983), the United States
Supreme Court, which is obviously binding on this Court, held that the common law standard of
witness immunity was not abridged by federal law, and therefore a police officer could not be
held liable for perjured testimony given during the plaintiff’s trial. The Court proceeded to lay
out the policy reasons behind witness immunity, holding: “A witness’s apprehension of
subsequent damages liability might induce two forms of self-censorship. First, witnesses might
be reluctant to come forward to testify. And once a witness is on the stand, his testimony might
be distorted by the fear of subsequent liability.” Id. at 333 (citations omitted). The Court
explained that “the truth-finding process is served if the witness’s testimony is submitted to ‘the
crucible of the judicial process so that the factfinder may consider it, after cross-examination,
together with the other evidence in the case to determine where the truth lies.’” Id. at 333-334,
quoting Imbler v Pachtman, 424 U.S. 409, 440; 96 S. Ct. 984; 47 L. Ed. 2d 128 (1976) (WHITE, J.,
concurring in judgment). This case merely reaffirms that a witness must be immune to the
consequences of providing damaging testimony, which in turn must extend to a party’s own
witnesses.
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In Mattco Forge, Inc v Arthur Young & Co, 5 Cal App 4th 392; 6 Cal Rptr 2d 781
(1992), the California Court of Appeals held that California’s “litigation privilege” statute3 did
not bar a party from bringing suit against its own expert. In that case, the plaintiff (Mattco)
engaged the defendant (Arthur Young) “to perform litigation support accounting work” in the
underlying action. Id. at 395. After the dismissal of that suit, Mattco brought suit against Young
alleging (in part) professional malpractice, negligence, and breach of contract. Id. at 396. The
California Court of Appeals determined that the policy considerations behind the litigation
privilege, freedom of access to courts and the encouragement of truthful testimony, would best
be served by allowing malpractice proceedings against expert witnesses:
Arthur Young was not a “neutral expert,” but one hired by Mattco. If an
expert witness’s negligence and breach of contract cause dismissal of the party
who hired that expert witness, that does not expand freedom of access to the
courts. Applying the privilege in this circumstance does not encourage witnesses
to testify truthfully; indeed, by shielding a negligent expert witness from liability,
it has the opposite effect. Applying the privilege where the underlying suit never
reached the trial stage would also mean that the party hiring the expert witness
would have to bear the penalty for the expert witness’s negligence. That result
would scarcely encourage the future presentation of truthful testimony by that
witness to the trier of fact. [Id. at 404.]
The California Court of Appeals found the distinction between one’s own witnesses and
adversarial witnesses to be of unique importance, because the policies underlying witness
immunity “can logically apply . . . only to trial testimony of adverse witnesses,” and thus were
immaterial to “a pretrial dispute between a party and its own expert witness that arose during
discovery.” Id. at 406.
In Murphy v AA Mathews, Div Of CRS Group Engineers, Inc, 841 S.W.2d 671 (Mo, 1992),
the defendant engineering firm was retained by a subcontractor to prepare claims for additional
compensation. The firm testified at arbitration and the subcontractor was awarded substantially
less than what it was seeking. Id. The subcontractor then filed suit against the engineering firm,
alleging that it “was negligent in its performance of professional services involving the
preparation and documentation of [the subcontractor’s] claims for additional compensation . . . ”
Id. The Missouri Supreme Court observed that witness immunity decisions generally entailed
statements made “directly in the judicial proceeding itself or in an affidavit or pleading, and all
of the statements were made by adverse witnesses or parties.” Id. It concluded that witness
immunity was not properly applied “to bar a suit against a privately retained professional who
negligently provides litigation support services.” Id. The Court reasoned that the policies
3
That statute provided in part: “ ‘A privileged publication or broadcast is one made: . . . In any
(1) legislative or (2) judicial proceeding, or (3) in any other official proceeding authorized by
law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable
pursuant to Chapter 2 . . . ’ ” Mattco Forge, Inc, 5 Cal App 4th at 402, quoting Cal Civ Code §
47(b).
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underlying witness immunity would not be served by protecting “professionals selling their
expert services rather than as an unbiased court servant.” Id. at 681. Furthermore, subjecting
professionals to liability for negligence would encourage skill, care, and prudence; and would
discourage “extreme and ridiculous positions in favor of their clients in order to avoid a suit by
them.” Id. The Court also emphasized the role expert witnesses play in case preparation,
providing advice and advocacy, and even playing as much of “a role in the organization and
shaping and evaluation of their client’s case as do the lawyers.” Id. at 682. It therefore
permitted the action against the engineering firm.
In LLMD of Mich, Inc v Jackson-Cross Co, 559 PA 297; 740 A2d 186 (1999), the
plaintiffs hired an accounting firm in the underlying action to calculate their lost profits. At trial,
a critical mathematical error in the firm’s calculations was revealed during cross-examination of
the firm’s chairman. Id. at 299. The chairman had not personally prepared the lost profits
calculation and could not explain the error. Id. The trial court granted a motion to strike the
chairman’s testimony. The next day, the plaintiffs accepted a settlement offer for $750,000; the
firm later recalculated the lost profits at $2.7 million. Id. The plaintiffs then sued the firm for
breach of contract and professional malpractice. Id. at 300. The Pennsylvania Supreme Court
held that witness immunity did not bar the action, but emphasized that it did so because the
gravamen of the action was negligence in formulating the expert opinion, rather than
dissatisfaction with the substance of the opinion. Id. at 304-307. In particular, “[a]n expert
witness must be able to articulate the basis for his or her opinion without fear that a verdict
unfavorable to the client will result in litigation.” Id. at 306. However, “immunizing an expert
witness from his or her negligence in formulating that opinion” would not serve the purposes
behind witness immunity.” Id. Rather, “[t]he judicial process will be enhanced only by
requiring that an expert witness render services to the degree of care, skill and proficiency
commonly exercised by the ordinarily skillful, careful and prudent members of their profession.”
Id. at 307. Thus, the court held that the accounting firm was not entitled to witness immunity.
Id.
The Connecticut Superior Court (i.e. a trial court) followed LLMD of Mich, Inc in
Pollock v Panjabi, 47 Conn Supp 179; 781 A2d 518 (2000). In Pollock, the plaintiffs retained a
spinal biomechanics expert to perform experiments relating to the underlying personal injury
action. Id. at 180. After pretrial voir dire of the expert, the trial court ruled that the expert’s
opinion was not credible and was not admissible at trial. Id. at 182. The trial court granted
numerous continuances so that the expert could perform additional experiments, but the expert
repeatedly failed to follow the conditions set forth by the trial court. Id. at 182-183. Ultimately,
the plaintiffs brought suit against the expert and a kinesiologist hired by the expert alleging (in
part) breach of contract and negligence. Id. at 183. The Connecticut Superior Court held that the
defendants were not entitled to invoke witness immunity, determining that the
policy reasons undergirding the absolute privilege accorded witnesses are not
implicated here. This is not a case in which the right of a witness to speak freely,
in or out of court, is involved. While conduct, objects and experiments may have
communicative aspects; the plaintiffs do not complain about what [the spinal
biomechanics expert] said or about anything [the kinesiologist], who never
testified, said or communicated. Rather, the plaintiffs complain of the defendants’
failure to perform work, as agreed upon, according to scientific principles as to
which there are no competing schools of thought. [Id. at 188.]
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The Court concluded that the gravamen of the plaintiffs’ claim was to “hold the defendants
accountable for not doing what they agreed to do,” which did not undermine the witness
immunity policy of ensuring that witnesses could speak freely. Pollock, 47 Conn Supp at 193-
194.
We find the above cases to be the most persuasive. However, additional state courts have
allowed a party to sue its own expert, determining that the policy considerations underlying the
doctrine of witness immunity would not be furthered by application in those cases. See Boyes-
Bogie v Horvitz, 14 Mass L Rptr 208 (Mass Super, 2001) (holding that witness immunity does
not bar action against a friendly expert who was negligent in valuing a martial asset); Marrogi v
Howard, 805 So 2d 1118 (La, 2002) (holding, in a case where the friendly expert made
numerous errors in estimating the plaintiff’s billings and summary judgment was granted based
on the expert’s deposition testimony, that “claims in connection with a retained expert’s alleged
failure to provide competent litigation support services are not barred by the doctrine of witness
immunity”); Hoskins v Metzger, 102 So 3d 752 (Fla App, 2012) (holding that it was erroneous
for the trial court to dismiss an action against a friendly expert on the basis of witness immunity
when the plaintiffs were alleging that they lost at trial because of the expert’s appearance at trial
and “his inadequate testimony”).
3. WITNESS IMMUNITY AS A DEFENSE AGAINST MALPRACTICE
It bears repeating that the Maiden Court prefaced its discussion of witness immunity by
ruling that the medical examiner was an adverse witness to the plaintiff. Maiden, 461 Mich. at
133. Witness immunity protects all witnesses, including experts retained by a party, from suit
for testimony or evidence premised on the damaging nature thereof. However, we note that a
common theme in the cases discussed above was whether to extend witness immunity to ordinary
professional malpractice claims. We find no Michigan law suggesting that witness immunity
already precludes a claim by a client against a retained professional for the negligent
performance of professional services. We are persuaded by the reasoning in the above cases that
witness immunity should not be further extended. Where a duty of professional care exists such
that a malpractice action may be maintained, witness immunity is not a defense to a malpractice
action except, as noted, insofar as the action is premised on the substance of the professional’s
evidence or testimony intended to be provided to the court.
IV. CONCLUSION
We conclude that the trial court erred by construing the doctrine of witness immunity too
broadly. A professional’s client is not precluded from maintaining a professional malpractice
action by witness immunity, except to the extent the action is premised on the substance of
evidence or testimony prepared for the benefit of the court. We decline to address any other
issues, such as the specific duties owed in this matter or the extent to which plaintiff’s specific
allegations actually implicate witness immunity. We reverse the trial court’s grant of summary
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disposition pursuant to MCR 2.116(C)(7), and we remand for further proceedings. We do not
retain jurisdiction. An important public question of first impression being involved, we direct
that the parties shall bear their own costs. MCR 7.219(A).
/s/ Amy Ronayne Krause
/s/ Brock A. Swartzle
/s/ David H. Sawyer
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