Kendrick v. Barker

• Decision Date: 09 January 2001
• Docket Number: No. 99-333.,99-333.
• Parties: Stephanie B. KENDRICK, Appellant (Plaintiff), v. Daniel L. BARKER, dba Barker Construction, Appellee (Defendant).
• Court: Wyoming Supreme Court

15 P.3d 734

Stephanie B. KENDRICK, Appellant (Plaintiff), v. Daniel L. BARKER, dba Barker Construction, Appellee (Defendant).

No. 99-333.

Supreme Court of Wyoming.

January 9, 2001.

Representing Appellant: James P. Castberg, Sheridan, WY.

Representing Appellee: Jeffrey C. Brinkerhoff, Hampton K. O'Neill, and Timothy M. Stubson of Brown, Drew & Massey, LLP, Casper, WY. Argument by Mr. O'Neill.

Before LEHMAN, C.J., and THOMAS, GOLDEN, HILL, and KITE, JJ.

GOLDEN, Justice.

[¶ 1] In this appeal, we consider whether the district court properly enforced an oral settlement agreement and ruled that, as a matter of law, Wyoming does not recognize unknown injury as grounds for finding that mutual mistake warrants setting aside an agreement to release all personal injury claims.

[¶ 2] We affirm.

ISSUES

[¶ 3] Appellant Stephanie B. Kendrick presents these issues for our review:

I. Did the district judge commit error in granting the defendant's motion for enforcement of settlement agreement when there existed a mutual mistake between the parties as to the plaintiff's injuries?

II. Did the district judge commit error in granting the defendant's motion for enforcement of settlement agreement that was an unconscionable settlement?

III. Did the district judge commit error in granting the defendant's motion for enforcement of settlement agreement when plaintiff accepted the offer of settlement while under duress?

IV. Did the district judge commit error in granting the defendant's motion for enforcement of settlement agreement when the plaintiff's acceptance was contingent upon the defendant submitting a written settlement agreement acceptable to the plaintiff?

Appellee Daniel L. Barker, d/b/a Barker Construction, presents this statement of the issues:

1. Did the district court commit plain error when it held that plaintiff's two affidavits, which violated the requirements of W.R.C.P. 56(e), and which contained and attached hearsay statements from her medical care providers, were sufficient to create a question of fact as to whether a mistake concerning plaintiff's condition existed at the time of the settlement conference, when plaintiff was actually required by Wyoming law to prove such a mutual mistake by the much higher burden of clear and convincing evidence?

2. Was the district court entirely correct in holding that the settlement agreement reached between the parties was as simple as the defendant agreeing to pay plaintiff $40,000 in exchange for a release of all claims, and was in no way contingent or dependent upon the form of subsequent proposed written documentation, which simply memorialized this agreement?

3. Was the district court entirely correct in holding that plaintiff had failed to present even a prima facie case regarding the defense of duress, since plaintiff presented no evidence of duress in this case?

4. Was the district court entirely correct in holding that plaintiff had failed to present even a prima facie case regarding the defense of unconscionability, since plaintiff presented no evidence of unconscionability in this case?

FACTS

[¶ 4] Kendrick filed suit for injuries she received when her vehicle collided with a Barker tractor-trailer. On January 25, 1999, an order entered after a scheduling conference set deadlines for motions, discovery, and scheduled a pretrial conference and trial. The order directed that there would be no change in scheduling unless approved by the district court; settlements should be reduced to writing and approved by counsel before notifying the court; and no continuances or canceling of hearing dates would be granted based on telephone calls. The parties designated a mediator and, on May 18, 1999, the district court assigned the case to the mediator for a settlement conference under W.R.C.P. 40(b).

[¶ 5] A settlement conference was held on June 4, 1999. On June 7, 1999, the mediator wrote to both parties outlining the terms of the tentative settlement agreement that had been reached and stating that Kendrick had until close of business on June 8 to accept Barker's final offer. The letter noted that the offer was open to allow Kendrick to determine an issue about a vehicle damages payment. On June 8, 1999, Kendrick's attorney faxed to Barker's attorney and the mediator Kendrick's acceptance of "$40,000.00 in full settlement of all claims against the Defendant." The mediator responded with a letter that day instructing the parties to prepare the first drafts of closing and settlement documents within three weeks. Kendrick's attorney also notified the district court, and the trial setting was vacated. After Kendrick received the document drafts, she notified her attorney that she would not accept the settlement and hired a new attorney.

[¶ 6] Barker filed a motion seeking enforcement of the settlement agreement and denial of the withdrawal of Kendrick's first attorney. Kendrick opposed enforcement, contending that the drafts' terms were inaccurate because she had agreed to the settlement offer of $40,000.00 for medical expenses only, not lost income, and contingent upon her car insurer's not seeking subrogation. Additionally, Kendrick contended that on July 19, 1999, after the settlement conference, she was diagnosed with a closed head injury, and she argued that mutual mistake precluded enforcement of the agreement.

[¶ 7] The trial court held a hearing on September 16, 1999, and Kendrick confirmed that she was objecting to form by requiring that the settlement proceeds be designated as medical expense damages and was not contending that she had reserved a claim against Barker. She also stated that she had been unable to obtain a written release of any subrogation claim from her car insurer and enforcement of the agreement could lead to an actual recovery of $2,000 which she contended was unconscionable. Kendrick also argued duress. Barker conceded that her acceptance of the offer was contingent upon whether her insurer would seek subrogation, but contended that her former attorney's affidavit indicated that he had confirmed the insurer would not seek subrogation before her acceptance and it was therefore not an issue barring enforcement. Barker contended that in Wyoming mutual mistake was inapplicable and, in any event, Kendrick's summary judgment materials violated W.R.C.P. 56(e) and the court did not have proper medical records before it to reach a decision on mutual mistake.

[¶ 8] After Kendrick told the trial court that that her car insurer had paid $10,000.00 for medical expenses and $8,000.00 for property damage, the trial court advised that the settlement proceeds could be designated strictly for medical expenses; however, in its order, the trial court did not make such a designation and, instead, ruled that a preponderance of the evidence showed that an oral settlement agreement without contingencies was reached after both parties negotiated concessions to their original positions with counsel present. The trial court also noted that Kendrick did not question the mediator's letter outlining the tentative settlement and unequivocally accepted the offer, and further, the parties' notification to the court that a settlement agreement had been reached resulted in vacating the pretrial conference and trial to which Kendrick did not object and she did not appear for those proceedings. The trial court found that the agreement was not contingent upon the form of written documentation and a prima facie case of duress and unconscionable bargain was not established. It further found that a question of fact on the issue of mutual mistake existed; but because Wyoming did not recognize a tort theory of mutual mistake, which the trial court understood to be different from mutual mistake in contract law, summary judgment was granted to Barker on that issue. This appeal followed.

DISCUSSION

Standard of Review

[¶ 9] In Wyoming, trial courts have the inherent power to summarily enforce settlement agreements entered into by parties litigant in a pending case. Wyoming Sawmills, Inc. v. Morris, 756 P.2d 774, 779 (Wyo. 1988); Kukla v. National Distillers Products Company, 483 F.2d 619, 621 (6th Cir.1973). The authority to enter a final judgment does not rest upon W.R.C.P. 56. Kukla, 483 F.2d at 621.

"The power of a trial court to enter a judgment enforcing a settlement agreement has its basis in the policy favoring the settlement of disputes and the avoidance of costly and time-consuming litigation. To effectuate this policy, the power of a trial court to enforce a settlement agreement has been upheld even where the agreement has not been arrived at in the presence of the court nor reduced to writing."

Wyoming Sawmills, 756 P.2d at 779 (quoting Kukla, 483 P.2d at 621).

[¶ 10] When the trial court is determining whether an oral settlement agreement exists that must be summarily enforced under its inherent authority, the court should examine factors indicating that, after involving the court in the dispute, the parties intended to settle the claim out of court and with legal advice and abandoned pursuit of a legal remedy. McCormick v. McCormick, 926 P.2d 360, 363 (Wyo.1996); cf. Kukla, 483 F.2d at 621-22

.

Enforcement of Settlement Agreement

[¶ 11] Addressing Kendrick's last issue first, she contends that her agreement to settle was contingent upon the written contract's expressing that the settlement amount was for medical expenses only, not lost income, and that her car insurer would not be seeking subrogation for the medical expenses that it paid. Barker contends that the trial court correctly ruled that the oral agreement was simply $40,000.00 in exchange for a release of all claims and no contingencies existed that prevented enforcement of the agreement. Although the transcripts show that the trial court explored avenues to resolve Kendrick's concern that the proceeds be designated as medical expenses, we agree with Barker that the trial court decided that...