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The Iowa Court of Appeals held that an attorney did not have actual or apparent authority to bind his client’s children to a mediated settlement of a probate dispute.
In In re Estate of Bart, No. 05-1599, 2006 WL 2872956 (Iowa Ct. App. Oct. 11, 2006), Anna Bart died leaving two adult children, Galen and Mary Lou. Mary Lou had two children of her own: Timothy and Kelly.
The probate proceedings were contentious. In an attempt to settle the dispute, Galen, Mary Lou, and Timothy all attended mediation, each represented by a different attorney. Timothy and his attorney left the mediation while negotiations were still ongoing. Following their departure, Galen and Mary Lou reached an agreement that was later reduced to writing. Neither Timothy nor his sister Kelly ever signed the agreement.
Based on the mediated settlement agreement, the administrator of the estate petitioned the court for authority to sell the decedent’s farmland. Timothy and Kelly objected to the petition, arguing that they were not bound by the settlement agreement because they never signed it. The district court concluded that the settlement agreement was not binding on all parties and thus denied the petition.
On appeal, the Court examined whether Mary Lou’s attorney had either actual or apparent authority to bind Mary Lou’s children, Timothy and Kelly, to the settlement agreement.
The Court concluded that Mary Lou’s attorney did not have actual authority because both he and Timothy’s attorney testified as such.
Galen argued that Mary Lou’s attorney had actual authority to bind Timothy to the settlement agreement because when he and his attorney left the mediation, they gave the impression that Mary Lou’s attorney had authority to negotiate on Timothy’s behalf. The Court rejected this argument because Timothy and his attorney left the mediation without giving instructions to the mediator or adverse parties. Moreover, the Court found that the empty signature lines reserved for Timothy and Kelly should have given the parties some indication that Mary Lou’s attorney did not have authority to bind them to the settlement agreement.
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