Doe v. American Guaranty and Liability Co.

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16-P-183 Appeals Court

JOHN DOE vs. AMERICAN GUARANTY AND LIABILITY CO. & others.1

No. 16-P-183.

Essex. November 8, 2016. - March 1, 2017.

Present: Wolohojian, Milkey, & Shin, JJ.

Attorney at Law, Malpractice, Communication with represented
party. Evidence, Legal malpractice, Privileged
communication. Privileged Communication. Waiver.
Practice, Civil, Motion to dismiss.

Civil action commenced in the Superior Court Department on
March 17, 2015.

Motions to dismiss were heard by Robert A. Cornetta, J.

Michael A. Tucker for the plaintiff.
William T. Bogaert for George Rockas.
Marissa I. Delinks for H. Ernest Stone.
Jonathan Small for American Guaranty and Liability Co.

MILKEY, J. Attorney H. Ernest Stone represented John Doe

in a criminal case and a related tort action. In the course of

that representation, Doe relayed certain information to Stone

that all parties indisputably agree was subject to attorney-

1
H. Ernest Stone and George Rockas.
2

client privilege. After the tort action ended in a default

judgment against Doe, Doe brought a legal malpractice action

against Stone based on his handling of the tort case. The

malpractice action concluded via a settlement agreement. Doe

next filed a complaint in the Superior Court alleging that in

defending the malpractice action, Stone misused the privileged

information he received during his earlier representation of

Doe. Doe named as defendants Stone; George Rockas, the attorney

who represented Stone in the malpractice action; and American

Guaranty and Liability Co. (American), Stone's legal malpractice

insurer. The defendants filed motions to dismiss, raising a

wide variety of defenses.2 See Mass.R.Civ.P. 12(b), 365 Mass.

754 (1974). The judge allowed the motions and judgment entered

dismissing the complaint. Doe appeals. Because we agree with

the motion judge that in bringing the malpractice action, Doe

waived the privilege that otherwise applied to the information

at issue, we affirm. Resolving the case on that ground, we have

no occasion to reach the defendants' other defenses.

2
The defendants argued then, and continue to argue on
appeal, that the intentional disclosure of privileged
information does not exist as an independent cause of action;
Rockas and American owed Doe no duty to protect the information;
the disclosure of the information was protected by a litigation
privilege; Doe waived the privilege by bringing the malpractice
action; Doe suffered no cognizable damages; and an insurer
cannot be liable without engaging in a more active role in the
litigation than American did here.
3

Background. As noted, this appeal involves four related

actions. We begin by summarizing those actions in the order

they were brought, reserving certain details for later

discussion. Our factual recitation is drawn from the

allegations set forth in the amended complaint in the action

before us, supplemented by background facts drawn from the

attachments to that complaint and documents that recount the

course of the earlier proceedings. See Shaer v. Brandeis Univ.,

432 Mass. 474, 477 (2000), quoting from 5A Wright & Miller,

Federal Practice and Procedure § 1357, at 299 (1990) ("In

evaluating a rule 12[b][6] motion, we take into consideration

'the allegations in the complaint, although matters of public

record, orders, items appearing in the record of the case, and

exhibits attached to the complaint, also may be taken into

account'").3 See also Mass.R.Civ.P. 10(c), as amended, 456 Mass.

1401 (2010) ("A copy of any written instrument which is an

exhibit to a pleading is a part thereof for all purposes");

Johnston v. Box, 453 Mass. 569, 581 n.19 (2009) (judges may

consider exhibits attached to complaint without converting

3
It bears noting that "[i]n the motion [to dismiss] and
opposition, the parties [all] made reference to facts and
documents . . . extrinsic to the pleadings," and no "party
appears to claim any factual disagreement with them or prejudice
from their being considered." Golchin v. Liberty Mut. Ins. Co.,
466 Mass. 156, 159 (2013) (allowing such extrinsic material to
be considered as if motion for judgment on pleadings had been
motion for summary judgment).
4

motion to dismiss to one for summary judgment); Reliance Ins.

Co. v. Boston, 71 Mass. App. Ct. 550, 555 (2008) (in evaluating

motion brought pursuant to Mass.R.Civ.P.12[b][6], court may take

judicial notice of court records in related proceedings).

1. Criminal proceeding. Doe served as the foster father

of two children. Based on allegations of abuse raised by one of

those children (Foster 1), the Commonwealth charged the

defendant with assault and battery. During the course of

Stone's representation of Doe in the criminal matter, Doe

confided that he had sexually abused the second foster child

(Foster 2) who was living in Doe's home at the same time as

Foster 1. The criminal case ended in a plea in which Doe

pleaded guilty to assault and battery.

2. Tort action. Foster 1 then filed a complaint in the

Superior Court against Doe alleging physical and sexual abuse.

Doe hired Stone, who had represented him in the criminal matter,

to represent him in the tort action. After Stone failed to file

answers to interrogatories propounded by Foster 1, the tort

action ended in a default judgment against Doe under which Doe

was ordered to pay Foster 1 over $400,000 in damages and

interest. It is uncontested that when the default judgment

entered, discovery had not been completed; Doe not only had

failed to answer Foster 1's interrogatories, he had not yet been

deposed.
5

3. Malpractice action. Doe then brought a legal

malpractice action against Stone. In that case, Stone was

represented by Rockas, who was hired by American, Stone's legal

malpractice insurer. Stone told Rockas the information Doe had

revealed about his abuse of Foster 2, and Rockas used a private

investigator and information contained in Stone's case files

related to his representation of Foster 1 to locate Foster 2.

After it became apparent that Rockas intended to defend the

malpractice action in part based on Doe's abuse of Foster 2,

Doe's attorney warned Rockas and American against making use of

any privileged information that Doe had revealed to Stone.

Rockas pressed forward and filed a motion to compel deposition

testimony from Doe regarding Foster 2. In support of that

motion, Stone filed an affidavit setting forth Doe's statement

that he had sexually assaulted Foster 2. The motion to compel

was allowed over Doe's opposition. Doe also unsuccessfully

sought to amend his complaint in the malpractice action to

include counts alleging that Stone, by and through Rockas, had

misused privileged information.

Shortly thereafter, the malpractice action was resolved by

a mediated settlement. The settlement included not only the

parties to the malpractice action (Doe and Stone), but Foster 1

as well. In this manner, the settlement resolved both the

malpractice action and the postjudgment collection proceedings
6

in the tort action. Under the terms of the settlement, $175,000

in insurance proceeds were to be divided among Foster 1 and the

attorneys for both Foster 1 and Doe. Doe also agreed to provide

Foster 1 with a promissory note for an additional $250,000,

secured in part by a line of credit. Finally, Doe released

Stone from "all claims that were or could have been asserted

against him as of the date of the filing of [the malpractice

action] but shall not release him . . . or any other party of

other claims."4

4. Current action. Almost two years after the malpractice

action was settled, Doe brought the current action against

Stone, Rockas, and American. In it, Doe alleges that in

defending the malpractice action, the defendants intentionally

misused privileged information regarding Doe's statement that he

abused Foster 2.5 Although it is uncontested that during the

4
All parties appear to agree that the reservation language
was intended to preserve Doe's ability -- to the extent it
otherwise existed -- to pursue the current action (even though
the malpractice action and the current action are closely
intertwined).
5
The amended complaint in the current action sets forth two
counts. Count I is similar to the claims that Doe
unsuccessfully sought to add to the malpractice action, although
it includes Rockas as an additional defendant. Count II,
brought against American only, alleges unfair settlement
practices in violation of G. L. c. 176D and G. L. c. 93A.
7

tort action Foster 1 claimed that Doe also had abused Foster 2,6

the complaint in the current action alleges that Foster 1's

attorney was unaware of Foster 2's whereabouts at that time.

Based on this, Doe alleges that Foster 2 therefore would not

have played any role in the tort action.7 Doe further contends

6
Specifically, Foster 1 stated in answers to
interrogatories in the tort action:

"When [Doe] procured another foster child, [Foster 2], who
was nine or ten at the time, [Foster 2] was forced to sleep
in [Doe's] bed, rather than in the twin bed in my room --
[Foster 2] cried about this. At this time, the physical
abuse with me escalated. I knew, by this time, that
[Doe's] treatment of me was grossly inappropriate, and I
was disgusted with how the same thing was happening with
[Foster 2]."
7
The complaint states in pertinent part as follows:

"Rockas and Stone knew and were on actual notice that
Foster 2's whereabouts were entirely unknown to [Foster
1's] attorney throughout the [tort] litigation . . . .

"In fact, [Foster 1's] attorney told Stone and Rockas that
while he knew of the existence of Foster 2, he had no way
to find [Foster 2] and could not have used [Foster 2] at
trial. . . .

"[Foster 2] would never have been a part of the underlying
case. . . ."

At oral argument, Doe informed the court that this
allegation was based on Foster 1's attorney's deposition in the
malpractice case. Relevant portions of the transcript of that
deposition were included in the motion to dismiss record. See
Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 n.4
(2004) ("Where, as here, the plaintiff had notice of [certain]
documents and relied on them in framing the complaint, the
attachment of such documents to a motion to dismiss does not
convert the motion to one for summary judgment"). An attachment
to Doe's complaint in the current case indicates that the source
8

that the defendants' use of the information with respect to

Foster 2 gave them undue leverage in the malpractice action and

that he otherwise would have obtained a greater recovery in that

case. He also alleges that the defendants' use of the

privileged information exposed him to additional civil and

criminal liability, although he does not claim, and nothing in

the record suggests, that Foster 2 has sued him or that the

Commonwealth has brought criminal charges based on the sexual

abuse of Foster 2.8

Discussion. Doe's statement to Stone that he had abused

Foster 2 indisputably was subject to attorney-client privilege.

See Mass. G. Evid. § 502(b)(1) (2016). The question is whether

Doe waived that privilege by bringing the malpractice action.

That question "turns on whether the disclosure is relevant,

material, or necessary to defend against the [malpractice]

charge." Commonwealth v. Woodberry, 26 Mass. App. Ct. 636, 637

(1988), citing Commonwealth v. Brito, 390 Mass. 112, 119 (1983).

Thus, if evidence of Doe's statement regarding Foster 2 was

relevant to the malpractice action, the privilege was waived.

of the difficulty that Foster 1's attorney faced in trying to
locate Foster 2 is that his young client did not know Foster 2's
last name.
8
We note that the current action was impounded following a
motion jointly submitted by the parties.
9

The dispute over relevance is a narrow one. The parties

agree that if Foster 2 had been called as a witness in the tort

case, Foster 2's testimony that Foster 2 also had been abused

during the same time period and in the same household as Foster

1 would have been admissible in that case. See Commonwealth v.

Hanlon, 44 Mass. App. Ct. 810, 817 (1998), quoting from

Commonwealth v. King, 387 Mass. 464, 470 (1982) (even in

criminal context, evidence of prior uncharged sexual abuse "when

not too remote in time, 'is competent to prove an inclination to

commit the [acts] charged . . . and is relevant to show the

probable existence of the same passion or emotion at the time in

issue'").

In turn, the admissibility of such testimony in the tort

action makes it substantively relevant to the malpractice

action.9 That is because in the malpractice case, the extent of

any damages that Doe suffered as a result of Stone's negligent

representation rests on what the result of the tort case

otherwise would have been (an issue to be resolved in the

portion of a malpractice action known as the "trial within a

trial"). See Glenn v. Aiken, 409 Mass. 699, 706 (1991) ("In a

9
We do not mean to suggest that Doe's statement to Stone
would be relevant to the malpractice action only if Foster 2
could have testified in the tort action. We note that
regardless of whether Foster 2 was available to testify, Foster
1 still presumably could have testified about what Foster 1 may
have observed regarding Doe's abuse of Foster 2.
10

malpractice action claiming that counsel for the defendant in a

civil case was negligent, the defendant attorney can prevail by

proving by a preponderance of the evidence that, even though he

may have been negligent, the plaintiff, his former client, would

have lost the underlying case anyway"). See generally Fishman

v. Brooks, 396 Mass. 643, 647 (1986) (discussing "traditional

approach" in legal malpractice action under which "[t]he

original or underlying action is presented to the trier of fact

as a trial within a trial" in order to determine damages caused

by attorney's negligence).

While conceding that Doe's abuse of Foster 2 in fact was

substantively relevant to the malpractice action, Doe contends

that Foster 2 was not available to testify in the tort action,

because Foster 2's whereabouts were unknown. On this basis, Doe

claims that his abuse of Foster 2 could not have come out in the

tort action, and hence could not be relevant to the malpractice

action. Thus, Doe's claim that he did not waive his privilege

rests on his contention that Foster 2 was unavailable in the

tort action. Before turning to that issue, we note two points

regarding the lens through which the availability issue should

be viewed.

First, it is important to keep in mind that in the "trial

within a trial" portion of a legal malpractice case, what would

have occurred in the underlying litigation had the attorney not
11

been negligent "must be decided on an objective basis." Glenn

v. Aiken, supra at 703 (affidavit by trial judge in underlying

criminal case stating that ruling would have been same had

defense lawyer raised objection held irrelevant to subsequent

civil malpractice action). That is, in the malpractice action,

the worth of the underlying litigation is to be based on how

that litigation "should" have gone, not on how any specific

lawyers (or judges) actually would have proceeded. See Mallen,

Legal Malpractice § 37:87 at 1677 (2016). See also Green v.

Brantley, 11 S.W.3d 259, 267 (Tex. App. 1999) (rejecting

argument that trial within trial in legal malpractice case had

to be limited to identical witnesses and evidence that would

have been presented in underlying action). Doe's allegation

that Foster 2 would not have been located must be assessed in

this light.

Second, although in reviewing the allowance of a motion to

dismiss we generally are required to accept the allegations of

the complaint as true, those allegations "must be enough to

raise a right to relief above the speculative level."

Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008),

quoting from Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007). "What is required at the pleading stage are factual

'allegations plausibly suggesting (not merely consistent with)'

an entitlement to relief. . . ." Ibid., quoting from Bell Atl.
12

Corp. v. Twombly, supra at 557. A complaint is insufficient if

it rests on "naked assertions" devoid of "further factual

enhancement." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

("Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice"). In

assessing the sufficiency of the complaint's allegations, we can

examine them in the context presented by the underlying

proceedings. See United States Telesis, Inc. v. Ende, 64

F. Supp. 3d 65, 68-69 (D. D.C. 2014) (allowing dismissal of

legal malpractice action on grounds that plaintiff had not

plausibly alleged that it could have prevailed in underlying

contract action, where record in underlying action -- of which

court took judicial notice -- revealed that type of damages

plaintiff sought would have been foreclosed).

With these principles in mind, we turn to the details of

the availability issue. In the procedural context of this case,

we are required to accept as true the allegation that during the

tort action, Foster 1's attorney was unaware of Foster 2's

whereabouts. As noted, the complaint here further alleges that

because of the attorney's lack of knowledge of Foster 2's

whereabouts, he in fact could not have used Foster 2 as a

witness in the tort case. To the extent that this allegation

speaks to what Foster 1's attorney in particular would have been

able to do had the tort action proceeded to trial, it is
13

irrelevant. See Glenn v. Aiken, 409 Mass. at 703. Even if we

view the complaint liberally as alleging that a reasonably

competent attorney representing Foster 1 would not have been

able to locate Foster 2, what is left is a bare conclusory

statement as to what would have occurred had the tort action not

ended in a default judgment while discovery was still pending.

The remaining allegations of the complaint do not support that

conclusion. To the contrary, the complaint points out that

Rockas was able to locate Foster 2 with information from Stone's

files. The complaint offers no explanation as to why, had the

discovery in the tort action gone forward, Doe could have kept

secret Foster 2's last name (or whatever other background

information Rockas used to locate Foster 2), or why Foster 1's

attorney could not have obtained the missing information from

other sources.10 See Lopez v. Commonwealth, 463 Mass. 696, 712

(2012), quoting from Ashcroft v. Iqbal, 556 U.S. at 679

(determining whether complaint plausibly alleges claim for

relief requires reviewing court to "draw on its judicial

experience and common sense").

Viewing the allegations of the complaint in the context of

the undisputed background facts, we conclude that Doe's

10
We note that the Executive Office of Health and Human
Services, which includes the Department of Social Services (now
known as the Department of Children and Families) originally was
a codefendant in the tort action.
14

assertions that Foster 2 would not have been located if the tort

action had gone forward amount to "naked assertions" devoid of

"further factual enhancement." Ashcroft v. Iqbal, supra at 678

(quotation omitted). As a matter of law, the Foster 2 issues

were relevant to the malpractice action, and they are not

rendered irrelevant by Doe's conclusory suggestions that Foster

2's whereabouts would have remained unknown. It follows that by

bringing the malpractice action, Doe waived his privilege with

respect to information related to Foster 2. Accordingly, none

of the defendants could be liable for their use of that

information in defending the malpractice action, and their

motions to dismiss were properly allowed.

Judgment affirmed.