STATE OF MAINE SUPERIOR COURT PENOBSCOT, SSe CIVIL ACTION DOCKET ,'''' NO. CV-06-206 -....~ 1;---,_,,",' I ,\.( r ; f, I.!i,l . _ --....,, j - 'Ii! c ,',
ALAN D. KNOWLTON, )
Plaintiff, ) ) I-F'I L~E::;'·:~'·:':\'.' ;'.:."':;~~:~-lfl· (,ll''''C.) ....;. 't.J i~ 1 (,:., r: . . !lRT '
) v. ) \ Jt i! t "/ ZL~ '1 \ PEN08~COT COUNTY : ) ) ORDER \ G. STEVEN ROWE, et al., ) ) l_.. _-----·--·--·..------' Defendant. ) 'i>~~C'/ r"~ , \ (. \" v' 0 I>-~"'( .' \\~~. This matter is before the court on a Rule 26(g) .;
1 't~~\c discovery dispute regarding whether the plaintiff may ~~~ \) depose the defendants' attorney and obtain other documents
and information regarding certain insurance complaint
negotiations.
BACKGROUND
Plaintiff Alan Knowlton ("Knowlton") is a former
employee of Bankers Life and Casualty Company ("Bankers
Life"). He was terminated pursuant to one of the terms of
a consent agreement entered into between Bankers Life and
the defendants in this matter, the Maine Attorney General's
office and the Superintendent of the Bureau of Insurance
(collectively referred to in this order as "the State").
The consent agreement reportedly represented the
culmination of negotiations pertaining to consumer
complaints received by the State against Bankers Life between 2002 and 2005. The Bankers Life consent agreement
with the State was executed on April 11, 2005.
Knowlton had reached an earlier consent agreement with
the State when he was accused of misrepresenting the
financial strength rating of Bankers Life in a recruiting
effort. This consent agreement provided, among other
things, that the State would forgo any other disciplinary
action against Knowlton with respect to his misconduct.
The Knowlton consent agreement with the State was executed
on March 28, 2005. In fact, following the execution of the
State/Bankers Life consent agreement, Knowlton was fired
consistent with the terms of that agreement which directed
that he be fired.
In his original complaint against the State, Knowlton
brought suit under separate contract and tort claims for
violation of his personal consent agreement with the State.
At that time, he requested to depose the State's attorney,
Assistant Attorney General Andrew Black (UAttorney Black"),
regarding the negotiations that led into the consent
agreement between the State and Bankers Life. In addition,
he requested that Attorney Black provide any documents
relating to such negotiations. The State objected on
grounds of statutory confidentiality pursuant to 24
M.R.S.A. § 206(2). Justice Mead sustained the objection in
2 a March 7, 2007 order, stating: nThe court is satisfied
that the negotiation process is subject to statutory
confidentiality. The court is further satisfied that the
current configuration of the matter does not justify
judicial abrogation of the confidentiality established by
the statute." However, Justice Mead did state that the
issue could be raised without prejudice should Knowlton's
tort claims survive a motion for summary judgment on the
procedural issues.
Following this order, however, Knowlton agreed to
dismiss his tort claim, acknowledging that it was barred by
the Maine Tort Claims Act. Subsequently, the court granted
Knowlton's request to amend his complaint in order to
incorporate several claims under 42 U.S.C. § 1983. In
order to obtain evidence in support of his 1983 claims,
Knowlton renewed his request for Attorney Black's
deposition, which brings us to the discovery dispute now
before the court.
DISCUSSION
The defendants renew their argument that the
negotiation process is subject to confidentiality
provisions of Maine statutory law. Pursuant to the Maine
Insurance Code, all Bureau records are subject to public
inspection except for nrecords, correspondence and reports
3 of investigation in connection with actual or claimed
violations of this Title or prosecution or disciplinary
action for those violations," which are confidential. 24-A
M.R.S.A. § 216(2). Nonetheless, "[a]ll records and
documents of the bureau are subject to subpoena by a court
of competent jurisdiction." Id. § 216(3). That suggests
to the court that there are limits on the claim for
confidentiality by the State.
The State first directs the court to Justice Mead's
March 2007 order and argues that the court cannot now allow
the deposition pursuant to the doctrine of the law of the
case. This doctrine applies to "proceedings involving the
same case." Monopoly, Inc. v. Aldrich, 683 A.2d 506, 510
(Me. 1996) (quoting Grant v. City of Saco, 436 A.2d 403,
405 (Me. 1981)). This is not the same "configuration" that
was before Justice Mead and which was the subject of his
order. As such, the court has authority to examine the
discovery motion with regard to the current case posture.
Second, the State argues that there are "several
flaws" in each of Knowlton's 1983 claims and, in this
sense, "Knowlton's constitutional claims have no more
potential viability than did his barred tort claim."
(State's Mem. of Law at 3-4). Although the defendants
question the validity of the 1983 claims, this dispute is
4 before the court solely on a discovery dispute and not as a
motion to dismiss.
Having addressed these initial arguments, this court
finds that the plaintiff should have the opportunity to
develop his case. Although the 1983 claims are separate
and distinct from the now dismissed tort claims, the State
previously recognized with respect to the tort claims that
uMr. Knowlton is at least entitled to the opportunity to
attempt to develop his case." (State's 2/23/2007 Mem. of
Law at 6). Likewise, Knowlton is entitled the opportunity
to develop his 1983 claims. Furthermore, section 216(2) is
concerned with public exposure to records and other
information concerning investigations and negotiations
pertaining to insurance violations. As the State points
out, there is a risk that public exposure to the
information requested by Knowlton would chill ucandid
exchange of information in Bureau investigations."
(State's Mem. of Law at 5). In order to prevent such a
chilling effect, the court can and does order, pursuant to
its subpoena power under section 216(3), that Knowlton will
be able to take the deposition of Attorney Black, however,
in the interest of preventing inappropriate public exposure
of the Bureau's 'records,' all records and transcripts from
the deposition, including deposition exhibits, will remain
5 confidential and will be kept in the custody of each
counsel who appear in this litigation for use exclusively
in this litigation. Copies of the deposition transcript
will not be provided to any third parties (including expert
consultants for any party) without an order of the Court
authorizing that disclosure, following a hearing, or by the
mutual agreement in writing of all counsel who appear in
this litigation. The court is prepared to revisit this
issue following the completion of the deposition, at the
request of any party, to further balance the interest of
the Bureau to confidentiality as against Knowlton's
interest in protecting his rights in this litigation.
CONCLUSION
The entry is:
For the above stated reasons, the court can and does
order, pursuant to its subpoena power under 24-A M.R.S.A.
section 216(3), that Knowlton will be able to take the
deposition of Attorney Black, however, in the interest of
preventing inappropriate public exposure of the Bureau's
'records,' all records and transcripts from the deposition,
including deposition exhibits, will remain confidential and
will be kept in the custody of each counsel who appear in
this litigation for use exclusively in this litigation.
6 Copies of the deposition transcript will not be provided to
any third parties (including expert consultants for any
party) without an order of the court authorizing that
disclosure, following a hearing, or by the mutual agreement
in writing of all counsel who appear in this litigation.
The court is prepared to revisit this issue following the
completion of the deposition, at the request of any party,
to further balance the interest of the Bureau to
confidentiality as against Knowlton's interest in
protecting his rights in this litigation.
The clerk shall incorporate this Order into the docket
by reference pursuant to M.R. Civ. P. 79(a).
Dated :'J'Jlr I b , 2007 ~, Kevin M. Cuddy Justice, Superior Court
7 07/19/2007 MAINE JUDICIAL INFORMATION SYSTEM ksmi.th PENOBSCOT COUNTY SUPERIOR COURT mjxxi.048 CASE PARTY ADDRESS BOOK ALAN D KNOWLTON VS STEVEN ROWE, AS AAG OF STATE OF MAINE, ET AL UTN:AOCSsr -2006-0110339 CASE #:BANSC-CV-2006-00206
ALAN D. KNOWLTON PL ATTY BALDACCI, JOSEPH M. Tel# (207) 945-3333 ATTY ADDR:6 STATE ST, SUITE 605 PO BOX 1423 BANGOR ME 04402-1423 ATTY MEHNERT, ERIC Tel# (207) 776-8378 ATTY ADDR:6 STATE STREET PO BOX 2668 BANGOR ME 04402
STEVEN ROWE AS ATTORNEY GENERAL,MAINE DEF ATTY TAUB, CHRISTOPHER C. Tel# (207) 626-8800 ATTY ADDR:111 SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-0006
ALESSANDRO A. IUPPA SUP INS - NO LONGER SUP, SUB DEF
MAIL ADDR:DEPT PROFESSIONAL & FINANCIAL 35 STATE HOUSE STATION AUGUSTA ME 04333
----------------------------------- ERIC A. CIOPPA SUP INS SUBSTITUTED DEF ATTY TAUB, CHRISTOPHER C. Tel# (Z07) 6Z6-BB00 ATTY ADDR:lll SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-~
M~More, Space ~ EXit:M
Select the EXIT KEY for poge selection line.
> STATE OF MAINE SUPERIOR COURT PENOBSCOT, ss. CIVIL ACTION DOCKET NO. CV-06-206 \ .. , \ ':" r )
ALAN D. KNOWLTON,
Plaintiff,
v. ORDER
G. STEVEN ROWE, ATTORNEY GENERAL OF THE STATE OF MAINE, and
ERIC A. CIOPPA, ACTING SUPER !1 INTENDENT OF THE MAINE BUREAU OF INSURANCE, ! F Ei"'(lEr~COT CO UNTY i ,-_.~-~------,----_ ... _-------_.. Defendants.
The plaintiff has moved to amend his complaint to add three defendants in their
individual capacities, Andrew Black, Glenn Griswold, and Judith Shaw. The defendants
have opposed this motion.
The plaintiff, Alan D. Knowlton, commenced this action by filing his original
complaint with this Court on September 26, 2006. In his original complaint he sought
damages from the defendants for breach of contract and intentional interference with a
contractual right and also sought a declaratory judgment. On April 23, 2007 the plaintiff
filed a motion to amend his complaint to remove his claim of intentional interference
with a contractual right and to add three claims pursuant to 42 U.S.c. § 1983. The
defendants did not oppose and the amendment was permitted.
Discovery in this case was twice extended and finally closed on January 28, 2008.
During discovery the plaintiff deposed all of the individuals he seeks to add as defendants
1 through his proposed amendment. He deposed Andrew Black on September 6, 2007.
The depositions of Glenn Griswold and Judith Shaw took place on November 1, 2007.
On February 27, 2008, the defendants filed a motion for summary judgment. The
defendants sought summary judgment on the plaintiff's claims brought under section
1983. The defendants argued that they could not be liable under section 1983 because
they were not "persons" within the meaning of that section when sued in their official
capacities as officers of the State. See 42 U.S.c. § 1983; Will v. Michigan Dep't ofState
Police, 491 U.S. 58, 71 (1989); Andrews v. Dep't ofEnvtl. Prot., 1998 ME 198, ~ IOn. 4,
716 A.2d 212,217.
On April 4, 2008 the plaintiff tiled his opposition to the defendants' motion for
summary judgment and the motion to amend his complaint that is now before the Court.
In his opposition to summary judgment, the plaintiff conceded that the defendants were
not persons under section 1983 but relied upon the motion to amend his complaint, which
is now before the Court, in order to oppose summary judgment. The defendants have
opposed the plaintiff's motion to amend.
Leave to amend pleadings "shall be freely given when justice so requires." M.R.
Civ. P. 15(a).1 "Whether to allow a pleading amendment rests with the court's sound
discretion." In re Petition ofSen, 1999 ME 83, ~ 10, 730 A.2d 680, 683. The discretion
of the court is limited and the court may abuse such discretion if it denies an amendment
that is necessary to prevent injustice. See Bahre v. Liberty Group, Inc., 2000 ME 75, ,-r 7,
750 A.2d 558, 560.
I The plaintiff has characterized his motion as one to amend the pleadings. Insofar as it seeks to add
defendants to the action it is a motion under M.R. Civ. P. 21. See I Field, McKusick & Wroth, Maine Civil Practice § 21.2 at 380 (2d ed. 1970). The court's standard for review of these motions is the same. See 4 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ~ 21.02(3) (3d ed. 2007).
2 The court must consider all circumstances surrounding a proposed amendment in
deciding whether or not to grant leave to amend. Factors include whether the amendment
would prejudice the opposing party, was brought in bad faith, would unduly delay the
trial, or was not requested in a timely way. "An amendment should be offered promptly
upon awareness of the need for it, and unreasonable delay may influence the court's
discretion." 1 Field, McKusick & Wroth, Maine Civil Practice § 15.4 at 304 (2d ed.
1970).
In this case the plaintiff brought his motion to amend his complaint over eighteen
months after his initial complaint was filed, after discovery was complete, and after the
defendants had filed a motion for summary judgment. The plaintiff argues that this
amendment should be permitted because it was only during discovery that these three
individuals admitted that they were involved in the decisions that are the subject of the
complaint. However, the plaintiff waited six months after taking depositions from these
individuals and waited until after discovery had closed to seek to amend his complaint.
The court is within its discretion to deny a plaintiff's motion to amend the pleadings
when it is filed long after the original complaint was filed, after the close of discovery,
and after defendants have filed a motion for summary judgment. McIntyre v. Nice, 2001
ME 74, ~ 10, 786 A.2d 620, 622.
The plaintiff in this case has not made a prompt motion to amend his complaint
following the discovery of the facts upon which the amendment is based. Rather, the
plaintiff is attempting to use his amendment as a tool to defeat the defendants' motion for
summary judgment on the plaintiff's section 1983 claims. 2 "A motion for leave to amend
2 In their motion for summary judgment the defendants argued that they are not "persons" for purposes of a claim under section 1983. The plaintiff concedes th is in his response and asks the Court to deny summary judgment based upon the proposed amendment.
3 is not a vehicle to circumvent summary judgment." Schlacter-Jones v. Gen. Tel., 936
F.2d 435, 443 (9th Cir. 1991). See Lockheed Martin Corp. v. Network Solutions, Inc.,
175 F.R.D. 640, 645 (C.D. Cal. 1997). The plaintiff may not simply amend his complaint
late in the litigation process in order counter meritorious arguments that have been raised
by his adversaries in their motion for summary judgment.
This amendment would further delay this litigation that has been pending for over
two years. Adding the aforementioned defendants would likely require additional
discovery as the proposed individual defendants may wish to retain their own counsel and
defend themselves. The plaintiff suggests to the Court that the State's attorneys would
represent these individuals alongside the current defendants thereby minimizing delay;
however, as the State has argued, there is potential that this will not occur. These three
individuals may have conflicting interests in the litigation that require separate
representation. See M. Bar R. 3.4(c)(2). The possibility of further delay in this already
lengthy litigation weighs heavily against the plaintiff s proposed amendment.
The Court also notes that no injustice will result upon the denial of the plaintiff s
motion. The statute of limitations for section 1983 claims is six years. 14 M.R.S. § 752
(2008); Stickney v. City of Saco, 2001 ME 69, ~ 27, 770 A.2d 592, 603; McKenney v.
Greene Acres Manor, 650 A.2d 699, 701 (Me. 1994). The conduct complained of
occurred in 2005, leaving the plaintiff ample time to file a separate action against the
proposed defendants ifhe wishes.
Considering the plaintiffs delay in seeking leave to amend his complaint, the
significant possibility of further delay in this litigation, and that no injustice will occur in
4 denying the plaintiff s motion, the Court denies the plaintiffs motion to amend his
complaint.
1. The defendants' motion to amend the pleadings is DENIED.
2. This order is incorporated into the docket by reference pursuant to M.R. Civ. P. 79(a).
Date: October 1 ,2008 ilham R. Anderson Justice, Superior Court
5 10/08/2008 MAINE JUDICIAL INFORMATION SYSTEM ksmfth PENOBSCOT COUNTY SUPERIOR COURT mjtvi.001 PAGE P - PARTY VIEW ALAN 0 KNOWLTON VS STEVEN ROWE, AS AAG OF STATE OF MAINE, ET AL UTN:AOCSsr -2006-0110339 CASE #:BANSC-CV-2006-00206
SEQ TITLE NAME DOB ATTY 001 PL ALAN 0 KNOWLTON BY JOSEPH BALDACCI ESQ / / T 002 DEF * STEVEN ROWE AS ATTORNEY GENERAL,MAINE / / T 003 DEF ALESSANDRO A IUPPA SUP INS - NO LONGER SUP / / PRO 004 DEF * ERIC A CIOPPA SUP INS SUBSTITUTED / / T
* BY CHRISTOPHER TAUB, AAG STATE OF MAINE SUPERIOR COURT PENOBSCOT, ss. CIVIL ACTION DOCKET NO. CV-06-206
G. STEVEN ROWE, ATTORNEY GENERAL OF THE STATE OF MAINE, and ~-_ ..._--_., FILED & ENTERED ERIC A. CIOPPA, ACTING SUPER SUPERIOR COURT INTENDENT OF THE MAINE BUREAU OF INSURANCE, OCT 1 5 2008
Defendants. PENOBSCOT COUNTY
The plaintiff seeks in his first amended complaint relief for breach of contract and
violations of 42 U.S.c. § 1983 as well as a declaratory judgment. The defendants, the
Secretary of State and Superintendent of the Maine Bureau of Insurance, have moved for
summary judgment and the plaintiff has opposed.
The plaintiff, Alan D. Knowlton, was previously employed by Bankers Life and
Casualty Company (hereinafter "Bankers Life") as the branch manager of its Bangor
office. In 2004, the Maine Bureau of Insurance received a complaint alleging that
Knowlton had misrepresented the financial strength rating of Bankers Life, as rated by
A.M. Best Company, during a recruitment meeting for new producers. The Bureau
determined that Knowlton had in fact misrepresented the rating. Knowlton entered into
consent agreement INS-04-2000 with the Bureau, which was signed by Knowlton on
1 March 28, 2005, and by the Bureau on AprilS, 2005. The sanctions required by the
consent agreement included inter alia, a $750 fine, a period of license probation, and
potential license suspension if the probationary period was not satisfactorily completed.
The consent agreement also provided that the sanctions contained therein would be the
sole sanctions against Knowlton in resolution of the alleged misrepresentations of
Bankers Life's financial strength rating.
25. In consideration of Mr. Knowlton's execution of and compliance with the terms of this Consent Agreement, the Superintendent and the Attorney General agree to forgo pursuing further disciplinary measures or other civil or administrative sanctions against Mr. Knowlton for the violations described in the Stipulations, other than those agreed to in this Consent Agreement. ...
(Supp. S.M.F. ~ 18; Shaw Mf. Ex. B).
Meanwhile the Bureau was also negotiating with Bankers Life in order to resolve
70 complaints that had been received from consumers from January 2002 through April
2005. Bankers Life representatives signed a consent agreement on April 13,2005, which
was signed by the Bureau on April 14, 2005. This agreement constituted the settlement
of multiple complaints that had been filed against Bankers Life.
10. This Agreement includes, but is not limited to, a settlement as to the company's responsibility under the following Bureau of Insurance administrative petitions, identified as follows:
INS-04-204, IN RE: Bankers Life and Casualty Company, Paul A. Landry and Jerold S. Smith;
INS-04-228, IN RE: Bankers Life and Casualty Company and Gary R. Smith;
INS-04-229, IN RE: Bankers Life and Casualty Company and Mary E. Matarazzo; and
INS-04-2000, IN RE: Bankers Life and Casualty Company and Alan D. Knowlton.
(Shaw Aff. Ex. A).
2 The agreement detailed varIOUS sanctions against Bankers Life including a
$400,000 civil penalty. It also required that Bankers Life relieve Knowlton and the
branch manager of its South Portland office from their positions as branch managers.
53. Within 14 days of the effective date of this Agreement, Bankers Life shall relieve the managers of its South Portland and Bangor branch offices of their positions as branch managers. Bankers Life shall fill the vacant branch manager positions as expeditiously as possible, but with the priority of selecting individuals who are experienced enough to ensure that each branch operates in accordance with Maine law and the terms of this agreement.
(Supp. S.M.F. ~ 47; Shaw Aff. Ex. A).
The consent agreement was fully executed on April 14, 2005 and Bankers Life
contacted Knowlton that same day to advise him that he was being removed from his
position.
A. Standard of Review
Summary judgment "shall be rendered ... if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, referred to in
the statements [of material facts] show that there is no genuine issue as to any material
fact." M.R. Civ. P. 56(c); Botka v. s.c. Noyes & Co., 2003 ME 128, ~ 18,834 A.2d 947,
952-53. "A material fact is one that can affect the outcome of the case." Dyer v. Dep 't of
Transp., 2008 ME 106, ~ 14, 951 A.2d 821, 825. "A genuine issue of material fact exists
when the fact-finder must 'choose between competing versions of the truth.'" Id.
(quoting MP Assocs. v. Liberty, 2001 ME 22, ~ 12, 771 A.2d 1040, 1044).
3 B. Nature of the Consent Agreement
The State argues that the consent agreement that it entered with Knowlton was not
a contract, precluding Knowlton from any recovery under contract law. An agreement
between two parties supported by consideration is a contract enforceable at law. See
RESTATEMENT (SECOND) OF CONTRACTS §§ 1,71 (1981); 1 JOSEPH M. PERILLO, CORBIN
ON CONTRACTS § 1.3 at 9-10 (rev. ed. 1993). Consideration is a "performance or return
promise ... sought by the promisor in exchange for his promise and is given by the
promisee in exchange for that promise." RESTATEMENT (SECOND) OF CONTRACTS § 71.
The consent agreement in this case is an agreement between Knowlton and the
State. The State received Knowlton's consent to the sanctions listed in the agreement as
consideration in exchange for its promise to pursue no further remedies or sanctions
relating to his alleged misrepresentations of Bankers Life's financial strength rating. The
fact that the agreement entered into by the parties is described as a consent agreement is
of no consequence. Contracts are described by many names, including leases and sales.
The use of the term "agreement" rather than "contract" does not remove this transaction
from the law of contracts. The plaintiff has properly raised issues of fact regarding the
existence of a contract; therefore, the Court cannot determine as a matter of law that a
contract does not exist.
The very nature of consent agreements supports this conclusion. A consent
agreement is essentially a settlement agreement in the context of adjudicatory
proceedings before an administrative agency. It is well-established in Maine that
"[s]ettlement agreements are analyzed as contracts." Marie v. Renner, 2008 ME 73, ~ 7,
946 A.2d 418, 420. The Court sees no discernable difference between a settlement
agreement in the context of civil litigation and a consent agreement in the context of
4 administrative adjudications; therefore, the consent agreement in this case should be
analyzed as a contract. See Employers Ins. Co. of Wausau v. Crouse-Cmty. Ctr., 489 F.
Supp. 2d 176, 180 (N.D.N. Y. 2007), reconsideration denied by 2008 U.S. Dist. LEXIS
18454 (N.D.N.Y. 2008).
C. Sovereign Immunity
The State further argues that it cannot be held liable for damages under contract
because it is protected by sovereign immunity. Sovereign immunity bars recovery
against the State unless the State has consented to be sued by an act of the legislature.
Drake v. Smith, 390 A.2d 541, 543 (Me. 1978). The Law Court has suggested such
consent may be implied for breach of contract claims when the legislature enacts "a
general statute allowing the State to enter into contracts." Profit Recovery Group, USA v.
Comm'r, Dep 't ofAdmin. & Fin. Servs., 2005 ME 58, ~ 28,871 A.2d 1237, 1244. See
Drake, 390 A.2d at 545.
In the present case, 10 M.R.S. § 8003(5)(B) authorizes the Bureau to enter into
consent agreements in order to resolve complaints or investigations. The Court finds no
occasion to determine whether or not an implied waiver of immunity exists in section
8003(5)(B) because that section explicitly waives immunity. "A consent agreement is
enforceable by an action in Superior Court." 10 M.R.S. § 8003(5)(B) (2008). The State
suggests that the statute's enforceability clause does not permit recovery for money
damages under breach of contract; however, nothing in the statute or otherwise suggests
this narrow interpretation. This waiver permits enforcement of a consent agreement in
the same way that any other contract may be enforced, including remedies at law and
equity.
5 The State has drawn this Court's attention to one unpublished case in which the
Superior Court applied sovereign immunity in the context of consent agreements under
section 8003(5)(B). In State v. Weinschenk, the Kennebec County Superior Court
dismissed a counterclaim against the Maine Oil and Solid Fuel Board alleging breach of
contract under a consent agreement entered into under section 8003(5)(B). State v.
Weinschenk, AUGSC-CV-2000-00244 (Me. Super. Ct., Ken. Cty. Feb. 2, 2001)
(Studstrup, 1.), rev'd on other grounds, 2005 ME 28, 868 A.2d 200. 1 When Weinschenk
went up on appeal, the Law Court chose not to address the Superior Court's application
of sovereign immunity because it held that the counterclaim at issue could have been
properly dismissed for failure to set forth the elements of a cause of action and failure to
allege facts entitling the claimant to relief. Weinschenk, 2005 ME 28, ~ 30, 868 A.2d at
209. The Law Court intentionally refrained from deciding whether sovereign immunity
applied to claims arising from breaches of consent agreements. In light of this and the
aforementioned reasons, this Court holds that section 8003(5)(B) explicitly waives
sovereign immunity in the enforcement of consent agreements and that the Court may
enforce the agreement through an award of damages.
D. Breach of Contract
The State argues that even if the consent agreement is an enforceable contract,
there was no breach. The agreement provided that the State would "agree to forego
pursuing further disciplinary measures or other civil or administrative sanctions against
I TheWeinschenk decision of the Kennebec County Superior Court stated in toto as follows. After hearing on the State's Motion to Dismiss the Defendant's Ric Weinschenk Builder's, Inc.'s Counterclaim, the Order and entry is as follows: the State's Motion to Dismiss the Counterclaim is Granted, Pursuant to M.R. Civ. P. 13(d), sovereign immunity has not been waived, Weinschenk, AUGSC-CY-2000-00244 (Me. Super. Ct., Ken. Cty. Feb. 2,2001) (Studstrup, J.).
6 Mr. Knowlton for the violations described in the Stipulations." (Supp. S.M.F. ~ 18; Shaw
Aff. Ex. B).
1. "against Mr. Knowlton"
The State asserts that the sanctions contained in its consent agreement with
Bankers Life requiring Knowlton's removal as manager of its Bangor office were not
sanctions against Knowlton, but only against Bankers Life. The consent agreement with
Knowlton only provided that it contained a plenary statement of the sanctions "against
Mr. Knowlton." (Supp. S.M.F. ~ 18; Shaw Aff. Ex. B). The State suggests that any
effect upon Knowlton stemming from the consent agreement with Bankers Life was
merely a collateral effect of that agreement and cannot be considered a sanction against
Knowlton.
The word at issue in the interpretation of the consent agreement is "against."
There is no question that requiring Knowlton's removal in the Bankers Life consent
agreement was a sanction, but was it a sanction against Knowlton? This Court must
apply principles of contract interpretation in resolving this question. When a contract is
unambiguous, its interpretation is a matter of law to be decided by the court as a matter of
law; however, if a contract or a term therein is ambiguous then its interpretation is a
question of fact for the jury to resolve. Villas By the Sea Owners Ass 'n v. Garrity, 2000
ME 48, ~ 9, 748 A.2d 457,461. "Whether or not a contractual term is ambiguous is a
question of law" and must be decided by the court. Id.
The word "against" in the consent agreement with Knowlton is ambiguous. It is
open to differing interpretations by the parties. On the one hand it could indicate that the
State agreed to forego only direct actions against Knowlton for his alleged
7 misrepresentations of Bankers Life's financial strength rating. On the other hand, it
could indicate that the State would not pursue any more sanctions that would adversely
affect Knowlton, whether directly or indirectly through his employer. In light of this
ambiguity, the interpretation of the consent agreement is a genuine issue of material fact
that cannot be determined as a matter of law.
2. ''for the violations described in the Stipulations"
The State has also argued that there is no breach because the consent agreement
with Bankers Life requiring Knowlton's removal was not for the same violations as the
consent agreement with Knowlton. The consent agreement with Knowlton was only a
plenary statement of sanctions "for the violations described in the Stipulations." (Supp.
S.M.F. ~ 18; Shaw Aff. Ex. B). If the sanctions imposed under the Bankers Life consent
agreement arose out of separate violation then there could be no breach. However, the
consent agreement with Bankers Life explicitly includes the same violation sanctioned
through the consent agreement with Knowlton. The consent agreement with Bankers
Life has a broader scope in that it settles additional complaints, but it does include
Knowlton's misrepresentations. The consent agreement with Bankers Life states that
"[t]his Agreement includes... a settlement as to the company's responsibility
under. ..INS-04-2000, IN RE: Bankers Life and Casualty Company and Alan D.
Knowlton." (Shaw Aff. Ex. A).
Even though the consent agreement with Bankers Life is a broader settlement than
the one with Knowlton, it still dealt in part with Knowlton's representations that were
already sanctioned in his consent agreement. This leaves a genuine issue of material fact
as to whether or not Knowlton's removal under the consent agreement with Bankers Life
8 was in fact based upon the same violations that were stipulated in the consent agreement
with Knowlton. Therefore, summary judgment must be denied.
E. Persons Under 42 U.S.C. § 1983
The defendants argue that Knowlton is not entitled to relief under section 1983
because they are not "persons" within the meaning of section 1983 when sued in their
official capacities. 42 U.S.C. § 1983. "[A] suit against a state official in his or her
official capacity is not a suit against the official but rather is a suit against the official's
office. As such, it is no different from a suit against the State itself." Will v. Michigan
Dep't of State Police, 491 U.S. 58,71 (1989) (citations omitted). A State is not a person
within the meaning of section 1983. Id. at 66.
Knowlton concedes that neither of the defendants are persons within the meaning
of section 1983. He instead relies upon a motion to amend his complaint in order to add
additional defendants, State employees who were involved in the consent agreement
negotiations upon which this action is based. This Court has denied Knowlton's motion
to amend his complaint; therefore, there are no persons within the meaning of section
1983 listed as defendants in this case. See Knowlton v. Rowe, BANSC-CV-2006-00206
(Me. Super. Ct., Pen. Cty., Oct. 7, 2008) (Anderson, 1.). There remain no issues of
material fact regarding Knowlton's section 1983 claims and summary judgment in favor
of the defendants is appropriate.
F. Declaratory Judgment
Knowlton asks this Court to issue a declaratory judgment that the clause in the
consent agreement between Bankers Life and the State requiring his removal (1)
9 constituted a breach of consent agreement between Knowlton and the State, and (2) is
void as unconstitutional. Knowlton further requests that the Court require the State to
excise the removal clause from the consent agreement. The State has argued that
summary judgment is proper because such a declaratory judgment would serve no useful
purpose and because the removal clause is constitutional. "[W]hether a declaratory
judgment should be issued rests in the sound discretion of the trial court." E. Fine Paper,
Inc. v. Garriga Trading Co., 457 A.2d 1111, 1112 (Me. 1983).
Under the Declaratory Judgments Act, a party may seek a declaratory judgment as
to the construction or validity of a contract. 14 M.R.S. § 5854 (2008). However, the
court should refrain from issuing declaratory judgments where they would serve no
useful purpose. Waterville Indus. v. Fin. Auth. ofMaine, 2000 ME 138, ~ 25,758 A.2d
986, 993; Dodge v. Town of Norridgewock, 577 A.2d 346, 347 (Me. 1990). A
declaratory judgment serves no useful purpose when it would only determine past
conduct that is unlikely to reoccur. See District Attorney v. City of Brewer, 543 A.2d
837, 839 (Me. 1988). See also 22A AM. JUR. 2D Declaratory Judgments § 28 (2003)
("While it is the general rule that a controversy is not withdrawn from the operation of
such laws merely because it involves disputed questions of fact, declaratory decree
statutes are not designed for the purpose of establishing purely factual issues.").
The issue of whether or not the State breached the consent agreement with
Knowlton by including a clause requiring his removal in the consent agreement with
Bankers Life is an issue of past fact and there is no likelihood that such breach will recur
because both Knowlton and his employer have already been fully sanctioned for
Knowlton's misrepresentations. Therefore, a declaration that the insertion of the removal
clause constituted a breach on the part of the State would serve no useful purpose. If a
10 breach actually occurred then such will be determined as an issue of fact and Knowlton
will receive an appropriate remedy under his claim for breach of contract. A declaration
that a breach occurred on top of such relief would have no effect whatsoever.
With regards to Knowlton's request that this Court declare void the provision
requiring his removal, both parties have overlooked a basic threshold issue. Knowlton
has asked this Court to declare void a provision in an agreement between Bankers Life
and the State. Knowlton was not a party to that agreement nor was he a third-party
beneficiary. A determination of the rights of the parties under an agreement between
Bankers Life and the State would only be appropriate if Bankers Life were a party to this
suit, which they are not. Even if this Court were to issue the declaration requested by
Knowlton, it would not have any effect upon the rights and obligations of the parties to
the agreement. 14 M.R.S. § 5963 (2008) ("no declaration shall prejudice the rights of
persons not parties to the proceeding"). See Harriman v. Harriman, 1998 ME 108, ,-r 9,
710 A.2d 923, 925 (holding that a court cannot change the contract rights of creditors or
individual debtors in allocating debt responsibilities between the parties in a divorce
action).
Based upon these considerations to which there are no issues of material fact, the
Court determines in its discretion as a matter of law that a declaratory judgment would
serve no useful purpose and is not appropriate. Consequently, summary judgment is
proper.
1. The defendants' motion for summary judgment is GRANTED IN PART and DENIED IN PART.
11 2. The defendants' motion for summary judgment is DENIED as to count one of the plaintiff s first amended complaint, breach of contract.
3. The defendants' motion for summary judgment is GRANTED as to count two of the plaintiffs first amended complaint, violation of 42 U.S.C. § 1983, due process.
4. The defendants' motion for summary judgment is GRANTED as to count three of the plaintiff s first amended complaint, violation of 42 U.S.c. § 1983, double jeopardy.
5. The defendants' motion for summary judgment is GRANTED as to count four of the plaintiff s first amended complaint, violation of 42 U.S.C. § 1983, impairment of contract.
6. The defendants' motion for summary judgment is GRANTED as to count five of the plaintiff s first amended complaint, declaratory judgment.
7. This order is incorporated into the docket by reference pursuant to M.R. Civ. P. 79(a).
- Dated: October /~ , 2008 ~ William R. Anderson Justice, Superior Court
12 01/22/2009 MAINE JUDICIAL INFORMATION SYSTEM PENOBSCOT COUNTY SUPERIOR COURT PAGE A - ATTORNEY BY CASE VIEW ALAN D KNOWLTON VS STEVEN ROWE, AS AAG OF STATE OF MAINE, ET AL CASE #:BANSC-CV-2006-00206
SEL VD REPRESENTATION TYPE DATE 01 0000007292 ATTORNEY:BALDACCI, JOSEPH M ADDR:6 STATE ST, SUITE 605 PO BOX 1423 BANGOR ME 04402-1423 F FOR:ALAN D KNOWLTON PL RTND 09/26/2006
02 0000003724 ATTORNEY:MEHNERT, ERIC ADDR:6 STATE STREET SUITE 600 BANGOR ME 04402 F FOR:ALAN D KNOWLTON PL RTND 06/27/2007
03 0000008416 ATTORNEY:TAUB, CHRISTOPHER C ADDR:111 SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-0006 F FOR:STEVEN ROWE AS ATTORNEY GENERAL,MAINE DEF RTND 10/27/2006 FOR: Eric A. Cioppa Acting Superintendent of Insurance for the State of Maine STATE OF MAINE SUPERIOR COURT PENOBSCOT, ss. CIVIL ACTION DOCKET NO. CV-06-206 .~
G. STEVEN ROWE, ATTORNEY GENERAL OF THE STATE OF MAINE, and FILED & ENTERED ERIC A. CIOPPA, ACTING SUPER SUPERIOR ~()IIRT INTENDENT OF THE MAINE BUREAU OF INSURANCE, DEC 1 9 2008
The defendants have filed a motion to reconsider the order of this Court granting
in part and denying in part the defendants' motion for summary judgment. Knowlton v.
Rowe, BANSC-CV-2006-00206 (Me. Super. Ct., Pen. Cty., Oct. 15,2008). They request
that this Court reconsider denying their motion for summary judgment as it related to the
plaintiff's claim for breach of contract.
The issue raised in the present motion was raised by the defendants' in their
motion for summary judgment and fully briefed. I The defendants again argue that
requiring the removal of the plaintiff from his position as the branch manager of the
Bangor office of Bankers Life in the consent agreement between the State and Bankers
Life was not "for the violations described in the Stipulations" of the consent agreement
I This motion does not seek to "bring to the court's attention an error, omission or new material that could not previously have been presented." M.R. Civ. P. 7(b)(5). Motions for reconsideration should not be used as an avenue to reargue issues that have already been made or could easily have been made. Shaw v. Shaw, 2003 ME 153, ~ 8, 839 A.2d 714, 716. The Maine Rules afCivil Procedure mandate that such a motion "shall not be filed." M.R. Civ. P. 7(b)(5). between the State and the plaintiff. The consent agreement entered with the plaintiff was
under docket number INS-04-2000. The consent agreement entered with Bankers Life
specifically stated in paragraph ten that it included a settlement as to the company's
responsibility under INS-04-2000. Contrary to the defendant's arguments in the present
motion, this creates a genuine issue of material fact as to whether the required removal of
the plaintiff was for the same violations as the consent agreement he had previously
entered.
The defendants argue from the record evidence that the particular proVIsIOn
requiring removal was not a sanction for the plaintiff's previously sanctioned
misconduct; however, they neglect to realize that the Court does not act as a fact-finder in
the context of a motion for summary judgment. If the defendants wish to ultimately
prevail on such arguments they must save them for the jury. The facts are still in dispute;
therefore, summary judgment is not appropriaie on the plaintiff's claim for breach of
contract and the defendants' motion for reconsideration is denied.
1. The defendants' motion for reconsideration is DENIED.
2. This order is incorporated into the docket by reference pursuant to M.R. Civ. P. 79(a).
Date: December! b," ,2008 J/Oft- William R. Anderson Justice, Superior Court