Opinion ID: 800997
Heading Depth: 2
Heading Rank: 1

Heading: Inconsistent Positions

Text: Regina Watkins serves as the next friend for the minor, Arckasier Watkins, in the legal malpractice action (the present position), just as she did in the underlying state medical malpractice suit (the former position). The crux of the complaint in the current action is that: –Prior to the state medical malpractice trial Watkins received a substantial settlement offer; –During the trial Sadler Bailey engaged in contumacious conduct which caused the state court trial judge to declare a mistrial and charge him with criminal contempt; 1 The district court relied on Tennessee’s doctrine of judicial estoppel, noting that the Tennessee courts apply similar factors as those used under the federal doctrine. However, this court has held that, even in diversity actions like this one, federal law rather than state law governs application of the doctrine in the federal courts, even in diversity suits like this one. Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598 n.4 (6th Cir. 1982). 4 No. 10-5258 Watkins v. Bailey, et al. –After the mistrial, but before the contempt hearing, the hospital defendants made a lower settlement offer; –Sadler Bailey advised her to accept the lower settlement offer; –Sadler Bailey did not tell her that he was attempting to settle the matter in order to avoid the contempt hearing; –Had she been given appropriate advice, Watkins would not have given her permission to settle on the terms and fees to which she agreed. Watkins claims that Sadler Bailey caused a mistrial, and then acted under a conflict of interest in misleading her into settling the action to save his own skin. Were these the only facts, judicial estoppel might not apply. See, e.g., Mungo v. Taylor, 355 F.3d 969, 981-82 (7th Cir. 2004) (holding that judicial estoppel was inapplicable in a legal malpractice case where the plaintiff’s earlier testimony that she freely and voluntarily agreed to sign the settlement agreement based on her attorney’s advice was not clearly inconsistent with her current position that her attorney gave her bad legal advice and pressured her into accepting the agreement). But the state court record in the medical malpractice action (the prior position) establishes that, prior to the settlement, Watkins also knew that: –The state court trial judge had declared a mistrial; –The judge was biased against her attorney and favored the hospital’s attorneys; –The judge threw Bailey in jail; –The defendants had offered a substantial sum to settle the case before trial. 5 No. 10-5258 Watkins v. Bailey, et al. In her deposition testimony in this case, Watkins explained why she brought the legal malpractice action. Q: So you’re here because Mr. Bailey failed to, in your words, go over in detail what happened at the mistrial? A: Yes. PageID 711. Yet, later in her deposition Watkins testified that: Q: Yeah. After the court declared a mistrial and, you know, found Mr. Bailey in contempt, did you feel like Mr. Bailey couldn’t represent you at that point? A: No. I didn’t feel that way. Q: Okay. A: Because I trusted him. Q: Okay. Did he continue to talk with you after that? A: Yes, sir. Q: Okay. And you knew that a mistrial had occurred? A: Yes, sir. Q: You knew that he had actually been sent to jail; is that correct? A: Yes, sir. Q: And the Judge is the person that did that? A: Yes, sir. PageID 731. In addition, Watkins testified that Beam and Raymond were still available to her to answer any questions about the settlement. Id. 6 No. 10-5258 Watkins v. Bailey, et al. Moreover, at the settlement hearing, Watkins was questioned by her attorney under oath. Watkins indicated that she had discussed with Bailey “in some detail” the terms of the proposed settlement agreement. PageID 160. She acknowledged that she knew the settlement would require Methodist Hospital to a pay a lesser amount than the original settlement offer, plus court costs and the guardian ad litem’s services. (Id.). Bailey and Watkins then engaged in the following colloquy: Q: Okay. Now, you know that you don’t have to do this. We could go to trial again, and we could presumably get a Court that could let us go all the way to a jury, and you might do better and you might do worse, or you might do the same. You understand that if you settle the case here, you’re giving up that right, and you’re taking basically the bird in the hand, the money right now, and that would be the end of this? A: Yes, sir. Q: You can’t come back ever for more money for your child no matter what might happen in the future. You understand that? A: Yes, sir. Q: Okay. Now, knowing all of those things, do you think it would be in the best interest of your child to accept this settlement of . . . dollars? A: Yes, sir. Id. And, on cross-examination, Watkins was asked by the hospital’s attorney: Q: . . . [Y]ou’re completely satisfied in your mind as the mother of this child that you’re doing the right thing, and you believe that in your heart, don’t you? A: Yes, sir. 7 No. 10-5258 Watkins v. Bailey, et al. Q: And you also believe that Mr. Bailey rendered valuable services to you as your lawyer and what he’s asking for is also in the best interest of you and your child? A: Yes, sir. Page ID 161. The court then asked her: THE COURT: Do you understand–Mr. Bailey has done a good job in telling you that–that this is the time that you’re going to ask this Court to approve this settlement, or you have the option, as well, to say, you know, I thought about this, I want to resume the trial or have a trial in this case. You have that option on behalf of your daughter. Do you understand that? THE WITNESS: Yes, sir. Id. Another important figure–the guardian ad litem–attended the settlement hearing. As noted, the guardian ad litem is charged under Tennessee law with assuring the court that “it is in the best interest of the minor to settle the claim in the approved amount.” Tenn. Code Ann. § 29-34-105. The guardian ad litem, an attorney, was in the courtroom the morning of the mistrial2 and must have witnessed Bailey’s behavior. The guardian ad litem therefore knew, or most certainly should have known, that the declaration of a mistrial had been precipitated by Bailey’s behavior on the second morning of trial. At the settlement hearing, the guardian ad litem verified that Watkins believed it was in the best interest of both herself and her child to settle the matter. More importantly, the guardian ad 2 Bailey’s antics occurred outside the presence of the jury. Although Bailey’s behavior warranted some form of punishment, the declaration of a mistrial was unnecessary. 8 No. 10-5258 Watkins v. Bailey, et al. litem by his signature “freely given,” agreed and approved of the settlement as “in the best interest of the minor.” PageID 174. Presumably he did so after honoring his statutory “duty to the court to impartially investigate to determine the facts . . . and his “duty to determine what is best for the [minor’s] welfare.” Tenn. Code Ann. § 34-1-107(d)(1). Thus, at the time, both Watkins herself and the guardian ad litem represented to the state court under oath that the settlement was in the best interest of Arckasier. Watkins, and most certainly the guardian, knew or were chargeable with full knowledge of the attendant facts. See McKay v. Owens, 937 P.2d 1222, 1229 (Idaho 1997) (stating that “the concept of judicial estoppel takes into account not only what a party states under oath in open court, but also what that party knew, or should have known, at the time the original position was adopted”; and that “the knowledge that the party possesses, or should have possessed, at the time the statement is made is determinative as to whether that person is ‘playing fast and loose’ with the court”). Even if she did not know that Bailey’s unruly behavior was the reason for the mistrial, Watkins knew that a mistrial had occurred but that she could nonetheless have a new jury trial. Yet she still opted to avoid the risk of further litigation and to “take the bird in the hand.” In other words, at the settlement hearing, based on the information provided by her attorneys during attorney-client conversations that a mistrial had occurred, Watkins took the position under oath that settling the case at that point in time for somewhat less than the original settlement offer was in the best interests of her child. For Watkins to claim that her attorneys were negligent means that she now believes the medical malpractice damages are more than her settlement amount, which is clearly inconsistent with her earlier statement under oath that it was in the best interest of her child to settle for that amount. 9 No. 10-5258 Watkins v. Bailey, et al. Furthermore, regardless of the basis of Watkins’ knowledge at the time of settlement, the guardian ad litem, who was equipped with all of the facts, still agreed the ultimate settlement was in the child’s best interest. In short, Watkins’ position on behalf of Arckasier in the present legal malpractice action is “clearly inconsistent” with the position she took previously in the state court malpractice case.3