Opinion
SUPERIOR COURT CIVIL ACTION Docket No. CV-13-206
02-03-2015
PAUL LEVESQUE, et al, Plaintiffs v. DANIEL G. LILLEY, ESQ., et al, Defendants
STATE OF MAINE
CUMBERLAND, ss. ORDER
Before the court is the third motion by the Lilley defendants for leave to amend their counterclaim and their third party complaint.
The Lilley defendants are seeking to amend their counterclaims to add claims for breach of contract, quantum meruit, and unjust enrichment as well as a setoff claim and defense - all based on the theory that the Levesques breached an obligation to the Lilley defendants to adequately defend the original verdict on appeal. The Lilley defendants have existing breach of contract, quantum meruit, and unjust enrichment claims for the attorneys fees allegedly owed to them based on the ultimate settlement that was reached.
Under 24 M.R.S. § 2961, attorneys fees in medical malpractice actions that exceed certain percentages must be approved by the court, and it is therefore possible that any recovery by the Lilley firm on its existing counterclaim would subsequently require court approval.
The Lilley defendants are seeking to amend their third party complaint to allege that, in addition to their existing claims against Flynn for contribution, Flynn owed the Lilley defendants a duty of due care in defending the original verdict.
According to the Lilley defendants' motion, the triggering event for the proposed amendment was Daniel Lilley's deposition testimony on October 2, 2014 that he was not just seeking a percentage share of the ultimate settlement in the case but was seeking to obtain recovery based on the original verdict before it was vacated on appeal.
The Levesques oppose the motion on the ground that there is no legal basis for any claim that they could be liable to the Lilley defendants based on the appeal. Flynn opposes the amendment on the ground that it is too late - an issue that is related to an additional dispute between the parties with respect to the deadline for designating experts.
That issue shall be addressed at a scheduling and Rule 26(g) conference which the court understands the clerk's office is attempting to arrange.
The court can find no legal basis, contractual or otherwise, for the claim that the Levesques owed any duty to the Lilley defendants in connection with the handling of the appeal. The Lilley defendants did not handle the appeal, and therefore they have no quantum meruit claim for the value of services rendered in connection with the appeal. See Dinan v. Alpha Networks Inc., 2013 ME 22 ¶ 19, 60 A.3d 792 (quantum meruit is for recovery of value of services or materials provided under implied contract). Since the Levesques lost the appeal, no benefit was conferred upon the Levesques that could form the basis for a claim of unjust enrichment. See A.F.A.B. Inc. v. Town of Old Orchard Beach, 620 A.2d 747, 749 (Me. 1992). Given the above, there is also no basis for a setoff claim or defense based on any alleged failure by the Levesques in connection with the appeal.
The contingency fee contract between the Lilley firm and the Levesques is contained in the record as an attachment to Flynn's January 21, 2014 motion for judgment on the pleadings.
Accordingly, the motion to amend is denied as it pertains to the counterclaim.
With respect to the proposed amendment to the third party complaint, the court agrees with Flynn that the motion is untimely. The original deadline for amendments to the pleadings was December 12, 2013. Although there have been several extensions of the pleadings was December 12, 2013. Although there have been several extensions of other deadlines in the scheduling order, that deadline was never extended.
One motion to amend the third party complaint was filed and granted after December 12, 2013. However, as the discovery deadline approaches, there is a point when deadlines on amendments to the pleadings should be enforced. This is particularly true in this case where the proposed amendment is not prompted by some newly discovered evidence obtained from an adverse party but by Mr. Lilley's statement at his deposition that he is seeking recovery based on the original verdict - a claim that should have been disclosed at the outset.
However, the court does not agree with counsel for Flynn that litigation relating to the appeal would significantly broaden the case. The Lilley defendants' first third-party claim against Flynn was (and remains) that Flynn is liable for contribution based on his negligent handling of the appeal. See Lilley defendants' June 20, 2013 third party complaint ¶ 4.
In addition, the proposed amendment to the third-party complaint is based on the theory that Flynn "owed [the Lilley defendants] a duty to act with due care that would not impair Lilley's interest in the already obtained judgment." Proposed Amended Third Party Complaint, attached as Exhibit A to Lilley defendants' third motion for leave to amend, ¶ 20.
This issue has already been the subject of litigation between the parties, and the court previously found that Lilley may pursue third party claims against Flynn based on a duty of care that Flynn owed to the Levesques. See order dated June 9, 2014 at 2. However the principle that a lawyer cannot be held liable to third parties based on the performance of the lawyer's professional duties, see DiPietro v. Boynton, 628 A.2d 1019 (Me. 1993), forecloses the claim that Flynn owed any duty to the Lilley defendants with respect to the appeal.
The Lilley defendants may therefore seek contribution from Flynn but are not entitled to any affirmative recovery against Flynn under their third party complaint. The entry shall be:
The Lilley defendants' third motion for leave to amend their counterclaim and third party complaint is denied.
The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a). Dated: February 3, 2015
/s/_________
Thomas D. Warren
Justice, Superior Court
WALTER MCKEE ESQ
MCKEE BILLINGS LLC PA
133 STATE STREET
AUGUSTA ME 04330
MARK FRANCO ESQ
THOMPSON & BOWIE
PO BOX 4630
PORTLAND ME 04112-4630
LEE BALS ESQ
MARCUS CLEGG & MISTRETTA
ONE CANAL PLAZA SUITE 600
PORTLAND ME 04101-4035 ORDER
Before the court is a motion by third party defendant John Flynn for judgment on the pleadings dismissing the third party complaint and a motion by defendants and third party plaintiffs Daniel Lilley, Christian Foster, and the Daniel G. Lilley Law Offices (collectively, the Lilley defendants) to amend the third party complaint.
Judgment on the Pleadings
A motion for judgment on the pleadings tests the sufficiency of the complaint. 2 C. Harvey, Maine Civil Practice § 12:14. For purposes of a motion for judgment on the pleadings, as on a motion to dismiss, the material allegations of the third party complaint must be taken as admitted. The third party complaint must be read in the light most favorable to the Lilley defendants to determine if it sets forth elements of a cause of action or alleges facts that would entitle the Lilley defendants to relief against Flynn pursuant to some legal theory. See, e.g., In re Wage Payment Litigation, 2000 ME 162 ¶ 3, 759 A.2d 217.
Third Party Complaint Count 1 (Negligence/Contribution)
Count 1 of the third party complaint asserts a claim for negligence and contribution, based on the allegation that Flynn's handling of the appeal was negligent. Third Party Complaint ¶ 4. Flynn argues this count must be dismissed under the principle that a lawyer cannot be held liable to third parties for the performance of the lawyer's professional duties. See DiPietro v. Boynton, 628 A.2d 1019, 1025 (Me. 1993). The problem with this argument is that the premise of the contribution claim is that Flynn violated the standard of care owed to his clients, the Levesques, and not to any third party.
In their opposition to Flynn's motion for judgment on the pleadings, the Lilley defendants argue that Flynn was also negligent in advising the Levesques to settle after the Law Court decision. See Lilley defendants' February 27, 2014 memorandum in opposition to Rule 12(c) motion at 8. This issue is addressed below in connection with the Lilley defendants' motion to amend the third party complaint.
Thus, the contribution claim is not based on any alleged duty owed to the Lilley defendants. The court concludes that if the Lilley defendants are found liable to the Levesques for professional negligence, the DiPietro principle would not prevent the Lilley defendants from seeking contribution from Flynn if they can prove that Flynn was professionally negligent in his handling of the Levesques' appeal.
Flynn also contends that he cannot, as a matter of law, qualify as a joint tortfeasor from whom contribution may be sought. The alleged harm to the plaintiffs, however, is based on the outcome of their case against Central Maine Medical Center. On that issue, if the Lilley defendants are held liable and can prove that professional negligence by Flynn caused or contributed to a result that was less favorable than otherwise would have been obtained, Flynn would qualify as a joint tortfeasor.
Paragraphs 5 and 6 of the third party complaint seem to suggest that the Lilley defendants may be seeking to have Flynn held liable to the Levesques even if the Lilley defendants are not found to be negligent. The Levesques have not asserted any claim against Flynn, and count 1 of the third party complaint therefore cannot provide any relief other than contribution in the event that the Lilley defendants are held liable to the Levesques.
Third Party Complaint Count 2 (Breach of Fiduciary Duty)
Count 2 of the third party complaint alleges that Flynn breached a fiduciary duty to the Lilley defendants. However, the third party complaint alleges that Flynn had terminated his employment with the Lilley defendants during the summer of 2010 and represented the Levesques on their appeal at a time when he was no longer employed by the Lilley defendants. Third Party Complaint ¶ 3. The alleged breach of fiduciary duty is alleged to have occurred after the appeal decision, when Flynn is alleged to have advised the Levesques that they had a potential malpractice claim against the Lilley defendants. Third Party Complaint ¶ 9.
Although the Lilley defendants allege that Flynn had a fiduciary duty to the Lilley defendants that "survived" Flynn's termination of employment, id., the court disagrees. Assuming that Flynn had a fiduciary duty to the Lilley firm while he was employed there, the third party complaint does not contain any factual allegations that would support the continued existence of a fiduciary duty once the employment relationship was severed. The court can find no inherent basis in Flynn's relationship as a former employee that would conceivably give rise to a continuing fiduciary duty.
The Lilley defendants allege that they placed trust and confidence in Flynn "while Flynn was employed by Lilley." Third Party Complaint ¶ 9.
While the court might be inclined to agree that a fiduciary relationship may have existed during Flynn's employment with the Lilley firm, this is not a foregone conclusion. Flynn has pointed to at least one decision from another jurisdiction holding that a lawyer who is employed by a law firm but who is not a partner is not subject to a fiduciary duty to the firm. Hess v. Kanoski & Associates, 668 F.3d 446, 455 (7th Cir. 2012) (applying Illinois law)
In addition, the Law Court has held that a general allegation of a fiduciary relationship is insufficient and that "the factual foundations of an alleged fiduciary relationship must be pled with specificity." Bryan R. v. Watchtower Bible and Tract Society, 1999 ME 144 ¶¶ 20-22, 738 A.2d 839. No factual basis has been alleged for a continuing fiduciary relationship or for the assertion that "there was a great disparity of position and influence between Flynn and Lilley and this disparity favored Flynn." Third Party Complaint ¶ 9.
As it relates to the time of Flynn's employment by the Lilley firm, when the Lilley defendants allege that the fiduciary relationship arose, the allegation that the disparity of position and influence favored Flynn runs counter to the usual dynamic in an employer-employee relationship.
It also bears emphasis that the fiduciary duty claim against Flynn is based on alleged advice given by Flynn to the Levesques at a time when Flynn was representing the Levesques. Unlike the contribution claim, which is based on an alleged violation of the standard of care owed by Flynn to his clients, the Lilley defendants' fiduciary duty claim is premised on an alleged duty owed to a party other than Flynn's clients. This claim runs squarely afoul of the general principle that, absent fraud or collusion, a lawyer is not liable to third parties for the performance of professional duties as an advocate for his clients. See DiPietro v. Boynton, 628 A.2d at 1025, citing Layman v. Layman, 578 A.2d 314, 316 (Md. App. 1990). Once he was no longer employed by the Lilley defendants, Flynn's duty was owed to his clients, not to his former employer.
Flynn is therefore entitled to judgment on the pleadings dismissing count 2 of the third party complaint.
Third Party Complaint Count 3
Count 3 of the third party complaint asserts a claim for tortious interference with contract or advantageous economic relationship, based on the theory that the Lilley defendants had a valid contract with the Levesques for attorney's fees which Flynn fraudulently induced the Levesques to breach.
To prevail on a claim of tortious interference with contract or advantageous economic relationship, the Lilley defendants must prove that a valid contract existed; that Flynn interfered with that contract by fraud; and that Flynn's interference proximately caused damages. Rutland v. Mullen, 2002 ME 98 ¶ 13, 798 A.2d 1104. To prove interference by fraud, the Lilley defendants must prove, inter alia, that (1) Flynn made a false representation (2) of a material fact (3) with knowledge of its falsity or in reckless disregard of whether that representation was true or false. Id. ¶ 14.
In addition, M.R.Civ.P. 9(b) requires that in all averments of fraud, the circumstances constituting fraud shall be stated with particularity. See James v. MacDonald, 1998 ME 148 ¶ 8, 712 A.2d 1054 (applying Rule 9(b) to tortious interference by fraud claim). The specific allegations in the third party complaint are that Flynn fraudulently induced the Levesques to breach the contract by
M.R.Civ.P. 9(b) provides that "the circumstances constituting fraud . . . shall be stated with particularity" but that intent, knowledge, or other condition of mind may be averred generally.
among other things, making false representations of material facts concerning Lilley's alleged negligent prior handling of the Levesques' case, representations that Flynn knew were not true or were made in reckless disregard of the truth.Third Party Complaint ¶ 14.
The allegation that Flynn engaged in fraud would remove the third party complaint from the principle that a lawyer is not ordinarily subject to liability to third parties for the performance of his professional duties to his clients. See Layman v. Layman, 578 A.2d at 316, cited in DiPietro, 628 A.2d at 1025. However, the Lilley defendants have failed to plead this count with the requisite particularity. In particular, the third party complaint does not allege the specific material facts which Flynn allegedly misrepresented to the Levesques.
This is particularly important under the circumstances of the instant case because a lawyer is obligated to provide his clients with his best professional judgment and a lawyer cannot be held liable for advising a client that, in his opinion, the client has a legal malpractice claim against a former attorney. This is true whether or not the legal malpractice claim is ultimately successful. See Rutland v. Mullen, 2002 ME 98 ¶ 15 (assertions of legal claims, even if later proven invalid, are insufficient as a matter of law to support a finding of tortious interference by fraud). Indeed, if any lawyer who advises a client to resist a claim for breach of contract were subject to a claim of tortious interference, then every contract claim could be joined with a tortious interference claim against the opposing lawyer.
At a minimum, only if a lawyer makes misrepresentations of material facts and does so either knowingly or in reckless disregard of the truth can a tortious interference claim potentially be asserted. In this case, the Lilley defendants have not alleged any specific facts that Flynn is alleged to have knowingly misrepresented, and Flynn is therefore entitled to judgment on the pleadings on count 3 of the third party complaint.
Lilley Defendants' Motion to Amend
The Lilley defendants' motion to amend seeks to add a fourth count of the third party complaint, seeking contribution based on Flynn's allegedly negligent advice that the Levesques should settle their claim rather than pursue a new trial after the Law Court remand. Without expressing any opinion as to the ultimate viability of that claim, the court concludes that the amendment sought at least states an additional claim for contribution based on alleged negligence and will allow the amendment. The entry shall be:
As far as the court can tell, there are a few other minor changes in the wording of the proposed amended third party complaint, but none are of any substance. However, certain words appear to have been inadvertently dropped from the second sentence of paragraph 3 of the proposed amended third party complaint, and that sentence is now missing a verb. The court will assume that paragraph 3 was intended to remain as set forth in the original third party complaint.
1. Third party defendant Flynn's motion for judgment on the pleadings is denied as to Count 1 of the third party complaint (negligence/ contribution) except to the extent that Count 1 seeks any relief other than contribution in the event that the Lilley defendants are held liable to the Levesques.
2. Flynn's motion is granted as to Counts 2 and 3 of the third party complaint (breach of fiduciary duty and tortious interference with contract), and judgment on the pleadings is entered dismissing those counts of the third party complaint.
3. The Lilley defendants' motion to amend the third party complaint is granted, without prejudice to any defenses that may be asserted by Flynn, who shall have 10 days from receipt of this order in which to file an answer to the amended third party complaint.
The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a). Dated: June 9, 2014
/s/_________
Thomas D. Warren
Justice, Superior Court
LEE BALS ESQ
MARCUS CLEGG & MISTRETTA
ONE CANAL PLAZA SUITE 600
PORTLAND ME 04101-4035
MARK FRANCO ESQ
THOMPSON & BOWIE
PO BOX 4630
PORTLAND ME 04112-4630
WALTER MCKEE ESQ
MCKEE BILLINGS LLC PA
133 STATE STREET
AUGUSTA ME 04330 ORDER
Before the court is defendants' motion to dismiss the complaint filed by Paul and Ida Levesque.
For purposes of a motion to dismiss, the material allegations of the complaint must be taken as admitted. The complaint must be read in the light most favorable to the plaintiff to determine if it sets forth elements of a cause of action or alleges facts that would entitle plaintiff to relief pursuant to some legal theory. A claim shall only be dismissed when it appears beyond doubt that a plaintiff is not entitled to relief under any set of facts that he might prove in support of his claim. E.g., In re Wage Payment Litigation, 2000 ME 162 ¶ 3, 759 A.2d 217.
The defendants' motion contends that the Levesques' settlement of their claim against CMMC upon remand precludes the Levesques, as a matter of law, from proving that the judgment they initially recovered was based on negligence on the part of Dr. Rietschel as opposed to negligence on the part of CMMC nurses. The court disagrees. On the face of the complaint it is at least possible that, through expert testimony or other evidence, the Levesques will be able to prove that it is more likely than not that the verdict they received at trial was based on Dr. Rietschel's negligence as opposed to negligence on the part of the CMMC nurses and that, once foreclosed from proceeding on the basis of Dr. Rietschel's negligence, the Levesques would have had a considerably weaker case if they had gone to a second trial. The entry shall be:
The complaint does not allege that the claim against CMMC was settled on remand but defendants have pointed to a docket entry to that effect. The authenticity of the docket entry has not been challenged and plaintiffs do not dispute the existence of a settlement with CMMC. Accordingly, the docket entry may be considered on the motion to dismiss. Moody v. State Liquor & Lottery Commission, 2004 ME 20 ¶ 9, 843 A.2d 43. --------
Defendants' motion to dismiss is denied. The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a). Dated: February 13, 2014
/s/_________
Thomas D. Warren
Justice, Superior Court
WALTER MCKEE, ESQ.
MCKEE BILLINGS LLC PA
133 STATE STREET
AUGUSTA, ME 04330
LEE BALS, ESQ.
JENNIE CLEGG, ESQ.
MARCUS CLEGG & MISTRETTA PA
ONE CANAL PLAZA SUITE 600
PORTLAND, ME 04101-4035
MARK FRANCO, ESQ.
THOMPSON & BOWIE
PO BOX 4630
PORTLAND, ME 04112-4630