A plaintiff suing for medical malpractice could not collect payment for her injuries under a settlement agreement, where she had not performed her end of the bargain. Specifically, the failure to execute a “more comprehensive settlement” addressing mutual confidentiality was non-performance by the plaintiff. The mutual confidentiality agreement did not prevent required public disclosures to the Medical Board as plaintiff claimed and it was not otherwise in violation of the Business and Professions Code. In addition, the defendant was not entitled to attorney fees for requests for admissions that went to the heart of the case and then used to demand attorney fees after prevailing on the issue.
Dr. Chang, defendant, is a board-certified plastic surgeon, who performed cosmetic surgery procedure on Pappas, the plaintiff in this action. The surgery consisted of a blepharoplasty on the upper and lower eyelids bilaterally. Pappas later sued Dr. Chang for medical malpractice claiming that the doctor was negligent in her performance of the surgery, and demanded arbitration pursuant to their agreement. The parties engaged in mediation, which did result in a signed settlement agreement dated 6/29/18. The terms stated that Dr. Chang would pay Pappas $100,000 for her injuries and Pappas agreed to execute a release of all claims, including a waiver of Civil Code section 1542 in a more comprehensive settlement agreement. The agreement also stated that a more comprehensive agreement and release was to be prepared and was to contain a provision requiring mutual confidentiality except as to instances where disclosure was required by law.
The parties were unable to come an agreement as to the comprehensive settlement agreement following the mediation. Due to this fact, Pappas sued Dr. Chang for breach of contract. Dr. Chang answered denying the allegations and asserting all appropriate affirmative defenses. Pappas filed a motion to enforce the settlement of 6/29. The trial court denied Pappas request because she had failed to “sign a more comprehensive settlement agreement and release which includes a provision for mutual confidentiality” as was plainly agreed upon in the 6/29 agreement between the parties. The Court of Appeals affirmed.
Pappas Agreed to Sign a More Comprehensive Settlement Agreement
The applicable paragraph from the 6/29 settlement agreements stated: “Pappas will execute a release of all claims, including waiver of Civil Code section 1542 in a more comprehensive settlement agreement and said release is to include a provision for mutual confidentiality.” Pappas’ argued that the 6/29 agreement should have been enforced because:
- The executed settlement agreement was enforceable as written despite the failure of the parties to subsequently agree on the terms of a more comprehensive settlement agreement.
- The settlement agreement required the payment of $100,000 in exchange for Civil Code section 1542 release of all claims and is independent of the provision to agree a more comprehensive settlement and confidentiality agreement.
- To the extent that the settlement agreement requires the parties to agree on new terms or a more comprehensive settlement agreement, that requirement is unenforceable.
The court determined that Pappa’s position was that the 6/29 agreement was enforceable in its own right, even though it did not contain the confidentiality clause that a more comprehensive settlement was intended to lay out in more detail. The court disagreed that the 6/29 agreement would suffice and found that it did not contain the full intent of the parties. The 6/29 settlement agreement “wasn’t an integrated agreement. The plain language of the agreement recite[d] that the settlement will be set forth in a more comprehensive settlement agreement. Thus, both parties understood that it was not the final expression of their agreement.”
Without this analysis of the negotiations between the parties, Pappas would be entitled to $100,00 from Dr. Chang without having to keep her end of the bargain, or do anything further. The court determined that Pappas failed to perform as specified in the initial agreement. Dr. Chang agreed to pay the $100,000 upon the signing of a more comprehensive settlement that included the details regarding mutual confidentiality, which never occurred.
Pappas Argues that Mutual Confidentiality Was Not a Material Term
Pappas claimed that the mutual confidentiality agreement was not a material term in the settlement between the parties. In examining the evidence, however, the judge noted that the 6/29 agreement clearly stated an intention to include a confidentiality provision and evidence of lengthy negotiations between the parties on this topic support this proposition.
Pappas also claimed that requiring a more comprehensive settlement agreement based on the 6/29 agreement was unenforceable because the intentions of the parties were “unspecified, vague and uncertain.” The court noted that given the fact that one party was a medical doctor and the other a lawyer, and both were represented by competent counsel, it is unlikely that all parties did not understand the content and meaning of the agreement to form a more comprehensive agreement as to confidentiality at a later date and that it was in fact a material term.
Confidentiality Agreement Was Not Overbroad or Illegal
Pappas continued her argument against the validity of the confidentiality agreement by claiming that it was overbroad and illegal. Specifically she argued:
- The confidentiality agreement was intended to prevent her from filing a complaint with the Medical Board in violation of the Business and Professions Code section 2220.7, and
- It contains a provision regarding payment of the settlement sum that is intended to avoid repeating the settlement in violation of Business and Professions Code 801.01.
The court soundly rejected both propositions. Although Dr. Chang was obviously concerned about Pappas’ claim being reported to the Medical Board, the mutual confidentiality agreement did not prohibit any disclosures required by law. Therefore, if Pappas is in fact allowed or required to make a report to the Medical Board pursuant to the Business and Professions Code, nothing in the discussed confidentiality agreement would prevent her from doing so. Pappas refused to sign any release containing a mutual confidentiality agreement, even when it was expressly stated that she was allowed to contact the Medical Board. Thus, the argument is moot.
Pappas also asserted that the mutual confidentiality agreement violated Business and Professions Code section 801.01, subdivision(a)(1) which requires settlements of $30,000 or more to be reported to the Medical Board. The court looked to the wording of the release and found that it clearly stated that amount to be paid to Pappas was $100,000 and that settlement would require the insurer to report the settlement to the Medical Board. Dr. Chang also testified that she was aware of the reporting requirement and was in no way attempting to skirt the issue. Therefore, again this argument was moot.