KEEFE et al. v. NORTHSIDE HOSPITAL, INC., 245 Ga. App. 420

Barnes, Judge. Dennis and Rachel Keefe filed suit to enforce a settlement agreement with Northside Hospital, Inc. and appeal from the trial court’s grant of

summary judgment to the hospital and the denial of their motion for

summary judgment. Because we find the trial court erred in granting

summary judgment to the hospital and denying the Keefes’

summary judgment motion, we reverse. On appeal from the grant of

summary judgment, this Court conducts a de novo review of the record, construing the evidence and all inferences therefrom in favor of the nonmoving party. Maddox v. Southern Engineering Co., 231 Ga. App. 802-803 (500 SE2d 591) (1998). Viewed in this light, the record shows that the settlement at issue in this appeal relates to injuries Dennis Keefe received during a June 11, 1992 admission to the hospital. After the trial court dismissed the Keefes’ complaint for professional negligence against the hospital based upon their failure to comply with OCGA § 9-11-9.1 and this Court affirmed, Keefe v.

Northside Hosp., 219 Ga. App. 875 (467 SE2d 9) (1996), the parties entered into settlement negotiations while the Keefes pursued a petition for certiorari to the Supreme Court. On February 5, 1996, the Keefes’ attorney and the hospital’s attorney orally agreed to settle the Keefes’ claims against the hospital for $25,000. Both attorneys sent letters confirming the settlement the same day. The Keefes’ attorney wrote: This will confirm that we have this day resolved the above captioned cause of action [Keefe v. Northside Hosp.] by settlement.

The Defendant Northside Hospital, Inc. has agreed to pay the Keefes the sum of twenty-five thousand dollars ($25,000) to dismiss their case with prejudice, and forbear the seeking of certiorari to the Supreme Court of Georgia. The hospital’s attorney wrote: This letter confirms settlement of any and all claims that were or could have been raised as a result of Lawrence Dennis Keefe’s treatment at Northside Hospital during his June 11, 1992 admission.

We will be forwarding to you our standard settlement package including the Release and Hold Harmless Agreement, Dismissal With Prejudice, Hospital Lien Affidavit and settlement check shortly. ... As you know, the settlement was with the understanding that Northside Hospital not be required to do any further legal work on this matter. Thus, we could not agree that any petition for cert be filed. After receiving a release from the hospital, the Keefes’ attorney requested that a confidentiality provision be deleted.

According to the hospital’s attorney, the changes requested by the Keefes’ attorney were made, and the attorneys for both parties agreed on the release language. As a result of the settlement, the Keefes’ attorney “abandoned all attempts to seek certiorari to the Supreme Court.” Approximately two months after the settlement was negotiated, the Keefes fired their first attorney and retained a second attorney to conclude the settlement and pursue a legal malpractice action against their first attorney.

Because the second attorney was concerned that the Keefes might release their legal malpractice action against their first attorney if they signed the current version of the release, he drafted a revised release and sent it to the hospital’s attorney. Although this revised release simply clarified that the Keefes were not releasing any legal malpractice actions against their first attorney and summarized the parties’ contentions in the underlying lawsuit, the hospital refused to accept these revisions and insisted that the Keefes sign the release agreed upon by their first attorney.

The revised release included language that the Keefes were releasing the hospital and all parties, other than their first attorney, in connection with Mr. Keefe’s June 11, 1992 admission to the hospital. When the Keefes failed to sign the release insisted upon by the hospital, the hospital stopped payment on the settlement check it had issued and provided to the Keefes’ first attorney. After the Keefes settled their legal malpractice claim against their first attorney approximately nine months later, they signed the release insisted upon by the hospital and requested a check for $25,000.

When the hospital refused to abide by the earlier settlement, the Keefes filed suit to enforce it. After the parties filed cross-motions for

summary judgment, the trial court granted the hospital’s motion and denied the Keefes’ motion. In its written order disposing of the motions, the trial court made the following findings:

(1) That a valid and binding settlement agreement was entered into between the parties on February 5, 1996;

(2) That the plaintiffs attempted to renegotiate a portion of the agreement by adding additional language to a release previously agreed upon by the parties;

(3) That the language added to the release was material;

(4) That defendant had the right to insist on the original language of the release as agreed to;

(5) That upon plaintiffs’ refusal to sign the agreed upon release, it was appropriate for the defendant to either rescind the agreement or move to enforce it; and

(6) Defendant promptly notified plaintiffs of its intention to rescind the settlement agreement and did properly rescind. The Keefes appeal from this ruling, contending the trial court erred when it failed to enforce their settlement with the hospital and denied their motion for

summary judgment. We agree with the trial court’s conclusion that the parties entered into a valid and binding settlement agreement on February 5, 1996, as do the parties to this appeal. We disagree with the trial court’s conclusion that the requested changes to the release were material and authorized the hospital to rescind the settlement agreement. The changes requested by the Keefes had no impact upon the bargained-for settlement with the hospital, i.e., that in exchange for $25,000, the Keefes would (1) release all claims that could have been brought as a result of Mr.

Keefe’s June 11, 1992 admission to the hospital, (2) forgo seeking certiorari in the Supreme Court, and (3) dismiss their case against the hospital. Nothing in the language of the original release would have prevented the Keefes from suing their first attorney for malpractice. In Lackey v. McDowell, 262 Ga. 185 (415 SE2d 902) (1992), the Supreme Court of Georgia held that: “[o]nly those parties named in the release will be discharged by that instrument.

By ‘named,’ we mean being identified either by proper name or such other description as leaves no question of the identity of the party released.” (Punctuation omitted; emphasis in original.) Id. at 185. Since the Keefes’ first lawyer would not fall within the Supreme Court’s definition of a “named” released party in the original release, the revised release, which simply sought to ensure that the Keefes did not somehow release their claims against their first lawyer for legal malpractice, did not expose the hospital to any additional legal work or liability.

As a result, the changes in the revised release and the Keefes’ understandable reluctance, based upon advice of counsel, to sign a release without these changes did not authorize the hospital to rescind the settlement. Stacey v. Jones, 230 Ga. App. 213, 215 (2) (495 SE2d 665) (1998) (failure to comply with demands to forward check and release by a certain time and date was not grounds for rescission of settlement). Therefore, the trial court erred when it denied the Keefes’ motion for

summary judgment to enforce the settlement and granted the hospital’s

summary judgment motion. Judgment reversed. Eldridge, Phipps and Mikell, JJ., concur. Johnson, C. J., concurs in the judgment only. Pope, P. J., and Blackburn, P. J., dissent. The original release did not specifically name the Keefes’ first attorney as a released party and the more general description of the parties released was linked to claims arising out of Mr. Keefe’s care during his June 11,1992 hospital admission. Since the Keefes’ claims against their first attorney arose out of a different event, namely their first attorney’s failure to file an OCGA § 9-11-9.1 affidavit, their first attorney was not a “named” party who would have been discharged by the original release.