Pappas v. Chang

• Decision Date: 03 March 2022
• Docket Number: A159792, A160293
• Citation: 75 Cal.App.5th 975,291 Cal.Rptr.3d 106
• Parties: Helena PAPPAS, Plaintiff and Appellant, v. Carolyn CHANG, Defendant and Respondent. Helena Pappas, Plaintiff and Respondent, v. Carolyn Chang, Defendant and Appellant.
• Court: California Court of Appeals

75 Cal.App.5th 975

291 Cal.Rptr.3d 106

Helena PAPPAS, Plaintiff and Appellant,

v.Carolyn CHANG, Defendant and Respondent.

Helena Pappas, Plaintiff and Respondent,

v.Carolyn Chang, Defendant and Appellant.

A159792, A160293

Court of Appeal, First District, Division 2, California.

Filed March 3, 2022

Attorney for Plaintiff and Appellant, Helena Pappas: Helena Pappas, in pro per;

Attorney for Amicus Curiae Centers for Public Interest Law on behalf of Plaintiff and Appellant: Consumer Protection Policy Center, Karen T. Stefano ;

Attorney for Defendant and Appellant, Carolyn Chang : Law Offices of Madden & Lynch, PC, Elisabeth A. Madden, Frances Bruce.

Richman, Acting P. J.

These consolidated appeals arise out of the settlement of a medical malpractice claim made by appellant Helena Pappas against respondent Carolyn Chang, M.D., more accurately the aftermath of a settlement of that claim. The settlement was made at a June 29, 2018 mediation where, represented by counsel, they agreed that Dr. Chang would pay Pappas $100,000. Both parties and their counsel signed a settlement agreement, one paragraph of which provided in part that Pappas "will execute a release of all claims, including waiver of Civil Code [section] 1542, in a more comprehensive settlement agreement ...; said release to include a provision for mutual confidentiality as to the facts of the underlying case, the terms and amount of this agreement."

The parties thereafter communicated for many months as to the terms of the "more comprehensive settlement agreement" and "a provision for mutual confidentiality," to no avail, in the course of which Pappas discharged her attorney and, representing herself, advised Dr. Chang's attorney that she would only comply with a provision for confidentiality if she received $525,000.

Still representing herself, Pappas sued Dr. Chang in a one-count complaint alleging breach of contract. Pappas retained new counsel and the case proceeded to a short bench trial, at the conclusion of which the trial court issued a 13-page statement of decision finding against Pappas "because she has not signed a ‘more comprehensive settlement agreement’ and release which includes a provision for mutual confidentiality."

Once again representing herself, Pappas appeals in case No. A159792, the first of the two consolidated appeals before us, essentially arguing that she need not provide a confidentiality provision and, in any event, such provision is against public policy and illegal, in violation of two sections of the Business and Professions Code. The arguments were rejected by the superior court. We reject them as well, and therefore affirm the judgment in case No. A159792.

The second appeal is in case No. A160293, where Dr. Chang appeals after the trial court denied her attorney fees as costs of proof at trial. ( Code Civ. Proc., § 2033.420.) She contends the trial court abused its discretion when it determined that Pappas's denial of two requests for admission was based on a good faith belief she would prevail at trial and that the requests went to the ultimate issue in the case. We reject Dr. Chang's claim as well, and therefore affirm the order in case No. A160293.

BACKGROUND

The General Setting, the Settlement at Mediation, and the Aftermath

In June 2016, Dr. Chang, a board-certified plastic surgeon, performed cosmetic surgery on the upper and lower eyelids of both of Pappas's eyes, in a procedure technically known as blepharoplasty.

In September 2017, represented by attorney Constantine Panagotacos, Pappas made a demand for arbitration, pursuant to the parties’ patient-physician agreement, alleging that Dr. Chang had been negligent in her care and treatment of Pappas.

The parties agreed to participate in mediation, which resulted in a settlement agreement signed on June 29, 2018. That agreement, executed by both parties and their attorneys, was 24-lines long, with these five substantive paragraphs:

"1. [Dr. Chang] will pay [Pappas] the total sum of $100,000.00.

"2. [Pappas] will execute a release of all claims, including waiver of Civil Code [section] 1542, in a more comprehensive settlement agreement and file a Request for Dismissal with Prejudice; said release to include a provision for mutual confidentiality as to the facts of the underlying case, the terms and amount of this agreement. This confidentiality includes, but is not limited to, any print, video, internet, or other media of any kind. The confidentiality agreement will not include disclosure to tax or financial advisors or to any disclosures required by law. The inclusion of the confidentiality agreement is not a material term of this settlement, and no consideration was offered and/or paid for it. The parties’ mutual promises of confidentiality are the sole consideration for this confidentiality provision. The healthcare practitioners retain the right to disclose and discuss as necessary for professional matters.

"3. [Pappas] will satisfy any and all liens.

"4. Each party to bear their own fees and costs.

"5. The parties intend that this document be enforceable pursuant to [Code of Civil Procedure] section 664.6, and that it constitutes a binding contract, and facsimile and/or email signatures are sufficient."

As described in detail below, Pappas and Dr. Chang, acting originally through counsel—Mr. Panagotacos and Elisabeth Madden, respectively—attempted to agree on the terms of a more comprehensive settlement agreement and a confidentiality provision, which attempts continued after Pappas discharged Mr. Panagotacos.

The attempts were not successful, and on November 29, 2018, Pappas filed suit against Dr. Chang, alleging one cause of action for breach of contract.

Dr. Chang filed an answer denying the allegations, and also asserting affirmative defenses, including that Pappas was herself in breach; that she had not performed an essential term of the contract; and that her subsequent communications and conduct had disavowed and repudiated the agreement.

On January 8, 2019, Pappas filed a motion to enforce the settlement, pursuant to Code of Civil Procedure section 664.6.

On January 9, Dr. Chang filed a petition to compel a return to arbitration and a request to stay all proceedings.

On February 21, the trial court denied Pappas's motion to enforce the settlement on the ground that the court did not have jurisdiction under Code of Civil Procedure 664.6 because there was no pending litigation when the parties agreed their settlement agreement could be enforced pursuant to that statute. That same day, the court also denied Dr. Chang's petition on the ground that the settlement agreement contained no arbitration provision and that Pappas's breach of contract claim was based on an alleged breach of the settlement agreement, not Dr. Chang's alleged medical malpractice.

The Trial

In September 2019, a court trial on Pappas's complaint was held before the Honorable Mary Wiss, a most experienced superior court judge. Pappas was once again represented by counsel, now by George Wolff; Dr. Chang continued to be represented by Ms. Madden. Both parties filed trial briefs, and testimony was taken over two days. The only witnesses were Pappas and Dr. Chang. Many exhibits were introduced, exhibits and testimony that revealed the following:

On July 6, eight days after the agreement reached at mediation, Ms. Madden forwarded to Mr. Panagotacos a "confidential release agreement" (hereafter sometimes the "July 6 agreement"). Paragraph 5 provided that in consideration of a release of all claims, Pappas would be provided with a check for $29,999.99 from the Doctors Company, a professional liability insurer, in settlement of all claims against Dr. Chang, plus an additional check in the amount of $70,000.01 to be paid by Dr. Chang. And paragraph 13 set forth a confidentiality agreement that bound Pappas and included an attorney fees provision in the event of breach.

Pappas refused to sign it. As Judge Wiss would come to put it, "Following the mediation [Pappas] became convinced that the confidentiality provisions of both the 6/29/18 Mediation Settlement Agreement and the 7/6/18 Confidentiality Release Agreement were overbroad and illegal and therefore void as contrary to law. [Pappas] testified that after the mediation it became more and more clear to her that Dr. Chang intended to avoid reporting the settlement to the California Medical Board as required by Health [and] Safety Code section 802.01 and that the settlement agreements were designed to prevent [Pappas] from filing a complaint against Dr. Chang with the California Medical Board."

On August 31, Pappas discharged Mr. Panagotacos. Pappas received a copy of her file from him, which included a July 18 email from Ms. Madden in which she confirmed that Dr. Chang would not prohibit Pappas from "responding and disclosing to the Medical Board," and proposed this new language for the confidentiality provision: "This provision does not prohibit Releasor from disclosures to the California Medical Board or any other government agency if such information is requested by the Board or another government authority." And the email concluded, "I am concerned that she might make a complaint to the Board. She is not legally required to do that."

Pappas testified that the email further confirmed her belief that the June 29 and July 6 agreements prohibited her from making a complaint to the Medical Board. She also testified that she anonymously called the Medical Board, described the two checks, and was told that it looked like an attempt not to report the settlement.

We digress briefly from the communication and email chronology to quote Judge Wiss's description of Dr. Chang's position: "Dr. Chang also adamantly asserted that she is well familiar with the reporting requirements and knows and understands her obligations to report settlements of $30,000 or more to the Medical Board. She disputes that she ever intended to hide the settlement from the Medical Board. Dr. Chang...