Settlement Announcements: What Could go Wrong?

September 14, 2016 § 4 Comments

The COA’s memorable decision in Pearson v. Browning, 106 So.3d 845 (Miss. App. 2012), is notable for the fact that it reversed the trial court because the counterclaiming party had not been served with a R81 summons for trial. I think most chancellors up to then — and even now — believe that once you invoke the jurisdiction of the court by filing a pleading (particularly a pleading on offense), you have submitted yourself to the jurisdiction of the court, and no further process is necessary, only notice per R5.

The reversal did not resolve the dispute between the parties, though. They went right back at it, and found themselves back in trial on contempt issues before the same chancellor. On November 5, 2013, the chancellor again ruled against Dennis Pearson, who appealed yet again. This time he contended that the original judgment rendered October 13, 2005, although styled as an “agreed” judgment, included terms not embraced in the settlement announcement and was not signed either by him or his attorney, and so was ineffective.

The COA affirmed in Pearson  v. Browning, handed down August 16, 2016. Judge Irving wrote for the court:

¶8. Dennis argues that the October 13, 2005 “agreed” modification order was invalid
because he did not agree to its terms and that neither he nor his attorney signed the order, as required by Uniform Rule of Chancery Court 5.03. Rule 5.03 states: “Every consent Judgment must be approved and signed by counsel for all parties to the suit who may be represented by counsel and interested in or affected thereby before being presented to the Chancellor for his signature. The Court may also require the parties to sign.”

¶9. Dennis argues that “[i]t is clear from looking at the transcript of August 16, 2005[,]
. . . that the agreement read into the record differed from the agreement as later written in the October 13, 2005 ‘Agreed Order.’” However, Dennis makes no specific argument regarding what is different. The chancellor’s findings of fact and conclusions of law on this issue state that the October 13, 2005 agreed order “is a mirror image of the parties’ agreement as read into the record.” Dennis only complains about the portion of the order granting Patricia all equity in the marital home. However, Dennis clearly agreed to this, as well as the other provisions of the order, during the August 16, 2005 hearing.

¶10. During the August 16, 2005 hearing, Dennis’s attorney stated into the record, “We
have reached an agreement regarding all issues contained in the pleadings.” Counsel then proceeded to detail modifications to the visitation schedule; the requirement that within sixty days, Patricia would refinance the marital home, Dennis would quitclaim his interest in the marital home to her, and she would be responsible for all mortgage payments on the home; the parties’ agreement to waive any contempt issues regarding past-due bills or visitation; and each parent’s right to claim one child as a dependent for tax purposes. The parties were then placed under oath and questioned by the chancellor about the modifications. Dennis’s testimony was as follows:

Q. [Dennis,] did you understand what the attorneys read into the record as
your agreement?
A. Yes, I do.
Q. Was that your agreement?
A. That’s correct.
Q. Do you understand that this agreement will be put into writing and will
become the court’s order?
A. Yes, I do.
Q. And you understand that failure to follow the agreement could result in
a contempt charge against you?
A. I do.

¶11. In ruling on Dennis’s motion to set aside the agreed order as invalid, the chancellor found Dennis’s signature on the agreed order unnecessary as “surplusage,” since the agreement had been read into the record and agreed to under oath by both parties. Also, in finding no merit to Dennis’s argument that the order was inconsistent with the settlement agreement read into the record, the chancellor stated in his findings of fact and conclusions of law:

The next day after the hearing (October 14, 2005), Dennis signed a Quitclaim Deed at a bank. This act by Dennis is consistent with the agreement of the parties in the transcript. This Quitclaim Deed transfers Dennis and Patricia’s interest in the marital home and property to Patricia and her present husband, Steven. Dennis now claims that the property was conveyed to Patricia in exchange for Patricia waiving her interest in the Thrift Savings Plan and retirement. This is inconsistent with the August 16, 2005 transcript, the October 13, 2005 Agreed Judgment of Modification, and Dennis’s act of conveyance in signing the Quitclaim Deed one (1) day after the Judgment.

¶12. This Court addressed a similar issue in McDonald v. McDonald, 850 So. 2d 1182
(Miss. Ct. App. 2002), aff’d on cert., 876 So. 2d 296 (Miss. 2004). In McDonald, the wife
filed for modification of the visitation schedule that was established at the time of her and her husband’s divorce. Id. at 1185 (¶3). A hearing was held, and both parties agreed to the new schedule. Id. at (¶4). However, the husband later refused to sign an agreed order. Id. at (¶5). The wife filed a “Motion for Entry of Agreed Order.” Id. The chancellor signed and entered the order without the husband’s or his counsel’s signature. Id. at 1186 (¶5). The husband appealed, arguing the “agreed” order was invalid, as he did not sign it and did not agree with its terms. Id. at 1188 (¶18). We agreed with the husband “that there must be consent for a consent decree.” Id. at (¶21). However, we also noted that “[a] consent judgment is in the nature of a contract,” and is binding as such. Id. at 1189 (¶25). Despite the husband later changing his mind, we found that at the relevant time for consent—when the settlement terms were announced in open court—the husband did agree to the settlement, and his agreement at that time was sufficient to be contractually binding. Id.

¶13. Specifically, we held that the circumstances of announcing in open court the settlement of the dispute that is the purpose for that hearing, with a recital of the terms of the settlement into the record, followed by an agreement to end the hearing, reflects an intention to be bound at that time. Absent any showing that the final written order did not reflect the agreement announced in court, or any identification of a matter cognizable under [Mississippi] Rule [of Civil Procedure] 60 that could lead to setting aside a consent decree after [its] being entered—and neither showing exists here—we find that the parties were bound by their agreement even before it was reduced to a formal written order. McDonald, 850 So. 2d at 1189 (¶¶25-26).

¶14. While neither Dennis nor his attorney signed the agreed order, the hearing transcript reflects that Dennis understood the agreement that was read into the record and that he understood that the agreement would be put into writing and become the court’s order. His attorney made no objection at the hearing to the entry of the order. The supreme court has found that proceedings recorded by a court reporter are sufficient to prove agreement by the parties. See Samples v. Davis, 904 So. 2d 1061, 1066 (¶15) (Miss. 2004) (“If parties reach an agreement, the agreement containing the terms should be signed by the parties’ attorney(s) or in appropriate cases, the parties, or recorded by the court reporter.” (Emphasis added)). Dennis has not provided any proof that the agreed order did not reflect the terms of the settlement agreement read into the record. Therefore, the settlement agreement announced in court and later reduced to writing was sufficient evidence of the parties’ consent to be bound. This issue is without merit.

So the case would appear to turn on Dennis’s failure to spell out in detail exactly how the judgment varied from the announcement. I think it’s laudable that the chancellor went to the trouble of addressing Dennis’s attack on the then-eight-year-old-judgment, given the prior appellate history of this case. I am sure the chancellor was trying to ensure no more appellate ricochets.

Still, I wonder why no one pointed out that Dennis should have raised this issue of the validity of the 2005 judgment by filing a notice of appeal within 30 days of that judgment. ‘way back in 2005 — now more than ten years ago and counting. Is this really a jurisdictional argument he is making, or is this a ministerial omission that could have been cured with a R59 motion?

This case highlights why I don’t like settlement announcements. It seems that one party is always looking for a way to wriggle out of them, and they often find lawyers willing to take their money to aid them in the attempt. Words spoken are never as precise as words reduced to writing. Better to reduce the agreement to writing so all can see and edit, and then have everyone sign. That’s my position, and I’m sticking to it.

§ 4 Responses to Settlement Announcements: What Could go Wrong?

  • The Court neglected to address the fact that when Mr. Pearson signed the Quit Claim Deed he specifically instructed the bank officer that it was not to be given to Mrs Browning unless it was at a closing and he was to be present. He never delivered the deed (another case going now) but the bank pulled out of the loan so the bank officer did release it to, or deliver it to, the closing attorney. For this the bank officer was terminated. The hearing in which the “agreement” was read into the record was in August 16 of 2005 and Mrs Browning’s attorney was given 10 days to prepare the written order. The Order, signed only by Mrs Browning and her attorney, was entered on October 13, 2005.

    I agree that there was an opportunity to appeal in 2005, none of the lawyers in the case now were in it then and I will not second guess as to why that was not done but this was about the same time as Katrina hit and devastated the coast. The fact that the Order was never signed came up in a prior hearing (January 23, 2008) when Mr. Pearson was asked “Did you or did you not sign the Order of October 13, 2005. His response was, “I have no idea what you are talking about.” He was handed a copy of the Order and looked at it saying, “No, I did not sign this and neither did my attorney and furthermore I have never seen it.” He also went on to say, when asked about his retirement, that he thought that was part of the agreement and why he was giving up his equity. He testified in 2008 that he thought that agreement was supposed to go in the Order that he was never allowed to sign or see. (That was perhaps another opportunity to appeal)

    I agree, this is another situation that cries out for having a binding document, I will even handwrite it out and have them sign that and then go type it up. Mostly I try to type it up while the parties are still there and present it to the Court that day. Much troubles and confusion could have been avoided and, for me, it has been a lesson learned.

    We do what we can with what we have sometimes, the fight continues…

  • hale1090 says:

    In contentious cases with contentious counsel, announcing specific terms on the record which are written out beforehand (even on a legal pad) and where the attorneys and the parties state the consent thereto helps prevent craw-fishing, post hearing arguments and creative editing after the parties leave the pressure of a pending court hearing. Providing the transcript to the chancellor when the attorneys and parties what to change things or can’t agree what was said in open court is inexpensive and saves time and $ in my experience. It is also easier to show the client what was actually said and agreed to. If this is not done then the attorneys might need to “hash out” an order then and there before folks before get second thoughts after they leave the court. That can be done as well.
    I have had sad experiences leaving settlement hearings and mediations without having a binding document which cost my clients frustration, fees, and more proceedings..

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