Judicial Estoppel Doctrine Bars Legal Malpractice Claim

Where a plaintiff has signed a settlement agreement swearing that such agreement is “fair and equitable,” she may be judicially estopped from later bringing a legal malpractice claim based on that same settlement.

In Kershaw v. Levy, No. M2017-01129-COA-R3-CV (No. M2017-01129-COA-R3-CV), plaintiff filed a legal malpractice claim against defendant attorney who had previously represented her during part of her divorce proceedings. When defendant took her case, plaintiff had already been convicted of criminal contempt once in the divorce case for incurring marital debt for gambling money, and she had a pending criminal contempt petition for forging checks to get gambling money. Further, her discovery responses were overdue. After defendant took the case, he drafted a response to the contempt motion wherein plaintiff admitted that she took the money, and she was sentenced to 30 days in jail, though she was released when defendant filed an appeal three days later.

Defendant secured an extension for plaintiff to file her discovery responses, and although defendant stated that he mailed them on the new due date, they were not postmarked until two days later. Because of this, the trial judge awarded default judgment to plaintiff’s former husband.

Defendant withdrew as counsel for plaintiff in May 2007, and plaintiff filed this malpractice case in June 2007. Plaintiff claimed that defendant was negligent in sending the discovery late and in allowing her to admit to the criminal contempt, and that his negligence “resulted in her receiving an inadequate settlement in the Divorce case and her serving approximately three days in jail.”

In November 2007, plaintiff (with the assistance of new counsel) and her former husband signed a marital dissolution agreement, whereby they both agreed that the “Agreement is entered into without undue influence… or for any reason not herein stated,” and that “the Agreement is fair and equitable and that it is being entered into voluntarily and with the advice of counsel.” As part of the settlement, the criminal contempt convictions were vacated and dismissed.

In February 2008, defendant attorney filed a motion for summary judgment, asserting that plaintiff should be judicially estopped from stating that her divorce settlement was unfair, and that plaintiff “should not be allowed to pursue any malpractice claim against him based on her criminal contempt convictions because they had been vacated and she voluntarily relinquished her right to pursue any post-conviction relief related to them in the MDA.” The trial court agreed, granting summary judgment, and the Court of Appeals affirmed.

Judicial estoppel is meant to “uphold the sanctity of the oath.” Here, the Court stated that plaintiff “swore under oath that her settlement in the Divorce Case was fair and equitable,” and that “she was not entering into the MDA as a result of any other reason not stated therein.” In the present matter, however, she sought damages for “allegedly receiving an inequitable settlement with her ex-husband—a position that is diametrically opposed to her representations under oath in the Divorce Case.” Plaintiff argued that she only signed the agreement stating it was “fair and equitable” “because her negotiating power had been severely diminished as a result of [defendant’s] prior conduct.” The Court rejected this argument, finding that the elements of judicial estoppel were present here, and that plaintiff was prohibited from taking a position opposite from what she had sworn.

The Court of Appeals also agreed that plaintiff was “without recourse against” defendant for the criminal contempt convictions. In the MDA, plaintiff “agreed to forego any right to appeal the merits of her criminal contempt convictions.” Further, plaintiff herself had admitted that she “engaged in the contemptuous conduct of which she was accused.” The Court ruled that “she may not now, particularly in light of her failure to appeal the conviction, assert that she was not guilty of this conduct and attempt to recover damages from [defendant] on this basis.” Summary judgment for defendant was accordingly affirmed.