Is This Really What We Want . . .

A serious question -- do we as a society want to have "a remedy for every wrong" -- at least in the sense of subjecting people to protracted court battles? A court in Illinois has allowed a pet owner to sue for emotional distress because her cat was mauled by a Rottweiler. Story here. The actual court opinion, Anzalone v. Kragness, Ill. Ct. App. March 7, 2005, is available here.

The plaintiff didn't even see it happen, and the defendants were, at worst, negligent. The cat was "boarding" at a veterinary hospital, and was taken out for exercise. An employee failed to close a door securely, and a Rottweiler burst into the room and killed the cat. Lousy to be sure, but the basis for a lawsuit for $100,000?

Let's assume for the sake of argument that the cat owner really has suffered headaches, weight gain, and severe emotional suffering as a result of the death as alleged in the complaint. Do we want to live in a society where you can be sued for a lot of money because your dog mauled a cat? I mean, stuff happens. Live's hard and then you die, and all that. The court has ruled only that she is entitled to go forward with her claim, not that she wins. But just defending a lawsuit, even if you win, generally costs big bucks. And there's plenty of stress and unpleasantness to go around during the litigation process.

There was a time once when the law refused to permit claims for stuff like this, specifically in recognition that life had to go on. Seems like we've lost that.

Circular Firing Squad?

The battle between Ron Perelman and Morgan Stanley is getting really interesting. Florida State Court Judge Elizabeth Maass has issued a pretty harsh ruling -- favorable to Perelman -- sanctioning Morgan Stanley for failing to produce documents. Morgan Stanley then moved to drop its counsel, Kirkland & Ellis, and asked for 180 days to get new counsel and prepare for trial. The court ruled that Morgan Stanley could get new counsel, but that the trial would start in a week. Story on line here. See also the front page of the WSJ today.

So, is this a tactic by Morgan Stanley in a case that's going sour or is it really feeling like Kirkland & Ellis screwed up? No way to know what's gone on behind closed doors. The stakes are huge -- up to $2.7 billion counting the punitive damages Perelman has asked for.

Employer Does Not Waive Right to Demand Arbitration by Defending EEOC Investigation

Fairly important decision from the First Circuit yesterday: Marie v. Allied Home Mortgage Corp., Docket No. 04-1403 (1st Cir. March 16, 2005). In it, the Court decided that: (1) whether a party complies with a contractual time limit to bring a claim for arbitration is a question for the arbitrator; and (2) whether a party has waived the right to arbitrate by inconsistent activity in another litigation forum is for the court. Resolution of this issue required the court to consider two recent Supreme Court decisions addressing arbitration rights: Green Tree Fin. Corp. V. Bazzle, 539 U.S. 444 (2003) and Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002).

On the merits, the Court held that because the employer could not stop the EEOC proceeding by invoking the arbitration agreement, it did not waive its right to do so by failing to raise the defense before the EEOC. The court reversed the district court's decision and remanded for entry of an order compelling arbitration.

Judicial Estoppel

Interesting decision yesterday from the Massachusetts Supreme Judicial Court on judical estoppel. Otis v. Arbella Mut. Ins. Co., Docket No. SJC-09273 (Mass. March 14, 2005).

Plaintiff John T. Otis brought a lawsuit against a man named Todd Cusick for injuries Otis suffered when Cusick hit him in an automobile accident. Cusick was driving while intoxicated at the time. The evidence showed that Otis was struck while crossing the street as a pedestrian, and that Otis was also intoxicated at the time. The defense was that Otis wandered in front of Cusick's car. The plaintiff's theory was that Otis stopped in the other lane to let Cusick pass, and that Cusick swerved across the yellow line and ran Otis over. Otis won a jury verdict of over $4 million.

Cusick didn't have enough assets to pay the judgment, so Otis released him in exchange for whatever rights he had against his insurance company and his former attorneys. Otis brought claims against them, contending that they had failed to uncover and introduce at trial "unassailable physical and forensic evidence" that would have shown that Otis did, in fact, wander in front of Cusick's car and that Cusick did not cross the yellow line.

The Superior Court applied judicial estoppel to bar Otis's claim, and the SJC affirmed. The idea behind judicial estoppel is that if a party successfully asserts a position in a court, it can't then take the contrary position in another proceeding. Fair enough. But Otis was asserting Cusick's rights against the defendants, not his own, and Cusick had not taken a contrary position in a prior proceeding.

The SJC was not persuaded by this argument, and cited the Restatement (Second) of Contracts sec. 336(4) for the proposition that the assignee's conduct may also be asserted as a defense by the alleged obligor. The Court cited purported "harm to the judicial system" if it allowed Otis to assert an "inconsistent position," and further noted that the doctrine is equitable, and it was within the superior court's discretion to apply it. "Allowing Otis to pursue such a claim in his own name would tarnish the court's reputation." Id. at 10.

This case has to be explained on the basis that the Court was angry at the idea that, assuming Otis's allegations were true, he had effectively taken a position in the underlying trial to win the $4 million judgment that he knew was untrue. There's just no way a court is going to reward that sort of conduct.

One has to wonder if there was a way to structure the deal so that Cusick brought the claim in his own name, such that the Court would have let it survive. I defended a case like that a few years ago in Rhode Island and the Court denied our motion for summary judgment (different issues, different grounds, but the structure underlying the claim was similar).

Useful Anti-SLAPP Case

In a decision dated March 11, 2005, the Massachusetts Court of Appeals held that:

(1) An attorney can invoke the anti-SLAPP statute against claims based upon protected petitioning activities s/he undertook on behalf of a client; and
(2) Communications made for the purpose of trying to settle the underlying dispute are protected by the anti-SLAPP statute.

Plante v. Wylie, Mass. Ct. App. Docket No. 03-P-1122 (March 11, 2005).

Some Interesting Recent Massachusetts Decisions . . .

Buduo Contractors Corp. v. Ventura, 2005 Mass. Super LEXIS 10 (Feb. 4, 2005): The court grants summary judgment on the basis of res judicata/claim preclusion, based on the denial of a motion to amend the complaint in a prior action, because the court reached the merits in denying the motion to amend.

Williams v. Massachusetts Mut. Life Ins. Co., 2005 U.S. Dist. LEXIS 1555 (D. Mass. Feb. 2, 2005): The court denies a motion to compel discovery, in which the plaintiff sought to have the defendant companies' hard drives searched for e-mail. The Court found that the plaintiff had offered no evidence, only speculation, to support his claim that the defendants had failed to produce all responsive documents -- "the inquiring party must present at least some reliable information that the opposing party's representations are misleading or substantively inaccurate."

BPR Group Limited Partnership v. Bendetson, 2005 Mass. Super. LEXIS 1 (Jan. 3, 2005). The court grants defendants' motions for summary judgment, and declines to dissolve joint ventures where to do so would contravene the joint venture agreements.

Gabriel v. Preble, 396 F.3d 10 (1st Cir. 2005). Diversity jurisdiction destroyed in derivative action, where corporation was a necessary party, and was hostile to the plaintiff, such that it should be aligned with the defendants for diversity analysis.

Lordi v. Lordi, 443 Mass. 1006 (2005). The court grants a petition to reform a trust, but "caution[s] litigations and attorneys . . . that cases such as this should not be brought lightly. . . . Wher a record contains insufficient proof, parties should expect their request for reformation to be denied."