Opinion
No. CA 08 01065.
March 4, 2009.
APPEAL FROM THE TWENTY-SEVENTH JUDICIAL DISTRICT COURT PARISH OF ST. LANDRY, NOS. 06-C-2589-D HONORABLE DONALD W. HEBERT, DISTRICT JUDGE.
Candyce C. Gagnard, MORROW, MORROW, RYAN BASSETT, Opelousas, LA, Counsel for Plaintiffs/Appellees: Ricky Thibodeaux, et al.
Matthew P. Keating, PLAUCHE, SMITH NIESET, Lake Charles, LA, Counsel for Defendants/Appellants: Evangeline Parish School Board and Louisiana Risk Management, Inc.
Katherine M. Loos, BRINEY FORET, Lafayette, LA, Counsel for Defendants/Appellants: Lawrence P. Broussard, Laidlaw Transit, Inc. and Laidlaw Transit Management.
Court composed of JOHN D. SAUNDERS, OSWALD A. DECUIR and ELIZABETH A. PICKETT, Judges.
This case involves an alleged compromise between plaintiffs who claimed injuries from an automobile accident between a school bus and another vehicle and the defendant school board, its insurer, the bus driver, and the driver's employer. The purported compromise entailed a letter from the plaintiffs' counsel that was signed by the defendants' counsel.
After the letter was signed by both counsels of record, the trial date was cancelled and witnesses were released from their subpoenas. When the defendants did not forward the settlement funds, the plaintiffs filed a motion to enforce settlement. The trial court found that a valid compromise existed between the parties in the form of the letter. As such, the trial court granted the plaintiffs' motion to enforce settlement. The defendants filed this appeal.
We agree with the trial court and find that the parties had entered into a valid compromise. Thus, we affirm the trial court's judgment. All costs of these proceedings are to be paid by the defendants.
FACTS AND PROCEDURAL HISTORY:
Ricky Thibodeaux, Mindy Thibodeaux, and Brenda Quirk, individually and on behalf of her minor child, Gearra Quirk (hereinafter collectively "the plaintiffs") filed a petition for damages in the 27th Judicial District Court on May 17, 2006, alleging personal injuries sustained from a motor vehicle accident which occurred on February 22, 2006. The motor vehicle accident occurred between a school bus and another vehicle. The petition, after two amendments, named Lawrence Broussard; the Evangeline Parish School Board (hereinafter "EPSB"); Louisiana Risk Management, Inc. (hereinafter "Larma"); Laidlaw Transit, Inc., and Laidlaw Transit Management Company, Inc. (hereinafter collectively "Laidlaw).
Defendant, Lawrence Broussard, was the driver of a school bus. The plaintiffs alleged that Broussard was employed by EPSB at the time of the accident. However, Broussard was actually employed by Laidlaw. EPSB was self-insured through Larma. When the plaintiffs determined that Laidlaw actually were Broussard's employers, they were added as defendants.
Settlement negotiations commenced between the parties after suit was filed. A series of letters were exchanged between counsel for the plaintiffs and counsel for the defendants. On March 19, 2008, counsel for the plaintiffs sent a letter to counsel for the defendants which purported to confirm the terms of the settlement reached by the parties. Counsel for the defendants signed the letter, agreeing to the terms of the settlement. Following this letter, the parties cancelled a trial date with the lower court and released witnesses from trial subpoenas.
After attempting to get the defendants to pay the agreed upon settlement proceeds, the plaintiffs filed a motion to enforce settlement/compromise on April 28, 2008. In response, the defendants filed a peremptory exception of no cause of action and an opposition to the plaintiffs' motion.
The trial court denied the defendants' exception and, further, granted the plaintiffs' motion. The court ruled that a binding compromise had been reached between the parties. The defendants filed this appeal. EPSB and Larma alleged two assignments of error while Laidlaw and Broussard alleged one assignment of error.
EPSB AND LARMA'S ASSIGNMENTS OF ERROR:
1. The trial court erred in finding a valid compromise agreement had been perfected between the parties.
2. The trial court erred in granting plaintiffs' motion to enforce settlement agreement.
LAIDLAW AND BROUSSARD'S ASSIGNMENT OF ERROR:
1. The trial court erred when it ruled against Laidlaw, enforcing a settlement about which Laidlaw had no knowledge and to which they did not consent.
EPSB AND LARMA'S ASSIGNMENTS OF ERROR NUMBERS ONE AND TWO:
EPSB and Larma contend in their first assignment of error that the trial court erred in finding that a valid compromise had been perfected between the parties. In their second assignment of error, EPSB and Larma assert that because the compromise was invalid, the trial court erred in granting plaintiffs' motion to enforce settlement. As the resolution of one assignment necessitates the result in the other, we will address both here.
Louisiana Civil Code Article 3071 states that "[a] compromise is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship." Our Louisiana Supreme Court, in Rivett v. State Farm Fire and Casualty Co., 508 So.2d 1356, 1359 (La. 1987) (footnotes omitted), stated that "[t]he essential elements of a compromise are (1) mutual intention of putting an end to the litigation and (2) reciprocal concessions of the parties in adjustment of their differences. The [Louisiana Civil] Code also specifically requires a contract in writing."
Under the Louisiana Civil Code, the word "compromise" is synonymous with the word "contract." See Hill v. Hill, 173 La. 574, 138 So. 107 (La. 1931). Compromise and settlements are favored by public policy and, given the interchangeable use of "compromise" and "contract," it follows that the steps taken to interpret a compromise are the same as those taken to interpret a contract. Brown v. Drillers, Inc., 93-1019 (La. 1/14/94), 630 So.2d 741. The first step in interpretation of a contract is dictated by La.Civ. Code art. 2046, which states, "[w]hen the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent."
Article 2046 emphasizes that the process involves no further interpretation, as opposed to no interpretation at all. Because a compromise extends only to those matters the parties intended to settle, the scope of the transaction cannot be extended by implication. In applying this rule of construction, courts are guided by the general principle that the contract must be considered as a whole and in light of attending events and circumstances.
The meaning and intent of the parties to a written instrument, including a compromise, is ordinarily determined from the instrument's four corners, and extrinsic evidence is inadmissible either to explain or to contradict the instrument's terms. When a dispute arises as to the scope of a compromise agreement, extrinsic evidence can be considered to determine exactly what differences the parties intended to settle.
Ortego v. State, Dept. of Transp. Dev., 96-1322, p. 7 (La. 2/25/97), 689 So.2d 1358, 1363-64. (Citations omitted; emphasis added.)
In the case before us, we have an instrument that the trial court determined was a compromise. That instrument was a letter from the plaintiffs' attorney to the then attorney for all of the defendants dated March 19, 2008. This letter, in pertinent part, states (emphasis added):
This is to confirm our agreement to settle the claim of Mindy Thibodeaux for a total of $32,500.00 plus court costs; the claim of Ricky Thibodeaux for a total of $2,500.00 plus court costs; the claim of Brenda Quirk on behalf of her minor child, Gearra Quirk, for a total of $50,000.00, plus court costs; the claim of Brenda Quirk, individually, for a total of $5,000.00, plus court costs; and the property damage claim of Ricky Thiobodeaux (sic) for a total of $7,200.00, plus court costs in full and final settlement of all claims against all defendants in this matter.
The letter was signed by both plaintiffs' counsel and by defendants' counsel.
Where the letter was signed by defendants' counsel, it stated:
SETTLEMENT ACCEPTED BY:
Alejandro R. Perkins/s
ALEJANDRO R. PERKINS
Attorney for defendants
It is clear to this court that this letter meets all of the criteria necessary to be a compromise. As is evident, it meets the writing requirement. Additionally, the letter indicates, in clear and explicit words that do not lead to absurd consequences, the mutual intention of all plaintiffs and all defendants to put an end to the litigation through reciprocal concessions. The plaintiffs, through their attorney of record, agree to settle all claims against all defendants in the case in exchange for the agreement of all defendants, through their attorney of record, to pay the specified amounts.
EPSB argues that a valid compromise was not reached as the parties to the instant matter merely had an understanding contemplating their mutual desire to end the litigation. EPSB asserts that there was no true compromise until defendants submitted a settlement check and a release to plaintiffs, followed by plaintiffs reviewing, agreeing to, and signing the release, plaintiffs signing and cashing the settlement checks, and plaintiffs dismissing defendants with prejudice. We find this argument is unconvincing. Following the reasoning put forth by EPSB, it would be necessary for parties privy to a contract to perform all necessary elements of that contract before that contract would ever be in existence, and, thus, enforceable.
EPSB's next contention relies upon the case of Anthony v. Liberty Mutual Insurance Co., 99-1730 (La.App. 3 Cir. 4/5/00), 759 So.2d 910. It argues that Anthony necessitates that we find the compromise that the plaintiffs are attempting to enforce is not valid. We find the Anthony case distinguishable from the case before us.
In Anthony, a plaintiff filed suit in a city court against an insurance company for property damage to his vehicle and for loss of use of that vehicle that resulted from an automobile accident. The parties' counsels of record exchanged letters that indicated that they agreed to settle the case for a certain amount and that the insurance company would be sending settlement documentation and a check. The settlement documentation included language dictating that the plaintiff would give up his right to pursue his damages for his personal injuries and the release on the back of the check also required relinquishment of any and all claims. The plaintiff refused to sign and returned the documentation and check. The insurance company filed a rule to compel settlement.
The Anthony court allowed extrinsic evidence to be used to help determine what the parties intended to settle in an alleged compromise. It did so because the parties disputed the scope of the alleged compromise as is allowed under Ortego, 689 So.2d 1358. The Anthony court did not find that a compromise between parties does not occur until a release is signed, checks are negotiated, and a court orders a case dismissed with prejudice, as EPSB contends. Rather, the Anthony court first used one piece of extrinsic evidence, the release that the defendant was attempting to get the plaintiff to sign, to determine that the defendants intended for the personal injury claims of the plaintiff to be included in the settlement. Next, the court used other extrinsic evidence, letters exchanged between counsel and the fact that he plaintiff refused to sign the release, to determine that the plaintiff did not intend for his personal injuries to be included in the settlement. As such, the Anthony court concluded that no meeting of the minds took place regarding these claims, and, thus, no compromise was ever reached between the parties.
Here, no party disputes the scope of the compromise. Thus, absent a finding that either the language of the compromise is not clear and explicit or that the language leads to absurd consequences, such extrinsic evidence is not to be considered under La.Civ. Code art. 2046.
EPSB also relies on Sceroler v. Rancher, 99-2859 (La.App. 1 Cir. 2/15/02), 808 So.2d 803, writ denied, 02-811 (La. 5/24/02), 816 So.2d 849 which is also distinguishable from the case before us. First, in Sceroler, like in Anthony, a dispute arose as to the scope of the compromise, and the court looked to extrinsic evidence to determine the intent of the parties. As we have determined, the scope of the compromise is not at issue in this case. Second, the Sceroler court found that the correspondence between counsels did not clearly outline an agreement that was mutually agreed upon by the parties, and that the correspondence acknowledged that the terms of the proposed settlement were subject to change. Here, as we stated above, the instrument has the language prerequisites of a compromise and, therefore, no extrinsic evidence is to be properly considered.
Further, even if this court could consider extrinsic evidence, we still could not find that the compromise was invalid. Although EPSB claims that the parties never intended the March 19, 2008, letter to be the embodiment of their compromise, it produces no evidence of this claim.
Next, EPSB argues that the March 19, 2008, letter did not create a compromise agreement binding on it under La.Civ. Code art. 3071because neither the plaintiffs, nor the defendants signed any formal settlement documents. To bolster this argument EPSB cites Grimes v. CIBA-GEIGY Corp., 96-494 (La.App. 1 Cir. 12/20/96), 684 So.2d 1159, writ denied, 97-182 (La. 3/14/97), 689 So.2d 1384. The Grimes case is not remotely related to the case before us.
In Grimes, a defendant was attempting to enforce a settlement even though neither the client, nor her attorney signed the settlement document. The only items signed by anyone was a check and a motion to dismiss the case that was signed by the plaintiff's attorney. The plaintiff's attorney testified that he signed those documents merely as a convenience to expedite the process once his client signed the settlement document. At the settlement conference, the attorney merely got verbal confirmation from his client that she approved of the terms of the settlement and that she, the client, would sign the document at a later date. The client changed her mind and refused to sign the document. The court found that because no one signed the settlement document, it did not meet the writing requirement of a compromise set out in La.Civ. Code art. 3071. Here, we have the March 19, 2008, letter signed by both counsels of record who, up to that point, had represented all plaintiffs and all defendants, respectively.
Another issue raised by EPSB regarding the validity of the compromise is that the attorney of record for the defendants had no "clear and express" consent to settle the case. EPSB states in brief that such is necessary per Townsend v. Square, 94-758 (La.App. 4 Cir. 9/29/94), 643 So.2d 787, and Smith v. Schultz, 546 So.2d 596 (La.App. 3 Cir. 1989). In Townsend, there was evidence in the record that the plaintiff's attorney had been fired prior to offering to settle the case. Thus, it was clear that the attorney had no authority to settle the case. In Smith, like in Townsend, this court looked to the record of the writ application and concluded that the evidence showed that the plaintiff did not give his attorney clear and express consent to settle the case. Here, neither EPSB nor Larma put forth any evidence that their counsel of record did not have authority to settle the case on their behalf minus the self serving statements made by the defendants' attorney of record in the proceedings below. As such, we find this argument has no merit.
Finally, EPSB argues that the entire compromise was not confected because no settlement was ever reached respecting the minor plaintiff because the settlement of a minor's tort claim is only valid upon court approval. This argument is misguided.
Louisiana Civil Code article 2031 (emphasis added) states:
A contract is relatively null when it violates a rule intended for the protection of private parties, as when a party lacked capacity or did not give free consent at the time the contract was made. A contract that is only relatively null may be confirmed.
Relative nullity may be invoked only by those persons for whose interest the ground for nullity was established, and may not be declared by the court on its own initiative.
"Confirmation of a contract, as referred to in Article 2031 above, involves making the contract valid by formal assent. That assent can be evidenced through the typical actions signifying ratification of a defective contract." Rowan v. Town of Arnaudville, 02-882, pp. 6-7 (La.App. 3 Cir. 12/11/02), 832 So.2d 1185, 1190. In the case before us, EPSB is attempting to invalidate a compromise based upon a relative nullity that exists not to protect its own rights, but exists to protect the rights of Gearra Quirk, the minor child of Brenda Quirk. Gearra Quirk's joining of the motion to enforce the settlement serves as ratification of the relatively null contract.
Accordingly, we find that a valid compromise existed between the plaintiffs and defendants, EPSB and Larma. As such, we affirm the trial court's judgment enforcing the settlement between those parties.
LAIDLAW AND BROUSSARD'S ASSIGNMENT OF ERROR NUMBER ONE:
Laidlaw and Broussard allege that the trial court erred when it ruled against Laidlaw, enforcing a settlement about which Laidlaw had no knowledge and to which they did not consent. We find this allegation has no merit.
Louisiana Civil Code Article 3082 states, "[a] compromise may be rescinded for error, fraud, and other grounds for the annulment of contracts. Nevertheless, a compromise cannot be rescinded on grounds of error of law or lesion." When the validity of a compromise is in question, the burden of proof is on the party attempting to invalidate that compromise. Barnhill v. Consol. Med., Disability Life Trust, 569 So.2d 1115 (La.App. 3 Cir. 1990) writ denied, 572 So.2d 93 (La. 1991).
Laidlaw argues that the compromise must be rescinded because there was an error of fact. As such, it bears the burden of proof.
After a thorough review of the record, we find no evidence that an error of fact occurred. While Laidlaw makes references to agreements between it and EPSB, as well as understandings between it and its attorneys of record, there is no evidence of these agreements in the record. Louisiana Code of Civil Procedure Article 2164 states, in pertinent part, that an "appellate court shall render any judgment which is just, legal, and proper upon the record on appeal." This court cannot make a ruling on what rights were given by these alleged agreements, as they are not within the record before us. Laidlaw had an opportunity to put forth evidence of its lack of consent for entering into the compromise at the hearing on whether to grant the plaintiffs' motion to enforce settlement. Its attorney of record did not do so. Laidlaw points out that the attorney present at the hearing did not purport to represent them, but Laidlaw did receive notice of the hearing through its then attorney of record. Whether that attorney actually informed Laidlaw of this hearing is beyond the scope of the record before us. It is certain, however, that it was reasonable for the plaintiffs and the court below us to rely on Laidlaw's attorney of record to inform them of the hearing and settlement.
Moreover, as the trial court aptly noted, Laidlaw's attorney of record, at minimum, had apparent authority to enter into a compromise on their behalf. Thus, any argument that Laidlaw makes regarding mistake of fact, much less one with no support in the record, would still not invalidate the compromise.
Apparent authority is a concept of estoppel operating in favor of a third person seeking to bind a principal for the unauthorized act of an agent. The burden of proving apparent authority is on the person seeking to bind the principal.
The judicially created doctrine of apparent authority has two requirements: (1) The principal must make some form of manifestation to an innocent third party; and, (2) The third party must rely reasonably on the purported authority of the agent as a result of the principal's manifestations.
Byles Welding Tractor, Inc. v. McDaniel, 441 So.2d 48, 49 (La.App. 3 Cir. 1983) (citations omitted).
In the case sub judice, Laidlaw's attorney of record was such since September of 2007. At no time prior to the settlement or trial preparation did any of the defendants or any of their representatives indicate to any of the plaintiffs or their counsel that the defendants' attorney of record did not possess the authority to enter into the settlement negotiations and execute a compromise. The defendants' counsel, on behalf of all defendants, filed pleadings, and attended a status conference, as well as numerous discovery and trial depositions. Further, prior to settlement, the defendants' counsel of record advised the plaintiffs that he had the authority to stipulate to liability and course and scope on the part of Broussard, as well as to the authenticity of various photographs the plaintiffs sought to introduce at trial. All of the preceding facts, coupled with the continuous participation in settlement negotiations, both orally and in written correspondence, by defendants' counsel of record made the plaintiffs' reliance on his authority reasonable.
Accordingly, we find that a valid compromise existed between the plaintiffs and defendants, Laidlaw and Broussard. There is no evidence in the record that a mistake of fact occurred as Laidlaw alleges. Given they have the burden to prove a mistake of fact, we must find they failed in carrying this burden. As such, we affirm the trial court's judgment enforcing the settlement between those parties.
CONCLUSION:
EPSB and Larma raised two assignments of error. Laidlaw and Broussard raised an additional assignment of error. We find no merit in any of the attacks on the validity of the compromise. Therefore, we affirm the trial court's judgment granting the plaintiffs' motion to enforce settlement. All costs of this proceeding are to be paid by the defendants.
AFFIRMED.
THIS OPINION IS NOT DESIGNATED FOR PUBLICATION. Rule 2-16.3, Uniform Rules, Courts of Appeal.