Appeal from the Superior Court of the District of Columbia (CA9635-04) (Hon. Judith Bartnoff, Trial Judge)
The opinion of the court was delivered by: Reid, Associate Judge, Retired:
Before REID, Associate Judge, Retired,*fn1 RUIZ, Associate Judge, Retired,*fn2 and FERREN, Senior Judge.
This case involves professional negligence claims arising out of legal representation provided by appellees Alan Balaran, and Debra Katz, David Marshall, Bernabei & Katz, PLLC ("B&K"), and Lynne Bernabei to appellant, Dwight W. Crawford, in connection with his employment as Executive Vice President and Chief Financial Officer ("CFO") of BET Services, Inc., and BET Holdings II, Inc. ("BET").*fn3 The representation included efforts to negotiate a severance package, and the prosecution and settlement of his wrongful termination lawsuit.*fn4 In three different orders, the trial court granted the respective motions for summary judgment and reconsideration filed by defendants/appellees. Mr. Crawford essentially contends that the trial court erred by granting summary judgment to all defendants/appellees and dismissing all of his claims.
For the reasons stated in this opinion, we affirm the trial court's grant of summary judgment to Ms. Bernabei as to the period after November 3, 2000,*fn5 but we are constrained to reverse the judgment of the trial court as to Mr. Balaran, Ms. Katz, B&K, and Mr. Marshall. We therefore remand this case for further proceedings.
Before proceeding to the factual summary of the case, we summarize the trial court's dispositive orders. In the first trial court order, signed on November 26, 2008, the Honorable Judith Bartnoff determined that except for 1.25 billable hours relating to a "meet and confer" discovery conference, Ms. Bernabei's only involvement in Mr. Crawford's case was her assignment as supervisor of Mr. Marshall prior to his admission to the District of Columbia Bar. Since Mr. Marshall was admitted to the D.C. Bar on November 3, 2000, the trial court granted Ms. Bernabei's motion for summary judgment "for the period after November 3, 2000, but . . . denied [the motion] to the extent that there are claims . . . regarding actions of Mr. Marshall prior to November 3, 2000." The court also granted Mr. Balaran's second motion for summary judgment on the ground that Mr. Crawford was required to "produce expert testimony to establish the standard of care owed to him by the defendants," but that the testimony of his expert, Professor Geoffrey C. Hazard, Jr., "cannot serve to establish the standard of care, when he states that his opinion is based on the opinion of an employment law expert and [Mr. Crawford] has not offered that underlying opinion." The trial court not only dismissed Mr. Crawford's claims against Mr. Balaran, but because the other defendants had incorporated Mr. Balaran's motion by reference, the trial court dismissed "any claims against the other defendants premised on the alleged negligence of defendant Balaran."
Judge Bartnoff's second order, signed on January 5, 2009, granted in part the summary judgment motion lodged by Ms. Katz, B&K, and Mr. Marshall. The trial court concluded that BET's Super. Ct. Civ. R. 11 sanctions motion, which was pending against the attorneys when they gave Mr. Crawford settlement advice about his lawsuit against BET, did not "create a conflict that tainted the defendants' settlement advice or preclude them from providing such advice in the underlying case." There was no conflict, the court reasoned, because the wrongful termination lawsuit was based on information that Mr. Crawford had provided to Ms. Katz, B&K and Mr. Marshall. Because Judge Bartnoff was uncertain whether her ruling "cover[ed] all of [Mr. Crawford's] claims of professional negligence against the defendants," she granted the summary judgment motion "in part."
In her third order, signed on February 12, 2009, Judge Bartnoff granted the motion for reconsideration filed by B&K. The court indicated that in their motion, these defendants had "carefully review[ed] all the allegations in [Mr. Crawford's] First Amended Complaint and [had] demonstrate[d] that there are no issues remaining to be resolved by the [c]court, in light of the [c]court's prior rulings. In addition, the trial court "treat[ed] the motion for reconsideration as conceded" under Super. Ct. Civ. R. 12-I (e)*fn6 because Mr. Crawford did not respond to the motion; nor did he ask for an extension of time in which to respond. Consequently, the court granted summary judgment to these defendants on all claims and dismissed Mr. Crawford's complaint.
The record reveals the pertinent interactions between Mr. Crawford and BET prior to his termination, as well as the circumstances surrounding his wrongful termination lawsuit against BET, the settlement of that lawsuit, and his subsequent professional negligence complaint against his former attorneys. Mr. Crawford's tenure with BET was relatively short. He began his duties as BET's Executive Vice President and CFO on January 4, 1999, and BET fired him on January 31, 2000. His basic task was to manage BET's corporate finance department. Early in his year with BET, Mr. Crawford became concerned about aspects of BET's financial affairs and he began to share some of his concerns with BET's top officials.
Although Mr. Crawford received a favorable performance evaluation (an overall rating of 88%) in October 1999, from the President of BET (Debra Lee), the relationship between Mr. Crawford and the President deteriorated substantially in late November 1999, during audit work conducted by BET's external auditors. On December 8, 1999, Mr. Crawford and Mr. Balaran (on behalf of Bernabei, Katz & Balaran) executed a retainer agreement which stated, in part, that Mr. Balaran's firm would "represent [Mr. Crawford] with respect to severance negotiations with BET Holdings, Inc.," and that "[t]he [f]irm's representation . . . [would be] limited at this juncture to counseling [Mr. Crawford] and attempting to negotiate a severance agreement with BET Holdings, Inc."
Subsequently, Mr. Crawford transmitted two communications to Ms. Lee, which became the subject of controversy in his underlying litigation with BET, as well as his professional negligence action against his lawyers. Mr. Crawford's complaint in this case identifies statements from both communications which he claims harmed his litigation against BET and forced him into an unfavorable settlement. Although Mr. Balaran drafted both communications for Mr. Crawford's signature, defendants/appellees emphasize that Mr. Crawford is the source of the information in both communications.
The first communication, a memorandum dated December 20, 1999,
concerned Mr. Crawford's "Phantom Stock Option Plan."*fn7
The memorandum began with the following sentence: "Recently,
we discussed my voluntary departure from BET."*fn8 The
second communication was Mr. Crawford's January 21, 2000, letter to
Ms. Lee. The letter referenced a "recent conversation" between Ms. Lee
and Mr. Crawford, and it sought to "make clear" that Mr. Crawford had
not resigned. After the sentence referencing the conversation, the
first two paragraphs of the letter stated:
At the outset, I wish to make clear that I never resigned from my position at BET. As you are well aware, my memorandum of December 20, 1999 was drafted for the sole purpose of exploring negotiations following the discussion of my possible voluntary departure. In that regard, you submitted to me a proposed separation agreement which purported to incorporate several of the topics we had discussed.
It is against this backdrop that I find your statement suggesting that I have resigned to be without foundation. What I find even more disturbing is the timing of your suggestion. I felt that negotiations toward a mutually satisfactory departure were proceeding at an acceptable pace. Then, once I brought to your attention on January 14, 2000 what I suspected to be fraudulent conduct on the part of several highly placed BET employees, you have now threatened me with removal from my position. I find these threats unacceptable from a professional perspective and curious given its proximity to my revealing to you the internal misconduct I referenced above.
A third document, this one drafted by Mr. Crawford (but never transmitted to anyone), also sparked controversy - a January 31, 2000 memorandum regarding "[t]ermination."*fn9
The memorandum indicated that Ms. Lee had informed him on January 21st that his last day of BET employment would be January 31st, and that on January 24th, Ms. Lee "had announced to Senior Staff members and to [his] staff that [he] had resigned [his] position as of January 31st." After detailing some of his personal concerns about BET's financial operations and the lack of support that he had received from Ms. Lee, Mr. Crawford concluded his memorandum with the following paragraph:
Shortly after this Senior Staff meeting and after the conclusion of a very difficult financial statement audit (an audit made more difficult by the reluctance of the advertising sales department to supply critical information), I met with [Ms. Lee] to discuss my future with BET. I again expressed my disappointment in the support of me and her lack of recognition of the improvement in the Finance department. We discussed my year at BET and the ongoing battles with fellow members [of] BET's Senior Staff. We specifically discussed the audit, the lack of cooperation during the FY 2000 budget and the ongoing abuse of BET corporate card priv[i]leges and the fact that these abuses [are] hurting BET's reputation and cost us money. After more discussion I suggested that due to the lack of support from her and [Mr. Johnson] and strained relationship with several members of Senior Staff, it may be best for me and for BET that I leave the company. [Ms. Lee] responded by saying that she could sense I was feeling this way and seemed to concur that it would be best that I leave. We then talked about timing and the fact [that] we were in the middle of the radio bidding and financing process. [Ms. Lee] stated there is never a good time for this [and] said take as much time as you like.
BET's Vice President for Human Resources hand-delivered a termination letter to Mr. Crawford on January 31, 2000, effective as of that date. On August 16, 2000, Mr. Crawford filed a complaint in Superior Court for the District of Columbia against BET, BET Chairman & CEO Robert L. Johnson, and Ms. Lee. By that time, Mr. Balaran had left his law firm. Consequently, Mr. Crawford and Ms. Katz (on behalf of B&K) signed an amended retainer agreement in mid-August 2000, authorizing B&K's representation with respect to Mr. Crawford's wrongful discharge lawsuit against BET. Mr. Crawford's complaint contained two counts, wrongful discharge and civil conspiracy. The Honorable James E. Boasberg presided over the case. As one of its defensive actions in response to Mr. Crawford's complaint, BET filed a Super. Ct. Civ. R. 11*fn10 sanctions motion against Mr. Crawford's lawyers. Judge Boasberg ordered the Rule 11 motion to be held in abeyance pending discovery, which was to proceed in two stages.
Near the end of the first stage of discovery, Ms. Katz sent Mr. Crawford a letter, dated January 28, 2003, encouraging him to settle his case with BET. The letter stated, in part:
Unfortunately, the first stage of discovery has shown that your case is much weaker than we believed it to be at the time we filed the lawsuit. This is due not only to the relatively consistent version of events that BET and its auditors have presented, but also to the fact that your own writings and testimony have undermined the version of the events that forms the basis for your claim for wrongful termination in violation of public policy . . . .
Prior to your showing us a copy of your January 31, 2000, memorandum to the audit committee, which you provided to us only several weeks ago, . . . we were confident in our ability to prove, as we had alleged in the Complaint, that when you met with Debra Lee in late November and insisted on her support in correcting BET's [alleged] unlawful financial practices, "Ms. Lee replied that BET did not provide the right employment environment for Mr. Crawford. She made it clear that BET no longer wished to continue his employment. At no time, however, did Mr. Crawford, either directly or indirectly, resign his employment with BET."
Unfortunately, your draft memorandum of January 31, 2000, to the audit committee directly contradicts this version of events. You write that you, and not [Ms.] Lee, "suggested" that you should leave BET; that [Ms.] Lee "concurred"; and that you and [Ms.] Lee put off until later a discussion about the "timing" of your departure. The memorandum not only undercuts a key allegation in the Complaint, but it is also fully consistent with the testimony that [Ms.] Lee gave at her deposition.
The letter also discussed what the attorneys would need to prove to prevail on the complaint, broached settlement possibilities, and detailed anticipated legal costs if mediation efforts were not successful.
On February 6, 2003, the parties agreed to a settlement; BET would pay Mr. Crawford $750,000 in exchange for his dismissal of all claims against BET, including any claim for attorneys' fees and costs. In connection with the settlement, Mr. Crawford sent a letter to BET, dated February 20, 2003, stating, in part, that he "did not have evidence to assert that BET, Mr. Johnson or Ms. Lee engaged in any unlawful conduct or directed others to do so."
Mr. Crawford filed his professional negligence lawsuit against defendants/appellees in December 2004, and he lodged his first amended complaint in March 2005. The amended complaint alleged several negligent actions by defendants/appellees, as well as conflicted representation. For example, Mr. Crawford claimed that Mr. Balaran prepared the text of his December 20, 1999, memorandum and his January 21, 2000, letter to Ms. Lee "which became  damaging piece[s] of evidence used by BET's counsel in defending the underlying lawsuit." He maintained that Ms. Katz "erroneously advised [him] that he would 'likely' lose on summary judgment" because of the December 20 and January 21 communications; he further averred that defendants/appellees failed to "advise him of the legal significance of 'voluntarily resigning' as opposed to 'being involuntarily terminated'"; and declared that Ms. Katz "negligently erred with regard to the analysis of the strength of [his] claims." In addition, Mr. Crawford asserted that: "The very existence of the Rule 11 [sanctions motion] created a conflict between Defendants['] personal, financial interests and their duty to zealously represent [him] through the exercise of independent professional judgment." Mr. Crawford sought damages "believed to be not less than [t]wenty [m]illion [d]ollars ($20,000,000), plus interest and costs." In response to Mr. Crawford's complaint, defensive motions were filed; the parties also conducted discovery.
During discovery, Mr. Crawford learned of a January 12, 2003, email from Ms. Katz to Mr. Marshall commenting on the advice given to Mr. Crawford by Mr. Balaran. The email stated:
Thanks for putting in all this time on [Mr.] Crawford['s case]. It feels like it's going to be very hard to overcome the bad advice [Mr.] Balaran gave him and [Mr. Crawford's] failure to tell a clear and credible story about what happened. But given that I have to go ...