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LEWIS v. GILBERT

January 26, 1990.

CHRISTINA LEWIS, Appellant,
v.
FOREST GILBERT II, Appellee.



Christina Lewis appeals a district court order confirming a settlement agreement and dismissing the case with prejudice. We affirm.

The parties have stipulated to the facts. Lewis and Forest Gilbert were involved in an automobile accident, which resulted in Lewis bringing a personal injury action against Gilbert. After discovery but prior to trial, Gilbert offered to settle the case for $11,500. The offer was made to Lewis' attorney, David Troup, who relayed the offer to Lewis. After discussing the offer at length, Lewis authorized Troup to accept the settlement. Troup called Gilbert's counsel and orally accepted the offer. Gilbert's counsel cancelled the scheduled jury trial and sent Troup a proposed journal entry of dismissal and release of all claims, which Troup forwarded to Lewis. Lewis refused to sign the proposed journal entry and release and told Troup she had changed her

[14 Kan. App. 2d 202]

      mind and would not accept the settlement offer. Gilbert filed a motion to dismiss and for confirmation of settlement agreement, which was granted by the court. The court found that Troup held extensive discussions with Lewis regarding the settlement offer and that Lewis unequivocally gave Troup authority to settle the litigation exactly as it was settled.

Lewis argues the settlement agreement was not binding because it was not reduced to writing. She further argues the trial court erred by refusing to require compliance with K.S.A. 60-241(a)(1)(ii), which requires that a stipulation of dismissal be signed by all the parties and filed.

  The parties are in agreement as to the facts. When the record on appeal consists of stipulated facts and documentary evidence, this court has the same opportunity on review as the trial court and may examine and consider the evidence in the same manner as did the trial court. In re Estate of Thompson, 226 Kan. 437, 440, 601 P.2d 1105 (1979).

  Unless required by statute or court rule, settlement agreements do not have to be reduced to writing to be valid. 15A Am.Jur.2d, Compromise and Settlement ยง 10, p. 782. The Kansas courts> have found that an oral settlement agreement is binding. In Nauman v. Kenosha Auto Transport Co., 186 Kan. 305, 349 P.2d 931 (1960), the defendant agreed to pay the Naumans $2,500 for damages sustained as a result of a nuisance caused by the defendant's sewage disposal system. The settlement agreement was entered into orally between the attorneys for both parties. Shortly after entering the agreement, the defendant's attorney informed counsel for the Naumans that his client had changed his mind, and the settlement was off. The trial court found an agreement had been made and awarded the Naumans $2,500. The Supreme Court affirmed, stating:

  "The law favors the compromise and settlement of disputes, and when parties, in the absence of any element of fraud or bad faith, enter into an agreement settling and adjusting a dispute, neither party is permitted to repudiate it. (Lewis v. Kimball, 103 Kan. 173, 173 P. 279; and Massey-Harris Co. v. Horn, 132 Kan. 206, 294 P. 666.) After the parties had agreed upon a compromise of a bona fide dispute, the courts> will not, in the absence of any element of fraud or bad faith, look into the merits of the original controversy to discover which was in the right." 186 Kan. at 310.

[14 Kan. App. 2d 203]

     

  In Connor v. Hammer, 201 Kan. 22, 439 P.2d 116 (1968), the parties were involved in an automobile accident, which resulted in the death of Mrs. Connor. The parties orally agreed to settle the case, after which the attorney representing Connor's estate confirmed the settlement agreement by letter, which stated, "we are accepting your settlement offer of compromise . . . for the sum of $1500.00." 201 Kan. at 23. Later, the plaintiffs changed their minds and tried to repudiate the settlement. The court enforced the settlement, noting, "The law favors the compromise and settlement of disputes and when parties, in the absence of any element of fraud or bad faith, enter into an agreement settling and adjusting a dispute, neither party is permitted to repudiate it." 201 Kan. at 24.

  Settlement agreements need not be in writing to be enforceable under Kansas case law. Once entered into, settlement agreements should be enforced absent a finding of fraud or bad faith. Here, Lewis does not allege fraud or bad faith but rather simply changed her mind with regard to the settlement. Accordingly, the oral agreement entered into between Lewis and Gilbert should be enforced.

  Gilbert directs attention to several other state court decisions, which support the conclusion that a valid settlement agreement exists. In Jannarone v. W.T. Co., 65 N.J. Super. 472, 168 A.2d 72 (1961), the parties were involved in an automobile accident. The plaintiff through her counsel orally settled the suit for $250. Later, plaintiffs counsel attempted to repudiate the agreement based on a change in judgment as to the value of the claim. The court stated:
"There was no justification for this repudiation by counsel of a settlement fairly and openly negotiated and arrived at. . . .
"The settlement of litigation ranks high in our public policy. [Citations omitted.] There is no good reason why an executory agreement between the parties, fairly arrived at, to settle pending litigation, should not be enforced in the cause, subject to the discretion of the court." 65 N.J. Super. at 476-77.
For other cases reaching a similar result see Herron v. City of Chicago, 618 F. Supp. 1405 (N.D. Ill. 1985); Gregory v. Hamilton, 77 Cal.App.3d 213, 142 Cal.Rptr. 563 (1978).

[14 Kan. App. 2d ...


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