Gilbride v. Trunnelle, 99-0358.

• Decision Date: 20 December 2000
• Docket Number: No. 99-0358.,99-0358.
• Parties: Ronald GILBRIDE, Appellee, v. Theodore R. TRUNNELLE and Rosalie Bonavia, Appellants, Mary Kahler, Donald Trunnelle, David Trunnelle and Susan Fudurich, Defendants. Mary Kahler, Donald Trunnelle, David Trunnelle and Susan Fudurich, Cross-Petitioners, v. Ronald Gilbride, Theodore R. Trunnelle and Rosalie Bonavia, Cross-Defendants.
• Court: Iowa Supreme Court

620 N.W.2d 244

Ronald GILBRIDE, Appellee, v. Theodore R. TRUNNELLE and Rosalie Bonavia, Appellants, Mary Kahler, Donald Trunnelle, David Trunnelle and Susan Fudurich, Defendants.

Mary Kahler, Donald Trunnelle, David Trunnelle and Susan Fudurich, Cross-Petitioners, v. Ronald Gilbride, Theodore R. Trunnelle and Rosalie Bonavia, Cross-Defendants.

No. 99-0358.

Supreme Court of Iowa.

December 20, 2000.

Chad A. Swanson, Thomas L. Staack, and Steven K. Daniels of Dutton, Braun, Staack & Hellman, P.L.C., Waterloo, for appellants.

Joseph J. Straub, Jr. and Eldon J. Winkel of Winkel & Straub Law Firm, Algona, for appellee.

Considered en banc.

LAVORATO, Chief Justice.

Theodore R. Trunnelle and Rosalie Bonavia appeal from a district court ruling granting Ronald Gilbride's motion for partial summary judgment to enforce a settlement in a real estate partition action. Theodore and Rosalie assert summary judgment was not proper because there was a genuine issue of material fact as to whether the attorney who negotiated the settlement was representing them at the time of the settlement. Theodore and Rosalie alternatively argue that, even if an attorney-client relationship existed, there was a genuine issue of material fact as to whether they had given the attorney authority to make a settlement on their behalf. We affirm and remand for further proceedings.

I. Background Facts and Proceedings.

This case arises out of a partition-in-kind and sale action, which Ronald Gilbride filed in Kossuth County on August 27, 1997. At the time, Gilbride owned an undivided one-fifth interest in 160 acres of farmland. The petition named Theodore and Rosalie as defendants, in addition to Mary Kahler, each of whom also owned an undivided one-fifth interest in the farmland. The petition also named as defendants Donald Trunnelle, David Trunnelle, Glen Trunnelle, Gordon Trunnelle, and Susan Fudurich, each of whom owned an undivided one-twenty-fifth interest in the farmland. Gilbride alleged that the farmland could be equitably divided so that he would receive a specific one-fifth division of the property.

On September 16 attorney James Hudson of Pocahontas filed an answer to the petition on behalf of all the defendants. On the same day, Hudson wrote Eldon J. Winkel, who represented Gilbride. In his letter, Hudson advised Winkel that he had visited with Mary Kahler, who had agreed to act as the Iowa spokesperson for the defendants. Hudson further advised that (1) Kahler had indicated she would like to work with Gilbride and (2) he had explained the nature of the partition action to Kahler, and she in turn had explained the action to the other defendants. Hudson stated that the defendants would be willing to either buy out Gilbride's interest or sell him a portion of the farmland.

Shortly after the petition was filed, Rosalie gave the original notice and petition that had been served on her to an Algona attorney, Robert Dotson, for him to review. On September 23 Dotson and Rosalie had a telephone conversation about the lawsuit in which she advised Dotson that Kahler had retained Hudson to represent all of the defendants. Dotson followed up the conversation with a letter in which he advised Rosalie that it would be foolish for the defendants to have more than one attorney. Dotson further stated:

It is my understanding that you will confer directly with Attorney Hudson concerning these matters, and, of course, enter into an attorney/client employment contract with him. Since Mr. Hudson will be representing you and presumably other defendants in this matter, I will not enter an appearance nor an answer to the petition. . . .

On February 26, 1998, an order was entered setting a settlement conference for April 20, 1998, and trial for April 23, 1998.

On March 23, 1998, Winkel wrote to Hudson with a proposed settlement: Gilbride would receive the east forty acres of the farmland in exchange for (1) giving up his interest in a "building site" on the land, (2) paying $7500 to the defendants, and (3) dismissing the partition action. At some point before this offer was made, Gilbride apparently had purchased the one-twenty-fifth interests of Glen Trunnelle and Gordon Trunnelle.

On April 2 Rosalie wrote Gilbride proposing a counteroffer: Gilbride would receive thirty-one acres and a one-fifth interest in the "acreage," which would be sold as a separate unit at a future date. In her letter, Rosalie gave a proposed legal description of the thirty-one acres and suggested that she could "have a lawyer check it for [her] and draw it up."

On April 8 Winkel responded to the letter and sent to Hudson a courtesy copy of his response as well as Rosalie's April 2 letter. In his letter to Rosalie, Winkel rejected her counteroffer, reiterated Gilbride's offer, and advised her that "[a]s Mr. Hudson is representing all of the defendants' interests, we are sending him a copy of this letter and a copy of your letter dated April 2, 1998, to Ron."

On April 16 Hudson called Winkel's office and spoke to his secretary. The secretary's written record of the call stated that the defendants were proposing to transfer to Gilbride the east thirty-seven acres of the farmland.

Shortly after April 16 and before the April 23 trial date, Winkel and Hudson worked out a settlement agreement whereby Gilbride would receive the east thirty-seven acres in consideration for his dismissal of the suit. The attorneys then cancelled the trial scheduled for April 23.

On April 29 Winkel wrote Hudson, enclosing a proposed warranty deed (purporting to transfer the east thirty-seven acres and containing signature lines for each defendant and spouse) and a document, captioned "Notation of Settlement Agreement." The following day, Hudson wrote back, stating that he had reviewed both documents and that they were "fine." Hudson sent Kahler a courtesy copy of this letter.

On May 1 Winkel wrote Hudson, asking Hudson to sign the enclosed "Notation of Settlement Agreement" and return it to Winkel.

The notation of settlement agreement provided, among other things, that (1) the parties had through their respective attorneys entered into a "binding settlement agreement in consideration for the ultimate dismissal" of the partition action, (2) Gilbride would receive the east thirty-seven acres of the farmland, and (3) Gilbride would dismiss with prejudice the lawsuit "upon proper execution by all parties concerned of the documents necessary to complete said partition." The last paragraph of the notation of settlement agreement stated: "The foregoing agreement is executed on behalf of the Plaintiffs and Defendants by their respective attorneys and intended to be filed in the above-entitled cause for the purpose of indicating that same has been settled and the terms thereof." Both attorneys signed the agreement on May 4.

On June 30 Winkel wrote Hudson, suggesting that Hudson might be having trouble convincing all of the defendants to sign the deed. Additionally, Winkel stated he "strongly" felt that Hudson would not be able to get all of the defendants' signatures on the deed. Winkel also stated that Theodore, who was living on the farm with his sister, Rosalie, came into Winkel's office, and he sounded like "he was not going to be willing to sign anything." Winkel proposed that he file a motion in the partition suit, requesting the court to appoint a receiver to execute the deed conveying title to Gilbride pursuant to the agreement.

On July 1 Hudson responded, indicating that Kahler had agreed to contact the other defendants about signing the deed.

On August 4 Gilbride filed a motion to amend his petition and an amended petition. The amendment alleged that Gilbride was the owner of the east thirty-seven acres of the subject farmland because of the notation of settlement agreement. Gilbride requested, among other things, that the court appoint a referee to execute a deed on behalf of the defendants to transfer the east thirty-seven acres.

On August 28 Hudson filed a resistance to Gilbride's motion to amend and the amended petition. Hudson filed the resistance on behalf of all the defendants except Theodore and Rosalie and alleged that Theodore and Rosalie refused to sign a deed in fulfillment of the notation of settlement agreement. The resistance further alleged that, because of the refusal of the two defendants to participate in the partition in kind, the court should appoint a referee and determine each of the parties' interest and partition the real estate entirely by sale.

As part of the resistance, Kahler, Donald Trunnelle, David Trunnelle and Susan Fudurich cross-petitioned for partition by sale against Gilbride, Theodore, and Rosalie.

The district court granted Gilbride's motion to amend. Later, Gilbride filed a motion for partial summary judgment supported by affidavit against all the defendants. He requested that the court enter summary judgment for him to receive the east thirty-seven acres of the real estate. Kahler, Donald Trunnelle, David Trunnelle, and Susan Fudurich resisted the motion. They admitted "that prior to trial a settlement agreement was agreed to between the respective counsel for and on behalf of the parties but denie[d] that said settlement agreement was a complete and binding agreement on all parties." Kahler submitted an affidavit in support of the resistance. Theodore and Rosalie did not file a resistance.

The district court held a hearing on the motion, but the hearing was not reported. Hudson, Winkel, and Kahler were present. None of the other defendants attended, but Rosalie did participate by telephone at which time she said that she opposed Gilbride's motion for partial summary judgment. The district court ruled it was undisputed "that at the time the settlement was arrived at, through Mary Kahler, [Hudson] had authority from all of the defendants to enter into [the] settlement agreement and to sign the Notation of Settlement Agreement." The court grante...