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Anderson v. Mills

Superior Court of Maine, Cumberland

April 10, 2018

CARRIE ANDERSON, et al., Plaintiffs
BARRY K. MILLS, ESQ., et al., Defendants


          Thomas D. Warren Justice.

         In this lawsuit plaintiffs Carrie Anderson and Deborah Collins are suing defendants Barry Mills and Hale & Hamlin LLC (collectively referred to as Mills) for professional negligence. Before the court is defendants' motion for summary judgment.

         Prior Proceedings

         The procedural history that led to this case arises from a set of convoluted proceedings that began in the Hancock County Probate Court and that led to a disputed settlement agreement followed by further proceedings in the Probate Court, the Superior Court, and the Law Court in which plaintiffs challenged the settlement agreement.

         The docket sheet of the Hancock Probate proceeding, Matter of Mary Banks, Hancock Probate No. 2005-264, is attached as Exhibit C to defendants' Statement of Material Facts dated September 21, 2017 (subsequently cited as "Defendants' SMF") and reflects that a petition for a conservatorship was originally filed on her own behalf by plaintiffs' mother, Mary Banks, in July 2005.[1] When Mary Banks subsequently withdrew her petition, plaintiffs Anderson and Collins along with two of their sisters, Liela Johnson and Rebecca York, filed their own petition for a conservatorship of their mother. Defendants' SMF ¶ 3 (admitted). In the Hancock conservatorship proceeding the four sisters were represented by Attorney Charles Budd from the Rudman Winchell law firm.

         The four sisters' petition for conservatorship was opposed by their mother, by their brother, William Banks, and by another sister, Constance Banks. The various submissions of the parties demonstrate that in addition to the issues raised by the petition for conservatorship, the proceedings eventually involved disputes between the four sisters and their brother with respect to the disposition of family property.

         The case was the subject of mediation with Attorney Jerrol Crouter on September 18, 2009. The events at the mediation are the subject of considerable dispute. However, it is undisputed that Anderson and Collins left while the mediation was still underway, that Attorney Budd thereafter signed a settlement agreement on their behalf, and that his authority to have signed that agreement is one of the major issues in controversy.

         Once it became clear that the settlement agreement was going to be challenged, Attorney Budd withdrew from representing the four sisters. Attorney Barry Mills (the defendant in this case) thereafter appeared on their behalf.

         The settlement agreement contained a provision that "any dispute regarding the interpretation, enforcement, or implementation or execution of this agreement.. . will be decided by binding arbitration by Jerrol Crouter."[2]

         On December 22, 2009 there was a hearing before Probate Judge Patterson on a motion by William Banks (joined by his mother and Constance Banks) to require arbitration before Crouter. The transcript of that hearing is annexed as Exhibit A to Defendants' SMF. Attorney Mills, on behalf of the four sisters, opposed that motion, arguing among other things that Budd had not been authorized to enter the settlement agreement by Anderson and Collins.[3]

         Probate Judge Patterson, in a decision filed January 12, 2010 (Exhibit D to Defendants' SMF) found that before they left the mediation, Anderson and Collins had informed Crouter that Budd was authorized to sign an agreement for them and had not informed Crouter that there were any limitations on Budd's authority. Judge Patterson therefore found that Anderson and Collins were parties to the settlement agreement. January 12, 2010 Probate Court Decision at 2-3.

         Judge Patterson also found that the agreement to arbitrate was severable from the remainder of the settlement agreement and that all four sisters had agreed to the arbitration provision. Id. at 4-5. Accordingly, he ordered the parties to proceed to arbitration before Crouter to resolve the remaining issues involved in the pending disputes with respect to the sisters' access to Mary Banks and with respect to certain property. These issues included whether the settlement agreement was illusory and whether it had been repudiated by William and Constance Banks.

         Attorney Mills recommended that his clients appeal from the decision of the Probate Court, and the probate docket sheet reflects that such an appeal was filed. Plaintiffs' SAMF ¶ 137; Probate Docket sheet entry for March 5, 2010. According to the Probate Court docket sheet, an order dismissing the appeal (presumably as interlocutory) was filed on March 31, 2010.

         Arbitration before Crouter was held on March 30, 2010. Defendants' SMF ¶ 29 (admitted). An arbitration decision was rendered on April 5, 2010 (Exhibit E to Defendants' SMF). The arbitration decision was adverse to the four sisters. Defendants' SMF ¶ 31. The issue of whether Budd had been authorized to enter the settlement agreement was not addressed in the arbitration decision and, having been addressed in the January 12, 2010 Probate Court decision, was not raised before the arbitrator.

         On May 25, 2010 Anderson and Collins, joined by their sisters Johnson and York and represented by Attorney Mills, commenced an action in the Hancock County Superior Court seeking declaratory relief that the September 18, 2009 settlement agreement resulting from the mediation was invalid. The docket record in the Superior Court proceeding, ELLSC-CV-2010-19, is annexed as Exhibit F to Defendants' SMF. The four sisters' motion to vacate the arbitration award was denied by Superior Court Justice Kevin Cuddy in a decision filed February 2, 2011 and annexed as Exhibit G to Defendants' SMF.

         The summary judgment record indicates that the issue of Budd's authority to sign the settlement agreement on behalf of Anderson and Collins was not raised by Attorney Mills in the Superior Court, and that issue was not addressed in the Superior Court's decision. Justice Cuddy did address what he characterized as the four sisters' claim that they had been compelled to arbitrate by the Probate Court and should not be bound by an arbitration award that they alleged was a nullity. Justice Cuddy ruled that jurisdiction over motions to stay arbitration lies with the Superior Court, not the Probate Court and that, having not sought such relief, the four sisters had voluntarily submitted to arbitration. He also stated, "The evidence persuades the Court that by executing their Settlement Agreement, Plaintiffs had already voluntarily agreed to arbitrate before Mr. Crouter." February 2, 2011 Superior Court decision at 3.

         Justice Cuddy ruled that Crouter as arbitrator had the authority to determine of the settlement agreement was enforceable and had not exceeded his authority under 14 M.R.S. § 5938(1)(C). Id. at 5-7. In a footnote, he concluded that the four sisters' arguments that the settlement agreement violated the statute of frauds, was illusory, and was the produce of mutual mistake had been decided adversely to them by the arbitrator and were res judicata. Id. at 6 n.4. Finally, Justice Cuddy ruled that the settlement agreement had not been procured by undue means under 14 M.R.S. § 5938(1)(A) and that the arbitration award had not been the product of bias on the part of the arbitrator under 14 M.R.S. § 5938(1)(B). Id. at 8.

         Justice Cuddy therefore denied the four sisters' motion to vacate the arbitration award and granted William Banks's motion to dismiss. On February 25, 2011, Justice Cuddy modified his order to add a sentence that the arbitration award was confirmed. Defendants' SMF ¶ 36 (admitted).

         The four sisters, represented by Attorney Mills, then appealed to the Law Court, which affirmed Justice Cuddy's decision on January 24, 2012. Anderson v. Banks, 2012 ME 6. The Law Court stated that the "pivotal issue" was the sisters' contention that the parties to the settlement agreement did not intend to submit disputes concerning the validity of the agreement to arbitration. 2012 ME 6 ¶ 13. Disagreeing with the Superior Court that the sisters had not preserved their argument that they had not agreed to arbitrate the validity of the settlement agreement, the Law Court nevertheless found that the Superior Court's decision had addressed the validity of the agreement to arbitrate and that its "conclusion that the [Settlement Agreement] contained within it the authority to allow the arbitrator to decide the validity of the Agreement as a whole was not an error of law." 2012 ME 6 ¶¶ 16-19. This statement was specifically made with respect to the sisters' arguments that the settlement agreement was illusory and violated the statute of frauds. See 2012 ME 6 ¶¶ 16, 18.

         The Law Court also rejected the four sisters' other challenges to the Superior Court decision. 2012 ME 6 ¶ 20. The Court did not address Budd's authority to execute the settlement agreement on behalf of Anderson and Collins and whether, if Budd had lacked authority, Anderson and Collins were not bound because they had never agreed to arbitrate. No argument with respect to Budd's authority was ever raised by Mills in the Law Court. Plaintiffs' SAMF ¶ 140.[4]

         Anderson, Collins, Johnson, and York subsequently commenced an action against Attorney Budd, Rudman Winchell, and several other Rudman Winchell lawyers for professional negligence. See Plaintiffs' SAMF ¶ 88 n.1. In their Rule 56(h)(2) statement, Anderson and Collins have relied on depositions taken in that action, Anderson v. Budd, ...

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