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Snow v. Bernstein, Shur, Sawyer & Nelson P.A.

Superior Court of Maine, Cumberland

January 20, 2017

SUSAN SNOW, Plaintiff
v.
BERNSTEIN, SHUR, SAWYER & NELSON, P.A., et al., Defendants

          ORDER

          Thomas D. Warren Justice.

         In this action plaintiff Susan Snow alleges that defendants Bernstein, Shur, Sawyer & Nelson P.A. and J. Colby Wallace, Esq. (collectively, BSSN), who previously represented Snow in certain Probate and Superior Court litigation involving the distribution of her late father's property, engaged in malpractice in the course of their legal representation. Snow has also brought claims against BSSN for breach of contract, breach of fiduciary duty, and intentional infliction of emotional distress.

         Before the court is a motion by BSSN to compel arbitration and a countervailing motion by Snow to stay the threatened commencement of any arbitration proceeding. See 14 M.R.S. §§ 5928(1) and (2). Briefly stated, BSSN is seeking to send Snow's malpractice claim to binding arbitration, and Snow seeks to litigate her claim in the courts.

         The basis of BSSN's motion to compel arbitration is a provision in the May 11, 2012 engagement letter between Snow and BSSN that states as follows:

         Arbitration

If you disagree with the amount of our fee, please take up the question with your principal attorney contact or with the firm's managing partner. Typically, such disagreements are resolved to the satisfaction of both sides with little inconvenience or formality. In the event of a fee dispute that is not readily resolved, you shall have the right to submit the fee dispute to arbitration under the Maine Code of Professional Responsibility. Any fee dispute that you do not submit to arbitration under the Maine Code of Professional Responsibility, and any other dispute that arises out of or relates to this a Rreement or the services provided by the law firm shall also, at the election of either party, be subject to binding arbitration. Either party may request such arbitration by sending a written demand for arbitration to the other. If a demand for arbitration is made, you and the firm shall attempt to agree on the arbitrators. If no agreement can be reached within 30 days of receipt of the demand, the party demanding arbitration may designate an arbitrator by sending a written notice to the other party. Within two weeks of that initial designation, the other party shall designate an arbitrator in writing. Thereafter, those two designated arbitrators shall meet promptly to select a third arbitrator. The arbitrators shall conduct the arbitration proceedings according to the procedures under the commercial arbitration rules of the American Arbitration Association and shall hold the arbitration hearing in Maine. The arbitrators shall be bound by and follow applicable Maine substantive rules of law as if the matter were tried in court. Either party shall have the right to appeal a decision of the arbitrators on the grounds that the arbitrators failed to properly apply applicable law.

(emphasis added).

         The above arbitration provision is contained in a four page attachment to a May 11, 2012 engagement letter entitled "Standard Terms of Engagement for Legal Services." At the end of the engagement letter Snow signed her name under the following statement, which appears in boldface capitals: "I agree to the terms of this letter including the attached Standard Terms of Engagement."

         The scope of representation in Snow's May 11, 2012 engagement letter was amended 14 months later, but the arbitration provision was not amended, and there is no evidence that it was discussed or considered at the time of the amendment.

         Snow's opposition to the motion to compel arbitration is based on several of the Maine Rules of Professional Conduct and their interpretation by the Professional Ethics Commission of the Board of Bar Overseers.

         Rule 1.8(h)(1) of the Maine Rules of Professional Conduct states that a lawyer shall not "make an agreement prospectively limiting the lawyer's liability for malpractice." Comment [14] to that rule states that this provision "does not . . . prohibit a lawyer from entering into an agreement with the client to arbitrate legal malpractice claims, provided such agreements are enforceable and the client is fully informed as to the scope and effect of the agreement" (emphasis added). Also relevant in this connection is Rule 1.4(b), which states that a lawyer shall explain a matter "to the extent reasonably necessary to permit the client to make informed decisions regarding the representation."

         Lastly, the definition of "informed consent" in Rule 1.0(e) of the Maine Rules of Professional Conduct provides as follows:

"Informed consent" means a person's agreement to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct. Whether a client has given informed consent to representation shall be determined in light of the mental capacity of the client to give consent, the explanation of the advantages and risks involved provided by the lawyer seeking consent, the circumstances under which the explanation was provided and the consent obtained, the experience of the client in legal matters generally, and any other circumstances bearing on whether the client has made a reasoned and deliberate choice.

         Snow has submitted an affidavit stating, inter alia, that no one at BSSN informed her that she was waiving her right to resolve malpractice claims through the court system, that no one at BSSN informed her that she was waiving her right to a jury trial by agreeing to arbitration, and that no one at BSSN informed her of the pertinent differences between ...


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