Cheryl C. Moore, M.D. v. Charles W. Grau, Esq. & a.

NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well
as formal revision before publication in the New Hampshire Reports. Readers are
requested to notify the Reporter, Supreme Court of New Hampshire, One Charles
Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that
corrections may be made before the opinion goes to press. Errors may be
reported by E-mail at the following address: reporter@courts.state.nh.us.
Opinions are available on the Internet by 9:00 a.m. on the morning of their
release. The direct address of the court's home page is:
http://www.courts.state.nh.us/supreme.
THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Merrimack
No. 2017-0035
CHERYL C. MOORE, M.D.
v.
CHARLES W. GRAU, ESQUIRE & a.
Argued: January 18, 2018
Opinion Issued: August 8, 2018
Devine, Millimet & Branch, P.A., of Manchester (Daniel E. Will and
Joshua M. Wyatt on the brief, and Mr. Will orally), and Associated Attorneys of
New England, of Manchester (John F. Skinner, III on the brief), for the plaintiff.
Bernstein, Shur, Sawyer & Nelson, P.A., of Manchester (Andru H.
Volinsky and Christina A. Ferrari on the brief, and Mr. Volinsky orally), for the
defendants.
Shaheen & Gordon, P.A., of Concord (William E. Christie on the
memorandum of law), for the intervenor.
HICKS, J. 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 18 U.S.C. § 1030 (2012). The CFAA defendants
responded with a number of counterclaims against WDH.
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):
2
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
3
judgment. We review the trial court’s application of the law to the
facts de novo.
Pike v. Deutsche Bank Nat’l Trust Co., 168 N.H. 40, 42 (2015) (citations
omitted).
“Generally, parties are free to settle a case on any terms they desire and
that are allowed by law.” Poland v. Twomey, 156 N.H. 412, 414-15 (2007).
“Settlement agreements are contractual in nature and, therefore, are generally
governed by principles of contract law.” Id. at 414. “Interpretation of a
contract, including whether a contract term or clause is ambiguous, is
ultimately a question of law for this court to decide.” Merrimack School Dist. v.
Nat’l School Bus Serv., 140 N.H. 9, 11 (1995) (quotation and brackets omitted).
“In interpreting a contract, we consider the contract as a whole,” id., and “we
give words their ordinary meaning unless it appears from the context that the
parties intended a different meaning,” id. at 13. “When parties use expansive,
unrestricted language, we will give those phrases their normal, broad reading.”
Id.
“Generally speaking and subject to exception, a party is not released
unless named in the release.” Balamotis v. Hyland, 159 N.H. 803, 808 (2010)
(quotation and brackets omitted). Even “a release . . . [that] purports to
comprehend all claims arising from a particular incident, including claims
against unspecified strangers, is not dispositive of the question whether the
release bars later suit against a party not named in the release.” Gagnon v.
Lakes Region Gen’l Hosp., 123 N.H. 760, 764-65 (1983). Because the assertion
that the Settlement Agreement bars this suit against the defendants is an
affirmative defense, the defendants bear the burden “to show that the release
was intended to discharge them or that the plaintiff has received full
compensation.” Id. at 765.
We note that Paragraph 4 reads as a covenant not to sue, rather than a
release. See Stateline Steel Erectors v. Shields, 150 N.H. 332, 338 (2003)
(discussing distinction between covenant not to sue and release). Nevertheless,
we see no impediment to applying the foregoing cases to the provision at issue
here, whether construed as a release, a covenant not to sue, or, as the
defendants call it, a “waiver of claims.” Indeed, while in the past, a release of
one joint tortfeasor generally barred suit against the others, though
presumably not named in the release, see Wheat v. Carter, 79 N.H. 150, 150
(1919); but cf. RSA 507:7-h (2010) (altering common law rule), such was never
the case with covenants not to sue, see Colby v. Walker, 86 N.H. 568, 570
(1934), nor true as a matter of law as to successive tortfeasors, see Wheat, 79
N.H. at 152.
4
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., 140 N.H. at 13 (construing “arise from or
out of”), we have construed the phrase “arising out of.” See, e.g., Cannon v.
Maine Bonding & Cas. Co., 138 N.H. 365, 366 (1994). As the trial court noted,
and the defendants reiterate, our cases recognize that “[t]he phrase ‘arising out
of’ has been interpreted as a very broad, general and comprehensive term,
which we have defined as meaning ‘originating from or growing out of or
flowing from.’” Merrimack School Dist., 140 N.H. at 13 (quotation and brackets
omitted). Courts in other jurisdictions, at least when construing the phrase in
an insurance policy, have given the phrase “arising from” the same broad
construction as “arising out of,” see Spirtas Co. v. Federal Ins. Co., 521 F.3d
833, 836 (8th Cir. 2008) (noting that, “in the insurance context courts appear
to be unanimous in interpreting the phrase ‘arising out of’ synonymously with
the term ‘arising from’”), and we will do likewise here.
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, 617 F.3d 82, 87 (1st Cir. 2010) (noting that
“[u]nder Maine law, as elsewhere, phrases such as ‘arising out of,’ when used
in insurance contracts, do not connote a direct causal nexus”). We, however,
have never interpreted the phrase so broadly, and the defendants have not
persuaded us to do so in this case. As we have construed the phrase “arising
out of,” and now construe the phrase “arising from,” for X to “arise out of” or
“arise from” Y requires some causal connection between X and Y. “While the
causal connection need not be ‘proximate’ as that term is used in the more
demanding evidentiary area of tort law, the causal connection must still exist.”
Pro Con Constr. v. Acadia Ins. Co., 147 N.H. 470, 472 (2002). “[T]he causal
connection between the two must be more than ‘tenuous,’” Cannon, 138 N.H.
at 366, and must consist of more than mere “but for” causation, Pro Con
Constr., 147 N.H. at 473.
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
5
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, 136 N.H. 178, 182 (1992). As such, it
requires proof of “facts upon which the law imposes a duty of care.” Id.
(quotation omitted). The duty of care in legal malpractice is one imposed by
law, and arises out of the attorney-client relationship itself. See id.; Miller v.
Mooney, 725 N.E.2d 545, 549 (Mass. 2000) (“The duty of care owed by an
attorney arises from an attorney-client relationship.”). Thus, “[t]o establish
legal malpractice a plaintiff must prove: (1) that an attorney-client relationship
existed, which placed a duty upon the attorney to exercise reasonable
professional care, skill and knowledge in providing legal services to that client;
(2) a breach of that duty; and (3) resultant harm legally caused by that breach.”
Yager v. Clauson, 166 N.H. 570, 572-73 (2014) (quotation omitted).
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, 356 N.W.2d 333, 335 (Minn. Ct. App.
1984) (quoting R. Mallen and V. Levit, Legal Malpractice § 1, at 3 (2d ed.
1981)). Accordingly, courts have recognized that “the injuries suffered by a
plaintiff in a legal malpractice suit are separate and distinct from those
suffered in the underlying suit,” Parnell v. Ivy, 158 S.W.3d 924, 927 (Tenn. Ct.
App. 2004), and that a “plaintiff’s malpractice action is an independent cause
of action, not subsumed in the plaintiff’s personal injury action,” Cook v.
Connolly, 366 N.W.2d 287, 291 (Minn. 1985); see also King v. Jones, 483 P.2d
815, 818 (Or. 1971) (concluding that “[p]laintiff’s claim against [a tortfeasor] for
personal injuries and her claim against [her lawyers] for malpractice are
separate and distinct claims”). It follows, as courts have also concluded, that
the attorney is not a joint tortfeasor with the defendants in the underlying
action. See, e.g., King, 483 P.2d at 817. Rather, the attorney is a successive or
independent tortfeasor. Cf. Gagnon, 123 N.H. at 763 (noting that medical
malpractice defendants were not joint tortfeasors with settling defendant in
personal injury suit, but rather, were “successive or independent wrongdoers
who are not liable for the same loss as the driver because their liability arises
solely from their alleged negligent conduct which aggravated the plaintiff’s
existing injury”).
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, 483 P.3d at 817 (concluding that settlement of
underlying action does not bar a malpractice action against attorney “on the
basis that a release of one joint tort-feasor releases all,” because the attorney is
not a joint tortfeasor with wrongdoer in underlying action); Parnell, 158 S.W.3d
6
at 925 (holding that because damages sought in plaintiff’s malpractice action
were “separate and distinct” from those sought in underlying action,
“settlement of the underlying lawsuit does not shield the former attorneys from
[malpractice] liability”); see also Becker v. Julien, Blitz & Schlesinger, P. C.,
406 N.Y.S.2d 412, 414 (Sup. Ct. 1977) (concluding that “the cause of action for
legal malpractice must stand or fall on its own merits, with no automatic
waiver of a plaintiff’s right to sue for malpractice merely because plaintiff had
voluntarily agreed to enter into a stipulation of settlement” in the underlying
action), aff’d as modified on other grounds, 411 N.Y.S.2d 17 (App. Div. 1978).
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., 902
P.2d 1025 (N.M. 1995). There, Irene Lujan’s son was injured in a collision
between motor vehicles on January 27, 1990. Lujan, 902 P.2d at 1026. In
settling the personal injury action against the other motorist, Lujan signed a
release “discharg[ing] ‘any and all other persons . . . who together with [the
other motorist] may be jointly or severally liable to [Lujan] . . . from any and all
claims . . . and demands of whatsoever kind or nature . . . for damages to
[Lujan's] person or property arising out of an accident on or about January 27,
1990.’” Id. at 1031. Lujan later sued Healthsouth Rehabilitation Corporation
and others (collectively, Healthsouth) “for medical malpractice in connection
with treatment of the femoral fracture that [her son] suffered in the accident
with” the other motorist. Id. at 1026. Healthsouth successfully moved for
summary judgment, arguing that the action was barred by the release given in
settling the underlying action, and the Court of Appeals affirmed. Id.
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 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.
7
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, 483 P.2d at 817-18 — arises out of the
attorney-client relationship. See Witte, 136 N.H. at 182; Miller, 725 N.E.2d at
549. The malpractice alleged here cannot be said to bear any causal
connection to the former relationship between WDH and the CFAA defendants
other than the fact that “but for” that relationship, Y&N’s services could not
have been terminated, there would have been no CFAA action, and the plaintiff
“would not have been subject to” the malpractice allegedly committed by the
defendants with respect to those matters. Lujan, 902 P.2d at 1031. Indeed,
the defendants themselves assert only a “but for” nexus, arguing that “[a]bsent
the relationship with WDH, [the plaintiff] would not have sought [the
defendants’] legal representation.” As noted above, however, the phrase
“arising from” requires some causal connection greater than mere “but for”
causation. Pro Con Constr., Inc., 147 N.H. at 472-73. Like the court in Lujan,
we conclude that the language at issue here is “simply insufficient to alert [the
plaintiff] that [WDH] was bargaining for the release of [the malpractice
defendants] in addition to [its] own release.” Lujan, 902 P.2d at 1032.
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, 406 N.Y.2d at 413, nor seeking to undo it, see id.; Virsen,
356 N.W.2d at 335 (noting that “the present legal malpractice action is not an
action to vacate, revive or set aside the settlement with” the tortfeasor in the
underlying litigation). Rather, she argues that the Settlement Agreement does
not bar the instant litigation. Thus, this argument does not persuade us to
alter our decision.
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
8
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, 166 N.H. 514, 519 (2014) (quotations and citations omitted).
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
9
“unmanifested state[] of mind,” id., has no bearing upon our interpretation of
the contract’s unambiguous language.
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, 484 F. App’x 18,
19 (6th Cir. 2012), which held that a legal malpractice case based upon former
counsel’s conduct in an underlying medical malpractice case was barred by
judicial estoppel. In addition to the factors of clear inconsistency between a
party’s earlier and later positions, judicial acceptance, and unfair advantage,
Watkins, 484 F. App’x at 20, the court addressed “several additional
considerations” in determining whether to apply judicial estoppel, id. at 24
(quotation omitted). WDH relies upon one of the additional considerations
examined by the Watkins court: “There is the hospital to think about: it entered
into a confidential settlement agreement. If the current lawsuit proceeds to
trial, the hospital essentially loses the benefit of that bargain, namely to avoid
litigation.” Id.
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,” id.
(quotation omitted), to alter the plain language of an unambiguous contract
provision. If WDH wanted to indemnify itself from costs associated with future
actions of the CFAA defendants which might involve WDH or its employees as
witnesses or otherwise, it could have drafted contract language to that effect.
The language of Paragraph 4 does not express such an intent and we will not
rewrite the parties’ contract to do so. “Parties generally are bound by the terms
of an agreement freely and openly entered into, and courts cannot make better
agreements than the parties themselves have entered into or rewrite contracts
merely because they might operate harshly or inequitably.” Appeal of
Silverstein, 163 N.H. 192, 202 (2012) (quotation omitted).
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
10
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 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.
11
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, 169 N.H. 1, 5 (2016) (quotation
omitted). This requirement, however, does not affect our conclusion above.
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, 356 N.W.2d at 335; see also Parnell, 158 S.W.3d at 928 (noting that
“[a]lthough [the plaintiff’s] damages in the malpractice lawsuit are measured
with reference to the underlying claim, her malpractice claim is separate and
distinct”).
“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, 159 N.H. at 811. Moreover, in light of our holdings herein, we find
it unnecessary to address the parties’ other arguments.
Reversed and remanded.
HANTZ MARCONI, J., concurred; KISSINGER, J., superior court justice,
specially assigned under RSA 490:3, concurred.
12