Keshishian v. CMC Radiologists
| Citation | 142 N.H. 168,698 A.2d 1228 |
| Decision Date | 15 July 1997 |
| Docket Number | No. 95–557.,95–557. |
| Court | Supreme Court of New Hampshire |
| Parties | Kevork B. KESHISHIAN, M.D., v. CMC RADIOLOGISTS and another. |
McLane, Graf, Raulerson & Middleton, P.A., Manchester (Jack B. Middleton, on the brief and orally, and Byrne J. Decker, on the brief), for plaintiff.
Orr & Reno, P.A., Concord (Richard B. Couser, on the brief and orally), for defendants.
The plaintiff, Dr. Kevork B. Keshishian, appeals several orders issued by the Superior Court (Groff, J.). The plaintiff sought equitable relief and damages from several defendants for their asserted role in ousting him from a medical partnership. We affirm.
This appeal presents a tangled web of facts and procedural maneuvers, all of which stem from the plaintiff's falling out with his former partners. The plaintiff was a founding partner of CMC Radiologists (the partnership), an association of radiologists that provided services to the Catholic Medical Center (CMC) in Manchester. In late 1987, the partnership began negotiations with CMC for a long-term contract. The plaintiff informed his partners that he planned to retire in 1991 and relocate to Maryland. In May 1988, the partnership executed a five-year radiology agreement with CMC. The agreement expressly provided that the plaintiff would withdraw from the partnership on June 30, 1991.
At some point in 1989, the plaintiff began to have second thoughts about his pending retirement due to a change in his economic circumstances. The partners, while willing to hire the plaintiff as a consultant, insisted that he withdraw from the partnership on June 30, 1991. Following negotiations, the parties entered into a consulting agreement in July 1991, in which the plaintiff sold his partnership interest to his fellow partners and agreed to provide his professional services to the partnership for two years at a fixed salary. The remaining partners formed a new partnership, which was later incorporated as CMC Radiologists, P.C.
In June 1993, as his two-year consulting agreement was set to expire and after his efforts to negotiate a return to partnership status failed, the plaintiff filed a petition for equitable relief and damages in superior court, naming as defendants the partnership, three individual partners (Channing S. Swan, II, M.D., Wane Joselow, M.D., and John E. Foster, M.D.), and the professional corporation. CMC was also named, but it was later dismissed as a defendant and is not a party to this appeal. In his petition, the plaintiff sought rescission of the 1991 consulting agreement, injunctive relief, and related damages. He claimed that the agreement was the product of duress and other improper conduct.
In November 1993, all defendants, except CMC, moved for summary judgment. They asserted that the plaintiff's claims were barred by his ratification of the consulting agreement and laches. In January 1994, the trial court granted the motion.
Shortly thereafter the plaintiff moved to amend his original petition. He claimed that his acquiescence to the 1988 radiology agreement, which indicated that he would retire in 1991, was the product of fraud and negligent misrepresentation. He therefore sought to rescind it and the 1991 consulting agreement which allegedly flowed from it. In May 1994, the trial court allowed this amendment.
The plaintiff filed a second motion to amend in February 1995, alleging breach of fiduciary duty and claiming damages for emotional distress and harm to his reputation. The trial court denied the proposed amendment.
Prior to trial the defendants moved to dismiss the fraud and negligent misrepresentation claims on the grounds that they were time-barred. The trial court deferred ruling on this motion and also deferred ruling on the defendants' motion to compel the plaintiff to elect between his legal and equitable remedies. A jury was then empaneled to hear the plaintiff's claims for money damages, and the court reserved the equitable claim for itself. After a seven-day trial, the jury deadlocked and a mistrial was declared.
The plaintiff then moved for a voluntary nonsuit on his equitable claim for rescission, which the court denied. The court next addressed the defendants' pending motion to dismiss and ruled that the plaintiff's legal claims were barred by the statute of limitations. The court also ruled against the plaintiff on the merits of his equitable claims, finding no fraud or negligent misrepresentation. This appeal followed.
On appeal, the plaintiff takes issue with four of the trial court's rulings: (1) the dismissal of his original claims on the basis of ratification and laches; (2) the denial of his second motion to amend his petition; (3) the ruling that his legal claims were barred by the statute of limitations; and (4) the denial of his motion for a voluntary nonsuit. We address each argument in turn.
The trial court granted the defendants' motion for summary judgment, ruling that the plaintiff's original claims were barred as a matter of law because the plaintiff had ratified the 1991 consulting agreement and because his claims were barred by laches. As we find no error with respect to the trial court's ratification ruling, we need not examine the alternate determination that the plaintiff's claims were barred by laches.
While a contract that is the product of duress is voidable, see King Enterprises v. Manchester Water Works, 122 N.H. 1011, 1013, 453 A.2d 1276, 1277 (1982), it is well settled that a party "cannot treat [a] contract as binding and as rescinded at the same time." Willoughby v. Moulton, 47 N.H. 205, 208 (1866). A contract made under duress will be deemed ratified if the aggrieved party fails to repudiate the agreement within a reasonable time after the duress has dissipated. See Blum v. Blum, 59 Md.App. 584, 477 A.2d 289, 294 (1984) ; McGee v. Stone, 522 A.2d 211, 214 (R.I.1987). "Intention to ratify may be signified in many ways, including intentionally accepting benefits under the contract, remaining silent or acquiescing in the contract for a long period of time after an opportunity exists to have it declared void, or acting upon the contract by affirmatively acknowledging it or performing under it." Kovian v. Fulton County Nat. Bank and Trust Co., 857 F.Supp. 1032, 1039 (N.D.N.Y.1994). Ratification is distinct from estoppel; it operates as an election, making the once voidable contract fully enforceable. See Sawtelle v. Tatone, 105 N.H. 398, 403, 201 A.2d 111, 115 (1964).
On appeal from a grant of summary judgment, we will affirm the trial court only if there was no genuine issue of material fact and if the moving party was entitled to judgment as a matter of law. Dwire v. Sullivan, 138 N.H. 428, 430, 642 A.2d 1359, 1360 (1994). The trial court found that after "[c]onstruing th[e] facts in the light most favorable to the plaintiff, it is clear that [the plaintiff] failed to repudiate the contract." The court also found that it was undisputed that the plaintiff fully performed his duties under the consulting agreement, accepted his salary and other benefits in full, and never indicated that he sought to disavow the agreement. The court consequently ruled that the plaintiff had ratified the consulting agreement, "and may not now seek to avoid [its] effect on the basis of duress, fraud or breach of fiduciary duty."
The plaintiff argues that he could not have repudiated the agreement, as he "still could not afford to lose his source of income." This argument fails because it would excuse lack of repudiation in every case in which a claim of economic duress was raised: absent a contract that is so imbalanced as to raise issues of unconscionability, cf. Williams v. Walker–Thomas Furniture Company, 350 F.2d 445, 449 (D.C.Cir.1965), the repudiation of an agreement will always compel the victim of the alleged duress to sacrifice some benefit.
The plaintiff's own correspondence demonstrates that soon after the consulting agreement was signed he told a third party that he felt he had been taken advantage of, thereby demonstrating that he was aware of the alleged grounds for rescission long before he brought his suit in superior court. See Sawtelle, 105 N.H. at 404, 201 A.2d at 115. Under these circumstances, the trial court could properly conclude that the plaintiff's failure to affirmatively repudiate the contract constituted ratification. Cf. Young v. Data Switch Corp., 231 Conn. 95, 646 A.2d 852, 856 (1994) ().
The plaintiff also asserts that his intent to ratify the agreement was a question of fact that could not properly be disposed of on summary judgment. In support of this argument, the plaintiff alleges that "[n]umerous documents submitted by Plaintiff in opposition to Summary Judgment clearly support his lack of intent to ratify."
We note that the bulk of the documents that the plaintiff refers to were not submitted with his objection to the defendants' motion for summary judgment, but instead were submitted with his motion for reconsideration. "[A]lthough Superior Court Rule 59–A entitles a party who has received an adverse ruling on a motion to seek reconsideration, the rule does not purport to authorize either party to submit further evidence bearing on the motion." Brown v. John Hancock Mut. Life Ins. Co., 131 N.H. 485, 492, 558 A.2d 822, 826 (1989). The trial court could have rejected the plaintiff's new exhibits outright, but there is no indication in the record that the court took this course, and we assume that it considered everything the parties had submitted. See id. at 492–93, 558 A.2d at 826.
The principal evidence offered in support of the plaintiff's contention that the defendants had notice of his intent to disavow the agreement consisted of several letters to CMC's president. CMC was not, however, a party to the 1991 agreement and did not move for summary judgment. The plaintiff...
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