McKay v. Owens
| Decision Date | 20 May 1997 |
| Docket Number | No. 22134,22134 |
| Citation | 937 P.2d 1222,130 Idaho 148 |
| Court | Idaho Supreme Court |
| Parties | Robynne L. McKAY, a single person; and Co-Ad, Inc., as guardian ad litem for Daniel Wayne McKay Butler, a minor and disabled person, Plaintiffs-Appellants, v. R. Bruce OWENS and Jane Doe Owens, husband and wife, and the marital community composed thereof, Howard & Owens, P.A., an Idaho professional services corporation; Howard L. Manweiler and Jane Doe Manweiler, husband and wife, and the marital community composed thereof, and Manweiler, Bevis & Cameron, P.A., an Idaho professional services corporation, Defendants-Respondents. Boise, December 1996 Term |
William F. Lee, Boise; and Robert B. Gould argued, Seattle, WA, for the appellant.
Evans Keane, L.L.P., Boise, for respondent Manweiler. William McCurdy argued.
Cosho, Humphrey, Greener & Welsh, Boise, for respondent Owens. Steven B. Price argued.
This is a legal malpractice case, stemming from an underlying medical malpractice action. In the medical malpractice suit, Henry E. Houst, Jr. (Houst) and respondent R. Bruce Owens (Owens) represented the interests of appellant Robynne L. McKay (McKay) and her disabled son Daniel, while respondent Howard Manweiler (Manweiler) was appointed by the court to act as guardian ad litem (guardian) for Daniel. McKay was separately represented at the minor's compromise hearing by Allen Ellis (Ellis), and James Baugh (Baugh) acted as an additional guardian for a trust to be set up for Daniel. Neither Houst nor Baugh is a party to this action.
The medical malpractice action settled, and after all parties agreed to it at the minor's compromise hearing, the court approved the settlement. McKay subsequently filed a legal malpractice action against Manweiler and Owens (collectively referred to as the Respondents). This appeal follows the district court's granting of summary judgment in favor of the Respondents, and the court's subsequent decision to grant sanctions, attorney fees, and costs against McKay and Ellis.
In 1987, McKay gave birth to Daniel by emergency caesarean section. Daniel has been severely disabled since birth, and in 1989, McKay filed a medical malpractice action on behalf of herself and Daniel against St. Luke's Regional Medical Center (St.Luke's) and her obstetrician. Her attorneys at that time were Houst and Owens. That same year, Manweiler was asked to be guardian ad litem for Daniel, although he was not appointed by the court until the minor's compromise hearing in 1992.
McKay alleges that Owens and Manweiler agreed to settle the case without her approval and over her repeated objections. She states that she felt that there was nothing she could do to reject the settlement after Owens and Manweiler accepted it, although the minor's compromise hearing had not yet been held and Houst told her she did not have to accept anything she did not want to. After becoming dissatisfied with Owens' representation, McKay retained Ellis to represent her interests in the medical malpractice action. She alleges that she attempted to find new counsel to take the medical malpractice action to trial, but that no one would represent her because of Owens' lien rights on attorney fees, and because the new counsel would have to split the attorney fees with Owens in some fashion.
Before the minor's compromise hearing, McKay filed objections to, among other things, the proposed compromise, and to Manweiler's appointment as guardian. McKay contends that she never withdrew two of her objections to the settlement. One of those objections was that she never agreed to the settlement. However, as discussed below, she clearly agreed to the settlement at the minor's compromise hearing. The second objection, which McKay also contends was never withdrawn, was stated as follows: The transcript from the minor's compromise hearing reflects that not only did McKay and Ellis agree to the settlement at the hearing, but that they specifically withdrew their objection to the attorney fees, as well as the other objections McKay made. Finally, neither she nor Ellis objected to Houst's statement that "all concerns presented by Robin [sic] McKay, pursuant to her objection filed by Mr. Allen Ellis, have been resolved."
After Ellis made his statement withdrawing the objections, the magistrate court asked: "[w]ith that, then, Mr. Ellis, you're saying you agree with the recitation of what the settlement is and you are recommending that for your client? " (emphasis added). Ellis responded "[y]es, Your Honor" [with the stipulation that money to be paid to McKay in 1997 and 2002 was in settlement of her personal injury claim]. Later, the Court again asked:
MS. ROBIN [sic] MCKAY: Yes.
THE COURT: And is there anything you want to say?
MS. ROBIN [sic] MCKAY: Not (indiscernible).
McKay alleges that despite the preceding dialogue with the court, she agreed to the settlement only after she was unable to find other representation, and then only to "mitigate her damages." She also alleges that she never was truly satisfied with the settlement, and argues that she never really agreed to it.
In an affidavit in the record, Ellis stated that "I advised plaintiff Robynne McKay to withdraw her objection to the proposed minor's After discussions with Mr. Ellis, and cognizant of my duty to mitigate damages, I agreed to withdraw my objections to the Minor's Compromise such that Daniel would receive as much as possible from the defendant hospital St. Luke's and the defendant doctor....
compromise in order to mitigate her damages as required by law prior to her bring [sic] malpractice and breach of fiduciary duty claims." Therefore, Ellis advised McKay to tell the court she approved the settlement, even though she now alleges that she never truly agreed to the settlement. McKay also stated in an affidavit that
At the minor's compromise hearing, in response to direct questions from the magistrate judge, Houst, Owens, Manweiler and Baugh gave their consent to the settlement. The magistrate court in the minor's compromise hearing then approved the settlement. McKay, Manweiler, Owens, Houst, and Ellis signed a "Release of All Claims and Indemnity Agreement." This release was signed after the minor's compromise hearing, and therefore was not before the magistrate judge. While that agreement specifically released St. Luke's and the obstetrician from further liability, it specifically preserved any claims McKay might have had against Owens. On appeal, no one disputes that the release did not bar any legal malpractice claims McKay might have.
In 1994, McKay's new attorneys, Robert Gould (Gould) and William Lee (Lee), filed a legal malpractice complaint against Owens and Manweiler. The complaint alleged negligence in representing a client, willful disobedience of a client's instructions, and failure to exercise discretion in good faith. Essentially, the complaint was that Owens and Manweiler settled the medical malpractice claim without McKay's consent, and that the amount of the settlement was insufficient. Manweiler filed a motion to dismiss under I.R.C.P. 12(b)(6), which the trial court denied, and alternatively a motion for summary judgment under I.R.C.P. 56. The trial court granted summary judgment based on the doctrines of judicial estoppel and quasi-judicial immunity. Owens also filed a motion to dismiss, which the trial court treated as a motion for summary judgment and granted on the basis of the doctrine of judicial estoppel.
Manweiler and Owens then filed motions for sanctions under I.R.C.P. 11, as well as attorneys' fees and costs. The court awarded costs as a matter of right under I.R.C.P. 54(d)(1), although it denied discretionary costs. In addition, the court required McKay's counsel to pay Owens' and Manweiler's attorney fees and computer research costs as a sanction under I.R.C.P. 11. McKay appeals.
The issues on appeal are:
1. Whether the trial court erred in granting Owens' motion to dismiss and Manweiler's motion for summary judgment based on the doctrine of judicial estoppel.
2. Whether the trial court erred in granting Manweiler's motion for summary judgment based on the doctrine of quasi-judicial immunity.
3. Whether the trial court erred in granting Owens' and Manweiler's motions for attorneys' fees, costs, and sanctions.
This appeal follows the district court's decision granting Manweiler's motion for summary judgment and Owens' motion to dismiss for failure to state a claim upon which relief can be granted. However, because the court considered matters outside the pleadings, such as affidavits and the record from the minor's compromise hearing, it properly treated Owens' motion as one for summary judgment. I.R.C.P. 12(b) provides that:
[i]f, on a motion asserting the defense ... to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment....
When the Supreme Court reviews a district court's decision on summary judgment, it employs the same standard as that properly employed by the trial court when originally...
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