Knowlton v. Rowe

STATE OF MAINE SUPERIOR COURT

PENOBSCOT, SSe CIVIL ACTION

DOCKET

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NO. CV-06-206

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This matter is before the court on a Rule 26(g) .;

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discovery dispute regarding whether the plaintiff may

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depose the defendants' attorney and obtain other documents

and information regarding certain insurance complaint

negotiations.

BACKGROUND

Plaintiff Alan Knowlton ("Knowlton") is a former

employee of Bankers Life and Casualty Company ("Bankers

Life"). He was terminated pursuant to one of the terms of

a consent agreement entered into between Bankers Life and

the defendants in this matter, the Maine Attorney General's

office and the Superintendent of the Bureau of Insurance

(collectively referred to in this order as "the State").

The consent agreement reportedly represented the

culmination of negotiations pertaining to consumer

complaints received by the State against Bankers Life

between 2002 and 2005. The Bankers Life consent agreement

with the State was executed on April 11, 2005.

Knowlton had reached an earlier consent agreement with

the State when he was accused of misrepresenting the

financial strength rating of Bankers Life in a recruiting

effort. This consent agreement provided, among other

things, that the State would forgo any other disciplinary

action against Knowlton with respect to his misconduct.

The Knowlton consent agreement with the State was executed

on March 28, 2005. In fact, following the execution of the

State/Bankers Life consent agreement, Knowlton was fired

consistent with the terms of that agreement which directed

that he be fired.

In his original complaint against the State, Knowlton

brought suit under separate contract and tort claims for

violation of his personal consent agreement with the State.

At that time, he requested to depose the State's attorney,

Assistant Attorney General Andrew Black (UAttorney Black"),

regarding the negotiations that led into the consent

agreement between the State and Bankers Life. In addition,

he requested that Attorney Black provide any documents

relating to such negotiations. The State objected on

grounds of statutory confidentiality pursuant to 24

M.R.S.A. § 206(2). Justice Mead sustained the objection in

2

a March 7, 2007 order, stating: nThe court is satisfied

that the negotiation process is subject to statutory

confidentiality. The court is further satisfied that the

current configuration of the matter does not justify

judicial abrogation of the confidentiality established by

the statute." However, Justice Mead did state that the

issue could be raised without prejudice should Knowlton's

tort claims survive a motion for summary judgment on the

procedural issues.

Following this order, however, Knowlton agreed to

dismiss his tort claim, acknowledging that it was barred by

the Maine Tort Claims Act. Subsequently, the court granted

Knowlton's request to amend his complaint in order to

incorporate several claims under 42 U.S.C. § 1983. In

order to obtain evidence in support of his 1983 claims,

Knowlton renewed his request for Attorney Black's

deposition, which brings us to the discovery dispute now

before the court.

DISCUSSION

The defendants renew their argument that the

negotiation process is subject to confidentiality

provisions of Maine statutory law. Pursuant to the Maine

Insurance Code, all Bureau records are subject to public

inspection except for nrecords, correspondence and reports

3

of investigation in connection with actual or claimed

violations of this Title or prosecution or disciplinary

action for those violations," which are confidential. 24-A

M.R.S.A. § 216(2). Nonetheless, "[a]ll records and

documents of the bureau are subject to subpoena by a court

of competent jurisdiction." Id. § 216(3). That suggests

to the court that there are limits on the claim for

confidentiality by the State.

The State first directs the court to Justice Mead's

March 2007 order and argues that the court cannot now allow

the deposition pursuant to the doctrine of the law of the

case. This doctrine applies to "proceedings involving the

same case." Monopoly, Inc. v. Aldrich, 683 A.2d 506, 510

(Me. 1996) (quoting Grant v. City of Saco, 436 A.2d 403,

405 (Me. 1981)). This is not the same "configuration" that

was before Justice Mead and which was the subject of his

order. As such, the court has authority to examine the

discovery motion with regard to the current case posture.

Second, the State argues that there are "several

flaws" in each of Knowlton's 1983 claims and, in this

sense, "Knowlton's constitutional claims have no more

potential viability than did his barred tort claim."

(State's Mem. of Law at 3-4). Although the defendants

question the validity of the 1983 claims, this dispute is

4

before the court solely on a discovery dispute and not as a

motion to dismiss.

Having addressed these initial arguments, this court

finds that the plaintiff should have the opportunity to

develop his case. Although the 1983 claims are separate

and distinct from the now dismissed tort claims, the State

previously recognized with respect to the tort claims that

uMr. Knowlton is at least entitled to the opportunity to

attempt to develop his case." (State's 2/23/2007 Mem. of

Law at 6). Likewise, Knowlton is entitled the opportunity

to develop his 1983 claims. Furthermore, section 216(2) is

concerned with public exposure to records and other

information concerning investigations and negotiations

pertaining to insurance violations. As the State points

out, there is a risk that public exposure to the

information requested by Knowlton would chill ucandid

exchange of information in Bureau investigations."

(State's Mem. of Law at 5). In order to prevent such a

chilling effect, the court can and does order, pursuant to

its subpoena power under section 216(3), that Knowlton will

be able to take the deposition of Attorney Black, however,

in the interest of preventing inappropriate public exposure

of the Bureau's 'records,' all records and transcripts from

the deposition, including deposition exhibits, will remain

5

confidential and will be kept in the custody of each

counsel who appear in this litigation for use exclusively

in this litigation. Copies of the deposition transcript

will not be provided to any third parties (including expert

consultants for any party) without an order of the Court

authorizing that disclosure, following a hearing, or by the

mutual agreement in writing of all counsel who appear in

this litigation. The court is prepared to revisit this

issue following the completion of the deposition, at the

request of any party, to further balance the interest of

the Bureau to confidentiality as against Knowlton's

interest in protecting his rights in this litigation.

CONCLUSION

The entry is:

For the above stated reasons, the court can and does

order, pursuant to its subpoena power under 24-A M.R.S.A.

section 216(3), that Knowlton will be able to take the

deposition of Attorney Black, however, in the interest of

preventing inappropriate public exposure of the Bureau's

'records,' all records and transcripts from the deposition,

including deposition exhibits, will remain confidential and

will be kept in the custody of each counsel who appear in

this litigation for use exclusively in this litigation.

6

Copies of the deposition transcript will not be provided to

any third parties (including expert consultants for any

party) without an order of the court authorizing that

disclosure, following a hearing, or by the mutual agreement

in writing of all counsel who appear in this litigation.

The court is prepared to revisit this issue following the

completion of the deposition, at the request of any party,

to further balance the interest of the Bureau to

confidentiality as against Knowlton's interest in

protecting his rights in this litigation.

The clerk shall incorporate this Order into the docket

by reference pursuant to M.R. Civ. P. 79(a).

Dated :'J'Jlr I b , 2007 ~,

Kevin M. Cuddy

Justice, Superior Court

7

07/19/2007 MAINE JUDICIAL INFORMATION SYSTEM ksmi.th

PENOBSCOT COUNTY SUPERIOR COURT mjxxi.048

CASE PARTY ADDRESS BOOK

ALAN D KNOWLTON VS STEVEN ROWE, AS AAG OF STATE OF MAINE, ET AL

UTN:AOCSsr -2006-0110339 CASE #:BANSC-CV-2006-00206

ALAN D. KNOWLTON PL

ATTY BALDACCI, JOSEPH M. Tel# (207) 945-3333

ATTY ADDR:6 STATE ST, SUITE 605 PO BOX 1423 BANGOR ME 04402-1423

ATTY MEHNERT, ERIC Tel# (207) 776-8378

ATTY ADDR:6 STATE STREET PO BOX 2668 BANGOR ME 04402

STEVEN ROWE AS ATTORNEY GENERAL,MAINE DEF

ATTY TAUB, CHRISTOPHER C. Tel# (207) 626-8800

ATTY ADDR:111 SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-0006

ALESSANDRO A. IUPPA SUP INS - NO LONGER SUP, SUB DEF

MAIL ADDR:DEPT PROFESSIONAL & FINANCIAL 35 STATE HOUSE STATION AUGUSTA ME 04333

-----------------------------------

ERIC A. CIOPPA SUP INS SUBSTITUTED DEF

ATTY TAUB, CHRISTOPHER C. Tel# (Z07) 6Z6-BB00

ATTY ADDR:lll SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-~

M~More, Space ~ EXit:M

Select the EXIT KEY for poge selection line.

>

STATE OF MAINE SUPERIOR COURT

PENOBSCOT, ss. CIVIL ACTION

DOCKET NO. CV-06-206

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ALAN D. KNOWLTON,

Plaintiff,

v. ORDER

G. STEVEN ROWE, ATTORNEY

GENERAL OF THE STATE OF MAINE,

and

ERIC A. CIOPPA, ACTING SUPER­ !1

INTENDENT OF THE MAINE BUREAU

OF INSURANCE,

! F Ei"'(lEr~COT CO UNTY

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Defendants.

The plaintiff has moved to amend his complaint to add three defendants in their

individual capacities, Andrew Black, Glenn Griswold, and Judith Shaw. The defendants

have opposed this motion.

BACKGROUND

The plaintiff, Alan D. Knowlton, commenced this action by filing his original

complaint with this Court on September 26, 2006. In his original complaint he sought

damages from the defendants for breach of contract and intentional interference with a

contractual right and also sought a declaratory judgment. On April 23, 2007 the plaintiff

filed a motion to amend his complaint to remove his claim of intentional interference

with a contractual right and to add three claims pursuant to 42 U.S.c. § 1983. The

defendants did not oppose and the amendment was permitted.

Discovery in this case was twice extended and finally closed on January 28, 2008.

During discovery the plaintiff deposed all of the individuals he seeks to add as defendants

1

through his proposed amendment. He deposed Andrew Black on September 6, 2007.

The depositions of Glenn Griswold and Judith Shaw took place on November 1, 2007.

On February 27, 2008, the defendants filed a motion for summary judgment. The

defendants sought summary judgment on the plaintiff's claims brought under section

1983. The defendants argued that they could not be liable under section 1983 because

they were not "persons" within the meaning of that section when sued in their official

capacities as officers of the State. See 42 U.S.c. § 1983; Will v. Michigan Dep't ofState

Police, 491 U.S. 58, 71 (1989); Andrews v. Dep't ofEnvtl. Prot., 1998 ME 198, ~ IOn. 4,

716 A.2d 212,217.

On April 4, 2008 the plaintiff tiled his opposition to the defendants' motion for

summary judgment and the motion to amend his complaint that is now before the Court.

In his opposition to summary judgment, the plaintiff conceded that the defendants were

not persons under section 1983 but relied upon the motion to amend his complaint, which

is now before the Court, in order to oppose summary judgment. The defendants have

opposed the plaintiff's motion to amend.

DISCUSSION

Leave to amend pleadings "shall be freely given when justice so requires." M.R.

Civ. P. 15(a).1 "Whether to allow a pleading amendment rests with the court's sound

discretion." In re Petition ofSen, 1999 ME 83, ~ 10, 730 A.2d 680, 683. The discretion

of the court is limited and the court may abuse such discretion if it denies an amendment

that is necessary to prevent injustice. See Bahre v. Liberty Group, Inc., 2000 ME 75, ,-r 7,

750 A.2d 558, 560.

I The plaintiff has characterized his motion as one to amend the pleadings. Insofar as it seeks to add

defendants to the action it is a motion under M.R. Civ. P. 21. See I Field, McKusick & Wroth, Maine Civil

Practice § 21.2 at 380 (2d ed. 1970). The court's standard for review of these motions is the same. See 4

JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ~ 21.02(3) (3d ed. 2007).

2

The court must consider all circumstances surrounding a proposed amendment in

deciding whether or not to grant leave to amend. Factors include whether the amendment

would prejudice the opposing party, was brought in bad faith, would unduly delay the

trial, or was not requested in a timely way. "An amendment should be offered promptly

upon awareness of the need for it, and unreasonable delay may influence the court's

discretion." 1 Field, McKusick & Wroth, Maine Civil Practice § 15.4 at 304 (2d ed.

1970).

In this case the plaintiff brought his motion to amend his complaint over eighteen

months after his initial complaint was filed, after discovery was complete, and after the

defendants had filed a motion for summary judgment. The plaintiff argues that this

amendment should be permitted because it was only during discovery that these three

individuals admitted that they were involved in the decisions that are the subject of the

complaint. However, the plaintiff waited six months after taking depositions from these

individuals and waited until after discovery had closed to seek to amend his complaint.

The court is within its discretion to deny a plaintiff's motion to amend the pleadings

when it is filed long after the original complaint was filed, after the close of discovery,

and after defendants have filed a motion for summary judgment. McIntyre v. Nice, 2001

ME 74, ~ 10, 786 A.2d 620, 622.

The plaintiff in this case has not made a prompt motion to amend his complaint

following the discovery of the facts upon which the amendment is based. Rather, the

plaintiff is attempting to use his amendment as a tool to defeat the defendants' motion for

summary judgment on the plaintiff's section 1983 claims. 2 "A motion for leave to amend

2 In their motion for summary judgment the defendants argued that they are not "persons" for purposes of a

claim under section 1983. The plaintiff concedes th is in his response and asks the Court to deny summary

judgment based upon the proposed amendment.

3

is not a vehicle to circumvent summary judgment." Schlacter-Jones v. Gen. Tel., 936

F.2d 435, 443 (9th Cir. 1991). See Lockheed Martin Corp. v. Network Solutions, Inc.,

175 F.R.D. 640, 645 (C.D. Cal. 1997). The plaintiff may not simply amend his complaint

late in the litigation process in order counter meritorious arguments that have been raised

by his adversaries in their motion for summary judgment.

This amendment would further delay this litigation that has been pending for over

two years. Adding the aforementioned defendants would likely require additional

discovery as the proposed individual defendants may wish to retain their own counsel and

defend themselves. The plaintiff suggests to the Court that the State's attorneys would

represent these individuals alongside the current defendants thereby minimizing delay;

however, as the State has argued, there is potential that this will not occur. These three

individuals may have conflicting interests in the litigation that require separate

representation. See M. Bar R. 3.4(c)(2). The possibility of further delay in this already

lengthy litigation weighs heavily against the plaintiff s proposed amendment.

The Court also notes that no injustice will result upon the denial of the plaintiff s

motion. The statute of limitations for section 1983 claims is six years. 14 M.R.S. § 752

(2008); Stickney v. City of Saco, 2001 ME 69, ~ 27, 770 A.2d 592, 603; McKenney v.

Greene Acres Manor, 650 A.2d 699, 701 (Me. 1994). The conduct complained of

occurred in 2005, leaving the plaintiff ample time to file a separate action against the

proposed defendants ifhe wishes.

CONCLUSION

Considering the plaintiffs delay in seeking leave to amend his complaint, the

significant possibility of further delay in this litigation, and that no injustice will occur in

4

denying the plaintiff s motion, the Court denies the plaintiffs motion to amend his

complaint.

The entry is:

1. The defendants' motion to amend the

pleadings is DENIED.

2. This order is incorporated into the docket by

reference pursuant to M.R. Civ. P. 79(a).

Date: October 1 ,2008

ilham R. Anderson

Justice, Superior Court

5

10/08/2008 MAINE JUDICIAL INFORMATION SYSTEM ksmfth

PENOBSCOT COUNTY SUPERIOR COURT mjtvi.001

PAGE P - PARTY VIEW

ALAN 0 KNOWLTON VS STEVEN ROWE, AS AAG OF STATE OF MAINE, ET AL

UTN:AOCSsr -2006-0110339 CASE #:BANSC-CV-2006-00206

SEQ TITLE NAME DOB ATTY

001 PL ALAN 0 KNOWLTON BY JOSEPH BALDACCI ESQ / / T

002 DEF * STEVEN ROWE AS ATTORNEY GENERAL,MAINE / / T

003 DEF ALESSANDRO A IUPPA SUP INS - NO LONGER SUP / / PRO

004 DEF * ERIC A CIOPPA SUP INS SUBSTITUTED / / T

* BY CHRISTOPHER TAUB, AAG

STATE OF MAINE SUPERIOR COURT

PENOBSCOT, ss. CIVIL ACTION

DOCKET NO. CV-06-206

ALAN D. KNOWLTON,

Plaintiff,

v. ORDER

G. STEVEN ROWE, ATTORNEY

GENERAL OF THE STATE OF MAINE,

and ~-_ ..._--_.,

FILED & ENTERED

ERIC A. CIOPPA, ACTING SUPER­ SUPERIOR COURT

INTENDENT OF THE MAINE BUREAU

OF INSURANCE, OCT 1 5 2008

Defendants. PENOBSCOT COUNTY

The plaintiff seeks in his first amended complaint relief for breach of contract and

violations of 42 U.S.c. § 1983 as well as a declaratory judgment. The defendants, the

Secretary of State and Superintendent of the Maine Bureau of Insurance, have moved for

summary judgment and the plaintiff has opposed.

BACKGROUND

The plaintiff, Alan D. Knowlton, was previously employed by Bankers Life and

Casualty Company (hereinafter "Bankers Life") as the branch manager of its Bangor

office. In 2004, the Maine Bureau of Insurance received a complaint alleging that

Knowlton had misrepresented the financial strength rating of Bankers Life, as rated by

A.M. Best Company, during a recruitment meeting for new producers. The Bureau

determined that Knowlton had in fact misrepresented the rating. Knowlton entered into

consent agreement INS-04-2000 with the Bureau, which was signed by Knowlton on

1

March 28, 2005, and by the Bureau on AprilS, 2005. The sanctions required by the

consent agreement included inter alia, a $750 fine, a period of license probation, and

potential license suspension if the probationary period was not satisfactorily completed.

The consent agreement also provided that the sanctions contained therein would be the

sole sanctions against Knowlton in resolution of the alleged misrepresentations of

Bankers Life's financial strength rating.

25. In consideration of Mr. Knowlton's execution of and compliance with

the terms of this Consent Agreement, the Superintendent and the Attorney

General agree to forgo pursuing further disciplinary measures or other

civil or administrative sanctions against Mr. Knowlton for the violations

described in the Stipulations, other than those agreed to in this Consent

Agreement. ...

(Supp. S.M.F. ~ 18; Shaw Mf. Ex. B).

Meanwhile the Bureau was also negotiating with Bankers Life in order to resolve

70 complaints that had been received from consumers from January 2002 through April

2005. Bankers Life representatives signed a consent agreement on April 13,2005, which

was signed by the Bureau on April 14, 2005. This agreement constituted the settlement

of multiple complaints that had been filed against Bankers Life.

10. This Agreement includes, but is not limited to, a settlement as to the

company's responsibility under the following Bureau of Insurance

administrative petitions, identified as follows:

INS-04-204, IN RE: Bankers Life and Casualty Company,

Paul A. Landry and Jerold S. Smith;

INS-04-228, IN RE: Bankers Life and Casualty Company

and Gary R. Smith;

INS-04-229, IN RE: Bankers Life and Casualty Company

and Mary E. Matarazzo; and

INS-04-2000, IN RE: Bankers Life and Casualty Company

and Alan D. Knowlton.

(Shaw Aff. Ex. A).

2

The agreement detailed varIOUS sanctions against Bankers Life including a

$400,000 civil penalty. It also required that Bankers Life relieve Knowlton and the

branch manager of its South Portland office from their positions as branch managers.

53. Within 14 days of the effective date of this Agreement, Bankers Life

shall relieve the managers of its South Portland and Bangor branch offices

of their positions as branch managers. Bankers Life shall fill the vacant

branch manager positions as expeditiously as possible, but with the

priority of selecting individuals who are experienced enough to ensure that

each branch operates in accordance with Maine law and the terms of this

agreement.

(Supp. S.M.F. ~ 47; Shaw Aff. Ex. A).

The consent agreement was fully executed on April 14, 2005 and Bankers Life

contacted Knowlton that same day to advise him that he was being removed from his

position.

DISCUSSION

A. Standard of Review

Summary judgment "shall be rendered ... if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, referred to in

the statements [of material facts] show that there is no genuine issue as to any material

fact." M.R. Civ. P. 56(c); Botka v. s.c. Noyes & Co., 2003 ME 128, ~ 18,834 A.2d 947,

952-53. "A material fact is one that can affect the outcome of the case." Dyer v. Dep 't of

Transp., 2008 ME 106, ~ 14, 951 A.2d 821, 825. "A genuine issue of material fact exists

when the fact-finder must 'choose between competing versions of the truth.'" Id.

(quoting MP Assocs. v. Liberty, 2001 ME 22, ~ 12, 771 A.2d 1040, 1044).

3

B. Nature of the Consent Agreement

The State argues that the consent agreement that it entered with Knowlton was not

a contract, precluding Knowlton from any recovery under contract law. An agreement

between two parties supported by consideration is a contract enforceable at law. See

RESTATEMENT (SECOND) OF CONTRACTS §§ 1,71 (1981); 1 JOSEPH M. PERILLO, CORBIN

ON CONTRACTS § 1.3 at 9-10 (rev. ed. 1993). Consideration is a "performance or return

promise ... sought by the promisor in exchange for his promise and is given by the

promisee in exchange for that promise." RESTATEMENT (SECOND) OF CONTRACTS § 71.

The consent agreement in this case is an agreement between Knowlton and the

State. The State received Knowlton's consent to the sanctions listed in the agreement as

consideration in exchange for its promise to pursue no further remedies or sanctions

relating to his alleged misrepresentations of Bankers Life's financial strength rating. The

fact that the agreement entered into by the parties is described as a consent agreement is

of no consequence. Contracts are described by many names, including leases and sales.

The use of the term "agreement" rather than "contract" does not remove this transaction

from the law of contracts. The plaintiff has properly raised issues of fact regarding the

existence of a contract; therefore, the Court cannot determine as a matter of law that a

contract does not exist.

The very nature of consent agreements supports this conclusion. A consent

agreement is essentially a settlement agreement in the context of adjudicatory

proceedings before an administrative agency. It is well-established in Maine that

"[s]ettlement agreements are analyzed as contracts." Marie v. Renner, 2008 ME 73, ~ 7,

946 A.2d 418, 420. The Court sees no discernable difference between a settlement

agreement in the context of civil litigation and a consent agreement in the context of

4

administrative adjudications; therefore, the consent agreement in this case should be

analyzed as a contract. See Employers Ins. Co. of Wausau v. Crouse-Cmty. Ctr., 489 F.

Supp. 2d 176, 180 (N.D.N. Y. 2007), reconsideration denied by 2008 U.S. Dist. LEXIS

18454 (N.D.N.Y. 2008).

C. Sovereign Immunity

The State further argues that it cannot be held liable for damages under contract

because it is protected by sovereign immunity. Sovereign immunity bars recovery

against the State unless the State has consented to be sued by an act of the legislature.

Drake v. Smith, 390 A.2d 541, 543 (Me. 1978). The Law Court has suggested such

consent may be implied for breach of contract claims when the legislature enacts "a

general statute allowing the State to enter into contracts." Profit Recovery Group, USA v.

Comm'r, Dep 't ofAdmin. & Fin. Servs., 2005 ME 58, ~ 28,871 A.2d 1237, 1244. See

Drake, 390 A.2d at 545.

In the present case, 10 M.R.S. § 8003(5)(B) authorizes the Bureau to enter into

consent agreements in order to resolve complaints or investigations. The Court finds no

occasion to determine whether or not an implied waiver of immunity exists in section

8003(5)(B) because that section explicitly waives immunity. "A consent agreement is

enforceable by an action in Superior Court." 10 M.R.S. § 8003(5)(B) (2008). The State

suggests that the statute's enforceability clause does not permit recovery for money

damages under breach of contract; however, nothing in the statute or otherwise suggests

this narrow interpretation. This waiver permits enforcement of a consent agreement in

the same way that any other contract may be enforced, including remedies at law and

equity.

5

The State has drawn this Court's attention to one unpublished case in which the

Superior Court applied sovereign immunity in the context of consent agreements under

section 8003(5)(B). In State v. Weinschenk, the Kennebec County Superior Court

dismissed a counterclaim against the Maine Oil and Solid Fuel Board alleging breach of

contract under a consent agreement entered into under section 8003(5)(B). State v.

Weinschenk, AUGSC-CV-2000-00244 (Me. Super. Ct., Ken. Cty. Feb. 2, 2001)

(Studstrup, 1.), rev'd on other grounds, 2005 ME 28, 868 A.2d 200. 1 When Weinschenk

went up on appeal, the Law Court chose not to address the Superior Court's application

of sovereign immunity because it held that the counterclaim at issue could have been

properly dismissed for failure to set forth the elements of a cause of action and failure to

allege facts entitling the claimant to relief. Weinschenk, 2005 ME 28, ~ 30, 868 A.2d at

209. The Law Court intentionally refrained from deciding whether sovereign immunity

applied to claims arising from breaches of consent agreements. In light of this and the

aforementioned reasons, this Court holds that section 8003(5)(B) explicitly waives

sovereign immunity in the enforcement of consent agreements and that the Court may

enforce the agreement through an award of damages.

D. Breach of Contract

The State argues that even if the consent agreement is an enforceable contract,

there was no breach. The agreement provided that the State would "agree to forego

pursuing further disciplinary measures or other civil or administrative sanctions against

I TheWeinschenk decision of the Kennebec County Superior Court stated in toto as follows.

After hearing on the State's Motion to Dismiss the Defendant's Ric Weinschenk

Builder's, Inc.'s Counterclaim, the Order and entry is as follows: the State's Motion to

Dismiss the Counterclaim is Granted, Pursuant to M.R. Civ. P. 13(d), sovereign

immunity has not been waived,

Weinschenk, AUGSC-CY-2000-00244 (Me. Super. Ct., Ken. Cty. Feb. 2,2001) (Studstrup, J.).

6

Mr. Knowlton for the violations described in the Stipulations." (Supp. S.M.F. ~ 18; Shaw

Aff. Ex. B).

1. "against Mr. Knowlton"

The State asserts that the sanctions contained in its consent agreement with

Bankers Life requiring Knowlton's removal as manager of its Bangor office were not

sanctions against Knowlton, but only against Bankers Life. The consent agreement with

Knowlton only provided that it contained a plenary statement of the sanctions "against

Mr. Knowlton." (Supp. S.M.F. ~ 18; Shaw Aff. Ex. B). The State suggests that any

effect upon Knowlton stemming from the consent agreement with Bankers Life was

merely a collateral effect of that agreement and cannot be considered a sanction against

Knowlton.

The word at issue in the interpretation of the consent agreement is "against."

There is no question that requiring Knowlton's removal in the Bankers Life consent

agreement was a sanction, but was it a sanction against Knowlton? This Court must

apply principles of contract interpretation in resolving this question. When a contract is

unambiguous, its interpretation is a matter of law to be decided by the court as a matter of

law; however, if a contract or a term therein is ambiguous then its interpretation is a

question of fact for the jury to resolve. Villas By the Sea Owners Ass 'n v. Garrity, 2000

ME 48, ~ 9, 748 A.2d 457,461. "Whether or not a contractual term is ambiguous is a

question of law" and must be decided by the court. Id.

The word "against" in the consent agreement with Knowlton is ambiguous. It is

open to differing interpretations by the parties. On the one hand it could indicate that the

State agreed to forego only direct actions against Knowlton for his alleged

7

misrepresentations of Bankers Life's financial strength rating. On the other hand, it

could indicate that the State would not pursue any more sanctions that would adversely

affect Knowlton, whether directly or indirectly through his employer. In light of this

ambiguity, the interpretation of the consent agreement is a genuine issue of material fact

that cannot be determined as a matter of law.

2. ''for the violations described in the Stipulations"

The State has also argued that there is no breach because the consent agreement

with Bankers Life requiring Knowlton's removal was not for the same violations as the

consent agreement with Knowlton. The consent agreement with Knowlton was only a

plenary statement of sanctions "for the violations described in the Stipulations." (Supp.

S.M.F. ~ 18; Shaw Aff. Ex. B). If the sanctions imposed under the Bankers Life consent

agreement arose out of separate violation then there could be no breach. However, the

consent agreement with Bankers Life explicitly includes the same violation sanctioned

through the consent agreement with Knowlton. The consent agreement with Bankers

Life has a broader scope in that it settles additional complaints, but it does include

Knowlton's misrepresentations. The consent agreement with Bankers Life states that

"[t]his Agreement includes... a settlement as to the company's responsibility

under. ..INS-04-2000, IN RE: Bankers Life and Casualty Company and Alan D.

Knowlton." (Shaw Aff. Ex. A).

Even though the consent agreement with Bankers Life is a broader settlement than

the one with Knowlton, it still dealt in part with Knowlton's representations that were

already sanctioned in his consent agreement. This leaves a genuine issue of material fact

as to whether or not Knowlton's removal under the consent agreement with Bankers Life

8

was in fact based upon the same violations that were stipulated in the consent agreement

with Knowlton. Therefore, summary judgment must be denied.

E. Persons Under 42 U.S.C. § 1983

The defendants argue that Knowlton is not entitled to relief under section 1983

because they are not "persons" within the meaning of section 1983 when sued in their

official capacities. 42 U.S.C. § 1983. "[A] suit against a state official in his or her

official capacity is not a suit against the official but rather is a suit against the official's

office. As such, it is no different from a suit against the State itself." Will v. Michigan

Dep't of State Police, 491 U.S. 58,71 (1989) (citations omitted). A State is not a person

within the meaning of section 1983. Id. at 66.

Knowlton concedes that neither of the defendants are persons within the meaning

of section 1983. He instead relies upon a motion to amend his complaint in order to add

additional defendants, State employees who were involved in the consent agreement

negotiations upon which this action is based. This Court has denied Knowlton's motion

to amend his complaint; therefore, there are no persons within the meaning of section

1983 listed as defendants in this case. See Knowlton v. Rowe, BANSC-CV-2006-00206

(Me. Super. Ct., Pen. Cty., Oct. 7, 2008) (Anderson, 1.). There remain no issues of

material fact regarding Knowlton's section 1983 claims and summary judgment in favor

of the defendants is appropriate.

F. Declaratory Judgment

Knowlton asks this Court to issue a declaratory judgment that the clause in the

consent agreement between Bankers Life and the State requiring his removal (1)

9

constituted a breach of consent agreement between Knowlton and the State, and (2) is

void as unconstitutional. Knowlton further requests that the Court require the State to

excise the removal clause from the consent agreement. The State has argued that

summary judgment is proper because such a declaratory judgment would serve no useful

purpose and because the removal clause is constitutional. "[W]hether a declaratory

judgment should be issued rests in the sound discretion of the trial court." E. Fine Paper,

Inc. v. Garriga Trading Co., 457 A.2d 1111, 1112 (Me. 1983).

Under the Declaratory Judgments Act, a party may seek a declaratory judgment as

to the construction or validity of a contract. 14 M.R.S. § 5854 (2008). However, the

court should refrain from issuing declaratory judgments where they would serve no

useful purpose. Waterville Indus. v. Fin. Auth. ofMaine, 2000 ME 138, ~ 25,758 A.2d

986, 993; Dodge v. Town of Norridgewock, 577 A.2d 346, 347 (Me. 1990). A

declaratory judgment serves no useful purpose when it would only determine past

conduct that is unlikely to reoccur. See District Attorney v. City of Brewer, 543 A.2d

837, 839 (Me. 1988). See also 22A AM. JUR. 2D Declaratory Judgments § 28 (2003)

("While it is the general rule that a controversy is not withdrawn from the operation of

such laws merely because it involves disputed questions of fact, declaratory decree

statutes are not designed for the purpose of establishing purely factual issues.").

The issue of whether or not the State breached the consent agreement with

Knowlton by including a clause requiring his removal in the consent agreement with

Bankers Life is an issue of past fact and there is no likelihood that such breach will recur

because both Knowlton and his employer have already been fully sanctioned for

Knowlton's misrepresentations. Therefore, a declaration that the insertion of the removal

clause constituted a breach on the part of the State would serve no useful purpose. If a

10

breach actually occurred then such will be determined as an issue of fact and Knowlton

will receive an appropriate remedy under his claim for breach of contract. A declaration

that a breach occurred on top of such relief would have no effect whatsoever.

With regards to Knowlton's request that this Court declare void the provision

requiring his removal, both parties have overlooked a basic threshold issue. Knowlton

has asked this Court to declare void a provision in an agreement between Bankers Life

and the State. Knowlton was not a party to that agreement nor was he a third-party

beneficiary. A determination of the rights of the parties under an agreement between

Bankers Life and the State would only be appropriate if Bankers Life were a party to this

suit, which they are not. Even if this Court were to issue the declaration requested by

Knowlton, it would not have any effect upon the rights and obligations of the parties to

the agreement. 14 M.R.S. § 5963 (2008) ("no declaration shall prejudice the rights of

persons not parties to the proceeding"). See Harriman v. Harriman, 1998 ME 108, ,-r 9,

710 A.2d 923, 925 (holding that a court cannot change the contract rights of creditors or

individual debtors in allocating debt responsibilities between the parties in a divorce

action).

Based upon these considerations to which there are no issues of material fact, the

Court determines in its discretion as a matter of law that a declaratory judgment would

serve no useful purpose and is not appropriate. Consequently, summary judgment is

proper.

The entry is:

1. The defendants' motion for summary

judgment is GRANTED IN PART and DENIED

IN PART.

11

2. The defendants' motion for summary

judgment is DENIED as to count one of the

plaintiff s first amended complaint, breach of

contract.

3. The defendants' motion for summary

judgment is GRANTED as to count two of the

plaintiffs first amended complaint, violation of 42

U.S.C. § 1983, due process.

4. The defendants' motion for summary

judgment is GRANTED as to count three of the

plaintiff s first amended complaint, violation of 42

U.S.c. § 1983, double jeopardy.

5. The defendants' motion for summary

judgment is GRANTED as to count four of the

plaintiff s first amended complaint, violation of 42

U.S.C. § 1983, impairment of contract.

6. The defendants' motion for summary

judgment is GRANTED as to count five of the

plaintiff s first amended complaint, declaratory

judgment.

7. This order is incorporated into the docket by

reference pursuant to M.R. Civ. P. 79(a).

-­

Dated: October /~ , 2008 ~

William R. Anderson

Justice, Superior Court

12

01/22/2009 MAINE JUDICIAL INFORMATION SYSTEM

PENOBSCOT COUNTY SUPERIOR COURT

PAGE A - ATTORNEY BY CASE VIEW

ALAN D KNOWLTON VS STEVEN ROWE, AS AAG OF STATE OF MAINE, ET AL

CASE #:BANSC-CV-2006-00206

SEL VD REPRESENTATION TYPE DATE

01 0000007292 ATTORNEY:BALDACCI, JOSEPH M

ADDR:6 STATE ST, SUITE 605 PO BOX 1423 BANGOR ME 04402-1423

F FOR:ALAN D KNOWLTON PL RTND 09/26/2006

02 0000003724 ATTORNEY:MEHNERT, ERIC

ADDR:6 STATE STREET SUITE 600 BANGOR ME 04402

F FOR:ALAN D KNOWLTON PL RTND 06/27/2007

03 0000008416 ATTORNEY:TAUB, CHRISTOPHER C

ADDR:111 SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-0006

F FOR:STEVEN ROWE AS ATTORNEY GENERAL,MAINE DEF RTND 10/27/2006

FOR: Eric A. Cioppa Acting Superintendent of Insurance for the State of Maine

STATE OF MAINE SUPERIOR COURT

PENOBSCOT, ss. CIVIL ACTION

DOCKET NO. CV-06-206

.~

ALAN D. KNOWLTON,

Plaintiff,

v. ORDER

G. STEVEN ROWE, ATTORNEY

GENERAL OF THE STATE OF MAINE,

and

FILED & ENTERED

ERIC A. CIOPPA, ACTING SUPER­ SUPERIOR ~()IIRT

INTENDENT OF THE MAINE BUREAU

OF INSURANCE,

DEC 1 9 2008

Defendants. PENOBSCOT COUNTY

The defendants have filed a motion to reconsider the order of this Court granting

in part and denying in part the defendants' motion for summary judgment. Knowlton v.

Rowe, BANSC-CV-2006-00206 (Me. Super. Ct., Pen. Cty., Oct. 15,2008). They request

that this Court reconsider denying their motion for summary judgment as it related to the

plaintiff's claim for breach of contract.

The issue raised in the present motion was raised by the defendants' in their

motion for summary judgment and fully briefed. I The defendants again argue that

requiring the removal of the plaintiff from his position as the branch manager of the

Bangor office of Bankers Life in the consent agreement between the State and Bankers

Life was not "for the violations described in the Stipulations" of the consent agreement

I This motion does not seek to "bring to the court's attention an error, omission or new material that could

not previously have been presented." M.R. Civ. P. 7(b)(5). Motions for reconsideration should not be used

as an avenue to reargue issues that have already been made or could easily have been made. Shaw v. Shaw,

2003 ME 153, ~ 8, 839 A.2d 714, 716. The Maine Rules afCivil Procedure mandate that such a motion

"shall not be filed." M.R. Civ. P. 7(b)(5).

between the State and the plaintiff. The consent agreement entered with the plaintiff was

under docket number INS-04-2000. The consent agreement entered with Bankers Life

specifically stated in paragraph ten that it included a settlement as to the company's

responsibility under INS-04-2000. Contrary to the defendant's arguments in the present

motion, this creates a genuine issue of material fact as to whether the required removal of

the plaintiff was for the same violations as the consent agreement he had previously

entered.

The defendants argue from the record evidence that the particular proVIsIOn

requiring removal was not a sanction for the plaintiff's previously sanctioned

misconduct; however, they neglect to realize that the Court does not act as a fact-finder in

the context of a motion for summary judgment. If the defendants wish to ultimately

prevail on such arguments they must save them for the jury. The facts are still in dispute;

therefore, summary judgment is not appropriaie on the plaintiff's claim for breach of

contract and the defendants' motion for reconsideration is denied.

The entry is:

1. The defendants' motion for reconsideration

is DENIED.

2. This order is incorporated into the docket by

reference pursuant to M.R. Civ. P. 79(a).

Date: December! b," ,2008 J/Oft-

William R. Anderson

Justice, Superior Court

2