664 S.E.2d 751
4. There is authority in equity to award to the prevailing litigant his or her
reasonable attorney's fees as 'costs'. . . when the losing party has acted in bad faith,
vexatiously, wantonly or for oppressive reasons. Syl. Pt. 3, Sally-Mike Properties v.
Yokum, 179 W.Va. 48, 365 S.E.2d 246 (1986).
Per Curiam:
This case is before us on appeal for a second time. In the first appeal
(hereinafter Messer I), (See footnote 1) we reversed the dismissal by the lower court of Theresa D.
Messer's discrimination suit based on handicap. Ms. Messer (hereinafter Appellant) now
appeals from the January 11, 2007, order of the Circuit Court of Cabell County granting
summary judgment to the defendants below. The defendants named in Appellant's suit are
her previous employer, Huntington Anesthesia Group, Inc. (hereinafter HAGI), and the
individual shareholder/physicians of HAGI, namely, Dr. Farouk Abadir, Dr. Hosny Gabriel,
Dr. Mark Newfeld, Dr. Ricardo Ramos, Dr. Alfredo Rivas, Dr. D. Grant Shy, Dr. Stanislav
Striz, and Dr. Michael Vega. (See footnote 2)
In the present appeal, Appellant asserts three errors which occurred upon
remand: the first regards the refusal of the lower court to enforce a settlement agreement she
alleges was reached after the case was returned to the lower court; the second concerns the
application of our holding in Messer I; and the third involves ex parte communications. We
will limit our discussion in this case to the sole issue of the settlement agreement because
our review of the record, briefs and arguments of counsel and the relevant law reveals that
the court-annexed mediation resulted in a valid and enforceable settlement agreement.
Therefore, the summary judgment order of the lower court is vacated and the case is
remanded for entry of an order consistent with this opinion.
7) The Defendants have not been able to reach all physicians partners that are party Defendants and this agreement
will be held in abeyance for 3 weeks (See footnote 7) pending unanimous
approval of all physicians partners. If there is not approval by
all within 3 weeks, there is no settlement and the matter may
proceed to trial as if no settlement was reached.
8) With unanimous consent of the partners to the
settlement, the amount specified in paragraph 1 will be paid by
June 30th, 2006. (See footnote 8)
(Strike-outs in original; footnote added.). The document was signed by Appellant,
Appellant's counsel, Dr. Gabriel and Mr. Dellinger.
It was established at the August 21 hearing that Mr. Dellinger sent a letter to
Dr. Abadir, Dr. Vega and Dr. Rivas on June 2, 2006, relating that Mr. Dellinger had talked
with the attorney for Drs. Newfeld, Shy and Striz, as well as another attorney some of the
remaining doctors had asked to informally look at the settlement agreement. (See footnote 9) According to
Mr. Dellinger's testimony, the letter outlined the issues facing HAGI and the doctors, and
the need to communicate with Appellant about whether or not settlement was acceptable.
Mr. Delligner said Dr. Ramos informed him by phone on June 5, 2006, that the letter had
been discussed at a meeting he arranged with Drs. Abadir, Vega and Rivas. Mr. Dellinger
learned during this phone call that the discussion at the meeting was heated at times, mostly
due to Dr. Abadir not wanting to settle. Mr. Dellinger also testified he was told by Dr.
Ramos that ultimately all of the individuals agreed to the settlement and that I was
authorized to communicate that to the other side.
Dr. Gabriel did not attend the June 3 meeting because he was out of the
country on vacation, so following the meeting Dr. Ramos e-mailed Dr. Gabriel the following
message:
Hosney
Today [S]aturday I meet with [Drs]. Rivas, Michael [Vega],
Farouk [Abadir]. I discuss the problem with the [M]esser case
and all ramifications of it. Michael said he has nothing to do
with it because he was not a partner and that he signed
something he . . . [is] not liable for anything, Farouk says he is
not paying nothing, Rivas says he will go with what ever we
decide. I am going to call our attorney on [M]onday and ask to
see if we can delay this until the 16 which is [F]riday and see
what happens. Farouk is saying let[']s go to court and fight but
he doesn't knoew [sic] the ramification of an appeal etc etc. If
you read this e-mail, write me back. Richard [Ramos].
Dr. Gabriel replied to Dr. Ramos by return e-mail on June 4, 2006, by stating:
I agree with you in settling the case and please let Rivas
ask the bank if we can borrow $100,000 and let [L]inda call
[M]r. [John] [P]erry [accountant] to ask him about the
advantage of getting the money from the bank or to pay it from
our pockets which ever advantage for us. Please don[']t listen
to [F]arouk, he will pay he likes it or not. Now I have the
internet connected and I will be in touch with you. Than[k]s.
Hosney
Dr. Ramos' rendition of the information exchanged during the June 5 phone
call is significantly different from the testimony of Mr. Dellinger. Dr. Ramos testified that
he told Mr. Dellinger during that phone conversation that we would like to settle and get
it over with. We still have Dr. Abadir not agreeing to the settlement. Dr. Ramos went on
to testify that I told him [Mr. Dellinger] Dr. Abadir did not agree. We had a heated
discussion on Saturday, but Hosny was going to work on him. When asked if he told Mr.
Dellinger that Dr. Gabriel was going to try to get Dr. Abadir to change his mind, Dr. Ramos
said he could not remember. He attributed his memory problems with his June 11, 2006,
hospitalization for cardiac bypass surgery on June 15.
On June 6, 2006, Mr. Dellinger sent a letter to the mediator and Appellant's
counsel reporting that the settlement is now final as all partners have approved the terms
agreed to by the parties at mediation. This letter further related that a typed settlement
agreement, release and dismissal order would be forwarded to Appellant's counsel in the
near future. Finally, it was indicated in the letter that Mr. Dellinger was planning to contact
the presiding judge in the case to advise him that the case had settled pending execution of
the documents, and that the scheduled June 14, 2006, hearing regarding Appellant's motion
to compel discovery (See footnote 10) was no longer needed. According to Mr. Dellinger, a blind copy of
the June 6 letter was sent to HAGI and the individual doctors.
Appellant was notified by her counsel of the settlement. Mr. Dellinger
forwarded a Confidential Settlement Agreement and Release of All Claims and a dismissal
order to Appellant's counsel by e-mail dated June 8, 2006, which also appeared in the form
of conventional written correspondence dated June 9, 2006. Copies of the June 9 letter were
sent to all Appellees.
Changes in the draft agreement were negotiated between counsel for each side
and a copy of the document was signed by Appellant and notarized on June 12, 2006. A
copy of the signed document was then sent to Mr. Dellinger. By e-mail dated June 13, 2006,
Mr. Dellinger requested one final change on behalf of his clients. The change was agreed
to in a subsequent phone call between the attorneys that day. During his testimony, Mr.
Dellinger indicated that between June 6, 2006, and June 13, 2006, he was not contacted by
any of the individual doctors as to any confusion or misunderstanding about their
acceptance of the settlement.
Mr. Dellinger notified the doctors by letter dated June 13, 2006, that he had
received the confidential settlement agreement signed by Appellant. In this communication
Mr. Dellinger told the doctors that [t]he revisions [made to the agreement handwritten by
the mediator] were acceptable and consistent with the agreement reached by the parties at
mediation. The letter thereafter related the need for the doctors to meet to sign and execute
the contract and set forth a time frame within which the checks had to be written in order to
conclude the settlement by the June 30, 2006, date fixed in the agreement.
Mr. Dellinger testified that he first learned that the doctors were not going to
abide by the settlement agreement on June 15, 2006, when he read the e-mail Dr. Gabriel
had sent to him near midnight the day before. During his testimony Mr. Dellinger said that
the substance of this e-mail message was that Dr. Abadir was against the settlement, Dr.
Ramos was undergoing a surgical procedure the following day, and from HAGI's point of
view the entire settlement was on hold.
Mr. Dellinger called Dr. Gabriel after reading the e-mail. Mr. Dellinger said
that during the phone call he expressed his surprise that the settlement was not going
forward, and reiterated what Dr. Ramos had said on the phone about the other HAGI
affiliated doctors agreeing to settlement and authorizing Mr. Dellinger to contact Appellant.
Mr. Dellinger testified that Dr. Gabriel in effect responded by saying I know, but Dr.
Abideer's [sic] against the settlement. And we haven't signed anything, and from our point
of view, you know, the settlement is not going through. Mr. Dellinger added that he
recalled that Dr. Gabriel also related some difficulty in obtaining financing and that Dr.
Ramos had changed his mind about settlement. Mr. Dellinger further stated that this was
the only communication he had with any of the doctors in response to the June 6 letter
confirming settlement.
Throughout Dr. Abadir's testimony at the August 21 hearing he said that he
never agreed to settle. On cross-examination, Dr. Abadir agreed that when he said he was
not willing to settle he meant that he was not willing to contribute either his personal funds
or the funds he believed he was entitled to from HAGI towards the settlement.
Dr. Abadir stated throughout his testimony that he did not read the mail he
received from Mr. Dellinger. However, he admitted to reading the June 6, 2007, letter
confirming settlement because it came shortly after the June 3, 2007, meeting of the doctors.
Dr. Abadir said that when he received the letter he called Dr. Ramos rather than Mr.
Dellinger because Dr. Ramos had arranged the June 3 meeting. Dr. Abadir also testified
that he was aware Mr. Dellinger was the lawyer representing the corporation and the eight
doctors named in Appellant's suit, but Dr. Abadir never spoke with Mr. Dellinger about the
settlement agreement or any other matter related to the case.
By correspondence dated July 3, 2006, Mr. Dellinger informed Appellant
through her counsel that the doctors were not going through with the proposed settlement
reached at mediation on May 18, 2006. Mr. Dellinger's letter also stated that he was
withdrawing as counsel in the case and indicated that other counsel would be substituted.
Thereafter Appellant moved to enforce the settlement agreement, and a hearing on the
motion was held on August 21, 2006. At the conclusion of the hearing the lower court
directed counsel to submit proposed findings of fact and conclusions of law as quickly as
possible, and the trial judge said that he would try to issue his ruling within a week. (See footnote 11) It
appears that the judge also indicated that the submissions of counsel did not have to be
served on opposing counsel. By order dated September 21, 2006, the lower court denied the
motion to enforce the settlement agreement based on the finding that Mr. Dellinger did not
receive from his clients the authorization to settle this case.
A status conference was held in November 2006, at which the parties advised
the lower court that the case was ready for trial. The schedule agreed upon at the status
conference was formalized in a December 11, 2006, order, which stated the trial date of
February 12, 2007, the pre-trial conference date of February 2, 2007, and the date by which
dispositive motions were to be filed as December 15, 2006.
On December 15, 2006, HAGI and the individual doctors filed motions to
dismiss and/or for summary judgment. The hearing on the motions was set for January 4,
2007. Appellant filed an initial response to the motions on December 29, 2006, (See footnote 12) in which
she reminded the lower court that defense had failed to comply with the deposition ordered
by the court in April 2006. The response indicated that the evaluation of the motions for
summary judgment would be inappropriate until after the Rule 30(b)(7) discovery was
completed on the rescheduled date of January 16, 2007. (See footnote 13) Thereafter on January 3, 2007,
Appellees filed a Motion to Quash Notices of Deposition. In support of the motion to
quash, Appellees asserted that discovery was ordered to be completed by October 31, 2006,
Appellant did not voice intent to take depositions subsequent to that date at the November
status conference and the schedule for deposition was excessively burdensome because of
the proximity to trial. (See footnote 14)
The hearing on the motions for summary judgment was conducted on January
4, 2007. At the conclusion of the arguments, the lower court directed counsel for the
respective parties to submit by January 9, 2007, proposed findings of fact and conclusions
of law without serving the same on other counsel. By order dated January 11, 2007, the
lower court granted Appellees' motions for summary judgment.
According to Appellant's counsel, it was not until January 15, 2007, during
a phone call with another lawyer in the case that he realized proposed findings of fact and
conclusions of law along with draft orders were directed by the court to be submitted
without service of the same on counsel for all parties. Based upon this knowledge,
Appellant filed a Motion to Determine Scope and Nature of Ex Parte Contacts on January
29, 2007. Following a hearing, the lower court denied the motion by order dated March 14,
2007, because [p]roper discovery of the alleged ex parte communications is to file a
Judicial Complaint against this Judge.
Appellant filed her petition for appeal of the summary judgment order with
this Court on May 11, 2007, and review was granted by order dated October 24, 2007.
In reviewing challenges to the findings and conclusions
of the circuit court, we apply a two-prong deferential standard
of review. We review the final order and the ultimate
disposition under an abuse of discretion standard, and we
review the circuit court's underlying factual findings under a
clearly erroneous standard. Questions of law are subject to a de
novo review.
We further elaborated on this general review process in syllabus point one of State ex rel.
Cooper v. Caperton, 196 W.Va. 208, 470 S.E.2d 162 (1996), by stating that findings of fact
are reviewed for clear error and conclusions of law are reviewed de novo. However,
ostensible findings of fact, which entail the application of law or constitute legal judgments
which transcend ordinary factual determinations, must be reviewed de novo.
We proceed in applying these standards to our study of the matters raised in
the case sub judice.
[o]ne who by his acts or conduct has permitted another
to act apparently or ostensibly as his agent, to the injury of a
third person who has dealt with the apparent or ostensible agent
in good faith and in the exercise of reasonable prudence, is
estopped to deny the agency relationship.
Id. at Syl. Pt. 1. Evidence supporting the existence of apparent authority includes
'statements, conduct, lack of ordinary care, or other manifestations of the principal's
consent.' Clint Hurt & Assoc. v. Rare Earth Energy, 198 W.Va. 320, 327, 480 S.E.2d 529,
536 ( 1996).
When an attorney-client relationship exists, apparent authority of the attorney
to represent his client is presumed. Syl. Pt. 1, Miranosky v. Parson, 152 W.Va. 241, 161
S.E.2d 665 (1968). We addressed the significance of this presumption of apparent authority
with regard to settlement agreements in Sanson v. Brandywine Homes, Inc., 215 W.Va. 307,
599 S.E.2d 730 (2004). The Sanson plaintiffs alleged on appeal that their attorney had
reached the settlement with the corporate defendant without their authorization. Although
accepting the position of the plaintiffs, the decision to enforce the settlement agreement was
upheld based upon the following reasoning:
While this Court has recognized that [t]he mere relation of
attorney and client does not clothe the attorney with implied
authority to compromise a claim of the client, Syllabus Point
5, Dwight v. Hazlett, 107 W.Va. 192, 147 S.E. 877 (1929), we
have also held that [w]hen an attorney appears in court
representing clients there is a strong presumption of his
authority to represent such clients, and the burden is upon the
party denying the authority to clearly show the want of
authority. Syllabus Point 1, Miranosky v. Parson, 152 W.Va.
241, 161 S.E.2d 665 (1968).
215 W.Va. at 312, 599 S.E.2d at 735.
In the order denying the enforcement of the settlement agreement in the instant
case, no mention is made of the strong presumption of authority raised by Mr. Dellinger
being the recognized attorney for all named defendants or the heightened burden Appellees
bore in order to rebut the presumption. After close examination of the record before us in
light of this legal standard, we are obliged to conclude that Appellees failed to meet their
burden of clearly showing a want of authority in this case.
It is clear from the record that the three doctors who terminated their
association with HAGI in 2004 did not object to the settlement because they believed they
had no responsibility to make any financial contribution under the terms of their 2004
separation agreement.
The record also supports the conclusion that Dr. Ramos served as the conduit
of information if not the spokesperson between the doctors who retained affiliation with
HAGI and Mr. Dellinger. Before the case was ordered to mediation, Dr. Ramos had sent
an e-mail to Mr. Dellinger saying that the doctors wanted to initiate settlement and he
proposed an initial settlement offer. He attended the mediation, organized a meeting with
the doctors about the terms of the handwritten mediation agreement, kept Dr. Gabriel
apprised of settlement developments even while Dr. Gabriel was traveling abroad, routinely
communicated information regarding the settlement to Mr. Dellinger by phone and e-mail,
and fielded questions from the HAGI doctors. In like fashion, the HAGI doctors recognized
him as their spokesperson by contacting him directly when they had concerns with the
settlement agreement. An example of this recognition is Dr. Abadir's testimony that while
he understood that Mr. Dellinger was the attorney in the case, he called Dr. Ramos with the
concerns he had about the division of responsibility for payment of the figure stated in the
settlement agreement. Actually, the only other individual who directly contacted Mr.
Dellinger was Dr. Gabriel, who represented HAGI as its president. Moreover, none of the
HAGI affiliated doctors contacted Mr. Dellinger immediately upon receipt of the June 6
letter announcing the doctors' acceptance of the settlement to at the very least question Mr.
Dellinger's authority to make such a move on their behalf. It was not until near midnight
on June 14 that Dr. Gabriel sent an e-mail to Mr. Dellinger telling him that the HAGI
doctors were opposing the settlement. Viewed as a whole, the statements and conduct of the
doctors form clear supportive evidence that Mr. Dellinger's reliance on Dr. Ramos'
representations was reasonable under the circumstances.
It is true that Dr. Ramos testified that Mr. Dellinger misconstrued what Dr.
Ramos told him during the June 5 phone conversation regarding agreement among the
HAGI doctors. However, Mr. Dellinger's account of the content of that phone call is
corroborated by the e-mail Dr. Gabriel sent to Dr. Ramos on June 4, the day before Dr.
Ramos called Mr. Dellinger to inform him about the June 3 meeting of the doctors who
remained affiliated with HAGI. The actual contents of the electronic communications about
the June 3 meeting bear repeating.
June 3, 2006, e-mail of Dr. Ramos to Dr. Gabriel:
Hosney
Today [S]aturday I meet with [Drs]. Rivas, Michael [Vega],
Farouk [Abadir]. I discuss the problem with the [M]esser case
and all ramifications of it. Michael said he has nothing to do
with it because he was not a partner and that he signed
something he . . . [is] not liable for anything, Farouk says he is
not paying nothing, Rivas says he will go with what ever we
decide. I am going to call our attorney on [M]onday and ask to
see if we can delay this until the 16 which is [F]riday and see
what happens. Farouk is saying let[']s go to court and fight but
he doesn't knoew [sic] the ramification of an appeal etc etc. If
you read this e-mail, write me back. Richard [Ramos].
June 4, 2006, reply e-mail of Dr. Gabriel to Dr. Ramos:
I agree with you in settling the case and please let Rivas
ask the bank if we can borrow $100,000 and let [L]inda call
[M]r. [John] [P]erry [accountant] to ask him about the
advantage of getting the money from the bank or to pay it from
our pockets which ever advantage for us. Please don[']t listen
to [F]arouk, he will pay [whether] he likes it or not. Now I
have the internet connected and I will be in touch with you.
Than[k]s. Hosney
The credibility of Dr. Ramos' testimony must also be weighed against the doctor's
admission that his memory was not clear regarding the specifics of what actually was said
during the June 5 phone call because of his subsequent cardiac surgery.
These facts simply do not establish the clear showing necessary to overcome
the presumption of Mr. Dellinger's apparent authority to bind his clients to the settlement
agreement. Appellant acted in good faith and exercised reasonable prudence in relying on
the apparent authority of Mr. Dellinger, and by so doing is entitled to enforcement of the
settlement agreement. Syl. Pt. 1, General Electric Credit Corp. v. Fields, 148 W.Va. at 176,
133 S.E.2d at 780. Accordingly, it was error for the lower court to deny Appellant's motion
to enforce the settlement agreement, and that ruling can not stand.
Appellant further maintains that award of attorney's fees is warranted upon
this Court finding the settlement agreement enforceable. We agree.
Litigants are normally responsible for paying their own attorney's fees unless
court rule, statute or express contract provision provides otherwise. Syl. Pt. 2, Sally-Mike
Properties v. Yokum, 179 W.Va. 48, 365 S.E.2d 246 (1986). However, [t]here is authority
in equity to award to the prevailing litigant his or her reasonable attorney's fees as 'costs'.
. . when the losing party has acted in bad faith, vexatiously, wantonly or for oppressive
reasons. Id. at Syl. Pt. 3. See Syl. Pt. 2, Sally-Mike Properties v. Yokum, 179 W.Va. 48,
365 S.E.2d 246 (1986).
As recognized by the lower court in the order denying the motion to enforce
the judgment, [i]t is undisputed that the Plaintiff and her Counsel were willing to discuss
the issues and attempt to negotiate in good faith. Appellant was unaware of any dispute
among the doctors regarding the settlement and accommodated Appellees logistical requests
at all phases of the settlement process, including agreeing to allow additional time to finalize
the settlement. Under these circumstances, Appellant should not have to bear the financial
burden caused by . . . [Appellees'] attempt to rescind a valid and enforceable settlement
agreement. Sanson, 215 W.Va. at 312, 599 S.E.2d at 735.