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Ninth Circuit:
Judge Properly Ordered Doctor to Pay USC’s Attorney Fees, Costs Based on No-Suit Vow
Dissenter Says Promise in a 2008 Settlement Agreement Not to Sue Again Based on Conduct Prior to Signing Doesn’t Apply to Action to Enforce 2007 Accord
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday affirmed an order that a medical doctor pay USC $182,925.97 in attorney fees and $1,009.32 in costs based on breaching a 2008 settlement agreement which provided he would not to sue it in connection with events occurring before the date of the accord, with a dissenter insisting that his promise cannot be interpreted to apply to a suit to enforce a 2007 settlement agreement.
The plaintiff, Jeffrey Isaacs, holds a medical degree obtained in 2010 from the American University of the Caribbean. He had been expelled from USC’s Keck School of Medicine, which he attended from August 2005 to June 2006.
The expulsion, according to a complaint he filed in 2019 in the U.S. District Court for the Central District of California, stemmed from allegations against him by a classmate’s ex-boyfriend and his charges of corruption on the part of USC deans.
Two Settlement Agreements
In a complaint filed in the District Court in 2006, he alleged “admissions corruption” (an allegation validated by recent proceedings unrelated to Isaacs) and contested his expulsion. Under a 2007 settlement agreement, USC was not to “release or disclose Isaacs’ disciplinary records to any third party.”
In 2008, Isaac signed a further settlement agreement which provides that he would “not file any lawsuits, charges, claims for arbitration, complaints, or appeals at any time hereafter based on, referring to, or incorporating any events, acts or omissions through and including the date hereof.” The penalty for doing so was that he would pay for all costs and losses, including attorneys’ fees, incurred by USC in connection with said lawsuit, charge, complaint, or appeal.”
The 2019 complaint for damages and declaratory relief alleges that USC did not seal his disciplinary records which were transmitted by an unknown person to Dartmouth [Hitchcock Medical Center], which terminated his residency. Dartmouth, the pleading recites, sent the records to the New Hampshire Board of Medicine which found he had failed to disclose his “criminal stalking” while at USC.
The board revoked his license on March 11, 2014.
Isaacs’s claims against USC were dismissed by District Court Judge Dale S. Fischer, who ordered the plaintiff to pay the university’s attorney fees and costs.
Majority’s Opinion
In yesterday’s memorandum opinion affirming that order, Circuit Judge Milan D. Smith Jr. and District Court Judge John E. Steele of the Middle District of Florida, sitting by designation, said Isaacs’ action refers to “and incorporate[s] acts that occurred before 2008,” declaring that “[a[ccordingly, USC is entitled to attorneys’ fees.”
In a dissent, Judge Sandra S. Ikuta maintained that the majority interpretation of the 2008 agreement “is unreasonable,” saying:
“The parties clearly did not intend that by entering into the 2008 settlement agreement, Isaacs would be precluded from enforcing it.”
She went on to comment:
“USC is only entitled to attorneys’ fees in response to lawsuits prohibited by the settlement agreement. Contrary to the majority…, Isaacs’ central argument is that the attorneys’ fees provision does not apply to his complaint in this case, because it focuses on USC’s breach of the settlement agreements, which he claims is not a prohibited lawsuit. The majority’s ruling that USC is entitled to attorneys’ fees here is necessarily based on its conclusion that the 2008 settlement agreement prohibits a lawsuit for breach of the settlement agreements. This conclusion makes the settlement agreements unenforceable.
“Accordingly, to the extent Isaacs’ September 2019 complaint brought claims for breach of the settlement agreements, USC was not entitled to attorneys’ fees. USC would be entitled to attorneys’ fees, however, to the extent the complaint alleges non-breach-of-contract claims based on actions or events associated with USC’s expulsion of Isaacs. Therefore, the district court should have apportioned the fees between covered and uncovered claims.”
In a rejoinder, contained in a footnote, the majority said:
“Our dissenting colleague raises an argument not raised by either party or considered by the district court below. Whether Isaacs is precluded from enforcing either settlement agreement to which he is a party is not relevant to the question before this court, which is whether, pursuant to the 2008 settlement agreement. USC is entitled to the attorneys’ fees it incurred in litigating against Isaacs’s wide variety of claims, some of which relate to and refer to pre-2008 events.”
The case is Isaacs v. USC Keck School of Medicine, 20-55633.
Affirmance of Fischer’s dismissal of the claims with prejudice—based mostly on time bars—came in a separate memorandum opinion.
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