(dissenting).
I respectfully dissent. The majority contends that the language of the release “cannot be said, upon a motion for summary judgment, to be a universal accord and satisfaction.” What the majority does not state is how, under our holding in Vidal v. American General Companies, 109 N.M. 320, 785 P.2d 231 (1990), Bennett rebutted the presumption of an accord and satisfaction. I agree with the court of appeals that Bennett cannot, simply by stating in an affidavit that there was no meeting of the minds, satisfactorily rebut the presumption in order to defeat summary judgment. To allow this would effectively destroy the rule of Harrison v. Lucero, 86 N.M. 581, 525 P.2d 941 (Ct.App.1974), and Vidal. In Vidal, we contemplated rebuttal in two specific areas: (1) the insertion of a reservation of rights into the release, and (2) the possibility of claims arising after the release. Neither of these are present in this case.
The policy of avoiding needless litigation fostered by the perception that parties intend to settle all their differences is particularly appropriate in this case. At the time of the release and stipulation for settlement, Bennett knew of all facts giving rise to her claims against Kisluk for malpractice and emotional distress. In that settlement, Kisluk accepted a fee of approximately thirteen percent which was a substantial reduction of the forty percent called for by the original fee agreement between him and Bennett. Furthermore, the release was part of an agreement that included a “stipulation for settlement” signed by Bennett, her new attorney, Kisluk and his attorney, and which expressly stated:
all parties are desirous of compromising and settling all matters in this case and desire by stipulation and agreement thereon to dispose of any and all claims of liability arising out of the injuries sustained by Plaintiff by reason of the accident which is the subject matter of this Complaint, and to dispose of any and all issues concerning attorney’s fees;
In view of the foregoing, I cannot find that Bennett rebutted the presumption of an accord and satisfaction to defeat the rule of Harrison and Vidal.
I also disagree with the majority in their refusal to apply the doctrine of res judicata to the settlement of attorney’s fees. Res judicata applies when the second suit has the following relationship with the first suit: (1) The parties must be the same, (2) the cause of action must be the same, (3) there must have been a final decision in the first suit, and (4) the first decision must have been on the merits. First State Bank v. Muzio, 100 N.M. 98, 100, 666 P.2d 777, 779 (1983). The parties are the same and there was a final decision on the merits of this case. “Dismissal with prejudice constitutes an adjudication of the merits and is therefore res judicata of the issues between the parties.” Campos v. Brown Constr. Co., 85 N.M. 684, 686, 515 P.2d 1288, 1290 (1973).
Even though the cause of action in the settled suit was for attorney’s fees, the same evidence is necessary to develop whether Kisluk is entitled to a fee as is required to develop whether he is guilty of malpractice. New Mexico defines “cause of action” as follows:
When a valid and final judgment rendered in an action extinguishes the plaintiff’s claim pursuant to the rules of merger or bar * * * the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.
Three Rivers Land Co. v. Maddoux, 98 N.M. 690, 695, 652 P.2d 240, 245 (1982) (reversed on other grounds); Universal Life Church v. Coxon, 105 N.M. 57, 728 P.2d 467 (1986), cert. denied, 482 U.S. 905, 107 S.Ct. 2482, 96 L.Ed.2d 374 (1987).
If parties agree to reserve certain claims for later litigation, they must do so by express language in the settlement documents. Medina v. Wood River Pipeline Co., 809 F.2d 531 (8th Cir.1987); Citibank, N.A. v. Data Lease Fin. Corp., 904 F.2d 1498 (11th Cir.1990).
Bennett is asking that we apply the opposite rule. She would have us reserve any claim that is not specifically mentioned in the settlement and dismissal. This would nullify res judicata because it would require all parties to enumerate all identifiable legal claims they were relinquishing whenever any litigation was settled. I am opposed to establishing this kind of rule. I strongly believe that litigation of legal fees necessarily disposes of any issue of malpractice. Felger v. Nichols, 35 Md.App. 182, 370 A.2d 141 (1977).
In Nat Kagan Meat & Poultry, Inc. v. Kalter, 70 A.D.2d 632, 632, 416 N.Y.S.2d 646, 647 (1979), the court stated:
A judicial determination fixing the value of a professional’s services necessarily decides that there was no malpractice [citation omitted]. This rule applies where an attorney seeks a charging lien for services rendered by him in the underlying action * * * as well as to a plenary action for nonpayment of attorney’s fees. The fact that [the prior case] * * * involve[d] an in rem proceeding, in that the lien only applie[d] to the proceeds of the underlying judgment [citation omitted] does not make said rule inapplicable * * *.
Bennett was not tricked into giving up her malpractice claim against Kisluk; all of her allegations in this regard were contained in her motion for substitution of counsel. Malpractice is an affirmative defense to a suit for attorney’s fees and must be properly asserted or be deemed waived. May’s Family Centers, Inc. v. Goodman’s Inc., 104 F.R.D. 112, 117 (N.D.Ill.1985); Krimsky v. Lombardi, 78 Misc.2d 685, 357 N.Y.S.2d 671 (1974).
Aside from the res judicata effect of the settlement, respondent’s abandonment of most of the attorney’s fees negotiated in his contract with petitioner constitutes payment by him in the settlement and should extinguish his liability and terminate the lawsuit.
Finally, I can see no ethical constraints on Kisluk signing the settlement documents prepared by Bennett’s lawyer. There is nothing in the relationship between them that would preclude the applicable general principle of law as to settlements. Kisluk was not Bennett’s lawyer when they reached a settlement. He was no longer advising her, and was not relying at all upon her settlement with Pacific Partners, but on her settlement with him. I would affirm the trial court and the court of appeals.
Because the majority opinion is contrary to this conclusion and analysis, I must respectfully dissent.