Lawson v. Brown's Day Care Center, Inc.

• Decision Date: 16 April 2001
• Docket Number: No. 98-447.,98-447.
• Citation: 776 A.2d 390
• Parties: Katherine, Bradley and Jordan LAWSON v. BROWN'S DAY CARE CENTER, INC., et al.
• Court: Vermont Supreme Court

776 A.2d 390

Katherine, Bradley and Jordan LAWSON v. BROWN'S DAY CARE CENTER, INC., et al.

No. 98-447.

Supreme Court of Vermont.

April 16, 2001.

Before AMESTOY, C.J., and DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.

ENTRY ORDER

Duncan Kilmartin, a counsel for defendants in this case, appeals the Caledonia Superior Court's order imposing a $2,000 sanction on him for filing unsealed information from a confidential mediation session with the court. He claims the court did not afford him procedural due process and erred because his professional responsibilities required him to make the disclosure. We reverse and remand for a determination on the issue of Kilmartin's motivation in making the disclosure.

In September 1997, plaintiffs Katherine and Bradley Lawson, represented by attorney Gareth Caldbeck, filed the underlying civil action to recover damages for injuries to their daughter Jordan Lawson, who choked on a rattle while at Brown's Day Care Center. The Cooperative Insurance Company retained Kilmartin to represent defendants. Defendants also retained separate counsel due to the prospect of an award in excess of their insurance coverage. After the case settled, the superior court sanctioned Kilmartin $2,000 and Caldbeck $1,000. Kilmartin appeals; Caldbeck does not appeal the sanction.

This case proceeded in an atmosphere of unbecoming hostility between Kilmartin and Caldbeck, expressed in numerous filings with the court. The wrangling escalated to the point where, in April 1998, the court commanded, "in filings with the court, the attorneys shall refrain from the use of rhetoric containing personal criticism." Nevertheless, as the court later noted, "Unfortunately, the filings of such documents did not stop." For example, on June 18, 1998, Kilmartin filed an "emergency" motion to disqualify Caldbeck on the basis of obstruction of justice, subornation of perjury, and presentation of false evidence. Kilmartin based the motion on the belief that Caldbeck had submitted false affidavits in the case. The court denied the June 18 motion, stating that the "factual discrepancies described in the [m]otion are not unusual ones to occur in discovery, and the court will not rule on an ex parte basis that they constitute a reason to halt a planned discovery process or an early neutral evaluation of the case."

Under a pretrial scheduling order, the court instructed the parties to engage in mediation with attorney Peter Joslin. The parties and their respective counsel met with Joslin on June 22, 1998, at which time the parties agreed that all mediation proceedings were to remain confidential.

On June 26, 1998, Kilmartin filed with the court an unsealed document entitled "Confidential Disclosure under DR 1-103(A)," disclosing discussions that took place during the mediation session and attaching a copy of a proposed settlement agreement. Disciplinary Rule 1-103(A) of Vermont's Code of Professional Responsibility,¹ applicable when Kilmartin made the disclosures, states: "A lawyer possessing unprivileged knowledge of a violation of DR 1-102 shall report such knowledge to a tribunal or other authority ...." DR 1-102 prohibits a lawyer from engaging in "illegal conduct involving moral turpitude," id. 1-102(A)(3); engaging in conduct involving "dishonesty, fraud, deceit, or misrepresentation," id. 1-102(A)(4); or engaging in conduct that is "prejudicial to the administration of justice," id. 1-102(A)(5).

Kilmartin asserted that Caldbeck had committed (1) a violation of 13 V.S.A. § 8 when, during the mediation, he proposed settlement terms under which defendants would refrain from making or authorizing "any claims, complaints or allegations, civil or criminal, against any parties or other persons" arising out of the lawsuit, and (2) a violation of DR 1-102 based on Caldbeck's negotiating demand that Kilmartin forego any criminal or disciplinary complaint against him. Accordingly, he disclosed this perceived transgression, citing DR 1-103(A) which requires attorneys in this state to report misconduct by other attorneys unless the information is privileged.²In re Anderson, ___ Vt. ___, 769 A.2d 1282 (2000) (mem.). After reading the cover and title pages accompanying the disclosure, the court returned the disclosure (unread) to Kilmartin, explaining in a notation written on the cover page that it would "not participate in ex parte communications concerning the case."

On July 2, Kilmartin filed a motion seeking permission to appeal the denial of his June 18 motion or, in the alternative to, to disqualify Caldbeck. This motion included the June 26 mediation disclosure. Caldbeck's response, filed on July 6, also described statements made during mediation, but requested that the court seal Kilmartin's motion. Thus began an exchange of several filings between the parties that disclosed more information pertaining to the confidential mediation. The court ordered the temporary seal of certain pages of these documents on three separate occasions, making clear that its reason for doing so was to protect the confidentiality of the parties' mediation and settlement discussions. On August 24, the court released the record from temporary seal, except for a portion of the draft settlement proposal regarding the settlement amount that is now permanently sealed. The court then ordered Kilmartin and Caldbeck to "appear and show cause why the court should not impose sanctions for violating the confidentiality of the mediation session by filing documents with the court containing descriptions of discussions at the mediation session and related negotiations and proposed terms of settlement."

The superior court sanction decision, delivered orally on the record shortly after the close of the September 2 hearing, shows that the court imposed the sanction for the following reasons:

1. The lawyers entered into a "verbal agreement that what took place at the mediation session was confidential."

2. The session took place pursuant to an order of the court so the attorneys made their promise "in connection with court business" and their "obligations ran not just to the parties themselves, but to the court and the court processes."

3. The attorneys had no reasonable expectation that they could file documents with the court and have them sealed.

4. Although there may be exceptions to confidentiality, the material disclosed "is precisely the kind of material" subject to confidentiality.

The trial court reasoned that the agreement of confidentiality, entered into by all parties, coupled with the fact that mediation occurred under a court order justified the sanctions. The court stated that it was "dealing with a situation where this was a session required by the court, conducted by a person appointed by the court who did obtain the agreement for confidentiality by all present, including the attorneys."

Nevertheless, it is important to recognize what is not part of the court's decision. There is no finding that Kilmartin made the filings for an improper purpose or in bad faith. Indeed, there is no finding that Kilmartin did not make the filing for exactly the purpose he stated: to disclose unethical conduct and/or potentially criminal conduct and to disqualify the opposing lawyer.

Although the decision does talk of expectations as to sealing, there is no indication that it would not be equally applicable to a complaint to the Professional Conduct Board or a complaint to the state's attorney. The rationale clearly covers disclosure to anyone not part of the mediation. The unstated assumption behind the decision of the court is that an attorney in Kilmartin's position could never disclose anything that occurred in the mediation for any reason. The court's order is broad enough to make a person who commits professional misconduct, even criminal misconduct, during a mediation immune from disciplinary sanction or prosecution because no one can lawfully disclose the misconduct.

Although we have held that a court may sanction attorneys for misconduct through its inherent powers, Van Eps v. Johnston, 150 Vt. 324, 326-27, 553 A.2d 1089, 1091-92 (1988), here the court found no exceptional circumstances and did not find that Kilmartin acted in bad faith. A finding of bad faith is essential to the court's power to impose the sanction it did. See Roadway Express, Inc. v. Piper, 447 U.S. 752, 767, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980) (a finding of bad faith must proceed any sanction based upon the court's inherent powers). Kilmartin is entitled to some explanation why the reasons for the disclosure were not only wrong, but so wrong that they were advanced in bad faith. The United States Supreme Court has observed that "[b]ecause...