Wednesday, August 15, 2018
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Lawyer Not Bound by Contract He Signed In Approving ‘As to Form and Content’
Confidentiality Clause Held Applicable Only to the Clients
By a MetNews Staff Writer
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BRUCE SCHECHTER Attorney |
An attorney who signed his client’s settlement agreement under the phrase “approved as to form and content” was entitled to a granting of an anti-SLAPP motion in a case against him for breaching the confidentiality provision of the settlement, the Fourth District Court of Appeal has held, finding that he was not a party to that agreement.
The attorney in the case, Bruce Schechter, and his firm, the R. Rex Parris Law Firm in Lancaster (“Parris”), represented Richard Fournier and Wendy Crossland (referred to in the opinion as “the Fourniers”) in their lawsuit against Monster Energy Company. The clients’ 14-year-old daughter, Anais Fournier, went into cardiac arrest in 2011 after consuming two Monster brand energy drinks, and died.
Schechter negotiated a settlement for the clients, which included a confidentiality provision purporting to bind their attorneys. He later gave an interview to the website Lawyersandsettlements.com, in which he mentioned that a recent case he had handled against Monster, involving a 14-year-old girl, had been settled for “substantial dollars for the family.”
Monster sued Schechter and Parris, alleging in part that they had breached the terms of the settlement agreement. The defendants filed an anti-SLAPP motion, which Riverside Superior Court Judge Daniel A. Ottolia granted as to causes of action for breach of the implied covenant of good faith and fair dealing, unjust enrichment, and promissory estoppel, but denied as to the breach of contract claim.
Protected Speech
Presiding Justice Manuel A. Ramirez of Div. Two wrote the opinion, filed Monday, reversing Ottolia’s ruling. He said the trial judge had reasonably determined that Schechter’s interview had been given in furtherance of his free speech rights, satisfying the protected-activity prong of the anti-SLAPP statute, Code of Civil Procedure §425.16.
As to the second prong—whether the plaintiffs had demonstrated a probability of success on the merits—Ramirez said there were two subissues:
“1. Whether the Fourniers could bind the Attorneys to the settlement agreement without the Attorneys’ consent; and
“2. Whether the Attorneys consented to be bound by the settlement agreement by signing it.”
As to the first question, Ramirez declared:
“[T]there are instances in which an attorney can bind his or her client to a contract….However, this does not work in reverse—the client cannot bind the attorney.”
The settlement agreement had specifically defined the parties as being Fournier, Crossland and Monster.
“Even if the Fourniers did expressly represent that they had the authority to execute the settlement agreement on behalf of the Attorneys,” Ramirez said, “that would not be binding on the Attorneys,” adding:
“[T]he provisions in the settlement agreement stating that the Fourniers’ attorneys agree to keep the settlement agreement confidential, if valid at all, mean that the Fourniers agree to direct their attorneys to keep the settlement agreement confidential. If their attorneys fail to do so, however, Monster’s only claim for breach of the settlement agreement is against the Fourniers. (We need not decide whether the Fourniers would have some claim against their attorneys.)”
Form and Content
The opinion focuses its analysis of the second question on Schechter’s signature under the phrase “approved as to form and content.” Ramirez said:
“The only reasonable construction of this wording is that they were signing solely in the capacity of attorneys who had reviewed the settlement agreement and had given their clients their professional approval to sign it. In our experience, this is the wording that the legal community customarily uses for this purpose.”
Ramirez went on to observe:
“We recognize that confidentiality is often a material term of a settlement agreement. If a party is willing to keep the settlement agreement confidential, but that party’s attorney is free to blab about it, the other party may not be willing to settle at all. Thus, it would be contrary to the public policy favoring settlement…to hold that there is no way to require the attorneys for the parties to keep a settlement agreement confidential. It seems easy enough, however, to draft a settlement agreement that explicitly makes the attorneys parties (even if only to the confidentiality provision) and explicitly requires them to sign as such.”
The case is Monster Energy Company v. Schechter, 2018 S.O.S. 3965.
Copyright 2018, Metropolitan News Company