Reversing a trial court, the Michigan Court of Appeals rules that an attorney being sued for legal malpractice and breach of fiduciary duty related to his actions as guardian and conservator of a person with disabilities during her divorce action cannot rely on the probate court’s previous refusal to remove him as guardian and approval of the divorce settlement as collateral estoppel to defeat those claims. Robinson v. Munger and Associates, PLLC (Mich.App.Ct., No. 325080, April 7, 2016).

In June 2011, Jon Munger, an attorney, was appointed as Angela Robinson’s guardian and conservator to represent her interests during her divorce.  In January 2012, Ms. Robinson’s parents, Remo and Marie Marzella, filed a petition under Michigan probate law to remove Mr. Munger as Ms. Robinson’s guardian and conservator, claiming that Mr. Munger was not properly representing Ms. Robinson’s interests.  After an evidentiary hearing, the probate court declined to remove Mr. Munger as guardian or conservator  On March 1, 2012, the court granted a judgment of divorce referencing a settlement agreement that was signed by Ms. Robinson’s husband and by Mr. Munger as Ms. Robinson’s guardian and conservator.  Mr. Munger was subsequently removed as Ms. Robinson’s guardian and conservator and the Marzellas were appointed in his stead.

The Marzellas then filed a legal malpractice and breach of fiduciary duty suit against Mr. Munger and his firm, claiming that the terms of the divorce were not in Ms. Robinson’s best interest and that Mr. Munger breached his fiduciary and legal duties while negotiating the settlement agreement.  The trial court granted Mr. Munger’s motion for summary judgment based on collateral estoppel, finding that the probate court’s refusal to remove Mr. Munger during the pendency of the divorce proceedings and the court’s approval of the settlement agreement barred the Marzellas from asserting further claims against Mr. Munger.

The Michigan Court of Appeals reverses the trial court.  The court finds that “the underlying court action relied upon by defendants was a guardianship proceeding initiated by petition—not a civil complaint or criminal information—and only resulted in a hearing, not a ‘litigation.’ Plaintiffs never had a ‘full and fair opportunity to litigate’ the issues underlying their claims; those issues of fact were never ‘actually litigated’ in a prior cause of action that resulted in a valid final judgment.
[citations removed] ‘Collateral estoppel conclusively bars only issues ‘actually litigated’ in the first action. A question has not been actually litigated until put into issue by the pleadings, submitted to the trier of fact for a determination, and thereafter determined.’[citations removed]”

To read the full text of the court’s decision, go to:   http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/COA/20160407_C325080_36_325080.OPN.PDF