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The Appellate Division of the New Jersey Superior Court refused to uphold an order enforcing a settlement agreement because there was a factual question as to whether or not the plaintiff's attorney was authorized to settle the case on her behalf.
In Moussa v. Vozza, 2007 WL 108315 (N.J. Super. Ct. App. Div. Jan. 18, 2007), Moussa was awarded $20,000 in a non-binding arbitration proceeding for injuries suffered in a motor vehicle accident. She rejected the award by filing a demand for a trial de novo. During subsequent settlement negotiations, Moussa's attorney accepted a settlement offer of $40,000, but Moussa later claimed that she had not authorized her attorney to settle on her behalf. The trial court granted a motion to enforce the settlement agreement.
On appeal, the Court reversed the trial court and found that a hearing was necessary to determine whether Moussa's attorney had either express or apparent authority to settle Moussa's claim. In so ruling, the Court noted that "[n]egotiations of an attorney are not binding on the client unless the client has expressly authorized the settlement or the client's voluntary act has placed the attorney in a situation wherein a person of ordinary prudence would be justified in presuming that the attorney had authority to enter into a settlement, not just negotiations, on behalf of the client."
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