Robertson v. Alling

• Decision Date: 24 June 2015
• Docket Number: No. CV–14–0246–PR.,CV–14–0246–PR.
• Citation: 715 Ariz. Adv. Rep. 23,351 P.3d 352,237 Ariz. 345
• Parties: Don C. ROBERTSON, as successor trustee of the Viola I. Robertson Trust dated October 1, 2009; Charlotte G. Hardy As Successor Trustee of the Viola I. Robertson Trust dated October 1, 2009; James H. Hardy and Charlotte G. Hardy, husband and wife; Bonita Sue Escobedo and James D. Sumpter, as Successor Trustees of the Sumpter Trust; W. Michael Addington and Cheryl Addington, husband and wife and Trustees of the W. Michael and Cheryl Addington Trust, Plaintiffs/Appellees, v. Robert E. ALLING and Jacqueline R. Alling, Individually and as husband and wife; Melissa L. Moore, Individually; Doyle K. Warner and Deanna K. Warner, Individually and as husband and wife; Harry L. Viezens and Marcia L. Viezens, Individually and as husband and wife and as Trustees of the Viezens Trust; Frederick and Calista Washburn, Individually and as husband and wife; MGF Funding, Inc., an Arizona corporation; Brian A. Mortensen and Oxana Mortensen, Individually and as husband and wife; Robert R. Hicks and Nicole Hicks, Individually and as husband and wife; Karl F. Kohlhoff and Joan M. Kohlhoff, Individually and as husband and wife and as Trustees of the Kohlhoff Family Trust; William D. Lawrence, Individually; Lawrence Properties, a general partnership; William Glaunsinger and Lorna Glaunsinger, Individually and as husband and wife; Thomas Graham and Regina Graham, Individually and as husband and wife; Graham Homes, LLC, an Arizona limited liability company; Gerald L. Graham, Individually and as Trustee of the Graham Family Trust, and Velma Graham, his wife, Defendants/Appellants.
• Court: Arizona Supreme Court

237 Ariz. 345

351 P.3d 352

715 Ariz. Adv. Rep. 23

Don C. ROBERTSON, as successor trustee of the Viola I. Robertson Trust dated October 1, 2009; Charlotte G. Hardy As Successor Trustee of the Viola I. Robertson Trust dated October 1, 2009; James H. Hardy and Charlotte G. Hardy, husband and wife; Bonita Sue Escobedo and James D. Sumpter, as Successor Trustees of the Sumpter Trust; W. Michael Addington and Cheryl Addington, husband and wife and Trustees of the W. Michael and Cheryl Addington Trust, Plaintiffs/Appellees

v.Robert E. ALLING and Jacqueline R. Alling, Individually and as husband and wife; Melissa L. Moore, Individually; Doyle K. Warner and Deanna K. Warner, Individually and as husband and wife; Harry L. Viezens and Marcia L. Viezens, Individually and as husband and wife and as Trustees of the Viezens Trust; Frederick and Calista Washburn, Individually and as husband and wife; MGF Funding, Inc., an Arizona corporation; Brian A. Mortensen and Oxana Mortensen, Individually and as husband and wife; Robert R. Hicks and Nicole Hicks, Individually and as husband and wife; Karl F. Kohlhoff and Joan M. Kohlhoff, Individually and as husband and wife and as Trustees of the Kohlhoff Family Trust; William D. Lawrence, Individually; Lawrence Properties, a general partnership; William Glaunsinger and Lorna Glaunsinger, Individually and as husband and wife; Thomas Graham and Regina Graham, Individually and as husband and wife; Graham Homes, LLC, an Arizona limited liability company; Gerald L. Graham, Individually and as Trustee of the Graham Family Trust, and Velma Graham, his wife, Defendants/Appellants.

No. CV–14–0246–PR.

Supreme Court of Arizona.

June 24, 2015.

Noel Fidel (argued), Law Office of Noel Fidel, Phoenix; Robert Grasso, Jr., and Jenny J. Winkler, Grasso Law Firm, P.C., Chandler, Attorneys for Don C. Robertson, et al.

Russell A. Kolsrud (argued) and Mark S. Sifferman, Clark Hill PLC, Scottsdale, Attorneys for Robert E. Alling, et al.

Stanley G. Feldman, Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., Tucson, and David L. Abney, Knapp & Roberts, P.C., Scottsdale, for Amici Curiae Arizona Association for Justice/Arizona Trial Lawyers Association.

Justice TIMMER authored the opinion of the Court, in which Chief Justice BALES, Vice Chief Justice PELANDER and Justices BERCH and BRUTINEL joined.

Opinion

Justice TIMMER, opinion of the Court.

¶ 1 Agreements between parties or attorneys in civil lawsuits are not binding if disputed unless they are evidenced by a writing or made orally in court. Ariz. R. Civ. P. 80(d). We here consider whether Rule 80(d) makes a written settlement agreement unenforceable because it lacked the written assent of clients who dispute their attorney's authority to make the agreement. Holding that no such written assent is required and that the agreement here satisfied Rule 80(d), we also conclude that it is enforceable because the attorney acted within the apparent authority given by his clients.

I. BACKGROUND

¶ 2 Petitioners (“the Robertson Group”) sued neighboring property owners (“the Alling Group”) concerning a water line. On January 29, 2013, the parties and their attorneys attended a mediation but did not reach an agreement. At the end of the mediation, the Alling Group, represented by attorney Mark Sifferman, made a settlement offer requiring acceptance within forty-eight hours.¹ Hours before the offer expired, Robert Grasso, the Robertson Group's attorney, told Sifferman that the Robertson Group needed more time to respond to the offer because one group member had a family emergency. Grasso proposed that the attorneys discuss the offer the next week. Sifferman did not extend the January 31 deadline, and the offer expired.

¶ 3 Sifferman advised his clients of Grasso's request and recommended they “leave the door open” for settlement. Two of the Alling Group members emailed Sifferman on February 4 stating that they and others favored “removing the settlement offer proposed in the mediation.” But Sifferman did not read the email and mistakenly thought all his clients were willing to settle on the terms previously conveyed to the Robertson Group.

¶ 4 On February 6, after talking with another attorney at Grasso's law firm, Sifferman sent that attorney an email extending a new settlement offer with terms that mirrored the prior offer but would expire at 5:00 p.m. on February 8. Grasso timely accepted the offer via email. Later, after Grasso's law firm had informed the trial court of the settlement (the “February 8 settlement”) and circulated draft settlement documents, Sifferman discovered he had lacked authority to extend the settlement offer. After conferring with his clients, Sifferman made a new settlement offer, which materially varied from the February 8 settlement.

¶ 5 The Robertson Group moved to enforce the February 8 settlement. Without an evidentiary hearing, the trial court granted the motion, ruling that Sifferman had actual and apparent authority to extend the settlement offer and, alternatively, that the Alling Group was equitably estopped from disputing that authority. The court also ruled that Arizona Rule of Civil Procedure 80(d) did not apply but, if it did, the emails exchanged between counsel satisfied the rule.

¶ 6 The court of appeals reversed. Robertson v. Alling, 235 Ariz. 329, 339 ¶ 38, 332 P.3d 76, 86 (App.2014). After finding that a dispute existed concerning Sifferman's authority to enter into the February 8 settlement, the court concluded that this dispute triggered Rule 80(d). Id. at 333 ¶ 10, 332 P.3d at 80. “Because the [Alling Group's] assent to the contract is not in writing,” the court reasoned, “the requirements of Rule 80(d) were not met, and the agreement is unenforceable as a matter of law.” Id. The court remanded for the trial court to determine whether the Alling Group is equitably estopped from opposing enforcement of the February 8 settlement. Id. at 339 ¶ 37, 332 P.3d at 86.

¶ 7 We granted review to decide whether Rule 80(d) applies when an attorney's authority to settle is challenged and to provide guidance on apparent authority, both recurring issues of statewide importance. We have jurisdiction pursuant to Article 6, Section 5 of the Arizona Constitution.

II. DISCUSSION

¶ 8 Because the trial court effectively granted summary judgment regarding the existence, terms, and enforceability of the parties' settlement agreement, we employ the summary judgment standard of review. See Perry v. Ronan, 225 Ariz. 49, 52 ¶ 7, 234 P.3d 617, 620 (App.2010). Accordingly, we determine de novo whether any genuine disputes of material fact exist and whether the trial court correctly applied the law, viewing the facts in the light most favorable to the Alling Group as the non-prevailing party. See Ariz. R. Civ. P. 56(a) ; BMO Harris Bank, N.A. v. Wildwood Creek Ranch, LLC, 236 Ariz. 363, 365 ¶ 7, 340 P.3d 1071, 1073 (2015).

A. Rule 80(d)

¶ 9 Rule 80(d) provides that “[n]o agreement or consent between parties or attorneys in any matter is binding if disputed, unless it is in writing, or made orally in open court, and entered in the minutes.” The issue before us is whether the rule requires a writing reflecting a client's assent to a written agreement when the client disputes its attorney's authority to make the agreement.

¶ 10 We interpret court rules to effect the drafters' intent. State v. Salazar–Mercado, 234 Ariz. 590, 592 ¶ 4, 325 P.3d 996, 998 (2014). When a rule's language is unambiguous, we apply it as written. Id. If the language is ambiguous, we apply secondary principles of construction, such as examining the rule's spirit and purpose as well as the effects and consequences of differing interpretations. Id.

¶ 11 The Robertson Group relies on Hays v. Fischer as support for its argument that Rule 80(d) applies only if “the existence of the settlement agreement and its terms are ... in dispute” and not when the client disputes whether it is bound by the settlement agreement. 161 Ariz. 159, 166, 777 P.2d 222, 229 (App.1989) ; see also Perry, 225 Ariz. at 54 ¶¶ 17–18, 234 P.3d at 622 (holding that Rule 80(d) does not apply because the client “only disputes whether he is bound to the settlement agreement; the agreement's existence and terms are not in dispute”). That group asserts that the Alling Group does not dispute the existence or terms of the February 8 settlement, but only contests whether it is bound by the agreement, and, therefore, Rule 80(d) does not apply.

¶ 12 Like the court of appeals, see Robertson, 235 Ariz. at 338 ¶¶ 31–32, 332 P.3d at 85, the Alling Group relies on Canyon Contracting Co. v. Tohono O'Odham Housing Authority, which held that if an attorney's settlement authority is disputed, Rule 80(d) requires a written manifestation of the client's assent to the agreement. 172 Ariz. 389, 393, 837 P.2d 750, 754 (App.1992). In Canyon Contracting, the court reasoned that this construction of Rule 80(d) furthers the rule's “policy of avoiding difficult issues of proof.” Id.

¶ 13 We agree with the Robertson Group. Rule 80(d) serves to avoid collateral disputes between parties by requiring written evidence of any stipulations and agreements. Cf. Hackin v. Rupp, 9 Ariz.App. 354, 355–56, 452 P.2d 519, 520–21 (1969) (stating that most jurisdictions have adopted similar rules to “prevent fraudulent claims of oral stipulations, and to prevent disputes as to the existence and terms of agreements and to relieve the court of the necessity of determining such disputes” (quoting 83 C.J.S. Stipulations § 4 (1969) ) (internal quotation marks omitted)). If parties do not dispute the existence or terms of an agreement, no purpose is served by applying Rule 80(d). Whether the agreement is in writing does not resolve whether the lawyer was authorized to bind the client. Because the parties here do not dispute the existence and terms of the February 8 settlement, Rule 80(d) does not apply.

¶ 14 But even if Rule 80(d) applies, the attorneys' exchange of emails satisfied the...