Blatt v. Manhattan Medical Group, P. C.

Sandler, J. P. (concurring).

After a careful study of the record, I am persuaded that the plaintiff sustained a devastating professional and personal injury, and one that should never have been inflicted on him, when, after nine years of conscientious service as a doctor with the defendant corporation and its predecessor organization, he was forced to resign because of aberrational conduct which occurred during a period of mental illness that was precipitated by the death of plaintiffs father. Nevertheless, I have come to the regretful conclusion that the evidence presented at the trial does not support plaintiffs claim for relief under the most probably correct interpretation of the controlling rule set forth by the Court of Appeals in Ortelere v Teachers’ Retirement Bd. (25 NY2d 196). Accordingly, I agree with the court that the judgment in plaintiffs favor must be reversed, and that the complaint should be dismissed, although I disagree with part of the analysis set forth in the court’s opinion.

Because the facts seem to me to present an issue of more than ordinary interest, and because I am not convinced that the language in Ortelere (supra) that seems to me dispositive would necessarily represent the judgment of the Court of Appeals in a case precisely presenting the issue raised in this case, I think it may be helpful for me to set forth my separate analysis of the issues raised on this appeal.

In Ortelere (supra), the Court of Appeals reconsidered in the light of developing psychiatric knowledge the rules defining *54the kind of mental incompetence that would render voidable contracts of persons who had not been adjudicated insane. The court said (at 202-203):

"Traditionally, in this State and elsewhere, contractual mental capacity has been measured by what is largely a cognitive test (Aldrich v. Bailey, 132 N. Y. 85; 2 Williston, Contracts [3d ed.], § 256; see 17 C.J.S., Contracts, § 133 [1], subd. e, pp. 860-862). Under this standard the 'inquiry’ is whether the mind was 'so affected as to render him wholly and absolutely incompetent to comprehend and understand the nature of the transaction’ (Aldrich v. Bailey, supra, at p. 89). A requirement that the party also be able to make a rational judgment concerning the particular transaction qualified the cognitive test (Paine v. Aldrich, 133 N. Y. 544, 546; Note, 'Civil Insanity’: The New York Treatment of the Issue of Mental Incompetency in Non-Criminal Cases, 44 Cornell L. Q. 76) * * *
"These traditional standards governing competency to contract were formulated when psychiatric knowledge was quite primitive. They fail to account for one who by reason of mental illness is unable to control his conduct even though his cognitive ability seems unimpaired. When these standards were evolving it was thought that all the mental faculties were simultaneously affected by mental illness. (Green, Mental Incompetency, 38 Mich. L. Rev. 1189, 1197-1202.) This is no longer the prevailing view (Note, Mental Illness and the Law of Contracts, 57 Mich. L. Rev. 1020, 1033-1036).”

The court went on to describe briefly the movement to revamp legal notions of mental responsibility that occurred in the criminal law, and observed that while there are different policy considerations for the criminal law and the civil law, "both share in common the premise that policy considerations must be based on a sound understanding of the human mind and, therefore, its illnesses. Hence, because the cognitive rules are, for the most part, too restrictive and rest on a false factual basis they must be re-examined.” (Ortelere v Teachers’ Retirement Bd., supra, at 203.)

The court went on to observe (supra, 25 NY2d, at 204) as significant that the Restatement (Second) of Contracts, "states the modern rule on competency to contract * * * Thus, the new Restatement section reads: '(1) A person incurs only voidable contractual duties by entering into a transaction if by reason of mental illness or defect * * * (b) he is unable to act *55in a reasonable manner in relation to the transaction and the other party has reason to know of his condition.’ (Restatement, 2d, Contracts [T.D. No. 1, April 13, 1964], § 18C.)”

Addressing the facts presented in Ortelere (supra), the court concluded that there should have been awareness of Mrs. Ortelere’s condition, Mrs. Ortelere having previously been diagnosed as suffering from a psychosis.

Finally, the court went on to say (supra, at 206): "Of course, nothing less serious than medically classified psychosis should suffice or else few contracts would be invulnerable to some kind of psychological attack.”

This last sentence, apparently limiting the revised rule to "nothing less than medically classified psychosis”, seems to me dispositive of the issue in this case. The testimony is clear, and indeed uncontradicted, that the plaintiff suffered from a major depressive illness at the time of the conduct that led the defendants to demand and secure his resignation, and suffered from that illness at the time he agreed to do so. There is no evidence, however, that this depressive illness was accompanied by psychotic features at the time he agreed to resign, and there is no basis in the record for the conclusion that the defendants should have known that he was suffering from a medically classified psychosis at that time.

I am unable to persuade myself that the decision of the Court of Appeals in Fuller v Preis (35 NY2d 425) may reasonably be interpreted as overruling the statement in Ortelere (supra) that limited relief under the updated rule to "medically classified psychosis”. Fuller v Preis involved the issue of causation in a tort case—specifically whether or not a suicide was caused by mental illness resulting from a negligently inflicted trauma. Whatever relationship may be thought to exist between the issue of mental illness as an element of causation in a tort case and as a factor rendering a contract voidable, it seems to me clear that the policy considerations are sufficiently different to preclude our interpreting the Fuller decision as overruling sub silentio the clear statement by the Court of Appeals in an opinion never referred to by the court in Fuller.

On the other hand, I recognize that in Ortelere (supra), the person whose mental competence was in issue had been diagnosed as psychotic, and that the Court of Appeals therefore had no occasion to consider the issue in a factual context in which a mentally ill person, although not psychotic, en*56tered into a manifestly inequitable contract as a result of his mental illness, and the other contracting party had reason to know of the mental illness. Moreover, an element of some uncertainty as to the Court of Appeals intent in Ortelere may be raised by the apparently unqualified endorsement in an earlier part of the opinion of the rule set forth in the Restatement (Second) of Contracts (now § 15), a rule not limited to the presence of "medically classified psychosis”.

That the facts adduced at this trial would have supported rescission under the Restatement rule seems to me clear notwithstanding the contrary view set forth in the court’s opinion. The evidence is clear, and indeed undisputed, that the plaintiff suffered a major depressive illness as a result of his father’s death, that the aberrational conduct which led to his forced resignation was the result of that illness, and that he was mentally ill at the time he agreed to resign. At a minimum, the defendants knew that the conduct which led them to seek the plaintiff’s resignation was unprecedented in the plaintiff’s work history, was clearly aberrational, and that it was connected with an emotional response to his father’s death. It may well be that the average person might not appreciate that this aberrational conduct could be the result of emotional illness, but I am unable to agree with the court that the doctors who constituted the board of directors of the defendant corporation could not reasonably have been thought by the jury to have had sufficient collective experience in their professional practices with unusual behavior in the aftermath of the death of a loved person to at least suspect the possibility of mental illness.

It should be noted parenthetically that even if the Restatement rule were to be accepted as the appropriate one, the judgment in plaintiff’s favor would still have to be reversed because the trial court, quite understandably, charged the traditional cognitive rule, and the evidence does not seem to me to support a verdict for plaintiff under that test.

What I have written above adequately sets forth my response to the central legal issues presented. Let me add briefly my belief that the court’s opinion does not adequately convey the wrong done the plaintiff by his forced resignation after nine years of conscientious service because of aberrational conduct during a period of mental illness following the death of a parent, and that it further understates the seriousness of the professional and emotional injury that the plaintiff sustained. The evidence strongly supports the jury’s separate *57factual conclusion that the terms of the settlement were not fair and reasonable. Without reviewing the facts in detail, I believe that any objective examination of the record would confirm that the compensation received by the plaintiff did not remotely compensate him for the loss that he sustained when he resigned.

Nor am I able to agree that plaintiff was "ably represented by counsel”. Although it is unpleasant to be critical of a veteran lawyer who represented plaintiff without compensation because of feelings of good will arising out of the lawyer’s relationship to the plaintiff’s deceased father, it is quite clear from the record that plaintiff’s lawyer never appreciated the significance of the rights that plaintiff surrendered when he resigned and the magnitude of the professional injury that he would sustain.

Sullivan, Kassal and Smith, JJ., concur with Milonas, J.; Sandler, J. P., concurs in a separate opinion.

Order and judgment (one paper), Supreme Court, New York County, entered on December 4, 1985, unanimously reversed, on the law and the facts, and the judgment vacated and the complaint dismissed, without costs and without disbursements.