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The Supreme Court of Missouri has reversed a trial court's order enforcing a mediated settlement agreement because of a factual dispute over the authority of one party's attorney to make the settlement offer.
In Eaton v. Mallinckrodt, Inc., No. SC 88122, 2007 WL 1428721 (Mo. May 15, 2007), Eaton had field suit for property damage allegedly caused by groundwater made toxic by waste discharged from a nuclear power plant operated by Mallinckrodt, Inc.
Eaton joined several other parties with similar claims in a mediation proceeding with Mallinckrodt. The other parties settled; Eaton did not. Negotiations continued, and when Eaton's former attorney made a settlement offer of $26,000, Mallinckrodt accepted.
When Eaton refused to sign off on the agreement, alleging that he had not authorized the attorney to make such an offer, Mallinckrodt filed a motion to enforce the agreement. The trial court granted the motion, based on "oral arguments" alone.
In overturning this decision, the Court noted "there is simply no evidence to support this judgment." More specifically, there are only three possible judicial responses to a motion to enforce a settlement: (1) hold an evidentiary hearing; (2) make a judgment on the pleadings; or, (3) treat it as a motion for summary judgment.
Though the Court stated that an evidentiary hearing is "by far the most desirable approach," judgment on the pleadings is allowed where there are no factual questions, and motions for summary judgment are allowable when all parties receive notice and have an opportunity to present "other evidence."
In this case, no evidentiary hearing was held. But neither of the other avenues were appropriate to this case. That is, a ruling based on the pleadings was not proper as the question of the attorney's authority presented a material issue of fact. A motion for summary judgment required proper notice to Eaton to present his own evidence, which had not been done. Because no appropriate judicial response was taken, the ruling was improper and the decision was reversed.
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