Teague v. St. Paul Fire and Marine Ins. Co.

Decision Date07 April 2009
Docket NumberNo. 2006 CA 1266R.,2006 CA 1266R.
Citation10 So.3d 806
PartiesMichael A. TEAGUE, M.D. v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, St. Paul Insurance Company, Seale, Smith, Zuber and Barnette, Donald Zuber, Catherine Nobile, Catherine Laufer, and ABC Insurance Agency.
CourtCourt of Appeal of Louisiana — District of US

John L. Hammons, Shreveport, Louisiana, for Plaintiff/Appellee Michael A. Teague, M.D.

Stephen R. Wilson, Baton Rouge, Louisiana, for Defendants/Appellants Seale, Smith, Zuber and Barnette, Donald Zuber, and Catherine Nobile.

Before KUHN, GAIDRY, and WELCH, JJ.

GAIDRY, J.

A physician, sued for medical malpractice, in turn sued his defense attorneys for legal malpractice in their handling of his defense and in facilitating his insurer's settlement of the malpractice case against him without his knowledge or consent. The defense attorneys appealed a judgment for damages against them. This matter comes to us on remand from the supreme court, following its reversal of our original opinion holding that the plaintiffs cause of action for legal malpractice was perempted. For the following reasons, we reverse the trial court's judgment and dismiss the action. We further overrule as moot the defendants' post-remand peremptory exception raising the objections of no cause of action and no right of action.

FACTS AND PROCEDURAL HISTORY

The factual and procedural background of this litigation, prior to the present remand, was briefly set forth in our original opinion and also reviewed in the supreme court's decision addressing the issue of peremption.1 Because we now address the merits of the judgment, we again review that background, with some additional detail.

The Medical Malpractice Action

The plaintiff, Michael A. Teague, M.D., is a plastic surgeon maintaining his professional practice in Baton Rouge, Louisiana, as a member of Associates in Plastic Surgery, a professional partnership. From 1994 through 1995, he evaluated and treated Elsie Brown, a licensed practical nurse. On October 18, 1994, Dr. Teague performed surgery consisting of three procedures: a bilateral lower eyelid blepharoplasty; a forehead lift; and the excision of a cancerous mole.

Ms. Brown claimed that although she had previously given written consent to all three procedures, she originally desired both upper and lower eyelid procedures, and subsequently obtained a second opinion from another surgeon confirming that a forehead lift was not necessary. Ms. Brown contended that she verbally withdrew consent for the forehead lift, thereafter executing an updated written consent for a lower eyelid blepharoplasty in which the forehead lift was not mentioned. Although not directly related to the issue of Ms. Brown's informed consent for the forehead lift, it was undisputed that Dr. Teague neglected to obtain prior approval for payment of the forehead lift procedure from Ms. Brown's medical insurer, and that the upper lid blepharoplasty (that had been approved by the insurer) was not in fact performed.

Ms. Brown filed a medical malpractice claim against Dr. Teague and his partnership in 1995. Dr. Teague's malpractice insurer, St. Paul Insurance Company (St. Paul), assigned the defense of the claim to the law firm of Seale, Smith, Zuber & Barnette, L.L.P., one of the appellants.2 Donald Zuber, one of the firm's partners and another appellant, acknowledged receipt of the defense assignment by letter of November 8, 1995, expressing the preliminary opinion "that this case will not represent a great deal of exposure on the part of Dr. Teague." Dr. Teague was sent a copy of that letter. After the medical review panel had unanimously concluded that no breach of professional standards occurred in the course of treatment, Ms. Brown filed suit. Mr. Zuber answered the suit on behalf of Dr. Teague, denying liability and requesting trial by jury. Upon undertaking Dr. Teague's representation, Mr. Zuber initially met with Dr. Teague to discuss the issues, and expressed confidence in mounting a successful defense. He subsequently delegated the handling of the litigation to an associate, Catherine Nobile, also an appellant, but did not formally withdraw from Dr. Teague's representation.

Pretrial discovery, including the deposition of Ms. Brown, proceeded. Following that deposition in 1997, Mr. Zuber wrote to Dr. Teague to inquire about the availability for deposition of his former nurse-counselor who secured and witnessed the signing of the surgical consent forms. Dr. Teague's office manager replied, stating that no one in the office knew her current address and that they had "no way of reaching her."

Ms. Nobile became primarily responsible for the defense of the litigation in 1998. On March 11, 1999, Ms. Nobile notified Catherine Laufer, St. Paul's adjuster, by e-mail that the trial court had "issued some tight discovery deadlines in this case, with discovery cutoff on May 1, despite the fact that the case is not yet fixed for trial." Ms. Nobile recommended the deposition of the physician whom Ms. Brown consulted for a second opinion, as well as the depositions of two other physicians consulted by Ms. Brown. Ms. Laufer responded by e-mail the same day, stating: "[W]e need to get to the bottom of this and if Teague just got carried away with himself, then we need to determine what it's worth."

On April 19, 1999, the trial court issued a case management schedule order, setting a three-day jury trial beginning on January 25, 2000. The order also fixed a deadline of August 1, 1999 for the filing of a jury bond by the defendants. Ms. Nobile wrote to Dr. Teague on April 30, 1999, advising him that the case had been set for a three-day jury trial and the date, commenting: "As you know, these things have a way of disappearing prior to trial." On the same day, Ms. Nobile wrote to Ms. Brown's attorney, acknowledging the latter's suggestion of "possible mediation," and advising that her "client" desired additional discovery and that she would "relay" any settlement offer from Ms. Brown. It is undisputed that Ms. Nobile later failed to file the required jury bond by August 1, 1999, the deadline established in the order, thus resulting in the loss of the right to a jury as the trier of fact. It is further undisputed that although St. Paul was informed of that procedural development, Dr. Teague was not.

On August 30, 1999, Ms. Nobile e-mailed Tara Nice, a St. Paul employee assisting its adjuster, Ms. Laufer, in response to a request for an evaluation relating to the issues of liability and damages. She advised Ms. Nice that no settlement offer had yet been received, and presented the following evaluation on the inquiries as to "Percent Chance to Win," "Verdict High," and "Verdict Low":

                Percent chance to win (zero verdict) is 20%
                Verdict High:         $20,000-$25,000
                Verdict low:          $ 8,500-$12,500
                

On September 16, 1999, Ms. Laufer sent a facsimile telecopier message to the Louisiana Patient's Compensation Fund (PCF), advising the PCF of the trial date and that it was "[d]oubtful there will be any impact upon the PCF." Ms. Laufer also confirmed that St. Paul was "[attempting to settle for well under $50,000."3

On October 27, 1999, Ms. Nobile sent a detailed, updated assessment to Ms. Laufer by e-mail. In that communication, she informed Ms. Laufer that the case's weaknesses were "sufficiently significant to attempt settlement prior to trial." Among those weaknesses, according to Ms. Nobile, was the fact that the trial was set before a "notoriously plaintiff-oriented" judge. Ms. Nobile expressed the opinion, however, that because certain facts supported Ms. Brown's version of events, "judge or jury would find for the plaintiff." She submitted a revised assessment of liability and damages: "Estimated chance of a zero verdict is 15%. . . . Realistically, the verdict range could be between $20,000 and $60,000."

An unexpected opportunity arose to take advantage of an opening in the schedule of a recommended mediator, and on Friday, October 29, 1999, the parties' attorneys participated in the mediation of the case. It is undisputed that Dr. Teague was never previously informed that the mediation would take place. As the result of the mediation, a settlement agreement was reached that day, whereby St. Paul agreed to pay the plaintiff $50,000.00 to compromise her claim against Dr. Teague. That afternoon, Ms. Nobile telephoned Dr. Teague's office and left a message for him, advising that the case had been settled. Dr. Teague returned Ms. Nobile's call that same afternoon and confirmed, to his surprise, that the case had been settled as the result of the mediation. On Monday, November 1, 1999, Dr. Teague telephoned Mr. Zuber, discussed the settlement, and expressed, in no uncertain terms, his dissatisfaction with the fact that the case was settled rather than tried.

The Legal Malpractice Action

On November 3, 2000, Dr. Teague instituted this litigation against St. Paul, Ms. Laufer, Mr. Zuber, Ms. Nobile, and Seale, Smith, Zuber & Barnette, L.L.P.4 In his petition, Dr. Teague alleged that an attorney-client relationship existed between him and the defendant attorneys in the prior medical malpractice action, that the defendant attorneys failed to properly investigate and defend that action, that they failed to keep him informed of significant developments affecting his interests, that they negligently forfeited his right to trial by jury, and that they engaged in a conspiracy to conceal their professional neglect by effecting the settlement of the medical malpractice claim.

Dr. Teague specifically alleged that his damages "were proximately caused, in whole or in part," by various intentional and negligent acts and omissions on the part of St. Paul and Ms. Laufer. Dr. Teague further alleged that "[a]s a direct consequence of the settlement," St. Paul reported the settlement to the National Practitioner Data Bank (the Data Bank).5 Finally, he...

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