Moreland v. Suttmiller, 19132

• Decision Date: 20 July 1990
• Docket Number: No. 19132,19132
• Citation: 397 S.E.2d 910,183 W.Va. 621
• Court: West Virginia Supreme Court
• Parties: Robert N. MORELAND and Naomi Moreland, His Wife, Appellants, v. Al SUTTMILLER, t/a Three Star Services, Defendant and Third-Party Plaintiff Below, Appellee, v. VELSICOL CHEMICAL CORPORATION, Third-Party Defendant Below, Appellee.

Page 910

397 S.E.2d 910

183 W.Va. 621

Robert N. MORELAND and Naomi Moreland, His Wife, Appellants, v. Al SUTTMILLER, t/a Three Star Services, Defendant and Third-Party Plaintiff Below, Appellee, v. VELSICOL CHEMICAL CORPORATION, Third-Party Defendant Below, Appellee.

No. 19132.

Supreme Court of Appeals of

West Virginia.

July 20, 1990.

Syllabus by the Court

1. "[T]he law favors and encourages the resolution of controversies by contracts of compromise and settlement rather than litigation; and it is the policy of the law to uphold and enforce such contracts if they are fairly made and are not in contravention of some law or public policy." Syl. Pt. 1, Sanders v. Roselawn Memorial Gardens, Inc., 152 W.Va. 91, 159 S.E.2d 784 (1968).

2. "When an attorney appears in court representing clients there is a strong presumption of his authority to represent such clients, and the burden is upon the party denying the authority to clearly show the want of authority." Syl. Pt. 1, Miranosky v. Parson, 152 W.Va. 241, 161 S.E.2d 665 (1968).

3. "The question of the attorney's want of authority to represent clients must be raised immediately by a motion or petition accompanied by affidavits." Syl. Pt. 2, Miranosky v. Parsons, 152 W.Va. 241, 161 S.E.2d 665 (1968).

Douglas B. Hunt, Charleston, for Robert N. Moreland.

Oscar M. Bean, Moorefield, for Al Suttmiller Three Star Services.

Richard L. Earles, Shuman, Annand & Poe, Charleston, for Velsicol Chemical Corp.

PER CURIAM:

This case is before this Court pursuant to an appeal from an order of the Honorable Judge C. Reeves Taylor, Circuit Judge of Mineral County. The appellants in this case appeal the June 21, 1988 dismissal order in which the court granted appellees' motions to enforce respective settlement agreements reached in a civil action. On appeal, the appellants assert that the court erred in holding that settlement agreements had been reached between the appellants and both appellees. In addition, the appellants maintain that their attorney did not have authority to enter into the settlements with the appellees on their behalf. Error is also alleged to have resulted because the court below failed to provide appellants with an evidentiary hearing

to determine whether the settlement agreements were executed under mistake, duress, coercion or lack of authority. We affirm the decision of the circuit court.

The underlying civil action was filed on August 8, 1979, by the appellants, Robert N. and Naomi Moreland. In that action, the Morelands brought suit against the appellee Al Suttmiller for damages resulting from alleged carelessness, negligence and incompetence in the use and application of Chlordane for termite extermination treatment in appellants' home. Suttmiller brought the appellee Velsicol, the manufacturer of the chemical Chlordane, into this suit as a third party defendant on a claim of indemnification on June 13, 1980.

In the fall of 1987, the parties engaged in serious negotiations in an effort to settle this case. At a hearing on September 14, 1987, counsel for the appellants announced in their presence that a settlement in the amount of $9,500.00 had been reached between the appellants and the appellee Velsicol. No objection to the settlement was heard by the appellants. Subsequent to this announcement of the settlement in court, the appellants refused to sign the release prepared to effectuate the settlement. Velsicol then filed a petition to enforce the settlement agreement at the end of September, 1987.

At a hearing held on October 1, 1987, counsel for the appellants informed the court in their presence that he believed there was an existing agreement to settle with Velsicol and that there was a meeting of the minds between Velsicol and the Morelands. Counsel for petitioners further explained that there was some problem with the language included in the release supplied by Velsicol, but that it was one which could be worked out. The pertinent language involved an indemnity provision with the remaining respondent Suttmiller. ¹ Appellants themselves once again were not heard to raise any complaint as to the substance of the settlement. At the conclusion of this hearing, the court deferred decision on enforcement of the settlement agreement to give the parties an opportunity to work out any remaining problems with the settlement.

Another pretrial proceeding on the motion to enforce the settlement agreement was held on December 8, 1987. At that time, the release between Velsicol and the Morelands remained unsigned and disputed. Furthermore, counsel for the appellants informed the court that there had also been discussion of settlement between the appellants and Suttmiller in an amount of $71,000.00. Appellants' counsel explained to the court that his "clients ha[d] been vacillating" and that at one time they had given him "authority to settle" but then they called back the following day and told him they had changed their minds. At the December 8, 1987 hearing, appellants' counsel possessed written authority, but that authority had been revoked pursuant to a phone call which took place the morning of the hearing. Since the Morelands were present at this hearing, the court allowed Mrs. Moreland to address the court regarding the settlements. Mrs. Moreland informed the court that she and Mr. Moreland had considered the settlement offers from both appellees, but were unsure as to whether $80,500.00 (the joint amount of both offers) would be sufficient to fully compensate them for the costs associated with removing the chemical Chlordane from their home. Salient portions of her statement included the following:

We think this offer of settlement is very low and very unfair. We have considered it because of our failure and our health. Both of us are going down fast. But their offer does not cover the clean-up, and we think that if they want out of this and they want a release, that they should pay for the clean-up over and above this settlement.

....

... After we considered settlement and began to start plans for work and clean-up and to rebuild, we run into a brick wall. We can do nothing. We cannot accept unless Velsicol will pay for the chemical clean-up.... Our plea is to you, Your Honor, that our settlement of eighty thousand be raised by both parties to what the cost really will be to us, which is $105,000.00.... (emphasis added)

At the conclusion of this December 8, 1987 hearing, the court deferred ruling on Velsicol's request to enforce the settlement agreement and set a thirty-day period during which the parties were to attempt to settle this case. The previously set trial date of January 19, 1988 was continued, and the court informed the parties that if this case did not settle, a trial would be held by the end of February, 1988.

On February 29, 1988, appellee Suttmiller filed a motion to enforce a settlement agreement it maintained had been reached with the appellants. The petition, which was never answered or denied by appellants, alleged inter alia that counsel for appellants had advised counsel for appellee Suttmiller that he had required both Mr. and Mrs. Moreland to provide him with written authority to settle, and that after he had received the written authority to settle, he had waited an additional period of several days to ensure that the Morelands didn't renounce such authority. Also during February 1988, letters regarding the settlement agreements were written by the appellants to their counsel and by their counsel to them in response. In a February 10, 1988 letter handwritten by Mrs. Moreland, the following was stated:

We have not changed our minds in any way. We do agree to accept the $80,000. offer of settlement you made us, no less, but we cannot and will not accept the Velsicol release as a release we must sign.... We know that $80,000. is a small recovery for all we been through, but we agreed to accept it to get this worry behind us.... (emphasis added)

In addition, Mrs. Moreland informed their counsel in this letter that she and her husband would not sign the Velsicol release because they never sued them, but that they would take the $9,500.00 as a gift with no strings attached. In letters dated February 3 and February 16, 1988, appellants' counsel, Mr. Shinaberry, informed the appellants that they were required to execute the releases before they could get the money for the settlement. If they continued to refuse to sign the releases, Mr. Shinaberry, advised them that the appellees would have no other recourse but to proceed with the petitions to enforce the settlement agreements in court. Mr. Shinaberry's letter of February 16 reflects his frustration with the fluidity of his clients' position. In that letter, a copy of which was sent to Judge Taylor, Mr. Shinaberry went so far as to tell his clients that they would receive the settlement free from any obligation to pay a contingency fee or reimburse him for expenses. Mr. Shinaberry further advised the Morelands he could not represent them in opposition to the pending motions to enforce.

Since the appellants continued to refuse to sign the releases, the appellees proceeded on the petitions to enforce the settlement agreements at a hearing held on May 21, 1988. Appellants' counsel and both appellees by counsel advised the court at this hearing that they believed that a settlement had been reached in this matter between the Morelands and both appellees. Counsel for the Morelands also reaffirmed that he had made a settlement on behalf of his clients and that the releases were in satisfactory form. As evidence of the consummation of a settlement agreement, checks had been written to the appellants in the amounts of $71,000.00 from Suttmiller and $9,500.00 from Velsicol. Because the Morelands refused to execute the releases prepared by appellees, the checks had not been tendered to the appellants. Based on his belief that a settlement agreement had been reached...