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Arizona Supreme Court Allows Court of Appeals Decision Expanding Defendants’ Ability to Enforce Settlements to Stand

July 17, 2019

On July 8, 2019, the Arizona Supreme Court issued an order denying plaintiff’s Petition for Review of an Arizona Court of Appeals decision that expanded the ability of defendants to enforce settlements under A.R.C.P. 80(a). Section 80(a) allows Arizona courts to enforce settlement agreements (or other agreements) based on some written acknowledgement on the part of a party’s attorney, but only where the attorney’s authorization to act is shown by some manifestation of that authorization on the clients’ part.

In this case, one plaintiff—the wife of the injured plaintiff, who herself had only a loss of consortium claim—repudiated a settlement agreement after their attorney had sent written (email) confirmation of it to the defendants’ counsel. The defendants moved to enforce the settlement under Section 80(a), but the trial court ruled that the plaintiffs’ counsel did not act with apparent authority in sending that email confirmation. The defendants then filed a Petition for Special Action with the Arizona Court of Appeals. In it, they argued that, even accepting the wife’s claim that she had not authorized her attorney to accept the settlement offer, it was undisputed that the plaintiffs had never objected to their counsel’s preparing a joint motion of all parties seeking to stay the trial and vacate a court hearing, transmitting that document to defendants’ counsel for signature, and then filing those documents with the trial court. The appellate court agreed with those arguments and ordered that the trial court enforce the settlement pursuant to Section 80(a)—a ruling that the Arizona Supreme Court has now allowed to stand. That decision will serve as authority that can help parties to enforce settlement and other agreements even when the parties have not signed those agreements and attempt to repudiate them after the fact.

Partner Jill Ann Herman litigated the underlying case, negotiated the favorable settlement agreement, and, with the assistance of Nicholas M. Gedo, Of Counsel, who handles many appeals for the firm, achieved the victory in the state’s higher courts.

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