HELEN LEVY V PAUL J NICOLETTI
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STATE OF MICHIGAN
COURT OF APPEALS
HELEN LEVY,
UNPUBLISHED
April 16, 1999
Plaintiff-Appellant,
v
No. 204900
Oakland Circuit Court
LC No. 96-515050 CK
PAUL J. NICOLETTI,
Defendant-Appellee.
Before: Hood, P.J., and Holbrook, Jr. and Whitbeck, JJ.
PER CURIAM.
Summary disposition was granted in favor of defendant pursuant to MCR 2.116(C)(7) after the
trial court determined that plaintiff's claims in this legal malpractice action were merged and barred by a
consent judgment entered into between the parties in a separate suit and thus, were barred by res
judicata. We reverse and remand.
Plaintiff retained defendant attorney to represent her in a divorce proceeding. Subsequent to the
judgment of divorce, plaintiff filed an appeal to this Court, which found that the alimony, COBRA and
property awards were fair and equitable, but remanded the case for a reevaluation of certain property.
Levy v Levy, unpublished opinion per curiam of the Court of Appeals, issued November 12, 1996
(Docket No. 180486). Thereafter, defendant filed an action to collect his fee for services rendered in
the divorce. Before resolution of that matter, plaintiff filed this action alleging legal malpractice. The
parties then reached a settlement in the attorney fee matter and a consent judgment was entered by the
court. The parties agreed on an amount to which defendant's law firm was entitled for representing
plaintiff in the divorce action, and the judgment was secured by a lien on plaintiff’s residence. The court
also ordered as follows:
IT IS FURTHER ORDERED AND ADJUDGED that post judgment proceedings and
foreclosure proceedings with reference to the property described herein shall be stayed
pending resolution in Oakland County Circuit Court of the matter captioned as Helen
Levy v Paul J. Nicoletti, Nicoletti & Watson, P.C. and Federlein & Keranen, P.C.,
Case #96-515050-CK.
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After the consent judgment was entered by the court in the attorney fee action, defendant
moved for summary disposition in this legal malpractice action pursuant to MCR 2.116(C)(7) and
(C)(8). The trial court granted the motion pursuant to MCR 2.116(C)(7). Plaintiff thereafter moved for
reconsideration, which motion was denied.
This Court reviews de novo decisions on motions for summary disposition to determine if the
moving party was entitled to judgment as a matter of law. Pamar Enterprises, Inc v Huntington
Banks of Mich, 228 Mich App 727, 738; 580 NW2d 11 (1998). "When reviewing a motion granted
pursuant to MCR 2.116(C)(7), we consider all affidavits, pleadings, and other documentary evidence
submitted by the parties and, where appropriate, construe the pleadings in favor of the plaintiff." Id.,
citing Smith v YMCA of Benton Harbor/St Joseph, 216 Mich App 552, 554; 550 NW2d 262
(1996). A motion under MCR 2.116(C)(7) should be granted only if no factual development could
provide a basis for recovery. Id. A trial court’s denial of a motion for reconsideration is reviewed for
an abuse of discretion. In re Beglinger Trust, 221 Mich App 273, 279; 561 NW2d 130 (1997).
Plaintiff argues that the trial court erred when it disregarded the intentions of the parties and the
express language of the consent judgment that was entered into by the parties in the attorney fee case.
She argues that settlement of the attorney fee case did not merge and bar the underlying legal
malpractice action. We agree.
A consent judgment is a "product of voluntary agreement," and thus, reflects the agreement of
the parties. Klawiter v Reurink, 196 Mich App 263, 266; 492 NW2d 801 (1992) (citations omitted).
Moreover, "[a]n agreement to settle a lawsuit is a contract that is subject to the legal principles generally
applied to contracts." Reed v Citizens Ins Co, 198 Mich App 443, 447; 499 NW2d 22 (1993).
And, it is permissible for a party to settle a lawsuit while reserving the right to litigate other related
claims. See In re Stafford, 200 Mich App 41, 43-44; 503 NW2d 678 (1993). In this case, the
language of the consent judgment was clear and unambiguous that the parties did not intend to merge
and bar the malpractice suit and its claims, but rather intended for the malpractice action to proceed to
resolution. Plaintiff took steps to preserve her malpractice claims when the settlement was reached in
the attorney fee case, and defendant agreed to this preservation by agreeing to the consent judgment.
The consent judgment should not be construed to relinquish plaintiff's rights in the malpractice case. The
trial court's ruling to the contrary, that the malpractice action was barred as a result of the settlement
reached in the attorney fee action, was in error where it failed to take into consideration the clear and
unambiguous language of the consent judgment, which indicated that the parties did not intend the
consent judgment to extinguish the malpractice claims. Therefore, we reverse the trial court's grant of
summary disposition.
On appeal, defendant also argues that even if the trial court's decision was incorrect, collateral
estoppel bars plaintiff's legal malpractice action. The trial court was presented with this issue, but did
not decide it. We may, however, properly review this issue where the question is one of law and the
facts necessary for its resolution have been presented. Adam v Sylvan Glynn Golf Course, 197 Mich
App 95, 98-99; 494 NW2d 791 (1993).
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We hold that collateral estoppel may operate to bar some or all of plaintiff's claims of
malpractice. In Alterman v Provizer, Eisenberg, Lichtenstein & Pearlman, PC, 195 Mich App
422, 424; 491 NW2d 868 (1992), the Court stated general principles of the doctrine of collateral
estoppel:
The doctrine of collateral estoppel holds that, where the first and second causes
of action are different, "the judgment [rendered in the first cause of action] is conclusive
between the parties in such a case as to questions actually litigated and determined by
the judgment." By the "very definition" of the doctrine, "one of the critical factors" is
"whether the respective litigants were parties or privy to a party." "In other words,
'[t]he estoppel is mutual if the one taking advantage of the earlier adjudication would
have been bound by it had it gone against him.'" [Citations omitted.]
The Court then noted, however, that "lack of mutuality does not always preclude the application of
collateral estoppel." Id. (citation omitted). Alterman was a legal malpractice case where the defendant
attorney had entered into a settlement on the plaintiff's behalf in an underlying lawsuit. The plaintiff later
moved to set aside the settlement from that suit on the grounds that he was not competent at the time he
entered into it. The federal trial court denied the motion. The plaintiff then sued the defendant attorney
for malpractice, alleging that he was negligent for allowing or causing the plaintiff to settle when he was
not competent to do so. Id at 423-424. This Court held that the plaintiff was collaterally estopped from
relitigating that issue because of the federal court ruling, even though the parties were not identical in the
underlying federal lawsuit and no mutuality existed. Id. at 427. In doing so, the Court noted:
In Caveney v Kirkpatrick, unpublished opinion per curiam, decided August
13, 1991 (Docket No. 124149), this Court held that a wife's malpractice action against
her divorce attorney based on the inadequacy of the property settlement was barred by
an appellate decision in the divorce proceeding holding that the settlement was fair and
equitable. [Id. at 426.]
In this case, this Court held that the property settlement was fair and equitable, and decided
other issues with regard to the divorce judgment. Levy, supra. Any issues decided by this Court in the
divorce proceeding, which also form the basis of the malpractice claim, are barred. On remand, the trial
court shall determine what claims, if any, are barred by the doctrine of collateral estoppel.
Defendant also argues, in the alternative, that summary disposition should have been granted
pursuant to MCR 2.116(C)(8). We disagree.
MCR 2.116(C)(8) permits summary disposition when the opposing party has failed to
state a claim upon which relief can be granted. A motion under this subsection
determines whether the opposing party's pleadings allege a prima facie case. The court
must accept as true all well-pleaded facts. Only if the allegations fail to state a legal
claim is summary disposition pursuant to MCR 2.116(C)(8) valid. [Stehlik v Johnson
(On Rehearing), 206 Mich App 83, 85; 520 NW2d 633 (1994).]
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Plaintiff had the burden of adequately alleging the existence of an attorney-client relationship;
negligence in the legal representation of the plaintiff; that the negligence was a proximate cause of an
injury; and the fact and extent of the injury alleged. Simko v Blake, 448 Mich 648, 655; 532 NW2d
842 (1995). A duty to use and exercise reasonable skill, care, discretion and judgment in the conduct
and management of a client's case exists as a matter of law if there is an attorney-client relationship. Id.
at 655-656. Plaintiff's pleading, notwithstanding potential collateral estoppel problems, does not fail to
state a claim. She alleged the existence of an attorney client-relationship and alleged that defendant was
negligent in his representation, including making specific allegations that defendant negligently advised
her with regard to the mediation evaluation, that he failed to accept the mediation evaluation pursuant to
her requests, that he negligently advised her about her chances at trial, and that he failed to request a
qualified domestic relations order pertaining to her husband's pension. Plaintiff also alleged that the
defendant's negligent conduct was the direct and proximate cause of her damages, which damages were
set forth in extensive detail.
We also disagree with defendant's proposition that plaintiff's complaint fails to state a claim
because all of the allegations of negligence amount to tactical decisions, which cannot form the basis of a
malpractice case. A motion for summary disposition pursuant to MCR 2.116(C)(8) is tested on the
pleadings alone. Simko, supra at 654. Where we are not presented with sufficient supported facts or
transcripts from the underlying divorce action, and where we are looking only to the pleadings, we
cannot and will not rule on the issue of whether the alleged negligent acts were merely tactical decisions
by defendant.
Finally, defendant also argues, in the alternative, that plaintiff's failure to respond to his
affirmative defenses provides an additional basis to affirm dismissal in this case. We disagree because
the lower court record contains within it a timely response to defendant's affirmative defenses.
Reversed and remanded for further proceedings. We do not retain jurisdiction.
/s/ Harold Hood
/s/ Donald E. Holbrook, Jr.
/s/ William C. Whitbeck
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