Brunet v. Decorative Engineering, Inc., 178683
| Decision Date | 09 February 1996 |
| Docket Number | No. 178683,178683 |
| Citation | 215 Mich.App. 430,546 N.W.2d 641 |
| Parties | Pierre BRUNET and Right-Way, Inc., Plaintiffs-Appellees, v. DECORATIVE ENGINEERING, INC. and Paul Mouland, Defendants-Appellants. |
| Court | Court of Appeal of Michigan — District of US |
Cross Wrock, P.C. by Russ E. Boltz, Detroit, for plaintiffs.
Joseph E. Mihelich, Eastpoint, for defendants.
Before MacKENZIE, P.J., and WHITE and LABEAU, * JJ.
Defendants appeal as of right from an opinion and order granting plaintiffs' motion for entry of a consent judgment. We reverse.
The basic facts are undisputed. Plaintiff Brunet (hereinafter plaintiff) is a former sales representative of defendant Decorative Engineering, Inc. Defendant Mouland (hereinafter defendant) is the president and sole shareholder of Decorative Engineering. Plaintiff brought this action for breach of contract and misrepresentation, claiming that he was entitled to certain compensation, including commissions, under the parties' sales representative agreement.
At defendant's deposition, a settlement agreement was placed on the record after defendant, on six occasions, invoked his Fifth Amendment rights during a line of questioning concerning his income taxes and banking practices. Defendant subsequently disavowed the settlement and refused to execute a consent judgment. Plaintiff claimed he was entitled to enforcement of the settlement and successfully moved for entry of a consent judgment.
MCR 2.507(H) provides:
Agreements to be in Writing. An agreement or consent between the parties or their attorneys respecting the proceedings in an action, subsequently denied by either party, is not binding unless it was made in open court, or unless evidence of the agreement is in writing, subscribed by the party against whom the agreement is offered or by that party's attorney.
In this case, it is undisputed that the settlement agreement plaintiff sought to enforce was not made in open court and was never reduced to a writing subscribed by defendant. Thus, defendant's contention, both in the trial court and on appeal, is that under MCR 2.507(H), the settlement agreement reached during his deposition was not binding. Plaintiff, however, argues, and the trial court held, that the court rule was never triggered in this case because defendant did not and cannot "deny" that the parties reached a settlement agreement. 1 According to the trial court, although the settlement was not placed on the record in open court or reduced to a signed writing, it was nevertheless enforceable because defendant agreed to its terms at his deposition.
We disagree with the trial court's analysis. As noted by the trial court, in Rossi v. Transamerica Car Leasing Co., 138 Mich.App. 807, 360 N.W.2d 307 (1984), the panel (M.J. Kelly, P.J., dissenting) held that under the predecessor to MCR 2.507(H), a party who acknowledges the fact that a subsequently disavowed settlement agreement was reached--but was never placed on the record in open court or reduced to writing--cannot "deny" the agreement and therefore cannot rely on the court rule to assert that the agreement is not binding. According to the Rossi majority, once a party acknowledges the fact that an out-of-court, oral agreement was reached, that party has admitted its existence and cannot "deny" the fact of an agreement.
Rossi clearly supports the trial court's holding in this case. The Rossi majority's reasoning, however, was abandoned in Rossi v. Transamerica Car Leasing Co (On Rehearing), 141 Mich.App. 403, 368 N.W.2d 880 (1984). There, a majority adopted Judge Kelly's dissent, which had maintained that "[t]he majority simply writes GCR 1963, 507.9 [the predecessor of MCR 2.507(H) ] out of existence." 138 Mich.App. at 812, 360 N.W.2d 307. Under Judge Kelly's analysis in Rossi, and the majority's reasoning in Rossi (On Rehearing), a party's repudiation of a settlement agreement before it is placed on the record in open court or reduced to a signed writing is a "denial" of the agreement for purposes of the court rule when the repudiation is based on a claim that a settlement was never reached because there was no meeting of the minds. See also Metropolitan Life Ins. Co. v. Goolsby, 165 Mich.App. 126, 418 N.W.2d 700 (1987); Rivkin v. Rivkin, 181 Mich.App. 718, 720, 449 N.W.2d 685 (1989).
Although applying a slightly differently worded court rule, the Texas Supreme Court employed a similar analysis in Kennedy v. Hyde, 682 S.W.2d 525 (Tex.1984). In that case, the parties to a lawsuit met for depositions, but instead became involved in settlement discussions. The discussions led to a settlement agreement that was signed by all the parties except Kennedy. Hyde alleged that although Kennedy refused to sign the settlement documents, he had nonetheless entered into an oral contract of settlement. Kennedy denied entering into a settlement agreement and argued that any alleged agreement was unenforceable under Rule 11 of the Texas Rules of Civil Procedure, which provided: "No agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record." The trial court and the Texas Court of Appeals concluded that the parties had entered into an oral agreement and that Rule 11 did not bar the enforcement of that agreement. The Texas Supreme Court reversed, stating:
The court of appeals in the instant case attempts to avoid application of Rule 11 by making a fine distinction, stating that "the purpose of rule 11 is to authorize rendition of agreed judgments." As we understand the opinion, an agreement in compliance with Rule 11 would authorize an agreed judgment on the merits of the underlying suit. An agreement in violation of Rule 11 would support the same result in the same suit. The sole distinction would be that in the latter case, the judgment would recite that it was based on breach of the contract to settle the suit, rather than incorporating the terms of the contract to settle the suit.
Given this interpretation, no "agreement between attorneys or parties touching any suit pending" need comply with Rule 11. For example, since any stipulation could be characterized as a contract, any stipulation failing to comply with Rule 11 could nonetheless be enforced as a contract.
This court will not eviscerate Rule 11....
* * * * * *
... Rule 11 is a minimum requirement for enforcement of all agreements concerning pending suits, including, but not limited to, agreed judgments.... The clear language of the rule indicates, and this court holds, that compliance with Rule 11 is a general prerequisite for any judgment enforcing an agreement touching a pending suit.
Like the Texas court rule, MCR 2.507(H) does not make binding any agreement or contract between the parties respecting the proceedings. Rather, it specifically states that such agreements or contracts are not binding unless made in open court or reduced to writing and signed by the party against whom the agreement is offered.
MCR 2.507(H) has been characterized as "essentially a court rule version of a statute of frauds governing legal proceedings." 3 Martin, Dean & Webster, Michigan Court Rules Practice (3d ed), p 125. As noted by the commentators: "Legal proceedings are of sufficient importance to require that written proofs be furnished in support of a claim by one party that the other party has entered into certain agreements, made certain concessions, etc. with respect to those proceedings." Id. Thus, just as an oral agreement for the sale of real property, for example, is unenforceable under M.C.L. § 566.108; M.S.A. § 26.908 even though that agreement may meet the technical requirements of a contract, an oral settlement agreement in a lawsuit is also unenforceable under MCR 2.507(H) unless it is...
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Michigan Mutual Ins. Co. v. Indiana Ins. Co.
...unenforceable under MCR 2.507(H) unless it is reduced to a signed writing or made in open court. [Brunet v. Decorative Engineering, Inc., 215 Mich.App. 430, 435-436, 546 N.W.2d 641 (1996).] In addition to the court rule, case law holds that "[a]n agreement to settle a pending lawsuit is a c......