Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from the Superior Court of Riverside County No. RIC387818. Stephen D. Cunnison, Judge.
Catanzarite Law Corporation, Nicole M. Catanzarite and Kenneth J. Catanzarite, for Plaintiff and Appellant.
Haight Brown & Bonesteel, Peter Q. Ezzell, Nancy E. Lucas, and Stephen M. Caine, for Defendants and Respondents.
OPINION
King J.
I. INTRODUCTION
John Mack (Mack) sued his former lawyers for malpractice. The lawyers, Robert (Robert) and Theodore (Theodore) Bacon, moved for summary judgment on the grounds that the action was barred by the statute of limitations and a release clause in a settlement agreement. The court granted the motion based upon the release.
On appeal, Mack contends that a triable issue of fact exists as to the enforceability of the release. We reject this contention and affirm the judgment.
II. SUMMARY OF UNDISPUTED FACTS
In order to have the proper context in which to understand the current action, it is necessary to set out the sequence of prior events leading up to the present action for professional malpractice.
A. The Formation of the Partnership
In 1990, Mack retained the predecessor to Crawford, Bacon, Bangs & Briesemeister (CBBB) in connection with the formation of the Palm Plaza Dental Group partnership (PPDG) with Dr. Harry W. Humphreys (Humphreys). Robert and Theodore were partners or shareholders of CBBB. Theodore prepared the partnership agreement and related documents; the documents were then signed by all parties to the agreement in April and May 1991.
In 1994, as the cash flow for the partnership failed to meet expectations, a dispute arose between Mack and Humphreys regarding the partnership finances. Robert provided legal advice to Mack during the dispute.
On May 11, 1995, Humphreys sent a letter to Mack expressing concern over certain aspects of the partnership finances. The letter stated Humphreys’s intent to withdraw if “we do not meet or meet but fail to reach accord” by June 5, 1995. On May 15, 1995, Mack sent a letter to Humphreys purporting to accept Humphreys’s “offer to voluntarily withdraw from [PPDG].” Mack stated that he wrote the letter to Humphreys after discussing the situation with Robert. Mack’s letter further stated that the acceptance of the withdrawal prevented Humphreys from reentering the partnership premises or opening a competing practice within five miles of PPDG.
B. The Underlying Litigation Between Mack and Humphreys
On June 28, 1995, Mack sued Humphreys (Underlying Litigation). Mack was represented by CBBB. Mack alleged, among other things, that Humphreys breached the partnership agreement by opening a competing practice within five miles of PPDG. Mack sought a preliminary injunction and damages for the breach of the partnership agreement. The injunction was denied. Upon the Bacons’ advice, Mack continued the suit in order to collect damages and a payment he alleged Humphreys owed to the partnership.
In response, Humphreys filed a cross-complaint against Mack. In consulting with Mack, Robert informed Mack that a cross-complaint is a standard “defense tactic” and he had no need to be concerned. Robert assured Mack that he had a strong position and that he would prevail on the cross-complaint.
On August 19, 1996, Mack substituted in Arias & Ozzello, P.C., in place of CBBB. Mark Ozzello (Ozzello) was his attorney in the case.
Following a bench trial, the trial court found against Mack on his complaint and in favor of Humphreys on the cross-complaint. Judgment was entered against Mack on February 15, 2002.
C. The Fee Dispute Between Mack and the Bacons
While the Underlying Litigation was still in progress, Crawford, Bacon & Bangs, APC (CBB), successors to CBBB, filed a claim (Fee Action) against Mack in small claims court for $5,000 in unpaid fees for legal services. The dispute was subsequently submitted to a binding fee arbitration proceeding. The disputed fees were for services that encompassed both the formation of the partnership and the Underlying Litigation. Mack contended that he had paid all fees owed and there was no outstanding balance due. Ozzello represented Mack in the Fee Action.
During a hearing in the Fee Action and in the presence of Mack’s attorney, Mack and Robert entered into an oral agreement to settle the Fee Action, with Mack agreeing to pay $4,000. There was also an understanding that Robert would provide Mack with the name of the payee.
A typewritten six-page settlement agreement was mailed by Robert directly to Mack for his signature on August 31, 1999. The settlement agreement contained the essence of the oral agreement, which was that Mack was to pay $4,000. The agreement specified Bacon & Mills, LLP (B&M), a successor to CBB, as the payee. The document was sent with a cover letter on B&M letterhead and signed by Robert “For the Firm.”
The settlement agreement also contained the following release clause: “[Mack] hereby releases, acquits and discharges [CBB and B&M], . . . their present and former officers, directors, employees, agents, shareholders, subsidiary corporations, parent corporations and affiliated entities including, without limitation, their present and former officers, directors, employees, agents, shareholders, subsidiary corporations, and parent corporations, from any and all rights, actions, claims, debts, demands, costs, contracts, liabilities, obligations, damages and causes of action, whether known, suspected or unknown, whether in law or in equity, which [Mack] had or now has or may claim to have by reason of those matters set forth in the arbitration, and any other matters which may relate, or which may have related, to any subject matter which was, or could have been raised at the time the arbitration proceeding was commenced.”
The agreement also included a waiver of all unknown claims pursuant to Civil Code section 1542 and set forth the text of that section.
The settlement agreement also contained representations and warranties providing that both parties had carefully read and fully understood its contents, that it was entered into voluntarily, and that both parties had the opportunity to have the contents reviewed by counsel prior to signing. The settlement agreement was signed by both parties on October 3, 1999.
D. The Present Action for Professional Malpractice
Nearly two and one-half years after Mack signed the settlement agreement, on January 17, 2003, Mack, individually and doing business as PPDG, sued Robert for malpractice. Mack alleged Robert failed to represent Mack competently in accordance with the standards required of a professional attorney.
Ozzello was also named in the original complaint, but was eventually dropped from the suit.
On December 9, 2005, Mack filed a second amended complaint (SAC) against Robert and Theodore, asserting claims for professional negligence and breach of fiduciary duty. On January 18, 2006, the Bacons filed their answer to the SAC and asserted various affirmative defenses, including that the claims were barred by the statute of limitations and the terms of the release in the Fee Action settlement agreement.
In Mack’s first cause of action for legal malpractice, he alleged the Bacons were negligent in providing advice on the formation of the partnership, in drafting the partnership agreement, in providing prelitigation advice, and in handling the litigation of the Underlying Litigation. In Mack’s second cause of action for breach of fiduciary duty, Mack further alleged that the Bacons covered up their negligence by not obtaining a conflict of interest waiver. As a result of the Bacons’ alleged wrongful conduct, a judgment was entered against Mack on February 15, 2002. Mack further alleged that he incurred unnecessary attorney fees and costs in the Underlying Litigation.
E. The Bacons’ Motion for Summary Judgment
The Bacons moved for summary judgment based upon the statute of limitations and the release. In support of the motion, the Bacons relied upon the terms of the settlement agreement and their declaration testimony that they had been either partners or shareholders of CBBB, CBB, and B&M. As such, they argued, they were covered by the release.
F. Mack’s Opposition
In opposition to the Bacons’ motion, Mack maintained the release is unenforceable because Robert sent the agreement directly to him when he was represented by Ozzello. He argued that this violated rule 2-100 of the Rules of Professional Conduct (Rule 2-100) and constituted overreaching. Rule 2-100 generally prohibits an attorney for one party from contacting another party who is represented by counsel. He asserted that Robert was acting as an attorney for CBB at the time of the arbitration hearing and not as an individual party to the action.
G. The Trial Court’s Ruling on the Motion
The trial court rejected Mack’s overreaching argument and granted the motion for summary judgment based upon the release. The trial court found Robert was acting as a principal and not as attorney of record for CBB and B&M with respect to the Fee Action and subsequent arbitration. The fact that Robert sent the settlement agreement directly to Mack, the court explained, had no bearing on the Bacons’ motion for summary judgment.
III. STANDARD OF REVIEW
We review a ruling granting a motion for summary judgment de novo. (Zavala v. Arce (1997) 58 Cal.App.4th 915, 925.) “In practical effect, we assume the role of a trial court and apply the same rules and standards which govern a trial court’s determination of a motion for summary judgment.” (Ibid.) We consider all evidence submitted in support of and in opposition to the motion, except evidence to which an objection has been made and sustained by the court, and all uncontradicted inferences reasonably deducible from the evidence. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.)
Summary judgment is proper if the moving papers establish that there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code. Civ. Proc., § 437c, subd. (c).) Summary judgment “provide[s] courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 844.)
Because Mack appeals from an order granting summary judgment, “we independently examine the record in order to determine whether triable issues of fact exist to reinstate the action.” (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.) In performing our independent review, we review the evidence in the light most favorable to the plaintiff as the losing party. (Ibid.) We liberally construe plaintiff’s evidentiary submissions and strictly scrutinize defendant’s own evidence, in order to construe any evidentiary doubts or ambiguities in the plaintiff’s favor. (Ibid.)
Because we review only the court’s ruling and not its rationale, we need not express any view as to the correctness of the court’s reasoning. (Continental Ins. Co. v. Columbus Line, Inc. (2003) 107 Cal.App.4th 1190, 1196.)
IV. DISCUSSION
Mack contends, as he did below, that Robert’s direct communication with Mack in order to obtain Mack’s signature on the settlement agreement constituted overreaching as a result of an improper communication with a represented party under Rule 2-100,thus invalidating the settlement agreement. Specifically, Mack claims that because he was represented by Ozzello when Robert mailed the settlement agreement, Robert should have sent the release to Ozzello instead of to Mack directly.
In construing the contents of a release or settlement agreement we apply contract principles; “a release or settlement agreement is governed by the same principles applicable to any other contractual agreement.” (General Motors Corp. v. Superior Court (1993) 12 Cal.App.4th 435, 439; see also Neverkovec v. Fredericks (1999) 74 Cal.App.4th 337, 348.)
A release has been defined as the abandonment, relinquishment, or giving up of a right or claim to the person against whom it might have been demanded or enforced. (Pellett v. Sonotone Corp. (1945) 26 Cal.2d 705.) A release serves to bar all claims, whether express or implied, when it is general in nature. This remains true despite the protestation of one of the parties that he or she did not intend to release certain types of claims. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1173 (Winet); see also San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, 1053.) To hold to the contrary would defeat the public policy purpose of encouraging parties to enter into settlements by agreement. (Carr v. Sacramento C. P. Co. (1917) 35 Cal.App. 439, 448-449; see also Williams v. City of Los Angeles (1991) 229 Cal.App.3d 1627, 1636.)
The terms of a release must be clear, unambiguous, and explicit in setting forth to an ordinary person untrained in the law that the intent and effect of the document is to release one party’s claims, and to indemnify another party from and against any liability to others that may occur in the future as a proximate cause of one’s negligence. (Ferrell v. Southern Nevada Off-Road Enthusiasts, Ltd. (1983) 147 Cal.App.3d 309.)
A release may be invalidated if it appears that assent to the release by the releasee was obtained by the releasor through the use of fraud, misrepresentation, deception, overreaching, or unfair conduct. (See Casey v. Proctor (1963) 59 Cal.2d 97, 103.) Where a party to a release voluntarily signs a written release, absent fraud, deception, misrepresentation, or undue influence, there is an indication that the release was entered into knowingly and the signer is estopped from claiming the terms were contrary to his intention or understanding. (Skrbina v. Fleming Companies (1996) 45 Cal.App.4th 1353, 1366-1367; Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163.) Evidence of the circumstances establishing whether a written release was obtained through illegality or fraud is admissible for this purpose. (Code Civ. Proc., § 1856, subd. (g).)
Where a release contains representations and warranties, for example that the parties to the agreement understood its terms and had the opportunity to confer with counsel prior to signing, the representations and warranties will control for purposes of construing the agreement in the absence of evidence of duress, fraud, or illegality. Extrinsic evidence is inadmissible “to flatly contradict the express terms of the agreement.” (Consolidated World Investments, Inc. v. Lido Preferred, Ltd. (1992) 9 Cal.App.4th 373, 379.)
We need not consider Mack’s subjective intent at the time of entering into the settlement agreement. Nor do we consider evidence of contrary meaning of the terms of the settlement agreement. As both issues were not addressed in the appellant’s opening brief they are deemed waived on appeal.
A. The Bacons Are Covered by the Release
Preliminarily, we must determine whether the Bacons are covered by the terms of the release. The release expressly covers: “[CBB & B&M], as well as BACON & MILLS, LLP . . ., their present and former officers, directors, employees, agents, shareholders, subsidiary corporations, parent corporations and affiliated entities including, without limitation, their present and former officers, directors, employees, agents, shareholders, subsidiary corporations, and parent corporations . . . .”
This issue is not expressly raised by Mack and has arguably been waived. However, the issue was discussed below and is addressed by the Bacons in their respondent’s brief. We address the issue to provide clarity to our analysis.
Although the Bacons are not expressly named in the release, it is possible that the Bacons are included within one of the named classes of affiliated parties specified in the release. In their separate statement in support of the motion for summary judgment, the Bacons assert that they were “partners” of CBB and B&M. In their supporting declarations, Robert stated that he and Theodore were “partner[s]” of CBB and B&M, and Theodore stated that he was a “shareholder” of CBB and of the Bacon Law Corporation. Theodore further declared that the Bacon Law Corporation was a partner of B&M. In Mack’s opposing separate statement, Mack disputes the fact that the Bacons were partners of the two firms based upon the fact that CBB was a professional corporation, not a partnership, and, according to Theodore’s deposition testimony, B&M was a partnership comprised of two corporations, the Bacon Law Corporation and the Mills Law Corporation.
Regardless of whether the Bacons were partners of CBB and B&M, as Robert stated, or that the legal relationships among the individuals and entities are as Mack asserts, we find that the Bacons are covered by the release. If the Bacons are partners of either CBB or B&M, they are “agents” for purposes of the partnership (see Corp. Code, § 16301) and therefore within the class of “agent” as set forth in the release. If CBB is a corporation, then the release covers the Bacons as “shareholders” of that corporation. Theodore expressly declared that he was a shareholder of CBB, a fact that Mack does not dispute. Although Robert stated that he was a “partner” of CBB, if CBB is in fact a professional corporation, Robert’s use of the term “partner” can only reasonably be construed in this context to mean he is a shareholder of that entity. The failure to expressly describe himself as a shareholder of the corporation (if it is a corporation) does not create a triable issue of fact on that point. Because the Bacons were either partners or shareholders of CBB, we find they are covered by the language of the release.
Additionally, Theodore, at least, is also covered by the terms of the release as a shareholder in an “affiliated entity” with B&M. Theodore was a shareholder of Bacon Law Corporation, a partner in B&M. The release specifically includes shareholders of entities affiliated with B&M.
B. Robert Did Not Violate Rule 2-100
Although Rule 2-100 makes it improper for an attorney to communicate directly with a represented party during the course of litigation, the rule does not apply to attorneys who are also parties to the litigation. As explained in the discussion accompanying Rule 2-100, “the rule does not prohibit [an attorney] who is also a party to a legal matter from directly or indirectly communicating on his or her own behalf with a represented party. Such [an attorney] has independent rights as a party which should not be abrogated because of his . . . professional status.”
Rule 2-100 provides, in part: “While representing a client, a member shall not communicate directly or indirectly about the subject of the representation with a party the member knows to be represented by another lawyer in the matter, unless the member has the consent of the other lawyer.”
Viewing the evidence in the light most favorable to Mack, we recognize that it is unusual for an attorney to send a release directly to a represented party, especially when the attorney is aware that the opposing party is represented by counsel. However, we find there is no triable issue as to whether Robert was acting as the attorney for a party, i.e., CBB, when he sent the settlement agreement to Mack. CBB was the party to the Fee Action and B&M owned the rights to the fees that were the subject of that action. Although it does not appear that B&M formally became a party to the proceedings, it is undisputed that by the time the settlement was reached, B&M was CBB’s successor in interest with respect to the disputed fees. There is no evidence that these entities were represented by counsel in either the small claims court or the arbitration proceeding. Indeed, a party in a small claims court action cannot be represented by an attorney. (Code Civ. Proc., § 116.530, subd. (a); see generally 2 Witkin, Cal. Procedure (4th ed. 1996) Courts, § 282, p. 352.) A corporation or partnership, of course, can only act through employees or agents, and can appear in a small claims court action only through an employee, officer, director, or partner. (See Code Civ. Proc., § 116.540, subds. (b) & (c).) When a corporate or partnership law firm is a party to a small claims action, an attorney may “take part” in the proceeding only if the attorney is an officer, director, or partner of the firm. (Code Civ. Proc., § 116.530, subd. (b)(2) & (3).) Thus, because neither CBB nor B&M (if it was a party) were represented by counsel as such in the small claims action, Robert could not have been representing either entity as their attorney. Nor is there any evidence that Robert acted as either entity’s attorney after the matter was submitted to binding arbitration. The only reasonable inference to be drawn from the facts is that, with respect to the Fee Action, Robert was acting as either an employee, officer, director, or partner of CBB and/or B&M; that is, not as their attorney. Contrary to Mack’s assertion, the fact that the delivery of the settlement agreement to Mack was accompanied by a letter on B&M’s letterhead, signed by Robert “For the Firm,” is not evidence that he was acting as an attorney for either entity (or that B&M was acting as attorneys for CBB). We conclude, therefore, that Robert did not violate Rule 2-100 as a matter of law.
C. Mack’s Signature Was Not Obtained by Misrepresentation, Concealment, or Fraud
Mack alleges that had he been aware that Robert did not confer with Ozzello concerning the settlement agreement’s terms and language, he would not have signed it. Specifically, he believed the three-month delay in receiving the release was due to Robert clearing the contents of the release with Ozzello and Ozzello seeing the release and approving it. After a cursory review, Mack signed the release.
Mack relies upon Frusetta v. Hauben (1990) 217 Cal.App.3d 551. Frusetta is a personal injury case in which the plaintiff was presented with a preprinted check. (Id. at p. 554.) The plaintiff was told by an insurance adjuster that the check was to be a partial payment for injuries the plaintiff suffered, and another payment would be received later. (Ibid.) The check received by the plaintiff included the words, “‘Bodily injury in full and final settlement.’” (Ibid.) The reverse of the check stated that if “‘“Full and Final Settlement” is printed on the front of the draft, endorsement of the draft constitutes a full Release of all claims known or unanticipated which the undersigned has or may hereafter have against the Payor . . . .’” (Ibid.) The plaintiff cashed the check. (Ibid.) The appellate court held the terms of the release were irrelevant if the releasee induced the releasor to misunderstand its terms, and a jury would likely find the circumstances surrounding the receipt of the check constituted overreaching. (Id. at p. 557.)
The circumstances here are more similar to Winet, supra, 4 Cal.App.4th at page 1173 and Donnelly v. Ayer (1986) 183 Cal.App.3d 978.
In Winet, a dispute arose between a client and an attorney over legal fees owed by the client. (Winet, supra, 4 Cal.App.4th at p. 1162.) The parties executed a settlement agreement, releasing all claims whether known or unknown, and expressly waiving the provisions of Civil Code section 1542. (Winet, supra, at pp. 1162-1164.) Subsequently, the client was sued by his limited partners for which the attorney had provided legal services by drafting a partnership agreement. (Id. at p. 1164.) The client, alleging malpractice, cross-complained for contribution and indemnity against the attorney. (Ibid.) Summary judgment was granted by the trial court and the appeals court affirmed. (Ibid.) The Court of Appeal held the client’s claim was barred by the settlement agreement, which contained an express intention to release all claims, whether known or unknown, against the attorney. (Id. at p. 1169.)
In Donnelly v. Ayer, supra, 183 Cal.App.3d 978, a former client brought a malpractice action against the attorney who had represented him in a personal injury suit. (Ibid.) After the attorney withdrew from representation pursuant to their fee agreement, the former client sought to bring a malpractice action against the attorney. (Ibid.) A settlement was reached between them and was finalized after signing a mutual release form. (Ibid.) The former client continued with his claim against the attorney despite signing the release. (Ibid.) Summary judgment was granted by the trial court and the appeals court affirmed. (Ibid.) The Court of Appeal held that the former client signed the release voluntarily after he had read it and it was a complete defense to the malpractice action, despite evidence of financial entanglement between the former client and his former lawyer. (Ibid.) The court also held that the attorney-client relationship between the two parties was properly terminated. (Ibid.)
Here, there is no evidence of active or passive misrepresentation, or even an attempt to conceal the contents of the release, by Robert. From the evidence presented, it appears that Mack is an educated professional and has the ability to read, write, and understand English. The general rule is that “‘“when a person with the capacity of reading and understanding an instrument signs it, he is, in the absence of fraud and imposition, bound by its contents, and is estopped from saying that its provisions are contrary to his intentions or understanding.”’” (Jefferson v. Department of Youth Authority (2002) 28 Cal.4th 299, 303; see also Tarpy v. County of San Diego (2003) 110 Cal.App.4th 267, 276.) Evidence of a differing understanding of the terms of the release is inadmissible. (Jefferson v. Department of Youth Authority, supra, at pp. 303-304.) The terms of the release were included in a six-page typed document and are clear and unambiguous. The agreement included representations and warranties that the parties understood its contents and had the ability to consult with their attorneys prior to signing. Indeed, Mack had possession of the draft agreement for approximately one month before he signed it, more than adequate time for Mack to read and have the settlement agreement reviewed by counsel prior to signing and returning it if he had any doubts as to its contents. In light of the foregoing authorities and the evidence presented, Mack has failed to establish a triable issue of fact as to the enforceability of the release.
Having reached a conclusion affirming the trial court’s decision that there is no triable issue of fact relating to Mack’s release of any and all claims in the settlement agreement, we need not consider the trial court’s ruling regarding the respective statute of limitations.
V. DISPOSITION
Judgment is affirmed. Respondents shall recover their costs on appeal.
We concur: Hollenhorst Acting P.J. Gaut J.