Court Opinion

ID: 865474
Source: CourtListenerOpinion
Date Created: 2013-04-27 00:29:57.062679+00
Date Added: 2024-06-11T09:10:59.558709
License: Public Domain

IN THE SUPREME COURT OF MISSISSIPPI

                               NO. 2006-CT-02016-SCT

IN THE MATTER OF THE GUARDIANSHIP OF
AUSTIN LANE, A MINOR:
WILLIAM BUSH, M.D.

v.

BRANDY LANE, NATURAL PARENT AND
LEGAL GUARDIAN OF AUSTIN LANE, A MINOR

                             ON WRIT OF CERTIORARI

DATE OF JUDGMENT:                         11/10/2006
TRIAL JUDGE:                              HON. JOHN S. GRANT, III
COURT FROM WHICH APPEALED:                RANKIN COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANT:                  STEPHEN P. KRUGER
                                          AUBREY BRYAN SMITH
ATTORNEY FOR APPELLEE:                    TINA LORRAINE NICHOLSON
NATURE OF THE CASE:                       CIVIL - PERSONAL INJURY
DISPOSITION:                              REVERSED AND REMANDED - 11/20/2008
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       EN BANC.

       DICKINSON, JUSTICE, FOR THE COURT:

¶1.    The issue presented in this medical negligence case is whether a chancellor abused

his discretion by withdrawing approval of a settlement agreement which had been fully

performed, solely because – contrary to everyone’s understanding – the minor plaintiff was

unable to pursue a claim against the settling defendant’s putative employer who, subsequent

to the settlement, was granted summary judgment by the circuit court.
                    BACKGROUND FACTS AND PROCEEDINGS 1

¶2.    Brandy Lane, twenty-nine weeks pregnant, was involved in a single-car accident in

Ridgeland, Mississippi, on February 3, 2003. Her obstetrician, Dr. William Bush, advised

her to stay overnight at River Oaks Hospital for observation. Dr. Bush saw her in his office

at the clinic the next day after her discharge, and she appeared fine.

¶3.    On February 6, however, Lane returned to the clinic because she had started bleeding.

Dr. Bush was not present, so she was examined by Dr. William Sutherland, who also

pronounced that she was fine. Later that day, Lane gave birth to her son, Austin, who was

born with several severe brain injuries, including hydrocephalus, cerebral palsy, and

blindness.

¶4.    Lane was appointed legal guardian for Austin by the Rankin County Chancery Court

so she could initiate a personal-injury claim on her son’s behalf. Lane instituted a civil action

in the Madison County Circuit Court against Dr. Bush, the City of Ridgeland, River Oaks

Hospital, the OB-GYN Clinic of Jackson, PLLC, and Dr. Sutherland, alleging that Austin’s

injuries were the result of Dr. Bush’s and Dr. Sutherland’s failure to properly evaluate and

treat Lane after the car accident.

¶5.    In August 2005, after learning that Dr. Bush’s liability insurance would not provide

coverage for the acts complained of in the lawsuit, Lane petitioned the chancellor to grant

her authority to settle Austin’s claims with him for $10,500, “in full and final settlement of

any and all liability of himself” now or in the future. The settlement agreement was

       1
      These facts are largely taken from the Court of Appeals’ decision in In Re Lane,
2008 Miss. App. LEXIS 118 (Miss. Ct. App. Feb. 26, 2008).

                                               2
conditioned upon its approval by the chancery court. The agreement also stated that Austin

retained the right to prosecute any claims “against the other named defendants including, but

not limited to, claims against the other defendants for their vicarious liability” for Dr. Bush's

conduct. However, the agreement did not mention the clinic, specifically, in this regard.

¶6.    At the settlement hearing, the chancellor inquired as to the liability of the remaining

defendants. Lane’s counsel represented to the chancellor that she understood the clinic could

still be held vicariously liable for Dr. Bush’s conduct. Counsel for Dr. Bush did not

contradict this understanding. Finding the settlement was in the best interest of Austin, the

chancellor approved the settlement agreement by decree dated August 15, 2005.

¶7.    In November 2005, the Madison County Circuit Court granted the clinic summary

judgment2 on the claim that it was vicariously liable for Dr. Bush’s conduct. The parties do

not completely agree on the trial court’s reason for granting summary judgment,3 and the

record provides neither the trial court’s reasoning for its order, nor other relevant pleadings

from the circuit court action.

¶8.    Dr. Bush claims the circuit court granted the clinic’s motion because the settlement

agreement’s language indemnifying Dr. Bush created an improper “circle of indemnity” 4

       2
       The clinic was not released from vicarious liability for the alleged negligence of Dr.
Sutherland.
       3
        As discussed later in this opinion, this Court’s opinion in J&J Timber Co. v.
Broome, 932 So. 2d 1 (Miss. 2006), had not yet been handed down, and thus was not a
factor in the summary judgment.
       4
        As the Court of Appeals noted: “The ‘circular indemnity’ or ‘circuity of action’
doctrine is ‘when as a result of indemnification obligations or settlement agreements between
the parties, a plaintiff would end up indemnifying another party for its own claim.’ Toyota
Motor Sales, Inc. v. Farr, 320 F. Supp. 2d 496, 498 (S.D. Miss. 2003) (quoting El Paso

                                               3
among the clinic, Lane, and Dr. Bush. Lane – while acknowledging the circuit court

interpreted the settlement agreement as releasing Austin’s vicarious liability claim against

the clinic under circular indemnity – claims the circuit judge found the settlement agreement

insufficient to preserve Austin’s claim for vicarious liability against the clinic for Dr. Bush’s

alleged negligence.

¶9.    In February 2006, Lane filed a motion asking the chancellor to amend his August 15,

2005, decree to more specifically state that the vicarious liability claims against the clinic for

Dr. Bush’s conduct were preserved. The record does not disclose how the chancellor could

have preserved such claims, since summary judgment had already been granted to the clinic

by the circuit court three months earlier. Nevertheless, at the hearing on this matter, the

chancellor stated that the settlement “released Dr. Bush individually and only him.”

¶10.   On March 20, 2006, the chancellor entered an amended decree in which he stated:

       The Court finds that it has jurisdiction of the parties and the subject matter and,
       having heard evidence and being fully apprised of the premises, finds that it
       was the intent of William G. Bush, M.D. and Brandy Lane to release the
       Minor’s disputed claims against William G. Bush, M.D. and only William G.
       Bush, M.D., and that it was the intent of Brandy Lane to preserve the Minor’s

Refinery, LP v. TRMI Holdings, Inc., 302 F.3d 343, 349-50 (5th Cir. 2002)); Crowson v.
Bridges, 227 Miss. 73, 75, 85 So. 2d 810, 811 (1956). The doctrine would operate in [this]
case as follows: since the clinic would be entitled to indemnity from Dr. Bush if it was held
liable for Dr. Bush’s actions, it could recover any money the clinic paid to the plaintiff from
Dr. Bush, who could then, because of the clause in his settlement agreement allowing for
“indemnity,” recover what he paid the clinic from the plaintiff. The plaintiff thus would end
up paying her own judgment, thereby creating the ‘circle of indemnity.’ Therefore, if a
settlement agreement does not specifically state that it is preserving a claim against another
defendant for vicarious liability for the tortfeasor, the result is that the agreement may
extinguish claims against the remaining defendant as a matter of law.”

                                                4
      claims against the OB-GYN Clinic, PLLC for its vicarious liability for Dr.
      Bush’s alleged negligence.

The amended decree also included the following relevant provisions:

      2) Following its investigation, this Court is satisfied that the proposed offer
      of settlement is a fair and reasonable offer and that it is in the best interest and
      welfare of said Minor that the settlement be made, therefore a decree is hereby
      granted accordingly, approving and authorizing such settlement;

      3) Petitioner is hereby authorized to receive and accept payment of the
      settlement in the sum of $10,500 directly to Nicholson Law Firm, PLLC, for
      said Minor’s expenses in the ongoing litigation against the remaining
      defendants;

      4) The Court hereby approves the proposed Release and Indemnity Agreement
      attached to the Petition as Exhibit “B” and upon payment and/or tender of said
      settlement funds to Nicholson Law Firm, PLLC, for and on behalf of said
      Minor’s expenses in the ongoing litigation against the remaining defendants,
      that Brandy Lane, for and on behalf of said Minor, is hereby authorized,
      empowered and directed to execute in favor of William G. Bush, M.D. a
      complete and binding Release of all claims against him and only him based
      upon injuries and damages sustained by or through Austin Lane, a Minor, on
      account of the above described incident in the form of the document attached
      to the Petition as Exhibit “B”;

      6) Petitioner is hereby authorized, empowered and directed to dismiss with
      prejudice, forthwith, the cause of action currently pending in the Circuit Court
      of Madison County, Mississippi styled “Brandy Lane, Individually and on
      Behalf of Austin Lane, a Minor vs. City of Ridgeland, River Oaks Hospital,
      Inc., OB-GYN Clinic of Jackson, PLLC, William G. Bush, M.D. and William
      K. Sutherland, M.D.” and bearing civil action number “2004-0011R” only as
      to William G. Bush, M.D.; and

      7) Until further order of this Court, Petitioner is neither authorized nor
      empowered to dismiss the Minor’s pending claims against the OB-GYN
      Clinic, PLLC for vicarious liability for Dr. Bush’s alleged negligence, nor to
      enter into any Release or Agreement which purports to or does release those
      claims.

      8) Upon compliance with the terms of this Decree, William G. Bush, M.D. is
      hereby fully acquitted and forever and finally discharged from any and all
      liability on account of the above described accident.

                                               5
¶11.      In his amended decree, the chancellor did not condition his approval of the settlement

on a reversal by the circuit court or an appellate court of the summary judgment which had

been granted to the clinic. In fact, the amended decree made no mention of the summary

judgment.

¶12.      Upon obtaining the amended decree, Lane filed a motion in the Madison County

Circuit Court, requesting that Austin’s vicarious liability claims be reinstated against the

clinic. The record does not disclose whether the motion was ever addressed by the circuit

court.5

¶13.      In May 2006, this Court handed down J&J Timber Co. v. Broome, 932 So. 2d 1

(Miss. 2006), which – clarifying several previous opinions – held that a vicarious liability

claim against an employer may not be pursued where the employee has been released.6 Lane

returned to chancery court and filed a motion to set aside the settlement with Dr. Bush,

arguing that this Court’s decision in J&J Timber had made performance of the settlement

agreement impossible. Specifically, Lane argued:

          Under [J & J Timber, the chancery] Court’s March 20, 2006 Amended decree
          is now a contradiction in terms. While the Amended Decree authorizes Brandy
          Lane to release the Minor’s claims against the tortfeasor, Dr. Bush, it
          specifically prohibits her from releasing the claims of vicarious liability
          against his employer, the Ob-Gyn Clinic. This state of affairs cannot exist
          under the new rule set out in J&J Timber. This Court must either affirm the
          existing settlement agreement with Dr. Bush and acknowledge that the Minor’s

          5
         However, before the circuit court ruled on the motion, this Court handed down J&J
Timber Co. v. Broome, 932 So. 2d 1 (Miss. 2006), which disallowed maintaining a vicarious
liability claim against an employer if the employee has been released.
          6
       See Granquist v. Crystal Springs Lumber Co., 190 Miss. 572, 1 So. 2d 216, 218
(1941); Richardson v. APAC-Mississippi, Inc, 631 So. 2d 143 (Miss. 1994); and W.J.
Runyon & Son, Inc. v. Davis, 605 So. 2d 38 (Miss. 1992).

                                                6
       claims against the Ob-Gyn Clinic for vicarious liability are extinguished as a
       matter of law, or the Court must set aside the Minor’s settlement agreement
       with Dr. Bush and allow the Minor to proceed in Circuit Court on his claims
       against both Dr. Bush and the Clinic.

¶14.   We find these representations to the chancellor incorrect, as a matter of law. The

clinic was granted summary judgment by the circuit court prior to our decision in J & J

Timber. Thus, the “new rule” referred to by Lane had no effect on her claim against the

clinic. Furthermore, Lane’s argument to the chancellor that setting aside the settlement with

Dr. Bush would somehow allow her to pursue a claim against the clinic was both illogical

and unsupported by the record. The clinic had already been granted summary judgment by

a circuit court judge, whose orders are not appealable to the chancery court.

¶15.   Nevertheless, on November 2, 2006, the chancellor set aside the settlement agreement,

finding persuasive Lane’s assertion of the contractual doctrine of impossibility of

performance. The chancellor ordered Lane to return the $10,500 settlement to Dr. Bush, and

to re-institute the suit in the circuit court against Dr. Bush on her son’s behalf.

¶16.   Dr. Bush appealed, and we referred the matter to the Court of Appeals, which affirmed

the chancellor’s decision. In Re Lane, 2008 Miss. App. LEXIS 118, at *19. After the Court

of Appeals denied Dr. Bush’s motion for rehearing on June 17, 2008, he filed a petition with

this Court for certiorari review, which we granted.

                                       DISCUSSION

¶17.   The essential facts are not in dispute. We must address a question of law, that is,

whether the doctrine of impossibility of performance of a contract, when applied to the facts

of this case, may serve as a basis for setting aside both the settlement agreement and the

                                               7
chancery court approval of the settlement. We review de novo a chancellor’s application of

the law. City of Picayune v. S. Reg’l Corp., 916 So. 2d 510, 519 (Miss. 2005).

¶18.   Dr. Bush makes three basic arguments on appeal: (1) his settlement with Lane had

already been fully performed, precluding application of the doctrine of impossibility of

performance; (2) Lane has wholly failed to satisfy the requirements of Mississippi Rule of

Civil Procedure 60 regarding setting aside prior judgments; and (3) voiding fully performed,

court-approved settlements will erode the public’s confidence in the judicial system.

Because we find the first issue dispositive, we decline to address the other two.

¶19.   The crux of Lane’s argument to the chancery court – and the one that the chancery

court accepted – was that this Court’s decision in J&J Timber Co. v. Broome, 932 So. 2d

1 (Miss. 2006), rendered performance of the settlement agreement with Dr. Bush

“impossible.” Lane argues that both she and Dr. Bush “intended” that her claims against the

clinic would survive, and that J&J Timber made that impossible by holding that the release

of an employee releases the employer’s vicarious liability for that employee’s actions. For

two reasons, we cannot agree.

       The J & J Timber argument.

¶20.   First, we find no explanation in the record of how this Court’s ruling in J & J Timber

should have any bearing on this case. The undisputed facts are that, when the chancellor

entered his amended decree approving the settlement agreement, summary judgment had

already been granted to the clinic, and J & J Timber had not been handed down. Thus, it

was not J & J Timber, but rather the summary judgment granted to the clinic by the circuit

court, which prevented Lane from pursuing a claim against the clinic. Stated another way,

                                             8
even if this Court had not handed down J & J Timber, Lane could not have pursued a claim

against the clinic for the alleged negligence of Dr. Bush because the circuit court had granted

summary judgment to the clinic for reasons other than J & J Timber, and the summary

judgment was not appealed.

       The “impossibility of performance” argument.

¶21.   The doctrine of impossibility of performance of a contract was adopted by this Court

as early as 1919:

       [W]hen a party by his own contract creates a duty or charge upon himself he
       is bound to discharge it, although so to do should subsequently become
       unexpectedly burdensome or even impossible; the answer to the objection of
       hardship in all such cases being that it might have been guarded against by a
       proper stipulation . . . . There are, however, certain classes of events the
       occurring of which are said to excuse from performance because “they are not
       within the contract,” for the reason that it cannot reasonably be supposed that
       either party would have so intended had they contemplated their occurrence
       when the contract was entered into, so that the promisor cannot be said to have
       accepted specifically nor promised unconditionally in respect to them. These
       three classes are: First, a subsequent change in the law, whereby performance
       becomes unlawful. Second, the destruction, from no default of either party, of
       the specific thing, the continued existence of which is essential to the
       performance of the contract. And, third, the death or incapacitating illness of
       the promisor in a contract which has for its object the rendering by him of
       personal services.

Piaggio v. Somerville, 80 So. 342, 344 (Miss. 1919) (internal citations omitted).

¶22.   As to the first class, Lane’s argument fails because J & J Timber was not a

“subsequent change in the law, whereby performance [became] unlawful.” As stated above,

J & J Timber could have had no bearing on this case because it was handed down after the

circuit court had granted summary judgment to the clinic on other grounds.

                                              9
¶23.   The second class under Piaggio is “the destruction, from no default of either party,

of the specific thing, the continued existence of which is essential to the performance of the

contract.” Piaggio at 344. The case before us today does not fall within this class.

¶24.   Under the terms of the settlement agreement, the only thing essential to Dr. Bush’s

performance was his payment of $10,500. Lane was not required to pursue a claim against

the clinic, and Lane’s ability to pursue the claim was not made a condition subsequent within

the agreement. J & J Timber affected no part of the “performance” required under the

settlement. In fact, performance under the settlement agreement was already complete when

J & J Timber was handed down.

¶25.   The amended decree did clearly set forth that the settlement with Dr. Bush was not

to be construed as a settlement with the clinic. Neither party claims that the chancellor’s

approval of the settlement with Dr. Bush released the clinic. The clinic was released from

liability – not by the settlement with Dr. Bush – but by the circuit court’s unappealed grant

of summary judgment which had already taken place when the amended decree was applied

for and entered.

¶26.   Furthermore, it cannot be rationally argued that the settlement agreement and amended

decree were conditioned upon the circuit court setting aside its summary judgment, since the

summary judgment was not mentioned in either document. This Court has held:

       [I]f a contingency may be guarded against by the parties in the contract, i.e.,
       it is foreseeable or within the control of one of the parties, its occurrence will
       not discharge the parties’ obligations under the contract. As the Court
       explained, “where a party, by his own contract, engages to do an act, it is
       deemed to be his own folly, that he did not thereby expressly provide against
       contingencies, and exempt himself from liability in certain events . . . .

                                              10
Starkville v. 4-County Elec. Power Ass’n, 819 So. 2d 1216, 1223 (Miss. 2002) (citing

Hendrick v. Green, 618 So. 2d 76 (Miss. 1993)).

¶27.   In negotiating the settlement with Dr. Bush, Lane was certainly free to demand the

inclusion of a condition subsequent, that is, a provision in the settlement agreement that the

validity of the settlement was conditioned upon her ability to successfully pursue a claim

against the clinic. But no such condition was included in the settlement or decree, and Lane

neither raised nor briefed the issue of condition subsequent.

¶28.   The performance language of the settlement agreement states:

       [F]or and in consideration of the total sum of ten thousand, five hundred
       dollars, paid to the Nicholson Law Firm . . . .the undersigned Brandy Lane, as
       Natural Mother and Legal Guardian of Austin Lane, a Minor, have for said
       Minor and do by these presents in the capacity as Natural Mother and Legal
       Guardian of said Minor, hereby release and forever discharge William G.
       Bush, M.D. . . . from any and all claims, demands, damages, actions, and
       causes of action, of every kind and nature . . . .

(Emphasis added). It is clear from this unambiguous language that, upon Dr. Bush’s

payment of the money, no performance remained under the settlement agreement.

¶29.   The final class listed in Piaggio – “the death or incapacitating illness of the promisor

in a contract which has for its object the rendering by him of personal services” – is clearly

not applicable here. Piaggio at 344.

¶30.   Thus, because the performance required under the settlement was not made

“impossible” by J&J Timber, Lane’s claim of impossibility of performance is without merit.

                                       CONCLUSION

¶31.   At the time the original settlement was approved by the chancellor, Lane was pursuing

a claim against the clinic. The chancellor’s later setting aside of that settlement because Lane

                                              11
had been unsuccessful in pursuing her claim against the clinic, was tantamount to

guaranteeing Lane she would be successful against the clinic. The institution of such a rule

would place every settlement in doubt. For this reason, and for the reasons stated above, we

find that the chancellor erred as a matter of law in setting aside the settlement because

performance of the settlement agreement was “impossible.” Accordingly, the decision of the

Rankin County Chancery Court is reversed and remanded for disposition consistent with this

opinion.

¶32.   REVERSED AND REMANDED.

       SMITH, C.J., WALLER, P.J., CARLSON, RANDOLPH AND LAMAR, JJ.,
CONCUR. GRAVES, J., CONCURS IN RESULT ONLY. DIAZ, P.J. AND EASLEY,
J., DISSENT WITHOUT SEPARATE WRITTEN OPINION.

                                            12