MEMORANDUM OF DECISION ON MOTION TO STRIKE #140
DOMNARSKI, J.
This is an action in damages arising from the murder of the plaintiffs' decedents, Ramona Kendall and her two daughters, Alexis Simone Kendall and Kayla Michelle Kendall, by their husband and father, Michael Kendall. The defendants move to strike all sixteen counts of the plaintiffs' second amended complaint on the ground that the complaint fails to sufficiently allege that any duty owed by the defendants to the plaintiffs' decedents was ministerial, as opposed to discretionary, in nature.
The plaintiffs are Katrea Anglin in her individual capacities as administratrix for the three individual decedents.
The original complaint in this action, filed December 27, 2005, contained nineteen counts and named three defendants, the town of East Hartford, acting through its police department, and Kevin Lemaire and James McElroy, both East Hartford police officers. The matter was removed to federal district court, but after the court dismissed the counts alleging federal claims, the matter was returned to the Superior Court, where Anglin filed an amended complaint against the same defendants on January 12, 2007. On March 1, 2007, the defendants moved to strike all sixteen counts of the amended complaint.
In that motion to strike, the defendants moved to strike ten counts of the amended complaint on the ground that they were barred by governmental immunity, six counts on the ground that they failed to plead facts to support recklessness claims, and one count alleging indemnification on the ground that it was dependent on the legal sufficiency of the other counts.
The motion was granted on September 27, 2007. In its memorandum of decision, the court, Bentivegna, J., concluded that the counts seeking damages for the allegedly negligent performance by the defendants of their law enforcement responsibilities were barred by governmental immunity because they alleged that the defendants owed the plaintiffs' decedents only discretionary, rather than ministerial duties, and the CT Page 21812 plaintiffs failed to sufficiently allege that any of the three exceptions to governmental immunity applied. The court further concluded that the recklessness counts failed to allege sufficient facts to support such a cause of action, and also struck the plaintiffs' indemnification count because it had struck all the previous counts on which that count relied.
On April 17, 2008, the plaintiffs filed a sixteen-count second amended complaint against the same defendants as the previous complaints. On April 2, 2009, the defendants filed the present motion at issue, a motion to strike all sixteen counts of the second amended complaint.
The filed pleading is titled "Revised Complaint" by the plaintiffs, but it is referred to herein as the second amended complaint.
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted . . . A motion to strike . . . consequently, requires no factual findings by the trial court . . . We take the facts to be those alleged in the complaint . . . and we construe the complaint in the manner most favorable to sustaining its legal sufficiency . . ." (Citations omitted; internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted . . . Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006).
While "[a] motion to strike admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis in original; internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997). "Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Citation omitted; internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 498.
"[A] motion to strike is essentially a procedural motion that focuses solely on the pleadings . . . It is, therefore, improper for the court to consider material outside of the pleading that is being challenged by the motion . . . Nonetheless . . . A [pleading] includes all exhibits attached thereto." CT Page 21813 (Citations omitted; internal quotation marks omitted.) Tracy v. New Milford Public Schools, 101 Conn.App. 560, 566, 922 A.2d 280, cert. denied, 284 Conn. 910, 931 A.2d 935 (2007).
The defendants' motion to strike states as grounds for its motion that the plaintiffs' "complaint attempts to impose a ministerial duty upon the defendants based upon the general orders of the East Hartford police department for actions which are clearly discretionary in nature, as is the existing law of this case." Given those grounds, the defendants' argument is that the allegations of the plaintiffs' complaint are legally insufficient to allege claims upon which relief can be granted because the plaintiffs are barred from recovering against the defendants by the doctrine of governmental immunity.
The plaintiffs' first argument in opposition to the defendants' motion is that a motion to strike is ordinarily an improper method for raising a claim of governmental immunity. Indeed, "[our Supreme Court] [has] previously determined that governmental immunity must be raised as a special defense in the defendant's pleadings . . . Nevertheless, [w]here it is apparent from the face of the complaint that the municipality was engaging in a governmental function while performing the acts and omissions complained of by the plaintiff, the defendant is not required to plead governmental immunity as a special defense and may attack the legal sufficiency of the complaint through a motion to strike." (Citations omitted; internal quotation marks omitted.) Violano v. Fernandez, supra, 280 Conn. 321.
This court agrees with Judge Bentivegna's statement in his memorandum of decision granting the defendants' motion to strike the plaintiffs' first amended complaint that "[i]t is clear from the plaintiffs' complaint that the defendants were performing the governmental function of law enforcement when the alleged acts and omissions occurred. The defendants may raise the issue of governmental immunity through a motion to strike." Anglin v. East Hartford, Superior Court, judicial district of Hartford, (September 27, 2007, Bentivegna, J.).
The plaintiffs further argue that "the defendants' motion to strike must be denied as the defendants were performing ministerial acts which were non-discretionary in nature as set forth in the orders concerning domestic violence and the general statutes, and/or because the officers violated a discretionary duty that was so clear and unequivocal that they may still be held liable in negligence."
"Notwithstanding the procedural posture of a motion to strike, this CT Page 21814 court has approved the practice of deciding the issue of governmental immunity as a matter of law." Gordon v. Bridgeport Housing Authority, 208 Conn. 161, 170, 544 A.2d 1185 (1988). "It is important to distinguish between the existence of a duty and the violation of that duty . . . To sustain a cause of action, the court must determine whether the defendant owed a duty to the plaintiff's decedent . . . and the applicable standard of care . . . The existence of a duty is a question of law . . . Only if such a duty is found to exist does the trier of fact then determine whether the defendant violated that duty in the particular situation at hand." (Citations omitted; internal quotation marks omitted.) Id., 171.
"At common law, municipal officers were liable for their own torts, but the municipality, their municipal `master,' was not vicariously liable for those torts . . . [General Statutes § ]7-465(a) effectively circumvented the general common law immunity of municipalities from vicarious liability for their employees' acts by permitting injured plaintiffs to seek indemnification from a municipal employer for such acts under certain circumstances and after conformance with certain statutory requirements, but it did not bar a plaintiff from seeking redress from those employees . . .
"Under the common law, [g]enerally, a municipal employee is liable for the misperformance of ministerial acts, but has a qualified immunity in the performance of governmental acts . . . Governmental acts are performed wholly for the direct benefit of the public and are supervisory or discretionary in nature . . . The hallmark of a discretionary act is that it requires the exercise of judgment . . . In contrast, [m]inisterial refers to a duty [that] is to be performed in a prescribed manner without the exercise of judgment or discretion." (Citation omitted; internal quotation marks omitted.) Bonington v. Westport, 297 Conn. 297, 306, 999 A.2d 700 (2010).
"[Our Supreme Court] has recognized that the common-law exceptions to liability for municipal employees are codified under [General Statutes] § 52-557n(a)." Id., 307 n. 8. Section 52-557(a) provides, in relevant part: "(1) Except as otherwise provided by law, a political subdivision of the state shall be liable for damages to person or property caused by: (A) The negligent acts or omissions of such political subdivision or any employee, officer or agent thereof acting within the scope of his employment or official duties; . . . (2) Except as otherwise provided by law, a political subdivision of the state shall not be liable for damages to person or property caused by: (A) Acts or omissions of any employee, officer or agent which constitute criminal conduct, fraud, actual malice or wilful misconduct; or (B) negligent CT Page 21815 acts or omissions which require the exercise of judgment or discretion as an official function of the authority expressly or impliedly granted by law."
The defendants argue in support of their motion that: (1) The plaintiffs' allegations that the town of East Hartford police department's general orders 153.50-153.51 created a ministerial duty is a conclusion of law, not a well pleaded fact; (2) despite the alleged effect of the general orders, all of the plaintiffs' alleged claims of negligence against the defendants involve discretionary acts; and (3) the general orders themselves call for the use of discretion. The plaintiffs respond to the defendants' arguments by contending that general orders 153.50-153.51 create, as alleged, ministerial duties owed by the town of East Hartford, through its police department, and the individual defendants, as police officers, to individuals including the plaintiffs' decedents.
The court first notes that given the well-settled principles applicable to the court's consideration of a motion to strike, the defendants are correct that while the court is obligated to admit as true that the town of East Hartford had an established set of police policies, rules and regulations pertaining to family violence issues, the court does not admit that they created a ministerial duty owed to the plaintiffs, because that part of the allegation is merely a legal conclusion. See Faulkner v. United Technologies Corp., supra, 240 Conn. 588.
Therefore, the court "must address . . . whether the alleged acts of negligence were discretionary or ministerial . . . [T]he determination of whether an act or omission is discretionary in nature and, thus, whether governmental immunity may be successfully invoked pursuant to . . . § 52-557n(a)(2)(B), turns on the character of the act or omission complained of in the complaint." (Internal quotation marks omitted.) Bonington v. Westport, supra, 297 Conn. 307.
"If by statute or other rule of law the official's duty is clearly ministerial rather than discretionary, a cause of action lies for an individual injured from allegedly negligent performance . . . There is a difference between laws that impose general duties on officials and those that mandate a particular response to specific conditions." (Citations omitted; internal quotation marks omitted.) Id., 308.
Our Supreme Court has stated that ministerial refers to a duty that is to be performed in a prescribed manner without the exercise of judgment CT Page 21816 or discretion, and there exists appellate precedent that stands for the conclusion that the "prescribed manner" must be set forth by some law; Soderlund v. Merrigan, 110 Conn.App. 389, 399, 955 A.2d 107 (2008); mandate of legal authority; Blake v. Mason, 82 Conn. 324, 327, 73 A. 782 (1909); or "city charter provision, ordinance, regulation, rule, policy or directive . . ." Violano v. Fernandez, supra, 280 Conn. 323; Segreto v. Bristol, 71 Conn.App. 844, 857, 804 A.2d 928, cert. denied, 261 Conn. 941, 808 A.2d 1132 (2002); see generally, Bonington v. Westport, supra, 297 Conn. 308-09.
Paragraph 5 of count one of the plaintiffs' second amended complaint, as well as the fifteen remaining counts as incorporated by reference, alleges: "At all times relevant herein, the defendant, town of East Hartford, had an established set of police policies, rules and regulations pertaining to family violence issues, creating a ministerial duty to the plaintiffs. (See attached General Order: 153.50.00 — Exhibit A.)" Exhibit A is a document titled "East Hartford Police Department General Order 153.50.00," but also includes sections labeled 153.51.00 et seq. The reasonable inference given the plaintiffs' allegations and reference to the included exhibit is that the general orders contained in exhibit A are the alleged set of police policies, rules and regulations.
General Order 153.50.00 is organized into several sequential sections. Section 153.50.50 carries the heading "Procedures for Responding Officers." Section 153.50.51 appearing under that title carries the heading "Investigating Officer." Several alphabetical subsections appear thereunder. Subsection (R) provides: "Give the victim(s) the Victim Information form . . . containing information and phone numbers for victims' rights and services [General Statutes § 46b-38b(d).]" Subsection (S) provides: "Before leaving the scene, help the victim to develop a short-term safety plan, which may include: 1. Planning what to do next. 2. Calling a friend or family member for support and/or accompaniment. 3. Going to a safe place for the night (i.e., family, friends, shelter)."
The above quoted portions of East Hartford's general orders represent East Hartford police department regulations and procedures requiring East Hartford police officers to act in certain prescribed manners when responding to family violence complaints. The quoted subsections, on their face, do not allow the responding officers to exercise discretion as to certain actions that may be taken, instead, they affirmatively require officers to "give the victim(s) the victim information form" and to "help the victim to develop a short-term CT Page 21817 safety plan" before leaving the scene of a family violence situation. Therefore, because these portions of East Hartford's general orders do not permit the police officers to exercise discretion as to whether these actions may be taken, these parts of the general orders, when construed in the manner most favorable to sustaining the legal sufficiency of the complaint, create ministerial duties owed by East Hartford police officers to victims of family violence when responding to such complaints.
Paragraph 28 of count one alleges: "On or about November 28, 2003, or for any period up to the date of December 13, 2003, neither Officer Kevin Lemaire nor any other member of . . . the town of East Hartford's police department, provided the plaintiff's decedent, Ramona Kendall, with information to be given to victims of domestic violence or to set up a safety plan for her and her children, the plaintiffs' decedents, Alexis Simone Kendall and Kayla Michelle Kendall."
The foregoing allegation, when admitted as true for purposes of the present motion to strike, establishes that neither Lemaire nor any other member of East Hartford's police department gave the plaintiffs' decedents information or helped set up a safety plan as general order 153.50.50 prescribes. This allegation is incorporated by reference into all of the remaining counts of the second amended complaint, and thus, every count of the complaint sufficiently alleges that the defendants failed to comply with at least two ministerial duties.
"[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Violano v. Fernandez, supra, 280 Conn. 318; see also Whelan v. Whelan, 41 Conn.Sup. 519, 520, 588 A.2d 251 (1991) [ 3 Conn. L. Rptr. 135] ("[i]nsofar as [a] motion to strike is directed [to] the entire complaint, it must . . . fail if any of the plaintiff's claims are legally sufficient" [internal quotation marks omitted]). Additionally, "grounds other than those specified should not be considered by the trial court in passing upon a motion to strike;" (internal quotation marks omitted) Gazo v. Stamford, 255 Conn. 245, 259, 765 A.2d 505 (2001); and our Supreme Court "will not uphold the granting of [a] motion to strike on a ground not alleged in the motion nor relied upon by the trial court." Blancato v. Feldspar Corp., 203 Conn. 34, 44, 522 A.2d 1235 (1987).
The sole ground contained in the defendants' motion for striking all sixteen counts of the plaintiffs' complaint is that "the complaint attempts to impose a ministerial duty upon the defendants CT Page 21818 based upon the general orders of the East Hartford police department for actions which are clearly discretionary in nature." The court has already concluded that the complaint sufficiently alleges the existence of ministerial duties and sufficiently alleges that the defendants failed to perform those duties. Therefore, for the foregoing reasons, and without considering any of the defendants' arguments unrelated to the grounds stated in their motion, the defendants' motion to strike is hereby denied.
compass the entirety of Cagle's claims for negligence/malpractice and breach of contract. Second, it failed to address the Lawyer Defendants' arguments concerning choice of law.
Under Oklahoma law, attorney's fees are not generally recoverable in the absence of a specific statute or contractual provision so providing. However, Oklahoma recognizes an exception in cases where a defendant has committed a tort or breach of contract causing the plaintiff to incur attorney's fees to protect her interest. See, e.g., Barnes v. Okla. Farm Bureau Mut. Ins. Co., 11 P.3d 162, 181 (Okla. 2000); see also Restatement (Second) of Torts § 914(2) (recognizing similar exception to general "American" rule concerning fees).
Because choice of law is determinative, we begin there. The Lawyer Defendants contend Texas law governs. Under Texas law, they argue, a non-client beneficiary like Cagle is categorically barred from bringing a legal malpractice and breach of contract claims against them. Oklahoma law, however, is less clear on this issue.
Texas, unlike Oklahoma, has not yet adopted § 914(2). See Akin, Gump, Strauss, Hauer Feld, L.L.P. v. Nat'l Dev. Research Corp., 299 S.W.3d 106, 119 (Tex. 2009).
Cagle claims, first, the Lawyer Defendants failed to preserve the choice-of-law issue, and second, Texas law should not apply. But, as will be seen, the Lawyer Defendants did preserve this issue. Moreover, as we explain, Texas law applies under Oklahoma's choice-of-law principles.
We review the district court's determination and interpretation of state law de novo. Berry Murphy, P.C. v. Carolina Cas. Ins. Co., 586 F.3d 803, 808 (10th Cir. 2009). In a diversity case, we "apply the substantive law of the forum state, including its choice of law rules." Id. (internal quotation marks omitted). Since Oklahoma is the forum state, we must determine what law it would apply to Cagle's claims against the Lawyer Defendants.
In recent cases we have clarified a pure de novo standard of review applies only where the facts are undisputed. U.S. Aviation Underwriters, Inc. v. Pilatus Bus. Aircraft, Ltd., 582 F.3d 1131, 1143 (10th Cir. 2009). This is because we review the findings of fact the district court makes in connection with choice of law questions for clear error. Moses v. Halstead, 581 F.3d 1248, 1251 (10th Cir. 2009).
Here, the district court made no factual findings concerning the choice of law issue. But this omission does not require a remand. The basic facts concerning the choice-of-law issue, such as Cagle's state of residence or the telephone calls and visits to Oklahoma made by the Lawyer Defendants, are essentially undisputed. We review ultimate findings on choice-of-law issues de novo. See U.S. Aviation Underwriters, 582 F.3d at 1143-44 (analyzing and weighing factors of "most significant relationship" test on appeal, reaching different conclusion than district court). Thus, we are able to do the choice of law analysis, complete with ultimate findings, based on the undisputed facts.
Additionally, having determined the correct choice of law, we may then apply that law to summary judgment issues, even if our conclusions concerning the applicable law differ from those of the district court. In exercising our de novo review, we may affirm summary judgment for any basis that appears in the record, whether or not relied on by the district court. Vaughn v. Epworth Villa, 537 F.3d 1147, 1150 (10th Cir. 2008), cert. denied, ___ U.S. ___, 129 S.Ct. 1528, 173 L.Ed.2d 657 (2009).
Applying Texas law, Cagle's claims against the Lawyer Defendants (with the possible exception of her negligent misrepresentation claim) simply fail.
1. Breach of Contract Claim
The Lawyer Defendants contend Oklahoma law requires us to give effect to a choice-of-law provision in the contingent fee agreement Norris signed; it requires application of Texas law. While Oklahoma generally follows the rule of lex loci contractus — under which a contract is governed by the state law where it is made — contracting parties may select another state's law as part of their agreement. See Harvell v. Goodyear Tire Rubber Co., 164 P.3d 1028, 1033-34 (Okla. 2006) ("[I]n Oklahoma, the established choice of law rule in contract actions known as lex loci contractus is that, unless the contract terms provide otherwise, the nature, validity, and interpretation of a contract are governed by the law where the contract was made.") (emphasis added) (footnote omitted).
The relevant provision in Norris's contract with the Lawyer Defendants reads as follows:
This Agreement shall be construed under and in accordance with the laws of the State of Texas, and the rights, duties and obligations of Client and of Attorney regarding Attorney's representation of Client and regarding anything covered by this Agreement shall be governed by the laws of the State of Texas.
Aplt.App., Vol. III at 1183.
Cagle vigorously disputes the applicability of this provision. As her first line of defense, she argues the Lawyer Defendants waived the "Texas law applies" argument. She presents three propositions to support the alleged waiver. First, she contends the application of Texas law is an affirmative defense the Lawyer Defendants should have raised in their answers to her complaint. See Fed.R.Civ.P. 8(c) (requiring party to "set forth affirmatively" its affirmative defenses). We disagree. The Lawyer Defendants' choice-of-law argument was merely part of their general defense — they were not liable to Cagle because she was not their client. It was not an independent affirmative defense or basis for dismissal. The Lawyer Defendants raised a "lack of privity" defense in their answers, see Aplt.App., Vol. I at 78, 317, and that was sufficient to preserve the component elements of the defense, including the contention Texas law governs its outcome. See, e.g., Wisland v. Admiral Beverage Corp., 119 F.3d 733, 737 (8th Cir. 1997) ("The rules do not require a party to plead every step of legal reasoning that may be raised in support of its affirmative defense; they only require a defendant to state in short and plain terms its defenses to a plaintiff's claims.").
Cagle also finds waiver in the Lawyer Defendants' failure to mention Texas law in their portion of the Joint Status and Discovery Report. But the record shows they did mention the issue in that Report. See Aplt.App., Vol. VIII at 3118 (stating "[t]he scope of the lawyers' representation was defined by a written agreement which . . . chose Texas law to govern any dispute.").
Finally, Cagle argues the Lawyer Defendants "never disputed [her] contention contained in her Motion for Partial Summary Judgment . . . that Oklahoma law applies to this case." Aplt. Reply Br. at 10. While the record does not contain their response to her partial summary judgment motion, the Lawyer Defendants did argue the choice-of-law issue extensively in their own motion for summary judgment, thus putting Cagle on notice concerning the issue. See Aplt.App., Vol. III at 1107-11 (arguing "TEXAS LAW APPLIES TO THE CLAIMS AGAINST THE LAWYER DEFENDANTS."). We conclude the Lawyer Defendants more than adequately preserved the choice-of-law issue for our review.
In her next line of defense, Cagle raises four arguments why the choice-of-law provision, even if not waived, does not apply to her claims. To begin with, she contends the district court should not have considered the contingent fee contract (containing the choice-of-law provision) as summary judgment evidence, because it was (a) hearsay and (b) unauthenticated. We easily reject both these contentions. First, the contract was not excludable as hearsay. It constituted an act of legal significance between Norris and her attorneys, not a "statement" offered for its truth. Schindler v. Seiler, 474 F.3d 1008, 1010-11 (7th Cir. 2007); Mueller v. Abdnor, 972 F.2d 931, 937 (8th Cir. 1992). See also Fed.R.Evid. 801(a). Second, both the contingent fee contract and Norris's signature on it were authenticated by Hutson's sworn deposition testimony, presented to the district court. See Aplt.App., Vol. VI at 2349-53.
Cagle next argues the choice-of-law provision cannot be used against her because she did not sign the contingent fee contract. But even a non-party's contractually-based claims can be subject to a choice-of-law provision if her rights are completely derived from those of the signing party. Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151, 1170 (11th Cir. 2009). That is plainly the case here. Cagle's breach of contract claim charges Norris "entered into a[n] employment contract for legal services with [the Lawyer] Defendants . . . to represent [ Norris] in all proceedings on her behalf in connection with the Wyeth litigation and the structured settlement." Aplt. App., Vol. I at 12. See also id., Vol. VIII at 3109 (similar language in Joint Status Report). Cagle's alleged contractual rights are entirely derived from those of Norris, who signed the contract. She is bound by the contract's choice-of-law provision.
Cagle next argues she should not be bound by the choice-of-law provision because there is no evidence the Lawyer Defendants ever signed the contract. Citing In re Godt, 28 S.W.3d 732, 738 (Tex. App.-Corpus Christi 2000, no pet.), she contends the Lawyer Defendants' failure to sign the contract makes its choice-of-law provision void. Texas law requires a contingent fee contract be signed by both the attorney and the client. See Vernon's Texas Gov't Code Ann. § 82.065(a). And none of the copies of the contract in the record contain the Lawyer Defendants' signatures. But Texas courts have held where the contingent fee contract has been signed by the client and fully performed but not signed by the attorney, the attorney can enforce its terms. Chambers v. O'Quinn, 305 S.W.3d 141, 152 (Tex.App.-Houston 2009) (arbitration provision); Enochs v. Brown, 872 S.W.2d 312, 317-19 (Tex.App.-Austin 1994). It appears the Texas courts would find the contingent fee contract, and its choice-of-law provision, enforceable by the Lawyer Defendants, even if not signed by them.
Finally, Cagle makes a partially meritorious argument. She contends the choice-of-law provision does not encompass all of her claims in the present action. We reject out of hand the first part of her argument: the choice-of-law provision only applies to an action seeking construction of the contingent fee contract. The plain language of the provision, while governing construction of the contract, also provides "the rights, duties and obligations of Client and of Attorney regarding Attorney's representation of Client and regarding anything covered by this Agreement shall be governed by the laws of the State of Texas." Aplt.App., Vol. III at 1183 (emphasis added). This language is broad enough to encompass her contractually-based claim.
Cagle also argues, however, the choice-of-law provision does not apply to her tort claims charging the Lawyer Defendants "were negligent in failing to obtain and/or preventing the physical issuance of [the] annuity policy." Aplt. Reply Br. at 13. These tort claims appear to fall outside the scope of the contingent fee agreement. By its terms, the contract governed only Norris's "claim for personal injuries and/or any other causes of action [she] may have against Wyeth and any other potentially responsible parties" in connection with her fen phen injury. Aplt. App., Vol. III at 1181. We must therefore look elsewhere in Oklahoma's choice-of-law rules for the law applicable to her tort claims.
Thus, for similar reasons it could certainly be argued Cagle's "breach-of-contract" claim also falls outside the scope of the contingent fee contract. But we need not address this problem, since her contractual claim fails for other reasons.
2. Tort Claims
Under Oklahoma's choice-of-law rules, "the rights and liabilities of parties with respect to a particular issue in tort should be determined by the law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties." Hightower v. Kan. City S. Ry. Co., 70 P.3d 835, 842 (Okla. 2003) (internal quotation marks omitted). This test, adopted from the Restatement (Second) of Conflict of Laws § 145 (1971), requires the consideration of four factors "according to their relative importance with respect to a particular issue as follows: (1) the place where the injury occurred, (2) the place where the conduct causing the injury occurred, (3) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (4) the place where the relationship, if any, between the parties occurred." Id. (internal quotation marks omitted).
We first address a threshold issue. Cagle attempts to incorporate into this analysis facts involving the Lawyer Defendants' representation of Norris in connection with the fen phen litigation. But this will not do. Cagle's alleged injuries did not result from the attorneys' representation of Norris against Wyeth or their settlement of Norris's claims against Wyeth. Rather, Cagle alleges a separate injury relating to the attorneys' conduct in relation to the annuity contract, procured after a settlement of the underlying litigation was complete.
Turning to the "most significant relationship" factors, the place of injury plays only a minor role in this case. Cagle was injured by MassMutual's refusal to issue the annuity policy and to pay benefits under the policy. The Lawyer Defendants inform us MassMutual took these actions from its corporate offices in Massachusetts, thus making Massachusetts the situs of the injury. Cagle does not argue otherwise. But the fact the injury took place in Massachusetts is obviously only fortuitous, and does not require application of the law of that state. See Restatement (Second) of Conflict of Laws § 145, cmt. "e" ("Situations . . . arise . . . where the place of injury will not play an important role in the selection of the state of the applicable law. This will be so, for example, when the place of injury can be said to be fortuitous or when for other reasons it bears little relation to the occurrence and the parties[.]").
More important is the next factor, the place where the conduct causing the injury occurred. Cagle asserts the Lawyer Defendants failed to inform Norris of the need for execution of the Addendum and the UQAR; failed to get these documents executed and sent to MassMutual; and in fact affirmatively interfered with their execution and delivery to MassMutual. These alleged affirmative actions or negligent omissions were facilitated by telephone calls or fax transmissions in which the Lawyer Defendants participated from their offices in Texas. Although some of these calls or faxes were placed to Oklahoma, where Norris and Cagle resided, and though one or more of the Lawyer Defendants met with Norris on occasion in Oklahoma, nearly all of the alleged misconduct was generated or initiated from Texas. We therefore conclude this factor favors the application of Texas law.
The domicile, residence, and business location of the parties is not disputed. Cagle lives in Oklahoma and the Lawyer Defendants are headquartered in Texas. An argument can also be made the location of the relationship between the parties involved both Texas and Oklahoma. Thus neither of these factors is dispositive. In any event, we conclude these factors are less important than the place where the conduct occurred.
There is one additional factor to consider. Cagle's claims allege misconduct and/or malpractice by attorneys licensed in Texas relative to an alleged duty they owed her in connection with an attorney-client relationship. "If the primary purpose of the tort rule involved is to deter or punish misconduct . . . the state where the conduct took place may be the state of dominant interest and thus that of the most significant relationship." Restatement (Second) of Conflict of Laws § 145, cmt. "c." See also Trierweiler v. Croxton Trench Holding Corp., 90 F.3d 1523, 1535-36 (10th Cir. 1996) (applying Colorado substantive law to alleged attorney negligence by Colorado attorney occurring in Colorado, though victim was Florida citizen doing business in Michigan). Cf. Hoiles v. Alioto, 461 F.3d 1224, 1232 (10th Cir. 2006) (noting California's interest, for purposes of most significant relationship test, in enforcing California rules regulating contingent fee agreements prepared by California attorneys). Thus, taken as a whole, the Restatement factors favor the application of Texas law to Cagle's tort claims.
Oklahoma has not adopted this language from comment "c" to Restatement § 145; however, we believe the Oklahoma courts would find the comment's reasoning persuasive.
B. Application of Texas Law
We now proceed to apply Texas law to Cagle's claims against the Lawyer Defendants. It is plain under Texas law Cagle cannot maintain these claims. She was not the client of the Lawyer Defendants, Norris was. Texas law recognizes a "privity barrier," under which "an attorney owes a duty of care only to his or her client, not to third parties who may have been damaged by the attorney's negligent representation of the client." Barcelo v. Elliott, 923 S.W.2d 575, 577 (Tex. 1996). With particular relevance to this case, the Texas Supreme Court has refused to recognize an exception to the privity barrier in favor of beneficiaries of a deceased's estate planning arrangements. See id.
Though the Barcelo decision involved a will and a trust rather than an annuity contract, its reasoning applies squarely in this case. The problems are the same regardless of the beneficial vehicle involved. They involve ambivalence and the difficulty courts experience with line-drawing. Simply put, an unexecuted document "may express the testator's true intentions, lacking signatures solely because of the attorney's negligent delay. On the other hand, the testator may have postponed execution because of second thoughts regarding the distribution scheme." Id. at 578. In light of these concerns, Lone Star judges have sought to avoid befouling their boots by fencing off altogether the messy fields of donative motive.
Nothing here suggests Norris had second thoughts about naming Cagle as a beneficiary or procuring the annuity contract. But even where the testator's intent is clear, the Texas Supreme Court has been categorically unwilling to sanction a malpractice action against attorneys by disappointed beneficiaries arising from an attorney's failure to insure execution of documents prior to the testator's death. The Texas Supreme Court has confessed its inability "to craft a bright-line rule that allows a lawsuit to proceed where alleged malpractice causes a will or trust to fail in a manner that casts no real doubt on the testator's intentions, while prohibiting actions in other situations." Id. The court cited what it viewed as real dangers of permitting such an action: disappointed beneficiaries might sue estate planning attorneys for failure to receive a bequest, thereby embroiling the courts in a morass of extrinsic evidence; estate planning attorneys might find their loyalties divided between clients and their presumptive beneficiaries; and recognizing such an action could potentially create greatly expanded and unjustified liability for attorneys to disappointed beneficiaries. Finally, the Barcelo court specifically foreclosed recovery on contract as well as tort principles. See id. at 579 (rejecting contract-based action by beneficiaries as inconsistent with Texas malpractice law).
As a fallback position, however, Cagle contends the Texas privity barrier should not apply to her claims against the Lawyer Defendants, because even under Texas law, an attorney may owe a duty to a non-client under negligent misrepresentation principles. Although the Texas courts do recognize a separate claim for negligent misrepresentation by a non-client beneficiary, they have made it clear such a claim does not fall under the rubric of legal malpractice:
[A] negligent misrepresentation claim is not equivalent to a legal malpractice claim. Under the tort of negligent misrepresentation, liability is not based on the breach of duty a professional owes his or her clients or others in privity, but on an independent duty to the nonclient based on the professional's manifest awareness of the nonclient's reliance on the misrepresentation and the professional's intention that the nonclient so rely. Therefore, an attorney can be subject to a negligent misrepresentation claim in a case in which she is not subject to a legal malpractice claim.
McCamish, Martin, Brown Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 792 (Tex. 1999) (citations omitted).
Such a claim for negligent misrepresentation is based on the Restatement (Second) of Torts § 552. See McCamish, 991 S.W.2d at 791-92. The Restatement test provides:
One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
Restatement (Second) of Torts § 552(1).
The Texas Supreme Court has described the four elements of a cause of action for negligent misrepresentation under this Restatement test as follows:
(1) the representation is made by a defendant in the course of his business, or in a transaction in which he has a pecuniary interest; (2) the defendant supplies "false information" for the guidance
of others in their business; (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the representation.
Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991).
This test requires, among other things, that the defendant supplied false information on which the plaintiff reasonably relied, causing her to suffer pecuniary loss. But Cagle identifies no affirmative false representation the Lawyer Defendants made to her. She mentions Ms. Hutson's suggestion that Norris structure part of her settlement, and Hutson's referral of Norris and Cagle to TJSG for this purpose. Neither of these communications, however, represents a false statement or representation to Cagle (or Norris, for that matter).
Cagle also points to the Lawyer Defendants' alleged failure to notify her and Norris of the need for Norris to sign the Addendum and UQAR to obtain issuance of the annuity contract. "Where there is a duty to speak, silence may be as misleading as a positive misrepresentation of existing facts." Brown Brown of Texas, Inc. v. Omni Metals, Inc., 317 S.W.3d 361, 384 (Tex.App.-Houston [1 Dist.] 2010, pet. filed) (quotation marks omitted). The problem is, Cagle has failed to show the Lawyer Defendants had any duty of disclosure to her.
"A duty to disclose may arise in four situations: (1) when there is a fiduciary relationship; (2) when one voluntarily discloses information, the whole truth must be disclosed; (3) when one makes a representation, new information must be disclosed when that new information makes the earlier representation misleading or untrue; and (4) when one makes a partial disclosure and conveys a false impression." Id. (quotation marks omitted). The first scenario does not apply; the Lawyer Defendants owed fiduciary duties to Norris, not Cagle. The other scenarios assume a representation by the Lawyer Defendants to Cagle concerning the requirements for issuance of the annuity contract that was either incomplete, misleading, or untrue. But Cagle points to no such representation by the Lawyer Defendants. In fact, the evidence shows Hutson did not discuss with Norris or Cagle what documents would be needed to obtain the annuity; she left that issue for TJSG to discuss with them. See Aplt.App., Vol. V at 1866. Therefore, Cagle has failed to establish a cause of action for negligent misrepresentation against the Lawyer Defendants.
3. Claims Against TJSG
Cagle cites nine separate TJSG failings she contends were negligent and/or constituted a breach of contract. Again, keeping our eye on the ball, it was Norris, not Cagle, who contracted with TJSG to obtain an annuity using Norris's settlement proceeds. Even assuming TJSG owed contractual or tort duties to Cagle as beneficiary of the Norris annuity and applying Oklahoma law, as Cagle urges, she fails to show TJSG breached any legally-recognized duty to her.
Cagle contends TJSG (1) failed to send the Addendum and UQAR to Norris on a timely basis for signature; (2) sent the Addendum to the wrong address; (3) misrepresented to Norris her annuity was finalized and failed to tell her she would be required to sign additional documents; (4) failed to notify Norris she should keep TJSG apprised of any change of address; (5) sent the Addendum and UQAR to Norris by second-day UPS without requiring a signature receipt; (6) failed to follow up with UPS concerning Norris's receipt of the shipment, or lack thereof; (7) failed to send the documents to Norris via the United States mail, by which they would automatically have been forwarded to her new address; (8) failed to email the documents to Norris; and (9) told Cagle when she called from the hospital on September 19, 2006, everything was done on Norris's annuity contract when, in fact, the paperwork was not completed.
These allegations can be divided into three categories: (1) TJSG's failure to notify Norris of her need to execute the Addendum and UQAR; (2) TJSG's failure to provide Norris with the Addendum and UQAR before she died; and (3) TJSG's alleged misrepresentation to Cagle everything was done on Norris's annuity contract. Cagle clearly cannot recover for the first category of alleged wrongs under either tort or contract principles. Norris's attorneys were well aware the Addendum and UQAR remained to be executed. Norris thus had notice of the remaining requirements for issuance through her agents, the Lawyer Defendants. Given this notice, TJSG had no duty to notify her personally. See Renberg v. Zarrow, 667 P.2d 465, 471 n. 16 (Okla. 1983) ("In the absence of fraud, notice or knowledge of attorney acquired during scope of employment is imputed to the client.").
Turning to the second category of alleged wrongs, any delay in sending the documents to Norris was also occasioned by the Lawyer Defendants, not TJSG. Clark instructed TJSG to wait until the annuity funded and MassMutual made the first payment before sending the documents to Norris. Once this occurred and Clark gave TJSG the go-ahead, it promptly sent the remaining documents to Norris for execution.
The second category of alleged wrongs, however, also includes TJSG's purported failure to insure the documents, once expedited, actually reached Norris on a timely basis. It is undisputed TJSG sent the documents to Norris's last known address by UPS two-day mail, where they were delivered on the very day Norris entered the hospital. Neither Cagle nor Norris notified TJSG of their new address. Within two weeks of entering the hospital, Norris unexpectedly died. Although TJSG appears to have been aware Norris's condition was incurable and could eventually be terminal, Cagle cites no evidence suggesting TJSG was aware Norris's death was imminent when they sent the documents to her to be signed. While Cagle has suggested a number of measures TJSG might have taken to be certain Norris would receive the documents, she fails to show either TJSG's contractual duties or any duty of reasonable care required TJSG to undertake any of these measures under the circumstances presented here. Arranging an expedited delivery by a reliable envoy to Norris's address of record is sufficient.
In general, an insurance broker's duty to its clients requires only it "act in good faith and use reasonable care, skill, and diligence in the procurement of insurance[.]" Kutz v. State Farm Fire Cas. Co., 189 P.3d 740, 744-45 (Okla.Civ.App. 2008). Assuming such a duty extends to the procurement of an annuity policy, and taking the facts as presented by Cagle as true, she fails to show a lack of good faith, reasonable care, skill, or diligence on TJSG's part in obtaining Norris's signature on the UQAR or the Addendum should result in TJSG being liable to Cagle.
Cagle also contends she telephoned an unnamed employee of TJSG on an unspecified date and time during Norris's hospital stay. This employee allegedly stated with respect to the annuity "Everything looks done to me." Aplt.App., Vol. VII at 2845 (depo. p. 283). This vague statement by an unspecified person is insufficient to create a genuine issue of material fact concerning a breach of duty by TJSG to Cagle.
Finally, in addition to the nine specified alleged failings by TJSG connected with issuance of the annuity prior to Norris's death, Cagle complains TJSG acted affirmatively to prevent the physical issuance of the annuity policy after Norris's death. She cites two instances of this alleged interference: (1) TJSG's instruction to MassMutual to "hold payments," id., Vol. I at 249; and (2) notes from a conference between Clark and Jeanie McIntyre of TJSG indicating they decided to suspend communications with Cagle's attorney, to "do nothing" and to "hold tight on getting [the] pol[icy] issued — don't get issued," id. at 283. The undisputed evidence does not support Cagle's characterization of these events.
TJSG made the request to "hold payments" after Norris died, pending receipt of her death certificate. Charlene Galt, an underwriting consultant with MassMutual, testified the holding of payments is the company's standard procedure when MassMutual is notified of the death of an annuitant. Aplt.App., Vol. IV at 1634. In fact, a hold on payments would have been imposed even if MassMutual had in hand all the documents necessary to have issued the annuity policy. Id. at 1635. We discern no breach of duty on TJSG's part in requesting MassMutual to follow its own standard practices.
The Clark/McIntyre conference notes, taken in context, refers to TJSG's discussions with Clark about how to handle what looked to be a burgeoning conflict between Cagle and her attorney and the potential beneficiaries of Norris's intestate estate over the validity of an entitlement to the annuity. After noting Oklahoma does not recognize same-sex marriage, the parties concluded there was an "issue" over "whether [the] annuity [had been] formally completed." Id., Vol. I at 283. In light of this ambiguity, they were "afraid" of having "mom sibling[s] come back to us." Id. The parties therefore agreed they should not deal with Cagle's attorney but should instead wait for issuance of "letters of testimony" that would confirm the authorization of the holder to "talk on her behalf as if serving Shavon Norris." Id. Noting the "Company [was] paying [the] annuity," the parties to this conversation decided to "do nothing" and to "hold tight on getting [the] pol[icy] issued." Id. They would not "get" the policy "issued." Id.
Even if this exchange discloses a breach of duty to Cagle, we discern no damages to her caused by the defendants' decisions about how to handle the conflict between Cagle and the beneficiaries of Norris's estate. The evidence indicates it was MassMutual's decision to suspend payments and not to issue the annuity contract. MassMutual knew Cagle was the beneficiary named in the policy. Its usual procedure in such cases would have permitted Cagle to execute the Addendum and UQAR even though Norris had died without executing them herself. See id., Vol. IV at 1600-02. But — and this is crucial — MassMutual did not offer Cagle this option, because "we realized there was a litigation and possibly competing claims." Id. at 1602.
Given MassMutual's concerns about litigation, Cagle fails to identify any action TJSG could have taken after Norris's death that would have persuaded MassMutual to change its mind. While the district court eventually decided the annuity contract was valid even without Norris's signature on the Addendum and UQAR, it took the very litigation about which Cagle complains to settle the matter, because MassMutual insisted on a court decree that would insulate it from liability before issuing the policy.
TJSG apparently made at least one additional effort to get the policy issued with the documents it had. On January 19, 2007, it faxed the settlement agreement signed by Norris and a Uniform Qualified Assignment to MassMutual, asking whether "MassMutual will issue the annuity contract for this matter based on the attached documents." Aplt. App., Vol. II at 526. MassMutual responded "no." Id.
CONCLUSION
The record discloses no genuine issue of material fact concerning whether the Lawyer Defendants and TJSG are liable to Cagle on her claims of breach of contract or negligence/malpractice, and they are entitled to judgment on these claims as a matter of law. The district court therefore properly granted summary judgment to the Lawyer Defendants and TJSG. The judgment of the district court is AFFIRMED.