Kaye v. Wilson-Gaskins

BERGER, J. Laurence Kaye (“Kaye”), appellant, an attorney, represented Linda Wilson-Gaskins (“Wilson-Gaskins”), appellee, in a wrongful termination lawsuit filed against Wilson-Gaskins’s former employer, Government Employees Insurance Company (“GEICO”). Following that representation, Wilson-Gaskins filed a complaint against Kaye alleging “legal malpractice.” The Circuit Court for Montgomery County granted summary judgment in favor of Kaye and dismissed Wilson-Gaskins’s complaint. Wilson-Gaskins appealed the dismissal of her claim. We affirmed the judgment of the circuit court and held that Wilson-Gaskins failed to make a prima facie case for professional negligence.

We further held that a release contained in a settlement agreement between the parties was enforceable. Thereafter, on March 17, 2015, Kaye filed a three-count complaint in the Circuit Court for Montgomery County alleging, among other things, that the filing of Wilson-Gaskins’s lawsuit against Kaye constituted a breach of the parties’ settlement agreement. Wilson-Gaskins filed a motion to dismiss Kaye’s complaint. Following two hearings, the court dismissed the first two counts of Kaye’s complaint.

Kaye then voluntarily dismissed count three of his complaint. 1 This timely appeal followed. On appeal, Kaye argues that the circuit court erred in granting Wilson-Gaskins’s motion to dismiss his complaint. Specifically, Kaye presents four issues for our review, 2 which we consolidate and rephrase as follows: ⁶⁶⁷ Whether the circuit court erred in dismissing Kaye’s complaint for breach of contract. 3 For the reasons stated herein, we shall affirm the judgment of the Circuit Court for Montgomery County. FACTUAL AND PROCEDURAL BACKGROUND For thirty-six years prior to her termination, Wilson-Gas-kins was a Senior Claims Examiner for GEICO.

In that capacity, Wilson-Gaskins was “responsible for overseeing and handling a case from beginning to end.” She handled cases “including major bodily injury, or any case where litigation was anticipated,” and she was “responsible for processing the entire case on [her] own,” including “contacting and interviewing witnesses, evaluating medical evidence, attempting to settle cases without litigation, referring the cases to outside counsel and ensuring that counsel was properly handling the case.” Wilson-Gaskins alleged that, on March 20, 2006, she was “constructively discharged” from her employment with GEI- ⁶⁶⁸ CO, after being told that if she did not retire, she would be terminated for “gross misconduct.” Kaye, and The Kaye Law Firm, subsequently represented Wilson-Gaskins in a lawsuit for wrongful discharge in the Circuit Court for Montgomery County captioned Linda Wilson v. Government Employees Insurance Co., Case No. 279956V. On June 9, 2009, following a trial, the jury returned a verdict in favor of Wilson-Gaskins in the amount of $1,415,991. Despite her significant recovery, Wilson-Gaskins was not satisfied with Kaye’s handling of the litigation. On June 14, 2009, Wilson-Gaskins wrote Kaye a letter requesting that “the proceeds from the jury award ... be held and not be disbursed in any way, until we have reached an agreement on the total distribution to include Attorney fees, cost [sic ] and expenses.” She stated that she was “requesting this action because of [her] overall dissatisfaction with the handling of [her] case from a legal standpoint.” Specifically, Wilson-Gaskins expressed that she was dissatisfied with several aspects of Kaye’s representation, including Kaye’s decision to file the claim in Montgomery County instead of “the more favorable jurisdiction of Prince George[’]s County”; delays in filing suit and with trial dates “as a result of [Kaye’s] needs”; the “failure to allege counts of retaliation and breach of contract” until beyond the statute of limitation (resulting in dismissal of those claims); and the failure to prove, to the satisfaction of the court, counts for discrimination and wrongful termination (resulting in dismissal on the discrimination count and the court’s denial of an award for punitive damages).

Wilson-Gaskins asserted that, as a result of Kaye’s actions, she incurred “substantial financial loss,” and requested a “substantial reduction in [his] attorney fees.” On June 17, 2009, Kaye sent Wilson-Gaskins a letter by facsimile regarding “Disbursement of Funds/Settlement of Claims.” That letter provided, in relevant part: In the past two days, you and I have engaged in a series of discussions regarding the disbursement of funds, settlement of your claims against GEICO, and allegations that I and ⁶⁶⁹ The Kaye Law Firm somehow mishandled aspects of your case. After our discussions, we arrived at a variety of agreements regarding actions to be taken. I am summarizing them below: 1. You authorize me to inform [GEICO’s counsel] that you agree that there will be no appeal of any issues of the case, and you are prepared to fully settle all claims, upon the payment of the $1,415,991.00 awarded in this case.[ 4 ] 2.

Assuming the settlement of the case at this point, Kaye Law Firm will receive an additional $275,000.00 in attorney fees for its representation of you in this matter, beyond what you have already paid in attorney fees earlier in this case ($45,000.00). You understand that this fee represents a significant reduction from the fees to which we are entitled as set forth in our retainer agreement. We have agreed that this is a flat fee. 7. You and I have agreed that we will sign a separate agreement between yourself, The Kaye Law Firm, and myself, which will include complete releases of any and all claims, including claims for professional negligence arising out of our handling of the case____You will act expeditiously to execute such release, and I agree not to disburse our attorney fees until that release is executed.

I believe that this letter accurately describes our discussions on the various issues set forth above. If you are in agreement with the contents of the letter, and give me your approval to proceed accordingly, please indicate this by signing your name below and sending the letter back to me by facsimile. ⁶⁷⁰ Wilson-Gaskins’s signature appears on the letter, dated “6-7-09.” On July 7, 2009, Wilson-Gaskins, Kaye, and The Kaye Law Firm entered into a settlement agreement. The settlement agreement contains what purported to be a release which provides in relevant part: A. Wilson[-Gaskins] does release and forever discharge Kaye ... [his] agents, servants, employees and all other persons, firms, associations, and corporations, past and present, of and from any and all actions, claims and demands including claims or actions for contribution or indemnity of whatever nature now existing or which may hereafter arise out of the legal representation of Wilson[-Gaskins] in regard to [Case No. 279956] including any consequences thereof now existing or which may develop, whether or not such consequences are known or anticipated. Kaye does release and forever discharge Wilson[-Gaskins] from any and all actions, claims and demands including claims or actions for contribution or indemnity of whatever nature now existing or which may hereafter arise out of the legal representation of Wilson[-Gaskins] in regard to [Case No. 279956] including any consequences thereof now existing or which may develop, whether or not such consequences are known or anticipated.

C. Wilson[-Gaskins] further acknowledges: (1) That she understands that before signing this General Release she was aware that she could, if she chose, consult with another lawyer of her choosing, that such consultation or representation is appropriate and that she has either consulted with an attorney of her choosing or voluntarily chosen to enter into this General Release without such independent consultation. (2) That no additional promise or agreement has been made as consideration for this Release and that the signing thereof has not been induced by any representations of the parties released, or by anyone in their behalf, concerning ⁶⁷¹ the nature, extent or duration of the injuries or damages sustained, or any other matter. D. In recognition of the work Kaye performed on behalf of Wilson[-Gaskins] in conjunction with [Case No. 279956], Wilson[-Gaskins] agrees that Kaye shall be entitled to an additional attorney fee in the amount of Two Hundred Seventy-Five Thousand Dollars ($275,000.00) beyond any attorney fees already paid to Kaye (which the parties agree has been approximately $45,000.00 at the inception of the case) prior to the date of the execution of this Release, and that Wilson[-Gaskins] continues to be responsible for all costs incurred in the prosecution of [Case No. 279956]. Wilson[-Gaskins] has also agreed that Kaye should be paid an additional Twenty-Five Thousand Dollars ($25,000.00) as a retainer for costs, and will pay any additional costs not covered by the retainer promptly from the moneys she has recovered as a result of her judgment in [Case No. 279956].

E. Wilson[-Gaskins] recognizes and agrees that the additional attorney fees received by Kaye represent a reduction in what Kaye would otherwise have been entitled to under the retainer agreement in effect between the parties. F. Wilson[-Gaskins] agrees that she retained separate counsel for the purposes of advising her as to matters about taxation, and she is solely responsible for paying her tax counsel. Wilson[-Gaskins] further acknowledges that Kaye has not held himself out to be an expert in the taxation of settlements and or damages. G. Wilson[-Gaskins] agrees that she has reviewed this Agreement and General Release, and understands each and every provision of it.

Both Wilson-Gaskins and Kaye signed the settlement agreement. On June 1, 2012, Wilson-Gaskins, pro se, filed a complaint in the Circuit Court for Prince George’s County against Kaye, Kaye’s professional liability insurer, and GEICO, alleging that ⁶⁷² they had engaged in “legal malpractice, retaliation and collusion.” Thereafter, Wilson-Gaskins retained counsel, venue was transferred to Montgomery County, and GEICO as well as Kaye’s professional liability insurer were dismissed from the action. In an amended complaint, Wilson-Gaskins asserted that Kaye’s breach of his professional duty of care constituted professional negligence and a breach of contract. WilsonGaskins alleged that she “suffered economic damages due to payment of unnecessary taxes, legal fees and similar expenses in excess of $75,000.” Kaye, in response, filed a motion to dismiss the amended complaint, or in the alternative, a motion for summary judgment.

In his motion, Kaye argued that Wilson-Gaskins’s complaint was barred by the release in the parties’ settlement agreement. After a hearing, the trial judge granted Kaye’s motion for summary judgment. Notably, the trial court did not expressly ground its decision in the language of the release contained in the parties’ settlement agreement. Rather, the court found that Wilson-Gaskins had not alleged facts sufficient to show that Kaye breached the relevant standard of care, that Wilson-Gaskins had failed to show that she suffered damages, 5 and that any damages she did suffer were not caused by Kaye.

Accordingly, the circuit court found that Wilson-Gaskins failed to make a prima facie showing of professional negligence or a breach of contract. As such, the circuit court granted Kaye’s motion for summary judgment. Wilson-Gaskins appealed the circuit court’s order granting summary judgment. In an unreported opinion filed June 11, 2014, we affirmed the circuit court’s grant of Kaye’s motion for summary judgment.

Initially, we held that the court was legally ⁶⁷³ correct in finding that Wilson-Gaskins had failed to make a prima facie showing establishing that she was entitled to the relief she sought in her complaint. Accordingly, we affirmed the circuit court decision because Kaye had shown that there was no genuine dispute as to any material fact and that he was entitled to judgment as a matter of law. We continued, however, to address the enforceability of the release that Wilson-Gaskins signed. 6 Upon considering the release, we held that: [Wilson-Gaskins] presented no facts of substantive unconscionability. Indeed, when the court asked what damages Ms. Wilson-Gaskins suffered as a result of Mr. Kaye’s actions, counsel never mentioned that the Release was unfair or unreasonably harsh.

The Release here was not unconscionable, and given that Ms. Wilson-Gaskins released all claims against Mr. Kaye “now existing or which may hereafter arise” out of the underlying litigation, the grant of summary judgment in favor of Mr. Kaye was proper. Following our holding, Kaye filed a complaint in the Circuit Court for Montgomery County against Wilson-Gaskins. In his complaint, Kaye alleged that by filing her complaint, Wilson-Gaskins breached the release contained in the parties’ settlement agreement. Kaye further alleged that WilsonGaskins breached the implied covenant of good faith and fair dealing, and that she was anticipating further breaches of the contract.

In response, Wilson-Gaskins, filed a motion to dismiss Kaye’s claims for breach of the release, and breach of the implied covenant of good faith and fair dealing. Additionally, Kaye filed a motion for partial summary judgment, ⁶⁷⁴ claiming that our prior opinion affirmatively established Wilson-Gaskins’s liability as the law of the case. After two hearings, the circuit court acknowledged that the release absolved Kaye of liability for conduct within the scope of the agreement. Nevertheless, the court found that the agreement did not provide Kaye with an affirmative cause of action to pursue damages against Wilson-Gaskins.

Accordingly, the circuit court granted Wilson-Gaskins’s motion to dismiss counts one and two of Kaye’s complaint. Kaye, then, voluntarily dismissed count three of his complaint. This timely appeal followed. Additional facts will be discussed as necessitated by the issues presented.

STANDARD OF REVIEW Under Maryland Rule 2 — 322(b)(2), a defendant may seek a dismissal of a complaint if the complaint fails “to state a claim upon which relief can be granted.” Indeed, “[t]he proper standard for reviewing the grant of a motion to dismiss is whether the trial court was legally correct. In reviewing the grant of a motion to dismiss, we must determine whether the complaint, on its face, discloses a legally sufficient cause of action.” In reviewing the complaint, we must “presume the truth of all well-pleaded facts in the complaint, along with any reasonable inferences derived therefrom.” “Dismissal is proper only if the facts and allegations, so viewed, would nevertheless fail to afford plaintiff relief if proven.” Higginbotham v. Pub. Serv. Comm’n of Md., 171 Md.App. 254, 265-66 , 909 A.2d 1087 (2006) (quoting Britton v. Meier, 148 Md.App. 419, 425 , 812 A.2d 1082 (2002)). “When moving to dismiss, a defendant is asserting that, even if the allegations of the complaint are true, the plaintiff is not entitled to relief as a matter of law.” Heist v. E. Sav.

Bank, FSB, 165 Md.App. 144, 148 , 884 A.2d 1224 (2005). Accordingly, we will review Kaye’s complaint to determine whether the allegations presented satisfy the elements necessary to obtain the relief sought. In so doing, we will accept as true the factual allegations made in ⁶⁷⁵ the complaint, but we review the legal premises upon which Kaye’s relief is sought de novo. In the present action, Kaye seeks relief for an alleged breach of contract arising from the breach of the release contained in the parties’ settlement agreement.

Accordingly, in reviewing the circuit court’s grant of Wilson-Gaskins’s motion to dismiss, we accept Kaye’s factual allegations, but we review de novo whether the allegations presented amount to a breach of the settlement agreement. DISCUSSION In the instant. litigation, Kaye contends that he is entitled to recover damages for Wilson-Gaskins’s breach of the parties’ settlement agreement. Specifically, Kaye asserts that the release contained in the agreement did not only immediately discharge any claim Wilson-Gaskins had against Kaye, but it also constituted a promise not to sue Kaye for claims arising out of his representation in the future. 7 Wilson-Gaskins, for her part, argues that the parties’ agreement contains no continuing obligation for her to refrain from litigating against Kaye. Moreover, Wilson-Gaskins maintains that even if a covenant not to sue is read into the contract, that agreement was not breached.

Additionally, Wilson-Gas-kins asserts that we should construe the release against Kaye as he is the drafter, that she pursued her litigation in good ⁶⁷⁶ faith, and that public policy prohibits Kaye from limiting his liability in this sort of fashion. The gravamen of the question as to whether Wilson-Gas-kins breached the release requires us to identify, interpret, and apply the settlement agreement that the parties entered into on July 7, 2009. Accordingly, in analyzing this question, we must identify the agreement between the parties. Upon identifying the agreement between the parties, we move to interpret the terms of that agreement.

Only after we interpret the terms of the agreement will we apply the agreement and determine whether Kaye has pleaded sufficient facts that, if proven, would entitle him to the relief he seeks. For the reasons stated herein, we hold that the settlement agreement reached by the parties only discharged obligations owed to Wilson-Gaskins, and that Wilson-Gaskins tendered complete performance upon effectuating the release. Accordingly, Wilson-Gaskins could not have breached an obligation that already had been discharged. We, therefore, hold that the circuit court did not err in granting Wilson-Gaskins’s motion to dismiss Kaye’s complaint.

I. The July 7, 2009 Settlement Agreement Is Enforceable Against the Parties. Initially, we note that there is a signed agreement between the parties, and that agreement is enforceable. This is so because we have previously held that the settlement agreement was not unconscionable and was enforceable. See Wilson-Gaskins v. Kaye, No. 692, Sep.

Term 2013 (Md.Ct. Spec.App.2014). Accordingly, our holding that the settlement agreement is enforceable between the parties constitutes the law of the case. See Haskins v. State, 171 Md.App. 182, 189-90 , 908 A.2d 750 (2006) (“ ‘[Ojnce an appellate court rules upon a question presented on appeal, litigants and lower courts become bound by the ruling, which is considered to be the law of the case.’” (quoting Scott v. State, 379 Md. 170, 183-84 , 840 A.2d 715 (2004))). ⁶⁷⁷ Wilson-Gaskins asserts in her brief that our prior decision is not the law of the case because we affirmed the circuit court’s dismissal of her claims on the grounds that she had not made a prima facie case for professional negligence, not because the settlement agreement precluded the action. As such, Wilson-Gaskins perceives our opinion on the validity of the settlement agreement as dicta and not the law of the case.

We disagree. When a question of law is raised properly by the issues in a case and the Court supplies a deliberate expression of its opinion upon that question, such opinion is not to be regarded as obiter dictum, although the final judgment in the case may be rooted in another point also raised by the record. Schmidt v. Prince George’s Hosp., 366 Md. 535, 551 , 784 A.2d 1112 (2001). For the reasons we articulated in our previous opinion, the question of the validity of the settlement agreement between the parties was properly presented in the prior appeal.

Accordingly, we affirm the enforceability of that agreement because the validity of that agreement constitutes the law of the case.

II

A Promise Never to Sue Will Generally Operate to Discharge Obligations Owed by the Promisee to the Promisor. Having concluded that the July 7, 2009 settlement agreement is enforceable and binds the parties, we must interpret the terms of that agreement. “Settlement agreements are enforceable as independent contracts, subject to the same general rules of construction that apply to other contracts.” Maslow v. Vanguri, 168 Md.App. 298, 316 , 896 A.2d 408 (2006). We begin by observing that the interpretation of a contract is a question of law subject to de novo review. SpaceSaver Sys., Inc. v. Adam, 440 Md. 1, 7 , 98 A.3d 264 (2014).

Moreover, in Maryland, we employ the objective theory of contracts, under which: ⁶⁷⁸ “[A court is to] determine from the language of the agreement itself what a reasonable person in the position of the parties would have meant at the time it was effectuated. In addition, when the language of the contract is plain and unambiguous there is no room for construction, and a court must presume that the parties meant what they expressed. In these circumstances, the true test of what is meant is not what the parties to the contract intended it to mean, but what a reasonable person in the position of the parties would have thought it meant. Consequently, the clear and unambiguous language of an agreement will not give away to what the parties thought that the agreement meant or intended it to mean.” Id. at 8 , 98 A.3d 264 (alteration in original) (quoting Gen.

Motors Acceptance Corp. v. Daniels, 303 Md. 254, 261 , 492 A.2d 1306 (1985)). As the Court of Appeals set forth in Gen. Motors Acceptance Corp., and again in SpaceSaver Sys., Inc., we emphasize that our paramount concern as we seek to interpret the parties’ agreement is to objectively determine what a reasonable person in the position of the parties would have intended this agreement to mean at the time it was effectuated. The settlement agreement in this case aimed to resolve a dispute that arose from Kaye’s representation of WilsonGaskins in her action against GEICO.

Wilson-Gaskins was contemplating pursuing a professional negligence claim against Kaye. In consideration for “a reduction in what Kaye would otherwise have been entitled to under [the parties’] retainer agreement,” 8 Wilson-Gaskins agreed to: [R]elease and forever discharge Kaye ... of and from any and all action, claims and demands including claims or ⁶⁷⁹ actions for contribution or indemnity of whatever nature now existing or which may hereafter arise out of the legal representation of Wilson[-Gaskins] in regard to Lawsuit including any consequences thereof now existing or which may develop, whether or not such consequences are known or anticipated. In Wilson-Gaskins’s prior appeal, we held that this agreement operates as a release that discharged any amount to which Kaye may have been liable to Wilson-Gaskins. The question in this case, however, is whether the language in this agreement expresses an affirmative promise by Wilson-Gas-kins not to sue on claims within the scope of the agreement.

Kaye contends that the release given by Wilson-Gaskins contains an implied obligation to refrain from suing Kaye. Wilson-Gaskins, on the other hand, avers that her obligation under the contract was discharged at the time the release was effectuated. In order to resolve this inquiry, we must address the distinction between a release and a covenant not to sue. “Releases are contractual, and they are therefore governed by ordinary contract principles.” Chi Title Ins. Co. v. Lumbermen’s Mut.

Cas. Co., 120 Md.App. 538, 548 , 707 A.2d 913 (1998). Indeed, “it is well settled that ‘[a] release is to be construed accordingly to the intent of the parties and the object and purpose of the instrument, and that intent will control and limit its operation.’ ” Owens-Ill., Inc. v. Cook, 386 Md. 468, 495 , 872 A.2d 969 (2005) (alteration in original) (quoting Shriver v. Carlin & Fulton Co., 155 Md. 51, 64 , 141 A. 434 (1928)). Because the nature and scope of a release is defined by, and in accordance with, the intent of the contracting parties as determined from an objective perspective, there is a notable dearth of authority articulating the exact definition of a release.

The Court of Appeals has, however, endeavored to define a release generally as “[a] giving up or relinquishment as of a right or claim[,] [t]he giving up or