Creech v. Melnik

• Decision Date: 19 November 1996
• Docket Number: No. COA95-1370,COA95-1370
• Parties: Sharon CREECH and Travis Creech, Guardians ad Litem of Justin Creech, Minor, Plaintiffs-Appellants, v. Evelyn H. MELNIK, M.D., Defendant-Appellee.
• Court: North Carolina Court of Appeals

Page 680

477 S.E.2d 680

124 N.C.App. 502

Sharon CREECH and Travis Creech, Guardians ad Litem of Justin Creech, Minor, Plaintiffs-Appellants, v. Evelyn H. MELNIK, M.D., Defendant-Appellee.

No. COA95-1370.

Court of Appeals of North Carolina.

Nov. 19, 1996.

Law Offices of Wade E. Byrd by Wade E. Byrd and Mary Ann Tally, Fayetteville, for plaintiffs-appellants.

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. by Samuel G. Thompson, William H. Moss, and James Y. Kerr, II, Raleigh, for defendant-appellee.

WYNN, Judge.

At approximately 2:00 p.m. on 23 September 1980, Southeastern General Hospital in Lumberton, North Carolina urgently called the defendant, Dr. Evelyn H. Melnik, to assist in the delivery of twins born to the plaintiffs, Sharon and Travis Creech. At the hospital, Dr. Melnik, a neonatologist, resuscitated Justin Creech and determined that his APGARS (initial birth assessment) were very low. Once stabilized, Justin was transferred to the nursery for admission.

The record on appeal indicates that standard protocol at the hospital called for the attending pediatrician to be notified immediately upon an infant's admission to the nursery. A nurse wrote admitting orders for Justin, and the medical records reveal that at 4:20 p.m. the attending pediatrician, Dr. Elwood Coley, was notified of a decrease in Justin's blood pressure. The medical records further reveal that following the delivery, Dr. Melnik had no further involvement in Justin's care until early the next morning when she was called to the nursery to provide resuscitation to Justin. At approximately 7:30 a.m. on 24 September, Justin's care was transferred from Dr. Coley to Dr. Melnik.

In March of 1988, plaintiffs' attorney, W. Paul Pulley, contacted Dr. Melnik and informed her that plaintiffs were considering bringing a medical malpractice action against the health care providers involved in Justin's delivery. He stated that he was having difficulty understanding the medical records and wished to retain her to assist him in interpreting the records. During this initial conversation, Dr. Melnik asked Mr. Pulley whether she was a potential or possible defendant. Apparently, from his response, she felt assured that plaintiffs would not sue her.

Mr. Pulley and Dr. Melnik subsequently met and communicated by telephone regarding this case on several occasions over the next few months. During that time, she provided information regarding Justin's care as set forth in the medical records, as well as regarding the standard of care for treating an infant in Justin's situation. The medical records showed that no blood gases had been taken on Justin until 7:00 p.m. on the day he was born. As a result, Justin was not given sufficient oxygen causing him to suffer from neonatal asphyxia. Dr. Melnik expressed the opinion that Justin's pediatric care had been substandard the first few hours after his birth, and this would have contributed to his severely handicapped condition. Dr. Melnik further stated that Dr. Coley was responsible for Justin's care during those hours.

As the investigation progressed, Dr. Melnik continued to have contact with and provide information to Mr. Pulley. The focus changed, however, when during a deposition on 13 July nurse Jean Reeves pointed out that Dr. Melnik may have been the person responsible for Justin's care in the first few hours after his birth.

Plaintiffs contend that following Ms. Reeves' deposition, Mr. Pulley contacted Dr. Melnik and informed her that she had potential malpractice exposure and advised her to retain an attorney. On the other hand, Dr. Melnik contends that Mr. Pulley had several subsequent information gathering conversations with her after he became aware that she was a potential defendant, and did not notify her that she was a potential defendant and should retain an attorney until after she was subpoenaed for a deposition. She also notes that there is no contemporaneous documentation of Mr. Pulley's alleged conversation on this matter in contrast with the extensive notes made by Mr. Pulley of his other conversations with Dr. Melnik.

On 12 October 1990, the plaintiffs filed suit against Dr. Melnik. After answering the complaint, Dr. Melnik moved for and was granted summary judgment based on the affirmative defenses of breach of implied contract not to sue and equitable estoppel. Plaintiffs appeal from this order.

On appeal, plaintiffs ask us to consider whether the trial court erred in granting summary judgment for defendant on the grounds of breach of contract and equitable estoppel. Because we find that summary judgment on both grounds was proper, we affirm the judgment of the trial court.

I. Breach of Contract

Plaintiffs contend the trial court erred in granting summary judgment for defendant on the grounds that they breached an implied contract not to sue. We disagree.

As an initial matter, we note that the law of agency applies to the relationship between a client and his attorney. Bank v. McEwen, 160 N.C. 414, 420, 76 S.E. 222, 224 (1912). Thus, the client is bound by the acts of his attorney within the scope of his authority. Id. Since neither party addresses the question of whether the attorney under the facts of this case could lawfully bind his clients to a contract, we need not reach that issue in this appeal. Therefore, we proceed to consider the question of whether the course of conduct between the parties in this case gave rise to a valid implied contract.

A contract implied in fact arises where there is no express intention of the parties, but an agreement creating an obligation can be implied or presumed from their acts. Snyder v. Freeman, 300 N.C. 204, 217, 266 S.E.2d 593, 602 (1980). "An implied contract is valid and enforceable as if it were express or written." Id. A validly formed contract requires mutual assent and consideration.

The record in this case reveals that Mr. Pulley initiated the contact with Dr. Melnik. Before providing any information, Dr. Melnik specifically asked Mr. Pulley whether she was being looked at as a defendant. In his deposition, Mr. Pulley stated: "I did at some point tell her that I wasn't looking at her. I didn't know of any reason for her to be a defendant in this action.... [I]t's not entirely incorrect that I did give her assurances that we had no interest in making her a defendant." Apparently, Dr. Melnik relied on Mr. Pulley's representations and provided valuable information regarding Justin's care.

Mr. Pulley contends that by telling Dr. Melnik that he had no reason to consider her as defendant in light of the information he had at that time, he was not promising to refrain from suing her at some point in the future should further investigation reveal that she was potentially liable. Therefore, he argues that since there was no mutual assent, no contract was formed and the suit against Dr. Melnik does not constitute a breach of contract.

We find, however, that an attorney's carefully chosen words do not necessarily prevent the formation of an implied contract not to sue. When finding mutual assent between the parties, "[t]he undisclosed intention is immaterial in the absence of mistake, fraud, and the...