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Patton v. Johnson

United States District Court, D. Rhode Island

August 2, 2018

RICKIE PATTON; and CATHLEEN MARQUARDT, Plaintiffs,
v.
BARRY JOHNSON and STEVEN JOHNSON, individually and as LAW OFFICES OF STEVEN M. JOHNSON, P.C. d/b/a THE JOHNSON LAW FIRM, Defendants.

          MEMORANDUM AND ORDER

          WILLIAM E. SMITH, Chief Judge.

         Before the Court is Defendant Barry Johnson's Motion to Stay and Compel Arbitration (ECF No. 11). Magistrate Judge Patricia A. Sullivan filed a Report and Recommendation (“R&R”) (ECF No. 20), recommending that the Motion be denied. Defendant filed a timely Objection to the R&R (ECF No. 30).[1] The Court accepts the R&R and denies Defendant's Motion.

         As Defendant acknowledges, “[T]he First Circuit in Powershare held that a motion to stay pending an arbitration was non-dispositive.” (Obj. 6 (citing Powershare, Inc. v. Syntel, Inc., 597 F.3d 10, 14 (1st Cir. 2010)).) On review of a magistrate judge's decision on a nondispositive motion, the Court “set[s] aside the order” only “if it ‘is clearly erroneous or is contrary to law.'” Powershare, 597 F.3d at 14 (quoting Fed.R.Civ.P. 72(a)) . “This means that [I] must accept both the trier's findings of fact and the conclusions drawn therefrom unless, after scrutinizing the entire record, [I] ‘form a strong, unyielding belief that a mistake has been made.'” Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 4 (1st Cir. 1999) (quoting Cumpiano v. Banco Santander P.R., 902 F.2d 148, 152 (1st Cir. 1990)).

         Although Defendant's objections are quite specific, they do not convey the necessary “strong, unyielding belief” that Magistrate Judge Sullivan clearly erred. For that reason, the Court adopts the well-supported R&R in full.

         Accordingly, this Court ACCEPTS the R&R (ECF No. 20) and adopts its reasoning and recommendations. Defendant's Motion to Stay and Compel Arbitration (ECF No. 11) is DENIED.

         IT IS SO ORDERED.

         REPORT AND RECOMMENDATION

          PATRICIA A. SULLIVAN, United States Magistrate Judge.

         Pending before the Court is the motion of defendant, attorney Barry Johnson, to stay this legal malpractice case and to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. ECF No. 11. Also named as defendants are the law firm for which Barry Johnson worked, Law Offices of Steven M. Johnson, P.C., d/b/a the Johnson Law Firm, together with its principal, Steven M. Johnson (collectively, “JLF”). Only Barry Johnson, who apparently is not related to attorney Steven M. Johnson, presses the motion to compel arbitration.[1]

         In their complaint, plaintiffs Rickie Patton and his wife, Cathleen Marquardt, have sued JLF and Barry Johnson, a Texas attorney who worked for JLF, for legal malpractice (among other torts), which Patton and Marquardt claim was committed in the course of defendants' representation of them[2] in litigating and settling Patton's claim in In re Kugel Mesh Hernia Patch Products Liability Litigation, MDL Docket 07- 1842-ML (D.R.I.). Barry Johnson seeks to enforce a set of arbitration clauses contained in the Attorney Representation Agreement (“ARA”) (ECF No. 1-1 at 18) executed in April 2007 by Patton (but not his wife) and JLF. ECF No. 1-1 at 18 ¶¶ 16-18. Barry Johnson did not sign the 2007 ARA; his contractual relationship is with JLF and did not begin until February 20, 2013, when he signed an employment agreement.[3]Nevertheless, Barry Johnson seeks to enforce (against Patton and Marquardt) ¶ 17 of the ARA, which states that any dispute regarding the “interpretation, performance, or breach of this Fee Agreement, including any claim of legal malpractice . . . shall be resolved by final and binding arbitration conducted in Fort Worth, Texas and administered by Judicial Arbitration and Mediation Service (JAMS).” ECF No. 1-1 at 18 ¶ 17. JLF has not joined, nor does it oppose, the motion.

         For the reasons that follow, I recommend that the motion to compel arbitration be denied.

         I. BACKGROUND

         In April 2007, Patton and JLF signed the ARA whereby Patton engaged JLF to represent him on a contingent fee basis in connection with his Kugel Mesh claim. ECF No. 1-1 at 18 ¶¶ 1-4. The ARA provides that it is to be construed pursuant to the law of Texas. Id. ¶ 10. Its severability clause makes clear that the unenforceability of any provision does not affect the other provisions. Id. The ARA reflects Patton's agreement that JLF might employ associate counsel at its expense and in its discretion to appear or undertake to represent Patton. Id. ¶ 11. While plaintiffs and JLF disagree on the precise sequence of events, it appears that Patton (but not Marquardt) signed the ARA either immediately prior to or during their only meeting with attorney Steven M. Johnson, who signed the ARA on behalf of JLF. See ECF Nos. 15-2 ¶ 4, 15-3 ¶¶ 3-4, 16-2 ¶¶ 4-5. The ARA is a form prepared by JLF, with terms set out in sixteen numbered clauses (exclusive of the arbitration clauses) and lines at the foot of the document for dates and signatures of “CLIENT” and “ON BEHALF OF FIRM.” These lines were signed and dated by Patton and by JLF indicating the formation of the contract to engage JLF. ECF No. 1-1 at 18. The parties do not dispute that these sixteen clauses of the ARA constitute a binding engagement agreement.

         The ARA's three arbitration clauses are paragraphs 16, 17 and 18. ECF No. 1-1 at 18 ¶¶ 16-18. They address arbitration exclusively, including venue selection (Fort Worth, Texas). None of the other provisions of the ARA makes any reference to arbitration or to forum selection for litigation or arbitration of disputes. Collectively, the three arbitration clauses provide:

(1) The client has been advised “of the advantages and disadvantages of the use of arbitration” and has had an opportunity to seek advice from independent counsel;
(2) Based on this advice, the parties agree that “any dispute arising from the interpretation, performance, or breach of this Fee Agreement, including any claim of legal malpractice, . . . shall be resolved by final and binding arbitration conducted in Fort Worth, Texas and administered by Judicial Arbitration and Mediation Service (JAMS)”; and
(3) “[J]udgment upon any award rendered by the arbitrator in such proceedings may be entered by any state or federal court with jurisdiction over the matter.”

Id. ¶¶ 16-18.

         These three clauses are configured differently from the other provisions in the ARA form in that each ends with the following: “***(CLIENT INITIAL HERE ___ X.” Id. (bold in original). However, none of the three is signed or initialed in the space following the clause. Both Patton and Marquardt have averred that, during their brief meeting with attorney Steven M. Johnson, he did not mention the arbitration clauses, did not advise them regarding arbitration and did not ask or suggest that Patton sign or initial any of the arbitration clauses. ECF Nos. 15-2 ¶ 5, 15-3 ¶ 4. As a result, only the foot of the document reflects Patton's signature. ECF No. 1-1 at 18. Patton has averred that he never believed or understood that he agreed to arbitration or that he was waiving his right to a jury trial. ECF No. 15-2 ¶ 6; see ECF No. 15-3 ΒΆ 4 (Marquardt also avers that Steven M. Johnson did not review the arbitration language or jury trial waiver during the meeting at which the ARA was signed). Steven M. Johnson's affidavit states that he met with Patton and Marquardt at the commencement of the engagement, soon after ...


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