Watts v. Polaczyk

619 N.W.2d 714, 242 Mich. App. 600
CourtMichigan Court of Appeals
DecidedDecember 8, 2000
DocketDocket 212953
StatusPublished
Cited by55 cases

This text of 619 N.W.2d 714 (Watts v. Polaczyk) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Watts v. Polaczyk, 619 N.W.2d 714, 242 Mich. App. 600 (Mich. Ct. App. 2000).

Opinion

Kelly, J.

Plaintiff appeals as of right the trial court’s order granting defendants’ motion for summary disposition in this legal malpractice action. We affirm.

On September 9, 1993, plaintiff lost his left leg as a result of a work-related accident. Four days later, while in the hospital recovering, defendants presented him with a four-page, single-spaced contingent fee compensation agreement for representation in pursuing any claims arising out of the accident. The retainer agreement contained an agreement to arbitrate any disputes arising out of the retainer or the representation.

On December 28, 1995, plaintiff signed a letter of agreement acknowledging that the Supreme Court had granted leave to appeal in several cases involving the intentional tort exception to the exclusive remedy provision of the Worker’s Disability Compensation Act, MCL 418.131(1); MSA 17.237(131)(1). Plaintiff agreed to await the outcome of those appeals before deciding whether to file a complaint against his employer. He acknowledged that the period of limita *602 tion would expire on September 9, 1996, and that he was free to retain other counsel rather than wait.

The Supreme Court decided the cases on July 31, 1996. Travis v Dreis & Krump Mfg Co, 453 Mich 149; 551 NW2d 132 (1996). Plaintiff was thereafter notified by letter dated August 8, 1996, that defendant law firm would no longer be able to pursue his case. He was again notified that failure to file a lawsuit by September 9, 1996, would forever bar his claim, and he was advised to immediately obtain a second opinion. Plaintiff signed an acknowledgment that he had received the letter and his file. Plaintiff was unable to find counsel willing to take his case with such little time remaining, and the period of limitation expired before he filed a complaint.

On September 9, 1997, plaintiff filed this action seeking damages for alleged legal malpractice. Defendants answered the complaint and asserted several affirmative defenses, none of which raised the arbitration agreement as a bar to this litigation. Defendants then sought leave to amend their affirmative defenses, claiming that the existence of the agreement to arbitrate was not discovered until the file was reviewed. Plaintiff opposed the amendment, arguing that amendment would be futile because the arbitration clause was invalid. The court held that such an argument was relevant to the enforceability of the clause, not to whether amendment should be allowed, and granted the motion.

Defendants then sought and were granted summary disposition under MCR 2.116(C)(7) on the basis that the action was barred by the arbitration agreement. Plaintiffs complaint was dismissed, and the matter was ordered to arbitration.

*603 We review a trial court’s grant or denial of a motion for summary disposition under MCR 2.116(C)(7) de novo to determine whether the moving party was entitled to judgment as a matter of law. DeCaminada, v Coopers & Lybrand, LLP, 232 Mich App 492, 496; 591 NW2d 364 (1998). In reviewing a motion under MCR 2.116(C)(7), this Court accepts as true the plaintiff’s well-pleaded allegations and construes them in the plaintiff’s favor. Abbott v John E Green Co, 233 Mich App 194, 198; 592 NW2d 96 (1998). We must consider the pleadings, affidavits, depositions, admissions, and documentary evidence filed or submitted by the parties to determine whether a genuine issue of material fact exists. MCR 2.116(G)(5); Employers Mut Casualty Co v Petroleum Equipment, Inc, 190 Mich App 57, 62; 475 NW2d 418 (1991).

The existence of an arbitration agreement and the enforceability of its terms are judicial questions for the court rather than for the arbitrators. Huntington Woods v Ajax Paving Industries, Inc (After Remand), 196 Mich App 71, 74; 492 NW2d 463 (1992). Presumably, judicial questions, like questions of law, are reviewed de novo. See Cardinal Mooney High School v Michigan High School Athletic Ass’n, 437 Mich 75, 80; 467 NW2d 21 (1991).

We must decide whether the arbitration agreement contained in defendants’ retainer agreement was valid. The clause stated as follows:

Any controversy, dispute, or question arising out of, in connection with, or in relation to this Agreement or its interpretation, performance or nonperformance, or any breach thereof, shall be determined by arbitration conducted in accordance with the then-existing rules of the American Arbitration Association or the Federal Mediation *604 and Conciliation Service and any decision rendered by the Arbitrator shall be final and binding upon the parties; and Judgment upon any arbitration award, including an award of damages, may be entered in any court having jurisdiction thereof. The Arbitrator may not amend, modify, or substitute any of the terms or conditions of this Agreement and his jurisdiction is thereby limited.

Plaintiff argues that the arbitration agreement should either be stricken or be limited to disputes over attorney fees. He asserts that, because defendants failed to advise him that the fee agreement contained an arbitration clause, it is invalid. We reject this argument. Michigan law presumes that one who signs a written agreement knows the nature of the instrument so executed and understands its contents. McKinstry v Valley Obstetrics-Gynecology Clinic, PC, 428 Mich 167, 184; 405 NW2d 88 (1987). Moreover, mere failure to read an agreement is not a defense in an action to enforce the terms of a written agreement. DeValerio v Vic Tanny Int'l, 140 Mich App 176, 179-180; 363 NW2d 447 (1984).

Next, plaintiff argues that the agreement is not valid because he was not provided with an opportunity to obtain the advice of independent counsel concerning the advisability of entering into the arbitration agreement. In support of this argument, plaintiff relies on two informal ethics opinions addressing arbitration clauses in retainer agreements. In the first opinion cited by plaintiff, it was decided that there is no ethical prohibition against an attorney including in a fee agreement a provision calling for the arbitration of fee disputes, provided that the client obtains independent counsel concerning the advisability of enter *605 ing into such an agreement. State Bar of Michigan Ethics Opinion RI-2 (January 28, 1989).

The second opinion cited by plaintiff noted that an arbitration clause contained in a fee agreement is governed by MRPC 1.8(h), which conditions agreements prospectively limiting the lawyer’s liability to a client for malpractice. State Bar of Michigan Ethics Opinion RI-196 (March 7, 1994). MRPC 1.8(h) states as follows:

A lawyer shall not:
(1) make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement; or

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Bluebook (online)
619 N.W.2d 714, 242 Mich. App. 600, Counsel Stack Legal Research, https://law.counselstack.com/opinion/watts-v-polaczyk-michctapp-2000.