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STATE OF MICHIGAN
COURT OF APPEALS


WOODCREST, L.L.C., Plaintiff-Appellant, v HONIGMAN MILLER SCHWARTZ & COHN, L.L.P., and ANN L. ANDREWS, Defendants-Appellees.

UNPUBLISHED November 18, 2008

No. 279757 Gratiot Circuit Court LC No. 07-010442-NM

Before: Murphy, P.J., and Sawyer and Smolenski, JJ. PER CURIAM. In this action for legal malpractice premised on settlement of a judgment without plaintiff's authorization, plaintiff appeals as of right from a circuit court order granting defendants' motion for summary disposition. We affirm in part, reverse in part, and remand for further proceedings. This appeal has been decided without oral argument pursuant to MCR 7.214(E). Plaintiff is a limited liability company with a single member, Henry Goldstein. Defendants represented plaintiff in an underlying action in which plaintiff pursued a cross-claim against Giffels-Webster Engineers, Inc., for negligence in the design and installation of underground utilities. On February 21, 2006, following a jury trial on plaintiff's cross-claim, the court entered a judgment in favor of plaintiff and against Giffels-Webster for $412,268.80, plus interest and costs. Between March 22, 2006, and April 3, 2006, counsel for Giffels-Webster and defendant Ann Andrews, who was representing plaintiff, engaged in settlement negotiations. In April 2006, Andrews allegedly advised the court in the underlying action that the parties were close to resolving all of the claims with a global settlement and release agreement. Plaintiff later discharged defendants on June 6, 2006, and denied the existence of a settlement. Giffels-Webster subsequently filed a motion to enforce a settlement premised on the negotiations between Andrews and Giffels-Webster. On April 3, 2007, over plaintiff's objections, the court granted Giffels-Webster's motion. Plaintiff's complaint in this case alleges that defendants committed legal malpractice in failing to inform plaintiff of the settlement negotiations, negotiating without plaintiff's knowledge or consent, and failing to protect its legal rights, resulting in loss of ability to collect the full judgment and additional attorney fees. Plaintiff alleges that it was never advised or -1-


consulted in regard to settling with Giffels-Webster for only $425,000. Plaintiff alleged a claim for breach of contract because defendants represented to plaintiff that the cost of litigation would not exceed $100,000, when in fact the cost exceeded $225,000. The breach of contract claim also refers to an express or implied agreement to "always act only in the interests of Plaintiff," and alleges breach of that agreement by "refusing to act in the interests of Plaintiff, but instead acting in their own interest, resulting in a settlement to which Plaintiff did not or does not agree." Defendants moved for summary disposition pursuant to MCR 2.116(C)(7), (8), and (10). With respect to the legal malpractice claim, defendants argued that summary disposition was appropriate pursuant to MCR 2.116(C)(7), because plaintiff was collaterally estopped from claiming that the amount of the settlement was inadequate. Defendants relied on a statement made by plaintiff's new counsel to the court in the underlying action to the effect that plaintiff's opposition to the motion to enforce the settlement agreement was not based on disappointment with the amount. At a hearing in the underlying case, Patricia Walter, counsel for Giffels-Webster, explained the negotiations that had occurred between Giffels-Webster and Andrews. According to Walter, Andrews had been working on a global settlement agreement with all the other lien claimants, but was terminated as counsel for plaintiff before that was complete. Walter maintained that "the terms of the settlement were the four twenty-five and a way to protect Giffels from having to continue to litigate, which if the releases didn't work, a dismissal would." The court inquired as to who had a claim against Giffels-Webster, and Walter responded only Michigan Pipe and Valve, but the lien had been extinguished. The court suggested that it sign an order dismissing Giffels-Webster as a party and Giffels-Webster "pay the four twenty-five." Walter responded, "I'm happy." THE COURT. Okay. Somebody's not happy. Maybe more than one person is not happy. Let me find out who is not happy. Let me start with you, Mr. Darnell [plaintiff's counsel]? MR. DARNELL. Thank you, Your Honor. Well, Your Honor, I think your questions

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