City of Gary v. Conat
| Decision Date | 29 June 2004 |
| Docket Number | No. 45A03-0312-CV-486.,45A03-0312-CV-486. |
| Citation | 810 N.E.2d 1112 |
| Parties | The CITY OF GARY and Ambrosio Calo, Appellants-Defendants, v. Michael O. CONAT, Appellee-Plaintiff. |
| Court | Indiana Appellate Court |
Michael J. Rappa, Johnson & Rappa, LLC, Merrillville, IN, Attorney for Appellants.
Ryan A. Bratcher, Merrillville, IN, Attorney for Appellee.
Appellants-Defendants, the City of Gary (the City) and Ambrosio Calo (Calo) (collectively, Appellants), appeal the trial court's grant of Appellee-Plaintiff's, Michael O. Conat (Conat), Motion to Enforce Settlement and Enter Judgment.
We affirm, in part, and reverse, in part.
Appellants raise three issues on appeal, which we restate as follows:
1. Whether the trial court erred by granting Conat's Motion, enforcing a Mediated Settlement Agreement against the City, where the City's Attorney had no express authority to enter into the settlement;
2. Whether the trial court erred in enforcing the Mediated Settlement Agreement against the City's employee, Calo; and
3. Whether the trial court erred in its assessment of interest against Appellants.
On February 4, 2000, Calo drove the City's Fire Squad Unit into the rear of Conat's semi-truck. On November 28, 2000, Conat filed a complaint against both the City and its employee, Calo, for personal injuries and other damages he suffered as a result of this collision. Subsequently, on August 21, 2001, all parties attended a court-ordered mediation conference conducted in accordance with the Indiana Rules of Alternative Dispute Resolution. At this mediation conference, a Mediated Settlement Agreement (Mediated Settlement) was executed between Conat, Attorney Luci Horton (Attorney Horton) on behalf of Appellants, and the mediator. Pursuant to the provisions of the Mediated Settlement, Conat accepted a total sum of $220,000 in settlement of all claims, payable no later than six months from the date of execution.
However, Appellants failed to timely pay any portion of the settlement amount. Consequently, on October 25, 2002, Conat filed his Motion to Enforce Settlement and Enter Judgment. On August 18, 2003, in response to Conat's Motion, Appellants filed their Objection and Response. Thereafter, on August 29, 2003, the trial court conducted a hearing on the parties' motions. On October 28, 2003, the trial court issued its Order granting Conat's Motion to Enforce Settlement and Enter Judgment. In its Order, the trial court held, in pertinent part, that:
It is THEREFORE ORDERED that [Appellants] pay to [Conat] the amount of $220,000, pursuant to the Mediated Settlement Agreement, plus Attorney fees for the time necessary to enforce the settlement, and interest on said settlement at a rate of ten percent (10%) per year from the date of the settlement. It is further ORDERED that [the City] is compelled to appropriate funds for the payment of the award instanter of the funds are available for that purpose, or levy and collect a tax to pay the award if there are insufficient funds available for that purpose. All monies due to [Conat] shall be paid no later than 45 days from the date of this Order.
Appellants now appeal. Additional facts will be provided as necessary.
When, as here, the trial court enters findings of fact and conclusions thereon, we apply the following standard of review: we must determine whether the evidence supports the findings and whether the findings support the judgment. Wagner v. Spurlock, 803 N.E.2d 1174, 1179 (Ind.Ct.App.2004). The court's findings and conclusions will be set aside only if they are clearly erroneous, that is, that the record contains no facts or inferences supporting them. Id. A judgment is clearly erroneous when a review of the record leaves us with the firm conviction that a mistake has been made. Id. We neither reweigh the evidence nor assess the credibility of witnesses, but consider only the evidence most favorable to the judgment. Id. Special findings, even if erroneous, do not warrant reversal if they amount to mere surplusage and add nothing to the trial court's decision. Id.
Appellants first contend that the trial court erred in finding the Mediated Settlement to be enforceable against the City. Specifically, Appellants assert that Attorney Horton, as a representative of a municipality, lacked the requisite statutory authority to enter into the Mediated Settlement on the City's behalf. Conversely, Conat alleges that by failing to timely assert Attorney Horton's lack of authority, Appellants are now equitably estopped from challenging the enforceability of the Mediated Settlement.
In Koval v. Simon Telelect, Inc., 693 N.E.2d 1299 (Ind.1998), by way of a certified question from the United States District Court for the Northern District of Indiana, our supreme court decided precisely the issue facing us today: if an Attorney settles a claim as to which the Attorney has been retained but does so without the client's consent, is the settlement binding between third parties and the client? Id. at 1301. Analyzing an Attorney's express, implied, and inherent agency power, the supreme court held that:
for purposes of an Attorney's inherent power, a procedure governed by Indiana's Rules for Alternative Dispute Resolution (ADR rules), is a procedure 'in court' if the parties are expected to appear by representatives with authority to resolve the matter. Accordingly, in the absence of a communication of lack of authority by the Attorney, as a matter of law, an Attorney has the inherent power to settle a claim when the Attorney attends a settlement procedure governed by the ADR rules.
Id. (emphasis added). Our supreme court based its holding on the Attorney's unique position of trust with his client and a long line of Indiana cases that recognize the power of an Attorney to bind the client to the Attorney's actions in court. The supreme court further clarified that its decision is derived from the need for structural integrity of court proceedings and the protection of third parties who rely on the finality of those procedures. See id. at 1305. As such, the court reminded us of the well-established general rule that:
[a]n Attorney may without express authority, bind his client by agreement that judgment may be taken against him, and that, too, though the Attorney knows that his client has a good defense to said action. If [the Attorney] acts contrary to the express directions of his client, or to his injury, the client must look to the Attorney for redress.
Id. (quoting Thompson v. Pershing, 86 Ind. 303, 310 (1882)).
In the instant case, we find that Attorney Horton, during the court-ordered mediation conference pursuant to ADR rules, had the inherent power to bind Appellants to the Mediated Settlement. Our review of the record reveals that Attorney Horton, at no point before, during, or even after the mediation conference disclaimed her authority to represent Appellants during these proceedings. In fact, she signed the Mediated Settlement in her capacity of "Attorney for [Appellants]." (Appellant's App. p. 37). Only two years later, after Conat filed his Motion to Enforce, did the Appellants for the first time allege Attorney Horton's lack of authority. Moreover, Attorney Horton was officially listed as the City's Attorney on its stationery, and represented herself throughout the legal proceedings with Conat as the representative of the City and Calo. Therefore, absent an express communication to the contrary, Conat could reasonably assume that Attorney Horton possessed the requisite authority to bind her clients during the Mediated Settlement in accordance with ADR Rule 2.7(B)(2).1
This result is in line with the recent supreme court decision in Georgos v. Jackson, 790 N.E.2d 448 (Ind.2003). Although the issue resolved in Georgos is distinct from the question in the present case, our supreme court reaffirmed its adherence to Koval. In Georgos, our supreme court decided whether, despite the Attorney's...
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