Patel v. Fisherbroyles, LLP

1

DEVEN PATEL, Plaintiff-Appellant, and SHABHANA PATEL, Plaintiff, v. FISHERBROYLES, LLP, ANTHONY CALAMUNCI, FRANK & FRANK, PLLC, JEROME FRANK, and MATTHEW FRANK, Defendants-Appellees.

No. 357092

Court of Appeals of Michigan

November 22, 2022

Wayne Circuit Court LC No. 18-012399-NM

Before: Murray, P.J., and Cavanagh and Cameron, JJ.

CAMERON, J.

In this legal malpractice action, plaintiff Deven Patel appeals as of right the trial court's order granting summary disposition under MCR 2.116(C)(10) in favor of defendants FisherBroyles, LLP (FisherBroyles), Anthony Calamunci, Frank & Frank, PLLC (the Frank law firm), Jerome Frank, and Matthew Frank. We affirm.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

This case arises out of complex legal proceedings involving Deven his family members, and their various businesses.^[1] Relevant to this case is Deven's ownership of VPH Pharmacy, Inc. ("VPH"). VPH was a "closed-door" pharmacy servicing primarily nursing homes, assisted living facilities, and group homes. Vincent Howard is the founder and original owner of VPH.

In 2009, Howard and Deven entered an agreement giving Deven the option to purchase all of VPH's outstanding Class A common stock. Deven exercised his rights under the option agreement in 2010, resulting in the execution of three documents: a promissory note, a security agreement, and a pledge agreement (collectively referred to as "the transactional documents"). Deven agreed under the promissory note to make monthly payments to Howard for the purchase of VPH, with the entire unpaid balance due on September 1, 2015. The purpose of the security agreement was "to extend credit to [Deven]" for the purchase of VPH. In exchange, Deven granted "a security interest in certain collateral of [VPH] as security for payment of the note." The pledge agreement was between Shabhana Patel, Deven's mother-in-law, and Howard. It granted Howard a security interest in VPH's shares of stock.

For the most part, Deven timely paid the monthly payments under the promissory note. But one day before the final balloon payment was due, Calamunci, an attorney and employee of FisherBroyles (collectively, "FisherBroyles defendants"), filed a complaint on behalf of Deven and VPH against Howard (the underlying case). Howard filed a 14-count counterclaim alleging, among other things, breach of contract, common-law conversion, and statutory conversion. The trial court dismissed the claims against Howard after Deven demonstrated a pattern of delays and failure to comply with orders regarding discovery and production of documents. Howard's counterclaims remained at issue.

Jerome and Matthew, attorneys with the Frank law firm (collectively, "Frank defendants"), appeared as cocounsel for Deven and VPH. Soon after, Howard moved for partial summary disposition with respect to his claims of breach of contract, common-law conversion, and statutory conversion. The trial court entered a scheduling order for a response, but defendants failed to file a timely response and did not appear at oral argument. The trial court concluded that Howard was entitled to summary disposition because Deven and VPH failed to present any evidence contradicting these counterclaims. The trial court later entered a judgment in Howard's favor for $1,278,310.55. The parties later stipulated to the dismissal of Howard's remaining counterclaims. VPH later filed a petition for Chapter 11 voluntary bankruptcy, which was eventually converted to a Chapter 7 bankruptcy for liquidation.

Deven then filed this lawsuit alleging legal malpractice and other claims against FisherBroyles^[2] and the Frank defendants. Deven asserted that defendants' failure to respond to Howard's motion for partial summary disposition or attend the hearing were direct and proximate causes of the seven-figure judgment in the underlying case.

The FisherBroyles defendants moved for summary disposition primarily because Deven could not prove that their actions were the proximate cause of the adverse judgment. The Frank defendants also moved for summary disposition, on the basis that they had no duty to respond to the motion because their representation was limited to negotiating a settlement-not to litigating the underlying case. The trial court granted the motions for summary disposition. As to the Frank defendants, the trial court opined that it was "not a close case," because the evidence demonstrated that Deven understood the Frank defendants' only involvement in the case was to negotiate a settlement. Regarding the FisherBroyles defendants, the trial court specifically addressed Howard's breach-of-contract claim. The trial court reasoned that the judgment in the underlying case would have been entered regardless of defendants' actions. Therefore, Deven was unable to prove the FisherBroyles defendants were the proximate cause of the adverse judgment. This appeal followed.

II. STANDARD OF REVIEW

A trial court's summary disposition ruling is reviewed de novo. El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 159; 934 N.W.2d 665 (2019). MCR 2.116(C)(10) tests the factual sufficiency of a claim. Id. at 160. A party seeking summary disposition under this rule can satisfy its burden by "submit[ting] affirmative evidence that negates an essential element of the nonmoving party's claim, or by demonstrat[ing] to the court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim." Lowrey v LMPS & LMPJ, Inc, 500 Mich. 1, 7; 890 N.W.2d 344 (2016) (quotation marks and citation omitted; alterations in original). The standard of review for dispositive motions brought under MCR 2.116(C)(10) is well-settled:

In evaluating a motion for summary disposition brought under this subsection, a trial court considers affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion. Where the proffered evidence fails to establish a genuine issue regarding any material fact, the moving party is entitled to judgment as a matter of law. [Trueblood Estate v P&G Apartments, LLC, 327 Mich.App. 275, 284; 933 N.W.2d 732 (2019), quoting Maiden v Rozwood, 461 Mich. 109, 120; 597 N.W.2d 817 (1999).]

"A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ." El-Khalil, 504 Mich. at 160 (quotation marks and citation omitted).

Resolution of this issue also requires this Court to interpret contract provisions, which presents a question of law reviewed de novo. Titan Ins Co v Hyten, 491 Mich. 547, 553; 817 N.W.2d 562 (2012). This Court's goal in interpreting a contract is always to ascertain and give effect to the intent of the parties as reflected in the plain language of the contract. Bayberry Group, Inc v Crystal Beach Condo Ass'n, 334 Mich.App. 385, 393; 964 N.W.2d 846 (2020). "The words of a contract are interpreted according to their plain and ordinary meaning, and this Court gives effect to every word, phrase, and clause while avoiding interpretations that would render any part of the document surplusage or nugatory." Id. (quotation marks and citation omitted). An unambiguous contract term must be enforced as written unless contrary to public policy. Soaring Pine Capital Real Estate & Debt Fund II, LLC v Park Street Group Realty Servs, LLC, 337 Mich.App. 529, 542; 976 N.W.2d 674 (2021). A contract is ambiguous if it is capable of irreconcilably conflicting interpretations. Klapp v United Ins Group Agency, Inc, 468 Mich. 459, 467; 663 N.W.2d 447 (2003). If a contract is ambiguous, the proper interpretation presents a question that must be decided by a fact-finder. Id. at 469.

III. GOVERNING LAW

The plaintiff in a legal malpractice claim must prove four elements: "(1) the existence of an attorney-client relationship; (2) negligence in the legal representation of the plaintiff; (3) that the negligence was the proximate cause of an injury; and (4) the fact and extent of the injury alleged." Manzo v Petrella, 261 Mich.App. 705, 712; 683 N.W.2d 699 (2004). The first element correlates with the duty element of a traditional negligence claim because the existence of the attorney-client relationship gives rise to a duty as a matter of law. Simko v Blake, 448 Mich. 648, 655; 532 N.W.2d 842 (1995).

The second element requires proof that the defendant breached a professional standard of care. Broz v Plante & Moran, PLLC, 331 Mich.App. 39, 52-53; 951 N.W.2d 64 (2020). Stated generally, an attorney "must only act as would an attorney of ordinary learning, judgment, or skill under the same or similar circumstances." Simko, 448 Mich. at 650. This Court recently explained that professional malpractice claims ordinarily require expert testimony to establish the applicable standard of care and that the defendant breached that standard. Broz, 331 Mich.App. at 53. This is because "the ordinary layperson is not equipped by common knowledge and experience to judge the skill and competence of the service and determine whether it meets the standard of practice in the community." Id. (quotation marks and citation omitted).

As with any other form of negligence action, the third element requires the plaintiff to prove "that the defendant's action was a cause in fact of the claimed injury." Charles Reinhart Co v Winiemko, 444 Mich. 579, 586; 513 N.W.2d 773 (1994). To do so, the plaintiff must demonstrate that he or she would have been successful in the underlying matter but for the attorney's malpractice. Id. "In other words, the client seeking recovery from his attorney is faced with the difficult task of proving two cases within a single proceeding." Id. (quotation marks and citation omitted...