Opinion
No. ED 86767
June 30, 2006
Appeal from the Circuit Court of Jefferson County, Hon. Gary P. Kramer.
Jerry and Clarissa Eaton-Pro Se, Festus, Missouri, for Appellant.
Peter Stark Strassner (Attorney for Malinckrodt, Inc) Michael H. Wetmore, (Attorney for United Nuclear Corporation) John Edward Galvin III (Attorneys for Chevron USA, Inc. and Gulf Oil Corporation), Richard Benjamin Korn-co-counsel, Richard A. Wunderlich (Attorneys for Westinghouse Electric Company) St. Louis, Missouri, Steven Baicker-McKee-co-counsel, Pittsburgh, PA, for Respondent.
Before Nannette A. Baker, Presiding Judge, Robert G. Dowd, Jr., Judge, Sherri B. Sullivan, Judge.
Introduction
Jerry L. and Clarissa L. Eaton (Appellants) appeal from the trial court's judgment granting the joint motion to enforce settlement of Mallinckrodt, Inc., Chevron U.S.A. Inc., Gulf Oil Corporation, Westinghouse Electric Company LLC and United Nuclear Corporation (Respondents). We reverse and remand.
Factual and Procedural Background
Respondents are current or former owners of a nuclear fuel processing plant in Hematite, Missouri. On April 9, 2003, Appellants along with others filed their first amended complaint for damages against Respondents, claiming that as a result of the Respondents' acts and/or omissions, Appellants' and others' property in the neighborhood or subdivision was contaminated by non-radiological volatile organic compounds.
Westinghouse actually purchased at appraised value the home, land and outbuildings of only one of Appellants' neighborhood's residents, and also paid this resident's relocation expenses. All of the other residents, save Appellants, have accepted cash settlements for the depreciation in value of their property. One resident settled for $20,000, and the rest settled for $12,000.
On August 20, 2004, the parties participated in mediation, which was unsuccessful for Appellants. Appellants were unhappy with the mediation and on September 27, went to their attorney Morry Cole's (Cole) office to pick up their file as they were seeking different representation. Despite this, and on this same day, Cole issued a settlement demand to Respondents on behalf of Appellants for $26,000, which Respondents accepted on September 28. On October 4, Respondents forwarded a settlement agreement. Appellants refused to participate in the agreement, contending that they did not authorize such an offer. On October 26, Cole filed a motion to withdraw from representation.
Respondents filed a Joint Motion to Enforce Settlement Agreement (motion to enforce settlement) on November 10. Appellants hired David Dalton (Dalton) as their counsel. Appellants filed a response to the motion to enforce settlement asserting their non-acquiescence to the settlement offer, as well as a motion for continuance of the court's hearing on the motion to enforce due to their retention of new counsel needing to familiarize himself with the case. The record indicates that the trial court never ruled on Appellants' motion for continuance, but heard oral argument on the motion to enforce settlement and took it under submission. On January 21, 2005, the trial court granted the motion, finding that Cole had apparent authority to settle the case and made a binding settlement demand upon Respondents which they accepted. Appellants now appeal.
Point Relied On
In their point on appeal, Appellants claim the trial court erred in denying them the opportunity to present testimony on the motion to enforce settlement.
Standard of Review
Because this is a court-tried case, the trial court's action will be affirmed unless there is no substantial evidence to support it, unless it was against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. Bolander v. City of Green City, 35 S.W.3d 432, 437 (Mo.App.W.D. 2000).
Discussion
The trial court held a hearing on the motion to enforce settlement, and entertained oral argument on the issue by counsel for Appellants and Respondents. However, the trial court did not hear testimony of Appellants nor consider any evidence they wished to present, even though Appellants had vehemently denied in their response to Respondents' motion any assent on their part to the settlement entered into purportedly on their behalf by their attorney with Respondents. The trial court also did not grant Appellants' motion for continuance, even though Appellants had fired the attorney who they claim unlawfully entered into the settlement agreement without their knowledge or consent, and had retained a new attorney.
In cases where an attorney represents that he or she has authority from the client to accept a settlement offer, and did reach an agreement with the other party's counsel to settle, Missouri courts have placed a substantial burden on the client to disprove his own attorney's authority if the client wishes to avoid the settlement. Southwestern Bell Yellow Pages, Inc. v. Dye, 875 S.W.2d 557, 561 (Mo.App.E.D. 1994). Only where the trier of fact has been convinced that authority to settle was truly lacking, or where the evidence has been deemed insufficient to raise the presumption of attorney authority, have our courts allowed clients to avoid or attempt to avoid settlements concluded by their attorneys. Id. at 562.
In every case cited by Respondents in support of their argument that Appellants have a heavy burden to defeat their counsel's apparent authority, the court held an evidentiary hearing. InBarton v. Snellson, 735 S.W.2d 160, 161 (Mo.App.E.D. 1987), the plaintiffs testified that they never gave their attorneys authority to settle for them. In Leffler v. Bi-State Dev. Agency, 612 S.W.2d 835, 838 (Mo.App.E.D. 1981), after the attorney made a prima facie case that he had authority to settle a lawsuit in the plaintiff's behalf, the plaintiff, through his own testimony, introduced evidence which, if believed, would have been sufficient to meet his burden of proving his attorney's lack of express authority.
Our perusal of the case law dealing with appeals of judgments granting motions to enforce settlement agreements demonstrates that in most cases, an evidentiary hearing was held and testimony and evidence was submitted, creating actual records for appeal. An exception is Bishop v. Heartland Chevrolet, Inc., 152 S.W.3d 893, 895 (Mo.App.W.D. 2005), in which our colleagues in the Western District remanded the case for an evidentiary hearing:
Subsequently, on September 25, 2003, this Court entered its order holding that a ruling on Respondent's motion to enforce the settlement agreement might require an evidentiary hearing and that any such hearing should be conducted by the trial court. This Court stayed the appeal and remanded the cause to the trial court "for the limited purpose of ruling on Respondent's motion to enforce a settlement agreement."
Upon remand, the trial court held an evidentiary hearing on the motion to enforce settlement. The trial court found in favor of Bishop on the motion, and ordered Heartland to tender the $47,500 settlement check that had been issued by its insurer to Bishop and for Bishop to then enter satisfaction of the judgment. Upon appeal, Heartland contended that the evidence presented failed to establish that Heartland or its attorney ever agreed to settle the case. Heartland argued that the testimony of its trial counsel reflects that he never communicated that he had the authority to enter into a settlement agreement or that he was agreeing to any terms of a settlement agreement.
The Western District found that with regard to the sufficiency of the evidence to support the trial court's order, Heartland failed to include in the record on appeal a transcript of the evidentiary hearing conducted by the trial court, and thereby left the Court with no means by which to assess whether the trial court had an adequate evidentiary basis for finding that a binding settlement agreement had been reached.
Id. at 896-897.
In the case sub judice, a transcript of the oral arguments was not made.
Although we cannot consider the e-mail and telephone conversation evidence submitted by Appellants in support of their position that their counsel did not have authority to make a settlement offer, since it was not before the trial court, In re Carl McDonald Revocable Trust, 942 S.W.2d 926, 932 (Mo.App.S.D. 1997), we certainly can find that the trial court should have been presented with this evidence, and should have considered it, before binding Appellants to the terms of the settlement agreement. Due process of law requires Appellants to have not only a fair but a meaningful hearing. Lewis v. City of University City, 145 S.W.3d 25, 31 (Mo.App.E.D. 2004), Duvall v. Lawrence, 86 S.W.3d 74, 83 (Mo.App.E.D. 2002), Goldberg v. Kelly, 397 U.S. 254, 267 (1970). Due process requires such procedural protections as the particular action demands,Duvall, supra, such as the opportunity for Appellants to tell their side of the story, Gilbert v. Homar, 520 U.S. 924, 929 (1997). The essence of due process is the requirement that a person in jeopardy of serious loss, as in the instant case, be given notice of the case against him or her and the opportunity to meet it; all that is necessary is that the procedure be tailored, in light of the decision to be made, to the capacities and circumstances of those who are to be heard, to insure that they are given a meaningful opportunity to present their case.Mathews v. Eldridge, 424 U.S. 319, 333 (1976). In the instant case, we find that the hearing held by the trial court did not give Appellants a meaningful opportunity to present their side of the story.
Furthermore, the burden on the trial court and Respondents would have been miniscule in light of the amount at stake for Appellants. Identification of the specific dictates of due process generally requires consideration of three distinct factors: First, the private interest that will be affected by the official action, which in the instant case, is large; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards, which in the instant case, is substantial, and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail, which in this case would be very little. Mathews, 424 U.S. at 335. See also, e.g., Goldberg, 397 U.S. at 263-271.
As for the trial court's failure to grant Appellants a continuance, case law states that the decision whether or not to grant a continuance is within the trial court's discretion. See, e.g., State v. Sullivan, 935 S.W.2d 747, 756 (Mo.App.S.D. 1996). A very strong showing is required to prove abuse of that discretion, with the party requesting the continuance bearing the burden of showing prejudice. Id.
In the instant case, Appellants had parted ways with their counsel because of his actions purporting to bind them to a settlement to which they had strongly objected. Upon hiring new counsel to represent them in this case where a substantial investment of theirs, namely their home, is at stake, they requested a continuance so that their new counsel could familiarize himself with the case, in order to provide them effective representation. The trial court did not rule on their motion, but rather denied it by implication in going forward with the hearing on the motion to enforce. This action, or rather inaction, by the trial court, coupled with its refusal to allow Appellants to testify, effectively deprived Appellants of their opportunity to challenge the presumption of their attorney's apparent authority. We find the trial court's failure to grant Appellants their requested continuance in this situation constituted an abuse of discretion, to Appellants' great prejudice.
We note that even if, as Respondents contend, the trial court's refusal is irrelevant because it would not change the result of this case, such an argument means that the trial court does not have to afford a party due process if his claim is without merit.Moore v. Board of Educ. of Fulton Public School No. 58, 836 S.W.2d 943, 948 (Mo.banc 1992). Compliance with the Due Process Clauses does not depend upon the merits of the claim. Id.
For the foregoing reasons, we find that the trial court erroneously applied the law in failing to accord Appellants a meaningful opportunity to be heard before depriving them of their right to a jury trial in determining how much compensation they are entitled for the loss of their property, and forcing them to accept a settlement amount the validity and legality of which they dispute. Appellants' point on appeal is granted.
The judgment of the trial court is reversed and this cause is remanded for proceedings consistent with this opinion.
Respondents' motion to dismiss is denied. Respondents' motion to strike portions of the legal file is granted.
Nannette A. Baker, P.J. and Robert G. Dowd, Jr., J., concur.