Tag: settlement

Make Sure You Are Sure! – A Comment on the Finality of Settlement Agreements under Louisiana Law

09.08.2023

Preparing for a trial is a tense and stressful process for attorneys and their clients. Sometimes, during trial preparation, a crucial piece of evidence can come to light that may push a case from a path towards trial to a path towards a settlement agreement. A “settlement” or “compromise” under Louisiana law is just that – an agreement between the parties to settle the dispute raised in the lawsuit, usually with the exchange of a sum of money. Often, settlements are reached in the weeks leading up to trial or even on the courthouse steps.

This type of scenario occurred in Nola Title Company, LLC v. Archon Information Systems. While in the thick of trial preparation, audio recordings from one of the parties were discovered. That party concluded this evidence would be prejudicial to its case at trial, which spurred settlement negotiations. The parties eventually agreed to a compromise and notified the court of the settlement via an email to the judge’s law clerk. The next day, the attorneys reported to court and verbally outlined the terms of the settlement agreement on the official court record.

Two weeks later, the defendants hired new counsel. Two months after that, counsel for the plaintiff forwarded the formal settlement documents to memorialize the agreement that was made between the parties and entered into the court’s record. However, the defendants refused to sign the paperwork and did not timely make the payments that previously were agreed upon. Therefore, the plaintiff filed a motion to enforce the settlement agreement.

In opposition to the motion to enforce, the defendants argued: 1) that their prior counsel did not have authority to enter into the settlement agreement; and 2) that the agreement on the record of the court was invalid because it did not include a provision about the audio recording, which the defendant claimed was a key element of the agreement between the parties. After an evidentiary hearing, the trial court found that the settlement that was stated on the record was an enforceable settlement agreement.

The Louisiana Court of Appeals for the Fourth Circuit affirmed the ruling of the trial court. In its opinion, the appellate court includes a summary of the law governing settlements in Louisiana. After a thorough review of the applicable law, the court came to the following conclusions:

The settlement agreement on the record of the court was a binding settlement agreement, even if the parties contemplated a future formal written agreement;
When a compromise is placed on the record, the recital must include full disclosure of the material terms;
Any “missing terms” from the recorded settlement agreement were not a material element of the settlement; and
The defendants’ prior counsel had authority to enter into the settlement as written.

Based upon the court’s ruling, if the parties have a meeting of the minds and settlement terms are entered on the trial court record, there are no “do-overs” or “take-backs.” It is important to “make sure you are sure” when entering the crucial courthouse steps settlement agreement.

References:

Nola Title Company, LLC v. Archon Information Systems, et. al., 2022-CA-0967 (La. App. 4 Cir. 4/13/23), 360 So. 3d 166.

When a Settlement Is Not a Settlement

06.01.2017

Louisiana law favors the settlement of disputes. With a settlement, both sides agree to avoid costly litigation and obtain a certain, negotiated result. While neither side is completely happy with the result in a typical settlement, the case is at least closed and the financial and emotional drain of litigation is ended. But the recent decision in The Marietta Trust and The Warren Trust v. J.R. Logging, Inc., Fair Hills Farm, LLC, Jerry Avants, Jr., Thomas Keaty, Jr. and XYZ Insurance Company, 2016 CA 1136 (La. App. 1 Cir. 5/11/17) shows what can happen when one of the parties change their mind. This case is important because it calls into question whether an exchange of emails is sufficient to reach a final settlement.

The Marietta Trust case involved a dispute regarding the wrongful cutting of timber and the parties seemingly came to a resolution. Via email, the case was negotiated and the terms were agreed upon. Formal settlement documents were drawn up and money was exchanged. However, when the time came to execute the final documents, one set of defendants refused to sign the paperwork. This refusal to sign came after the attorney for these defendants directly stated in an email that his “clients have agreed to the settlement.” Id. at *4. In response to the refusal to sign, the other parties filed a Joint Motion to Enforce Settlement Agreement which was denied by the Trial Court.

Settlement agreements are governed by the Louisiana Civil Code art. 3071 which provides that litigation can be resolved via settlement or compromise. A settlement agreement can take two forms: 1) recitation in open court; or 2) a writing. “The purpose of the writing requirement is to serve as proof of the agreement and the acquiescence therein.” Marietta Trust, 2016 CA 11336, Id. at *3. The writing must be signed by the parties or their agents. “Until the parties sign a written document or documents evincing their consent to the terms of the proposed agreement, a party is free to change his or her mind.” Id. at *3. Prior courts have found that emails meet the “writing” requirements. See, Geer v. BP America Production Co., 2014-450 (La. App. 3 Cir. 11/5/14), 150 So. 3d 621; Dozier v. Rhodus, 2008-1813 (La. App. 1 Cir. 5/5/09), 17 So. 3d 402.

The appellate court in Marietta Trust refused to enforce the “settlement.” The court found that the exchange of emails was insufficient to meet the “writing” requirement of Civil Code article 3071 because neither the emails nor any other evidence showed that the attorney possessed “the express consent necessary to accept the terms of the settlement.” Id. at *3.

When is a settlement not a settlement? Maybe when it came to you through your inbox. So, if an email from the attorney is not sufficient to perfect a settlement, what can we do? The answer offered by the 1st Circuit is to either: 1. Recite in open court; or 2. Obtain a writing that includes the client’s express consent given to the attorney to settle the case (presumably for the amount in the writing).

“IME” Killer Bill Put Down

05.19.2017

The Louisiana plaintiffs’ bar recently sought to tilt the scales of justice through Senate Bill 185, a bill seeking to complicate a defendant’s efforts to obtain an Independent Medical Examination (“IME”). An IME is an examination of the plaintiff by a physician or medical examiner hired by the defense. IMEs are important in the defense of a case and often act as a catalyst for settlement or to reduce the value of a claim.

Bill 185 was introduced by Senator Jay Luneau (D) and passed with a unanimous 35 – 0 vote in the Senate. The bill proposed amendments to Louisiana Code of Civil Procedure Article 1464 to impose the following conditions upon IMEs:

All parties would be barred from referring to an IME as “independent” in the presence of a jury.
A plaintiff could not be ordered to submit to multiple examinations by multiple physicians within the same field of specialty, regardless of the number of defendants.
The party to be examined would have the right to have a person of his or her choosing present during the exam, including the plaintiff’s attorney.
The party to be examined would have the right not only to have the entire examination videotaped, but the ability to force the party requesting the examination to pay for all associated costs.

Were these conditions enforced, many physicians might have chosen not to provide IMEs at all when the process would involve: a potentially adversarial plaintiff’s attorney; a patient room packed with video equipment; and, the spectacle of it all captured on tape. Further, the bill would have stifled the ability to defend injury claims.

We may never know what effect these changes might have brought. On May 16, 2017, the House Civil Law and Procedure Committee, involuntarily deferred on a 4-4 vote. This action effectively killed the bill and saved the IME as currently understood.

By: John Grinton, a Keogh Cox associate whose practice areas include commercial and construction litigation. When he is not practicing law, John spends most of his time with his wife, Kellye, and their two dogs.