Central Indiana Podiatry, P.C., Northwest Surgery Center, LLC, d/b/a Foot & Ankle Surgery Center, f/k/a Foot & Ankle Surgery Center, LLC and Anthony E. Miller, D.P.M. v. Barnes & Thornburg, LLP

FILED
OPINION Oct 19 2016, 6:01 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
James A. Knauer Forrest Bowman, Jr.
Steven E. Runyan Jennifer K. Bowman
Kroger, Gardis & Regas, LLP Bowman & Bowman
Indianapolis, Indiana
Mark Crandley
Barnes & Thornburg, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Central Indiana Podiatry, P.C., October 19, 2016
Northwest Surgery Center, LLC, Court of Appeals Case No.
d/b/a Foot & Ankle Surgery 49A02-1603-PL-498
Center, Appeal from the Marion Superior
f/k/a Foot & Ankle Surgery Court
Center, LLC and Anthony E. The Honorable Cynthia J. Ayers,
Miller, D.P.M., Judge
Appellants-Plaintiffs, Trial Court Cause No.
49D04-1210-PL-41939
v.
Barnes & Thornburg, LLP,
Appellee-Defendant.
May, Judge.
Court of Appeals of Indiana | Opinion 49A02-1603-PL-498 | October 19,2016 Page 1 of 23
[1] Central Indiana Podiatry, P.C. (“CIP”), Northwest Surgery Center, LLC d/b/a
Foot & Ankle Surgery Center f/k/a Foot & Ankle Surgery Center, LLC
(“FASC”), 1 and Anthony Miller, D.P.M. (“Miller”) (collectively “the Miller
Parties”) appeal summary judgment for Barnes & Thornburg, LLP (“B&T”).
The Miller Parties present multiple issues for our review, which we consolidate
and restate as:
1. Whether the Miller Parties’ allegations of fraud preclude B&T
from relying on the Release Agreement; and
2. Whether the terms of the Release Agreement preclude the
Miller Parties from suing B&T for the alleged acts of malpractice.
We affirm.
Facts and Procedural History
[2] B&T had provided legal services to Miller, as owner and sole shareholder of
CIP and FASC, since the early 1990’s. The current case stems from a
disagreement regarding legal fees.
1. The Vogel Federal Litigation
[3] On November 7, 2005, Thomas Vogel, D.P.M., a former employee of CIP and
FASC, filed a federal claim (“Vogel Federal Litigation”) against the Miller
1
We will refer to the Northwest Surgery Center as FASC throughout this opinion because FASC is the
acronym used by the courts and parties.
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Parties alleging, among other things, “anti-kickback violations, mail, wire, and
healthcare fraud, money laundering, racketeering activity, breach of contract,
back wages, conversion, and offenses against property.” (Br. of Appellee at 6.)
[4] On December 28, 2005, B&T, on behalf of the Miller Parties, filed an answer to
the complaint, a counterclaim, and a request for an injunction. B&T partner
William Pope was the billing attorney for the work involved in the action, but
three other B&T partners, J. Michael Grubbs, Thomas Shea, and John Koenig,
also entered appearances.
[5] Vogel filed three motions for summary judgment in the Vogel Federal
Litigation between February 8 and March 8, 2006, causing B&T to spend extra
time on the case. On May 17, the court consolidated the Vogel Federal
Litigation with a claim brought by another former Miller employee, Yong
Chae, D.P.M., which included similar allegations. B&T also represented the
Miller Parties in the Chae claim. The court set a hearing for May 25, 2006, to
consider arguments regarding the Miller Parties’ motions for injunction in both
cases.
[6] During the pendency of the Vogel Federal Litigation and the Chae claim,
Miller complained several times to Pope about the legal fees B&T was charging
him. In response, Pope proposed an agreement that indicated Miller had been
billed, as of March 31, 2006, attorney fees of $138,008.50 in the Vogel Federal
Litigation and $4,082.00 in the Chae claim, for a total of $142,090.50. As of
the date of the proposed agreement, Miller had paid $23,886.12. The proposed
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agreement contained provisions regarding payment and a cap on Miller’s legal
fees. Pope advised Miller to retain independent counsel to review the
agreement. On May 16, 2006, Miller rejected Pope’s proposed agreement.
[7] At the hearing on May 25, the judge in the Vogel Federal Litigation advised
Miller and Vogel to try to reach a settlement. During the negotiations, Miller
expressed an interest in maintaining a professional relationship with Vogel
because Vogel would produce additional revenue for FASC by performing
surgeries at FASC. Koenig advised Miller against continuing the relationship
because Vogel had previously sued Miller, accused Miller of dishonesty, and
allegedly operated on patients while he was impaired. After many hours of
negotiation, Miller reached settlement agreements with both Vogel and Chae.
[8] The Vogel settlement required multiple agreements among the parties to be
entered into within thirty days of the agreement:
1. The parties agree to simultaneously enter into the following
agreements within 30 days after the date of this Agreement:
a) A Mutual Release from the Restrictive Covenant in the
Employment Agreement between CIP and Dr. Vogel.
b) An Option Agreement between FASC and Dr. Vogel
permitting Dr. Vogel to purchase up to 2% of the
ownership of FASC.
c) A Subscription Agreement for the purchase of at least
one share of FASC containing a provision requiring the
shareholder to exclusively perform all surgeries at FASC
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unless the patient’s condition or patient’s choice requires
that the surgery be performed elsewhere.
d) A Mutual Waiver and Release of all claims raised in or
that could have been raised in the lawsuit.
e) A Dismissal of the lawsuit with prejudice via a
stipulation that includes all allegations of fraud.
f) A Mutual Non-disparagement Agreement.
(App. at 350.)
[9] Because of the agreement to transfer a portion of FASC ownership to Vogel,
Pope advised Miller he would need to change FASC’s status as an “S”
subsidiary of CIP for federal income tax purposes. To do so, Pope proposed the
creation of a new limited liability company (“LLC”) in which FASC and Vogel
would have ownership interests, thus preserving the “S” subchapter election.
Pope spoke with Miller on May 30 and June 1, 2006, regarding this plan. Pope
prepared documentation to create the new LLC around that time as well. Pope
sent the documentation regarding the proposed LLC creation to Vogel’s
attorney, Paul Black, on June 19, 2006.
[10] Also in early June 2006, Miller and Pope had multiple telephone conversations
regarding legal fees Miller owed B&T. Around this time, Miller and Pope
reached an oral agreement about the fees. On June 19, 2006, Pope sent Miller
the written expression of that oral agreement, entitled the Settlement and
Release Agreement (“Release Agreement”). Pope told Miller that B&T would
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require Miller to consult independent counsel before executing the Release
Agreement. The Release Agreement also provided Miller was required to
consult independent counsel before executing the Release Agreement.
[11] Miller consulted Jim Knauer, who had represented the Miller Parties in other
matters in the past. Pope spoke with Knauer via telephone on June 20, 2006,
and Knauer indicated he had reviewed the Release Agreement. On June 22,
2006, at 5:00 p.m., Pope met with Miller to discuss the LLC Documentation
and the Release Agreement. Miller confirmed he had discussed the Release
Agreement with Knauer and “said Knauer told him the terms proposed were
standard and he would have to accept them to get the fee reductions.” (Id. at
123.) By the time Miller reviewed the Release Agreement, he had incurred
legal fees in the Vogel Federal Litigation and the Chae case in excess of
$190,000.00. Miller signed the Release Agreement. The meeting lasted
approximately ninety minutes.
[12] The terms of the Release Agreement provided, in relevant part:
1. The Miller Parties shall pay to B&T the total sum of One
Hundred Forty-Five Thousand Dollars and No Cents
($145,000.00) by check, made payable to Barnes & Thornburg,
LLP, which check shall be delivered to B&T on or before June
30, 2006.
2. Upon payment of the amount set forth in paragraph 1 hereof,
the Miller Parties are released and forever discharged by B&T
from the payment of any further amounts to B&T for costs or
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services performed on the Lawsuits. 2 The Miller Parties are
expressly not released or discharged from the payment for any
costs or fees associated with any services performed by B&T for
one or more of the Miller Parties on any matters other than the
Lawsuits.
3. The Miller Parties agree that B&T has earned and is entitled
to keep the amount set forth in paragraph 1 hereof, plus all other
sums previously paid to B&T by any one or more of the Miller
Parties.
4. The Miller Parties hereby release and forever discharge B&T,
and all predecessor and successor firms, including without
limitation their respective present and past partners, associates
and employees, from any and all claims, of any nature, known or
unknown, which the Miller Parties now have, have had, or may
later claim to have arising from or related to any aspect of B&T’s
representation of the Miller Parties relating in any way to the
Lawsuits.
5. Upon conclusion of the Lawsuits, B&T will provide to the
Miller Parties, at the Miller Parties’ own expense, a copy of its
legal file as kept in the ordinary course of business related to
B&T’s representation of the Miller Parties in the Lawsuits. The
Miller Parties release B&T from any obligation it may have to
keep or maintain any files or documents related to B&T’s
representation of the Miller Parties in the Lawsuits after the
conclusion of the Lawsuits.
2
The Release Agreement indicates the “Lawsuits” are the “claims asserted against the Miller Parties in the
matter of Thomas A. Vogel, D.P.M. v. Anthony E. Miller, D.P.M., et al., Cause No.1:05-CV-1668-SEB-
VSS, and the matter of Yong Chac [sic], D.P.M. v. Anthony E. Miller, D.P.M., et al., Cause No. 1:06-CV-
09195-LJM-VSS, presently pending in the United States District Court for the Southern District of Indiana,
Indianapolis Division[.]” (App. at 177.)
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6. The Miller Parties declare, warrant and represent that:
(a) The Miller Parties have not assigned nor transferred to
any person, entity or party any claims that are the subject
of this Agreement and that they are the sole party in
interest with respect to the claims about which this
Agreement is being made;
(b) No promise, enticement or agreement not expressed in
this Agreement has been made to the Miller Parties and
that the terms of the Agreement constitute the entire
agreement between the Parties with respect to the subject
matter hereof, and that the terms of this Agreement are
contractual and not merely a recital; and
(c) The Miller Parties may in the future discover facts
different from or in addition to those which they now
know or believe to be true with respect to the matters that
are the subject of this Agreement, and the Miller Parties
agree that this Agreement shall remain in effect in all
respects, notwithstanding the discovery or existence of
different or additional facts.
7. B&T declares, warrants and represents that:
(a) B&T has not assigned nor transferred to any person,
entity or party any claims that are the subject of this
Agreement and that it is the sole party in interest with
respect to the claims about which this Agreement is being
made;
(b) No promise, enticement or agreement not expressed in
this Agreement has been made to B&T and that the terms
of the Agreement constitute the entire agreement between
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the Parties with respect to the subject matter hereof, and
that the terms of this Agreement are contractual and not
merely a recital; and
(c) B&T may in the future discover facts different from or
in addition to those which it now knows or believes to be
true with respect to the matters that are the subject of this
Agreement, and B&T agrees that this Agreement shall
remain in effect in all respects, notwithstanding the
discovery or existence of different or additional facts.
8. Pursuant to Rule 1.8(h) of the Indiana Rules of Professional
Conduct, B&T expressly informs the Miller Parties that
independent representation is recommended and appropriate in
connection with a client settling a claim against their lawyer.
Accordingly, the Miller Parties should obtain independent
representation of an attorney not affiliated with B&T in
connection with entering into this Agreement. The Miller Parties
are cautioned that B&T is representing only its own interests in
negotiating and preparing this Agreement and is not representing
or protecting the interests of the Miller Parties with regard to this
Agreement.
9. Each party represents and acknowledges that they have relied
upon the advice of independent counsel in reaching agreement
on the terms contained herein, and each party acknowledges
that, for purposes of entering into this Agreement, they have not
and do not rely upon any representation or statement made by
the other party or that party’s agent or representative that is not
expressly stated in this Agreement.
*****
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15. Each individual signing this Agreement hereby
acknowledges that he or she has carefully read this entire
Agreement and understands its contents.
(Id. at 178-181) (footnote added).
[13] On June 23, 2006, Pope read an email from Vogel’s attorney, Paul Black,
regarding the LLC Documentation. The email was time stamped at 6:11 p.m.
on June 22, 2006. It was the first correspondence Pope received from Black
regarding the matter. Black indicated Vogel objected to the clauses in the LLC
Documentation that would impose on Vogel a lifelong obligation to perform
surgeries at FASC. Black and Miller’s attorneys corresponded via email many
times following the initial response and the parties disagreed about the
interpretation of some of the terms of the Vogel Agreement. Pope had multiple
conversations with Miller regarding this issue in June and July 2006.
[14] On July 24, 2006, B&T received $145,000.00 from Miller as agreed in the
Release Agreement. In the coming months, Miller’s attorneys at B&T and
Black attempted to come to an agreement regarding the LLC Documentation.
Pope updated Miller on the status of these negotiations on a regular basis. On
September 26, 2006, Vogel signed a “Subscription for Common Shares,” (id. at
45) (Subscription Agreement), for the purchase of one share of stock in FASC.
However, he later refused a certificate of interest in the LLC and demanded the
return of the check he tendered for the purchase of the stock. The check was
never returned and never deposited. On September 29, 2006, Pope filed
paperwork with the Indiana Secretary of State converting FASC to an LLC.
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[15] On October 3, 2006, the parties filed a stipulation of dismissal in the Vogel
Federal Litigation, which the court granted on October 6. On October 11, B&T
attorney Grubbs received a letter from Black stating:
Vogel did not agree to buy interest in Foot & Ankle Surgery
Center, LLC, nor did he consent to the conversion of Foot and
Ankle Surgery Center, Inc., to Foot & Ankle Surgery Center,
LLC. Please inform your clients that, among other things, they
are in material breach of the [Subscription Agreement] signed by
Dr. Vogel on September 26, 2006.
(Id. at 368-9.) On March 12, 2007, Knauer, as Miller’s new counsel, filed a
motion to vacate the dismissal of the Vogel Federal Litigation. The court
denied the motion on May 3, 2007.
2. The Hamilton County Litigation
[16] On May 31, 2007, Miller and CIP, represented by Knauer, filed a claim
(“Hamilton County Litigation”) in Hamilton Superior Court against Vogel,
alleging breach of the Subscription Agreement. 3 Vogel responded with a
counterclaim against the Miller Parties, asserting they breached the
Subscription Agreement first. On September 6, 2012, a jury found for Vogel on
both the claim and counterclaim, but it awarded him no damages.
3
FASC was not originally a party in the Hamilton County Litigation, but was added later.
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3. The Malpractice Action
[17] On October 26, 2012, the Miller Parties filed a claim against B&T for
malpractice (“Malpractice Action”), which is the action underlying this appeal.
On October 7, 2013, the Miller Parties filed an amended complaint alleging
“Attorney Malpractice.” (Id. at 41.) On April 21, 2014, B&T filed its answer to
the amended complaint and asserted as an affirmative defense, “All of
Plaintiffs’ claims set forth in the First Amended Complaint are barred by the
[Release Agreement].” (Id. at 65.) On November 13, 2013, B&T filed a motion
to dismiss the claim based on the terms of the Release Agreement. In response,
the Miller Parties alleged B&T engaged in fraud in the inducement, fraudulent
concealment, and constructive fraud when entering the Release Agreement
with Miller and thus the Release Agreement was subject to reformation and/or
rescission. 4 On March 18, 2014, the trial court denied B&T’s motion to
dismiss.
[18] B&T filed two motions for summary judgment - the first on March 24, 2015,
and the second on August 19, 2015. The trial court held a hearing on both
4
The Miller Parties’ reply to B&T’s motion to dismiss, wherein they asserted their claims of fraud, is not in
the record before us. However, B&T indicates in its first motion for summary judgment, “In response to
[B&T’s motion to dismiss] the plaintiffs claimed for the first time that B&T fraudulently induced them to
enter into the Release, and it is therefore unenforceable against them.” (App. at 69.) B&T’s first motion for
summary judgment also mentioned the Miller Parties’ other allegations of fraud made in their reply to B&T’s
motion to dismiss. In their response to B&T’s motion for summary judgment, the Miller Parties do not
dispute B&T’s statement regarding when the Miller Parties first made the fraud claims.
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motions for summary judgment on December 7, 2015. On February 16, 2016,
it granted summary judgment for B&T.
Discussion and Decision
[19] We review summary judgment de novo, applying the same standard as the trial
court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Drawing all
reasonable inferences in favor of the non-moving party, we will find summary
judgment appropriate if the designated evidence shows there is no genuine issue
as to any material fact and the moving party is entitled to judgment as a matter
of law. Id. A fact is material if its resolution would affect the outcome of the
case, and an issue is genuine if a trier of fact is required to resolve the parties’
differing accounts of the truth, or if the undisputed material facts support
conflicting reasonable inferences. Id. We will affirm a summary judgment on
any theory or basis found in the record. Allen Gray Ltd. P’ship IV v. Mumford, 44
N.E.3d 1255, 1256 (Ind. Ct. App. 2015).
1. Allegations of Fraud
[20] B&T filed a motion to dismiss that asserted the Release Agreement precluded
the Miller Parties’ action. In response, the Miller Parties claimed B&T’s actions
in procuring the Release Agreement constituted fraudulent inducement and
fraudulent concealment, and B&T engaged in constructive fraud. B&T then
filed a motion for summary judgment that asserted, as a matter of law, the
Miller Parties could not raise fraud in response to B&T’s motion to dismiss.
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[21] The averment of allegations of fraud is governed by Indiana Trial Rule 9,
generally titled, “Pleading special matters.” T.R. 9(B) states, “In all averments
of fraud or mistake, the circumstances constituting fraud or mistake shall be
specifically averred. Malice, intent, knowledge, and other conditions of mind
may be averred generally.” Thus, unlike most claims, which require only a
“short and plain statement of the claim [and] a demand for relief,” T.R. 8(A),
fraud must be raised in the pleadings. See Weber v. Costin, 654 N.E.2d 1130,
1134 (Ind. Ct. App. 1995) (T.R. 9(B) requires fraud be alleged as part of a
pleading).
[22] Pleadings in an action before the trial court include:
(1) a complaint and an answer;
(2) a reply to a denominated counterclaim;
(3) an answer to a cross-claim;
(4) a third-party complaint, if a person not an original party is
summoned under the provisions of Rule 14; and
(5) a third-party answer.
T.R. 7(A). That rule also states: “No other pleadings shall be allowed; but the
court may in its discretion, order a reply to an answer or third-party answer.”
Id. The Miller Parties asserted fraud in response to a motion to dismiss.
However, neither a motion nor a response to a motion is considered a pleading.
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Rivera ex rel. Rivera v. City of Nappanee, 704 N.E.2d 131, 132 (Ind. Ct. App.
1998), trans. denied.
[23] In Beckom v. Quigley, 824 N.E.2d 420 (Ind. Ct. App. 2005), the Beckoms were
unknown third-party beneficiaries to a will. Quigley was the testator’s attorney
and co-executor of the will. In their complaint, the Beckoms alleged Quigley
was negligent in his preparation of the testator’s will because he did not
ascertain the Beckoms were intended beneficiaries. During the hearing on
Quigley’s motion for summary judgment, the Beckoms alleged Quigley
“fraudulently sabotaged [the testator’s] intent in naming the Beckoms as his
beneficiaries in order to further his own financial gain.” Id. at 428. We rejected
the Beckoms’ allegation of fraud because their complaint asserted negligence,
not fraud. The Beckoms stated their allegation of fraud during the hearing
regarding Quigley’s motion for summary judgment. Thus, they did not state a
claim of fraud as required by T.R. 9(B). Id. at 429.
[24] Here, the Miller Parties contend the trial court should have determined the
Release Agreement was subject to reformation and/or rescission based on the
Miller Parties’ allegations of fraud. However, the Miller Parties did not include
the allegations of fraud in the complaint. Instead, they averred fraud “for the
first time” as part of a reply to B&T’s motion to dismiss. (App. at 69.) As the
Miller Parties did not plead fraud as part of their complaint, they have not
stated a redressable claim. See Beckom, 824 N.E.2d at 429 (“since the Beckoms
did not plead fraud with specificity in their Complaint, they fail to state a
redressable claim”). As the Miller Parties’ fraud allegations were improperly
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presented to the trial court, and thus unavailable, we must consider whether the
terms of the Release Agreement precluded the Miller Parties’ allegations of
malpractice.
2. Waiver of Liability in Release Agreement
[25] The construction of a contract is a question of law. Rice v. Meridian Ins. Co., 751
N.E.2d 685, 688 (Ind. Ct. App. 2001), trans. denied. When we interpret contract
provisions, our goal is to enforce the intent of the parties as provided in the
contract. Id. If the language is clear and unambiguous, we give that language
its plain and ordinary meaning and enforce the contract according to its terms.
Id. A contract is to be read as a whole when trying to ascertain the parties’
intent, and we will make all attempts to construe the language in a contract so
as not to render any words, phrases, or terms ineffective or meaningless. Id.
We must accept an interpretation of the contract that harmonizes its provisions,
as opposed to one that causes the provisions to conflict. Id.
[26] The meaning of a contract is to be determined from an examination of all of its
provisions, not from a consideration of individual words, phrases, or even
paragraphs read alone. Payday Today, Inc. v. Defreeuw, 903 N.E.2d 1057, 1062
(Ind. Ct. App. 2009), reh’g denied. In determining the intention of the parties, a
contract should be considered in light of the surrounding circumstances when it
was made. Allen v. Clarian Health Partners, Inc., 980 N.E.2d 306, 309 (Ind.
2012). Specifically, we should consider the nature of the agreement, the facts
and circumstances leading up to the execution of the contract, the relationship
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of the parties, the nature and situation of the subject matter, and the apparent
purpose of making the contract. Id.
[27] The Miller Parties and B&T entered into the Release Agreement on June 22,
2006. The release provision says:
The Miller Parties hereby release and forever discharge B&T, and
all predecessor and successor firms, including without limitation
their respective present and past partners, associates and
employees, from any and all claims, of any nature, known or
unknown, which the Miller Parties now have, have had, or may
later claim to have arising from or related to any aspect of B&T’s
representation of the Miller Parties relating in any way to the
[Vogel Federal Litigation and Chae Case].
(App. at 179.) The Miller Parties agreed:
The Miller Parties may in the future discover facts different from
or in addition to those which they now know or believe to be true
with respect to the matters that are the subject of this Agreement,
and the Miller Parties agree that this Agreement shall remain in
effect in all respects, notwithstanding the discovery or existence
of different or additional facts.
(Id.) The Miller Parties contend the Release Agreement “is not prospective in
nature,” (Br. of Appellants at 38), and thus B&T could be found liable for
negligence occurring after the Release Agreement was signed.
[28] In support of their argument, the Miller Parties make much of the words
“known and unknown” in the Release Provision, asserting those words indicate
the claims covered by the Release Provision “must refer to accrued claims as it
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is not possible to ‘know something’ (or not know something) that has not yet
happened.” (Br. of Appellants at 40.) That argument is inconsistent with other
contract language. The Miller Parties released B&T from claims “arising from
or related to any aspect of B&T’s representation of the Miller Parties relating in
any way” to the Vogel Federal Litigation and the Chae case. (App. at 179.)
The Release Agreement is to be in effect “notwithstanding the discovery or
existence of different or additional facts.” (Id.)
[29] The Miller Parties’ claims of negligence arose from B&T’s alleged failure to
draft an agreement Vogel would sign as part of the Vogel Federal Litigation.
When considering the Release Agreement as a whole, we conclude the Release
Agreement encompasses any action related to the Vogel Federal Litigation,
whether or not the behavior giving rise to that action accrued prior to the
execution of the Release Agreement. See Rice, 751 N.E.2d at 688 (if contract
terms are unambiguous, appellate court interprets the terms using plain and
ordinary language; the language is not examined in a vacuum, instead we
consider the language of the contract as a whole and construe it to harmonize
the terms).
Conclusion
[30] The Miller Parties did not properly present their fraud claims to the trial court
because they did not do so in a pleading. The trial court did not err when it
granted summary judgment in favor of B&T because the Release Agreement
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prohibits the Miller Parties from suing B&T for actions taken in the Vogel
Federal Litigation. Accordingly, we affirm.
[31] Affirmed.
Bailey, J., concurs.
Crone, J., concurs with separate opinion.
Court of Appeals of Indiana | Opinion 49A02-1603-PL-498 | October 19,2016 Page 19 of 23
IN THE
COURT OF APPEALS OF INDIANA
Central Indiana Podiatry, P.C., Court of Appeals Case No.
Northwest Surgery Center, LLC, 49A02-1603-PL-498
d/b/a Foot & Ankle Surgery
Center,
f/k/a Foot & Ankle Surgery
Center, LLC and Anthony E.
Miller, D.P.M.,
Appellants-Plaintiffs,
v.
Barnes & Thornburg, LLP,
Appellee-Defendant.
Crone, Judge, concurring.
[32] I agree with my colleague’s resolution of the issues presented in this appeal. I
write separately, however, to question the wisdom of allowing attorneys to
prospectively insulate themselves from liability for future acts of legal
malpractice.
[33] The Code of Professional Responsibility, which governed Indiana’s legal
community until 1987, “categorically prohibited all attempts to limit [an]
attorney’s liability for malpractice.” Matter of Blackwelder, 615 N.E.2d 106, 108
(Ind. 1993) (citing Disciplinary Rule 6-102). At least one attorney was
disbarred based partly on such “abhorrent” conduct. Matter of Powell, 526
Court of Appeals of Indiana | Opinion 49A02-1603-PL-498 | October 19,2016 Page 20 of 23
N.E.2d 971, 974 (Ind. 1988) (finding pre-1987 violations of Disciplinary Rule 6-
102 and other Code provisions: attorney forged checks, converted clients’
funds, and “exacerbated the misconduct by attempting to exonerate himself”
with release agreement). A sea change occurred when the Indiana Supreme
Court adopted the Rules of Professional Conduct, which are based on the
American Bar Association’s Model Rules. Rule 1.8(h) 5 currently provides that
a lawyer shall not
(1) make an agreement prospectively limiting the lawyer’s
liability to a client for malpractice unless the client is
independently represented in making the agreement; or
(2) settle a claim or potential claim for such liability with an
unrepresented client or former client unless that person is advised
in writing of the desirability of seeking and is given a reasonable
opportunity to seek the advice of independent legal counsel in
connection therewith.
As far as I am aware, no explanation was offered for this change in policy.
[34] The Rules’ preamble states that “[a] lawyer, as a member of the legal
profession, is a representative of clients, an officer of the legal system and a
public citizen having special responsibility for the quality of justice.” It further
states that “[i]n all professional functions a lawyer should be competent, prompt
5
Rule 1.8(h) mirrors the corresponding ABA Model Rule.
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and diligent.” Id. 6 These lofty concepts are rendered meaningless when
lawyers are allowed to avoid liability for future incompetence or lack of
diligence and thereby degrade the quality of justice. According to the preamble,
“[t]he [legal] profession has a responsibility to assure that its regulations are
conceived in the public interest and not in furtherance of parochial or self-
interested concerns of the bar.” The practice of law is and should be a
profession and not merely a simple business transaction. To hold otherwise is
to ignore the fundamental fiduciary relationship an attorney owes a client. For
this reason (and others), I do not believe that it is wise public policy to allow
lawyers to draft their own “get out of jail free” cards.
[35] In this case, the clients that agreed to release counsel from liability for any
future malpractice were sophisticated and had sufficient resources to hire a
reputable law firm to review the liability release. Many clients are not so
fortunate. I also find it troubling that the Rules apparently would not prohibit
lawyers from inserting liability releases into initial fee agreements as a matter of
course, which would fundamentally change the nature of the attorney-client
relationship from one of loyalty and fiduciary duty to one of purely economic
self-interest.
6
See Ind. Professional Conduct Rules 1.1 (“A lawyer shall provide competent representation to a client.
Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably
necessary for the representation.”) and 1.3 (“A lawyer shall act with reasonable diligence and promptness in
representing a client.”).
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[36] I presume that our supreme court took these and similar considerations into
account when it adopted Rule 1.8(h). And I understand that B&T is operating
within the parameters established by our current Rules of Professional Conduct.
Therefore, I am compelled to concur as to this issue. Furthermore, this case has
been decided on summary judgment. There has been no determination
regarding the quality of legal services provided by B&T, and my objection to the
current state of the law should not be interpreted as professing an opinion on
such matters.
[37] Legitimate arguments can be made that lawyers should be allowed to limit
liability to clients for past acts of malpractice in arm’s-length negotiations
involving independent counsel; this is nothing more than the settlement of an
existing claim. But, in my view, allowing lawyers to prospectively limit liability
to clients for future acts of malpractice subverts the very nature of the attorney-
client relationship. Until and unless our supreme court abolishes this practice,
Hoosiers seeking competent and diligent legal representation may be left to fend
for themselves against lawyers who wish to avoid liability for future acts of
malpractice.
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