Howard v. Dimaggio

• Court: Washington Court of Appeals
• Writing for the Court: SHIELDS
• Citation: Howard v. Dimaggio, 855 P.2d 335, 70 Wn.App. 734 (Wash. App. 1993)
• Decision Date: 27 July 1993
• Docket Number: No. 12317-1-III
• Parties: Sharon L. HOWARD, Appellant, v. Donna DIMAGGIO and John Doe Dimaggio, wife and husband, Respondents. Division 3, Panel One

Page 734

70 Wn.App. 734

855 P.2d 335

Sharon L. HOWARD, Appellant, v. Donna DIMAGGIO and John Doe Dimaggio, wife and husband, Respondents.

No. 12317-1-III.

Court of Appeals of Washington,

Division 3, Panel One.

July 27, 1993.

Leroy P. Shuster and Shuster Law Office, Spokane, for appellant.

Michael J. McMahon, Etter & McMahon, P.S., Spokane, for respondents.

SHIELDS, Judge Pro Tem. ^*

Sharon Howard sued Donna Dimaggio for injuries she received in an automobile accident. Their attorneys negotiated a settlement. Before execution of the settlement documents, Ms. Dimaggio's insurance carrier paid Ms. Howard's insurance carrier for its subrogation interest. Ms. Howard subsequently refused to sign the settlement documents. The court granted Ms. Dimaggio's motion to enforce the settlement. Ms. Howard contends the court erred. We agree, reverse and remand for trial.

On August 17, 1990, 3 days before trial, Ms. Dimaggio's attorney offered a settlement of $16,000 cash and payment of Ms. Howard's insurance carrier's subrogation interest in the amount of $8,429.84. Ms. Howard's attorney accepted the offer subject to her approval. That same day, Ms. Dimaggio's attorney notified Ms. Dimaggio's insurer, St. Paul Fire and Marine Insurance Company, that a settlement had been reached.

Ms. Dimaggio's attorney drafted a release of liability to be signed by Ms. Howard, a medical guaranty letter and a stipulation to an order of dismissal to be signed by her attorney, and an order of dismissal with prejudice to be presented to the court. The documents were sent to Ms. Howard's attorney on August 23, 1990, accompanied by a cover letter indicating a check would be issued after all of the documents were signed and returned to him. ¹ A copy of the letter was sent to Lloyd Brian, the claims supervisor for St. Paul. On September 20, 1990, St. Paul issued a check to Farmer's Insurance Group in the amount of $8,429.84. Farmer's cashed the check, satisfying its subrogation interest.

On October 5, 1990, Ms. Dimaggio's attorney reminded Ms. Howard's attorney they were still awaiting the executed settlement documents. In November, Ms. Howard's attorney responded that Ms. Howard was dissatisfied with the settlement agreement and would not be signing the documents. In February 1991, Ms. Howard's attorney withdrew and new counsel was substituted.

On February 7, 1992, Ms. Dimaggio filed a motion for an order enforcing the settlement agreement. After a hearing on February 28, the court granted the motion, finding: "Settlement was agreed upon by the attorneys for the parties. Plaintiff is estopped to deny the settlement of this case." The court ordered Ms. Howard to execute all documents required to settle the matter, and dismissed her complaint with prejudice.

The court's authority to enforce a settlement agreement is derived from court rule and statute. CR 2A provides:

No agreement or consent between parties or attorneys in respect to the proceedings in a cause, the purport of which is disputed, will be regarded by the court unless the same shall have been made and assented to in open court on the record, or entered in the minutes, or unless the evidence thereof shall be in writing and subscribed by the attorneys denying the same.

RCW 2.44.010 provides, in part:

An attorney and counselor has authority:

(1) To bind his client in any of the proceedings in an action or special proceeding by his agreement duly made, or entered upon the minutes of the court; but the court shall disregard all agreements and stipulations in relation to the conduct of, or any of the proceedings in, an action or special proceeding unless such agreement or stipulation be made in open court, or in presence of the clerk, and entered in the minutes by him, or signed by the party against whom the same is alleged, or his attorney[.]

CR 2A and RCW 2.44.010 are designed to avoid disputes like the one between these parties:

The purpose of the cited rule and statute is to avoid such disputes and to give certainty and finality to settlements and compromises, if they are made. While the compromise of litigation is to be encouraged, negotiations toward a compromise are not binding upon the negotiators. Where, as here, it is disputed that the negotiations culminated in an agreement, noncompliance with the rule and statute leaves the court with no alternative. It must disregard the conflicting evidence as they direct.

Eddleman v. McGhan, 45 Wash.2d 430, 432, 275 P.2d 729 (1954); see also Bryant v. Palmer Coking Coal Co., 67 Wash.App. 176, 179, 834 P.2d 662 (1992), review denied, 120 Wash.2d 1027, 847 P.2d 480 (1993).

Here, it is undisputed that these procedures were not followed. Ms. Howard's attorney entered into an oral settlement agreement subject to her approval. In his deposition, he stated he and Ms. Dimaggio's attorney had agreed on the specific amounts required for settlement, but did not discuss details of the release and hold harmless documents, verification of satisfaction of the interests of other subrogated parties, or who would be designated payees on the $16,000 check. Ms. Howard's attorney stated he accepted the dollar amounts of the proposed settlement contingent upon Ms. Howard's approval of the terms and conditions of the release and hold harmless documents.

Ms. Dimaggio contends the deposition of Ms. Howard's attorney satisfies the requirements of RCW 2.44.010 and CR 2A, relying on Stottlemyre v. Reed, 35 Wash.App. 169, 172, 665 P.2d 1383, review denied, 100 Wash.2d 1015 (1983) (citing Butler v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 528 F.2d 1390, 1391 (9th Cir.1975)). She argues Ms. Howard's attorney admitted in his deposition that a settlement was reached, waived his signature, and thereby constructively signed the deposition pursuant to CR 30(e). Her reliance on Stottlemyre is misplaced.

In Stottlemyre, the agreement between the attorneys was made in open court. Mrs. Stottlemyre's attorney stated he accepted a settlement subject to his client's approval, and that his client had orally approved it. Stottlemyre, 35 Wash.App. at 172-73, 665 P.2d 1383. Here, while Ms. Howard's attorney stated he accepted the settlement contingent on her approval, Ms. Howard did not approve and refused to sign the settlement documents.

Even though the evidence establishes the attorneys agreed on the amount of the settlement, it also establishes they did not reach an agreement on the terms of the hold harmless and release documents. Therefore, noncompliance with CR 2A and RCW 2.44.010 left the trial court without authority to enforce the alleged settlement agreement. Bryant, 67 Wash.App. at 179, 834 P.2d 662. See also Greyhound Lines, Inc. v. Superior Court, 98 Cal.App.3d 604, 159 Cal.Rptr. 657 (1979).

The court also granted the motion to enforce the settlement agreement on an alternative basis. It found Ms. Howard is estopped from denying the settlement agreement because she did not timely convey her disapproval of the release terms to Ms. Dimaggio, and Ms. Dimaggio's insurance carrier performed in accordance with the agreement.

Equitable estoppel is not favored, and the party asserting...