Summary
In Krueger v. Herman Mutual Insurance Co., 30 Wis.2d 31, 139 N.W.2d 592 (1966), the Wisconsin supreme court upheld the trial court's determination that an oral settlement agreement be given full effect.
Summary of this case from Gliniecki v. Borden, Inc.Opinion
January 12, 1966. —
February 1, 1966.
APPEAL from a judgment of the circuit court for Brown county: AROLD F. MURPHY, Circuit Judge of the Twentieth circuit, Presiding. Affirmed.
For the appellant there were briefs by Kaftan, Kaftan Kaftan of Green Bay, and oral argument by Fred Kaftan.
For the respondent Herman Mutual Insurance Company there was a brief by Everson, Whitney, O'Melia, Everson Brehm of Green Bay, and oral argument by John C. Whitney.
For the respondent Merchants Indemnity Company there was a brief by Cornelisen, Denissen, Kranzush Kuehn, and oral argument by David J. Condon, all of Green Bay.
This is an action to recover damages for personal injuries sustained as a result of an automobile accident. The plaintiff, Mrs. Krueger, was a passenger in a vehicle operated by her husband, Wesley Krueger, when it was involved in an accident with another vehicle operated by James Marchand. The accident occurred on May 8, 1960, in Green Bay. The plaintiff's husband was killed instantly as a result of the collision.
As an affirmative defense to Mrs. Krueger's personal-injury action, the defendant insurance companies pleaded the existence of a compromise agreement entered into in April, 1961, between themselves and A. S. Vanden Heuvel, the attorney representing the plaintiff. Under the alleged settlement, the insurance companies agreed to pay the plaintiff $3,000 in full compromise of her personal-injury claim and for the medical expenses incurred as a result of the accident.
A trial was held before the court, sitting without a jury, on the sole issue of the alleged compromise agreement. The evidence established that Mr. Vanden Heuvel had been retained by the plaintiff shortly after the accident. The retainer agreement was informal and did not define Mr. Vanden Heuvel's authority to represent the plaintiff. Letters of retainer were sent by Mr. Vanden Heuvel to the defendant insurance companies in May, 1960.
In March, 1961, Mr. Vanden Heuvel began to negotiate with E. D. Kranzush, the attorney who was representing Merchants Indemnity. Settlement proposals were submitted by both attorneys during this negotiation stage. Mr. Kranzush testified that on April 3, 1961, he telephoned Mr. Vanden Heuvel and offered $3,000 as a settlement of the plaintiff's claim for personal injuries, with the additional understanding that this would include the medical expenses incurred by the plaintiff.
Mr. Vanden Heuvel stated that he then telephoned the plaintiff and conferred with her about the settlement offer. He declared that the conversation lasted approximately two minutes and that the plaintiff expressed dissatisfaction with the $3,000 amount. Mr. Vanden Heuvel testified that he advised Mrs. Krueger that $3,000 was the highest they could get and that she told him in effect that if "this is all we can get, we will have to take it, period."
The acceptance of the $3,000 offer was communicated by Mr. Vanden Heuvel to Mr. Kranzush; on April 5, 1961, Mr. Kranzush forwarded to Mr. Vanden Heuvel two drafts in the total amount of $3,000 from the defendant insurance companies, along with a release to be signed by the plaintiff.
Mr. Vanden Heuvel's testimony revealed that he informed either the plaintiff or her son that the drafts and release were in his possession and was told that the plaintiff would not accept the $3,000 amount. Shortly thereafter, the plaintiff telephoned Mr. Vanden Heuvel and discharged him as her attorney.
On April 11, 1961, Mr. Vanden Heuvel returned the unsigned release and the checks to Mr. Kranzush and informed him in an attached letter that the plaintiff had changed her mind "as a result of pressure from her family" and that she refused to settle the claim for less than $5,000.
Mrs. Krueger testified that during the April 3d telephone conversation with Mr. Vanden Heuvel she did not state that the $3,000 figure was acceptable. She asserted that she neither accepted nor rejected this figure. The plaintiff also declared that she never accepted the $3,000 offer and did not change her mind or talk to her family relative to the compromise offer as testified by Mr. Vanden Heuvel.
The trial court determined that Mr. Vanden Heuvel had authority to negotiate the settlement to finality. The judgment gave full effect to the $3,000 settlement and dismissed Mrs. Krueger's complaint. She appeals from such judgment.
The problem in this case concerns a collapsed compromise. Settlement discussions were conducted by the attorneys, and they thought they had struck a bargain. However, the plaintiff was displeased with the arrangement. We must determine whether the trial court was correct in giving effect to the settlement despite the plaintiff's claim that she neither accepted the settlement nor authorized her attorney to do so.
We shall first dispose of two matters which are not deemed to be crucial and which we believe can be readily resolved. Mrs. Krueger had a claim for her own personal injuries as well as a claim for damages stemming from the death of her husband. There may be some confusion as to which claim or claims the settlement was to cover, but we find no true issue in that regard. Both attorneys involved testified that the settlement figure of $3,000 solely encompassed Mrs. Krueger's claim for her personal injuries and her medical expenses; the judgment which was entered does not purport to relate to the wrongful-death claim.
Another tangent of this case relates to the fact that the learned trial judge determined that there was apparent authority in Mr. Vanden Heuvel to make the settlement. That position is not tenable, as the respondents readily concede. Mrs. Krueger had no direct dealings with the insurers, and she did nothing to cloak her attorney with any prerogatives which might have induced the insurers to believe that Mr. Vanden Heuvel had any enlarged authority. Mattice v. Equitable Life Assurance Society (1955), 270 Wis. 504, 508, 509, 71 N.W.2d 262; Hansche v. A. J. Conroy, Inc. (1936), 222 Wis. 553, 560, 561, 269 N.W. 309; Domasek v. Kluck (1902), 113 Wis. 336, 339, 89 N.W. 139.
The trial court's erroneous interpretation of the agency as one in the area of apparent authority is not fatal, since its judgment would irresistibly follow from its other findings. At the end of the trial and before determining the questions of law, the trial court made an express finding that Mr. Vanden Heuvel "was authorized to negotiate to a finality" in behalf of Mrs. Krueger. See Medlock v. Schmidt (1965), 29 Wis.2d 114, 138 N.W.2d 248.
The Lawyer's Authority.
The general retainer of an attorney does not carry with it the power to compromise the client's cause of action. Such power is dependent upon express authority from the client. Balzer v. Weisensel (1951), 258 Wis. 566, 568, 46 N.W.2d 763; Seymour State Bank v. Rettler (1917), 164 Wis. 619, 621, 160 N.W. 1084; Fosha v. O'Donnell (1904), 120 Wis. 336, 342, 97 N.W. 924. See also State ex rel. Derber v. Skaff (1964), 22 Wis.2d 269, 274, 125 N.W.2d 561. While his general retainer gave Mr. Vanden Heuvel the right to negotiate on his client's behalf, it is clear that he did not have any right to consummate a settlement prior to the time of his telephone conversation with Mrs. Krueger on April 3, 1961.
The two participants in that conversation gave divergent views as to what was said by them. The appellant suggests that it was inappropriate for counsel to offer testimony as to this conversation which was at variance with his client's recollection. When the issue relates to the extent of the attorney's authority from his client, we see no irregularity in the attorney's testifying as to his knowledge thereof. Indeed, Mr. Vanden Heuvel was obliged to testify as to the facts as he understood them. See sec. 325.22, Stats. In 1846, Mr. Chief Justice GIBSON observed:
"It is a popular, but gross mistake, to suppose that a lawyer owes no fidelity to any one except his client and that the latter is the keeper of his professional conscience." Rush v. Cavenaugh (1846), 2 Pa. (Barr) 187, 189.
The variance between the testimony of Mr. Vanden Heuvel and Mrs. Krueger was resolved by the trial court's conclusion that the attorney had authority to make the settlement; the trial judge termed Mrs. Krueger's consent a "ratification of the settlement." It is clear that the court gave no credence to Mrs. Krueger's interpretation of the conversation wherein she claimed to have stated the following in regard to the proposed $3,000 settlement:
"I just said that I didn't think it was right, that it wasn't what I wanted . . . I told him I didn't think that was right so I didn't accept it."
Mr. Vanden Heuvel was not precise in his testimony as to his settlement negotiations or as to his discussion with Mrs. Krueger. For example, he was not definite as to dates, adding, "I was amazed to discover that this was four years ago." He also acknowledged that Mrs. Krueger was unhappy with the proposed settlement and that their conversation was very brief. Nevertheless, he did testify that he had advised her that the figure was "the highest we could get" and "she says then we will have to accept it, or words of that effect."
The conclusion that the attorney had authority to settle is based upon disputed evidence which the trial court had a right to believe. The holding is not against the great weight and clear preponderance of the evidence and must be sustained.
The Written Release.
After Mr. Kranzush, on behalf of Merchants Indemnity Company, and Mr. Vanden Heuvel arrived at their oral understanding, Mr. Kranzush transmitted two checks totaling $3,000 and a release form to Mr. Vanden Heuvel. The appellant contends that this indicated that the settlement was not intended to be final until the release was actually executed. The appellant also stresses the fact that in transmitting the checks and the release, Mr. Kranzush requested that the release be returned at least one day before the drafts were presented for payment.
We find no merit in this contention on the part of the appellant. There is nothing about the oral settlement agreement which suggested that it was contingent upon the execution of a written release. The trial court held that the attorneys entered into a contract of settlement and that "the refusal by the plaintiff to endorse the settlement draft and to execute the general release did in no manner militate against the efficacy of the settlement agreement." Such findings are not against the great weight and clear preponderance of the evidence and must be sustained.
The record warrants the trier of facts' conclusion that the oral agreement was complete and final at the time it was made and that the execution of a subsequent document did not prevent the oral contract from having immediate effect. Jungdorf v. Little Rice (1914), 156 Wis. 466, 470, 145 N.W. 1092.
By the Court. — Judgment affirmed.