J-A26020-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
VASILIS M. KOSTAKIS AND MAIDA : IN THE SUPERIOR COURT OF
S. JOHNSTON KOSTAKIS : PENNSYLVANIA
:
Appellants :
:
:
v. :
:
: No. 546 MDA 2017
JULIE A. LAMMEL AND DENISE M. :
ST. PIERRE :
Appeal from the Order Entered March 3, 2017
In the Court of Common Pleas of Centre County
Civil Division at No(s): 2014-3406
BEFORE: BOWES, OLSON and RANSOM, JJ.
MEMORANDUM BY OLSON, J.: FILED JANUARY 19, 2018
Vasilis M. Kostakis (“Vasilis”) and Maida S. Johnston Kostakis
(collectively “Appellants”) appeal from the order entered on March 3, 2017
granting Julie A. Lammel’s and Denise M. St. Pierre’s (collectively
“Neighbors’”) motion to enforce the parties’ settlement agreement. We affirm.
The factual background of this case is as follows. On November 20,
2013, Vasilis was trimming tree branches on his property. Neighbors’ dog left
Neighbors’ property and attacked Vasilis. He suffered serious injuries as a
result of the attack.
The procedural history of this case is as follows. On September 5, 2016,
Appellants filed a complaint against Neighbors relating to the dog’s attack on
Vasilis. During a mediation on July 8, 2016, Appellants authorized their former
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counsel1 to settle the case for $100,000.00; however, no agreement was
reached at the mediation. On July 19, 2016, Neighbors informed Appellants’
former counsel that they were willing to settle the case for $25,000.00.
Appellants’ former counsel relayed the offer to Appellants and, on the morning
of July 27, 2016, they rejected the offer. Instead, Appellants hand-delivered
a letter to their former counsel in which they reaffirmed that they were willing
to settle the case for approximately $100,000.00.
After receiving Appellants’ correspondence, their former counsel
contacted them via telephone. During that conversation, Appellants
authorized their former counsel to settle the case for between $25,000.00 and
$30,000.00. On July 29, 2016, Appellants’ former counsel asked Neighbors
to increase their $25,000.00 offer by the amount of a medical lien owed by
Appellants. Neighbors acquiesced and an oral settlement between counsel for
the parties was reached. A written settlement release was then drafted and
presented to Appellants. They refused to sign the settlement release.
On September 15, 2016, Neighbors moved to enforce the oral
settlement agreement. Appellants’ former counsel then withdrew his
appearance and new counsel entered his appearance. An evidentiary hearing
was held on January 23, 2017. On March 3, 2017, the trial court granted
1 Throughout this memorandum, we refer to the attorney who represented
Appellants prior to them filing an opposition to Neighbors’ motion to enforce
the settlement agreement as former counsel to differentiate that attorney
from Appellants’ current counsel.
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Neighbors’ motion to enforce the oral settlement agreement. This timely
appeal followed.2
Appellants present three issues for our review:
1. Whether the trial court abused its discretion by granting
[Neighbors]’ motion to enforce the settlement agreement when
Appellants’ prior legal counsel lacked express authority to enter
into a binding oral settlement agreement on behalf of Appellants
to settle the lawsuit for the sum of $26,194.21?
2. Whether the trial court abused its discretion in finding that the
conversations between Appellants’ prior legal counsel and
[Neighbors]’ counsel amounted to a binding oral agreement when
the material terms of the agreement had not been finalized in the
form of the exact dollar amount of the proposed oral settlement
agreement between the parties?
3. Whether the trial court abused its discretion by granting
[Neighbors]’ motion to enforce the settlement agreement absent
an executed settlement release?
Appellants’ Brief at 5-6 (certain capitalization omitted).3
All three of Appellants’ issues challenge the trial court’s decision to
enforce the parties’ settlement agreement. The granting of a motion to
enforce a settlement agreement is a mixed question of law and fact. See
Camp Horne Self Storage LLC v. Lawyers Title Ins. Corp., 150 A.3d 999,
1001 n.4 (Pa. Super. 2016) (citation omitted). Therefore, our standard of
2 On April 3, 2017, the trial court ordered Appellants to file a concise statement
of errors complained of on appeal (“concise statement”). See Pa.R.A.P.
1925(b). On April 21, 2017, Appellants filed their concise statement. On May
5, 2017, the trial court issued its Rule 1925(a) opinion. All of Appellants’
issues were included in their concise statement.
3 We have re-numbered the issues for ease of disposition.
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review is whether the trial court’s legal conclusions are correct and whether
its factual findings are supported by the record. Id.
In their first issue, Appellants argue that their prior counsel lacked
express authority to enter into a settlement agreement on their behalf. “[A]n
attorney must have express authority in order to bind a client to a settlement
agreement. . . . [S]uch express authority can only exist where the [client]
specifically grants the [attorney] the authority to perform a certain task on
the [client’s] behalf. Salsman v. Brown, 51 A.3d 892, 894 (Pa. Super. 2012)
(citation omitted).
Appellants cite to the letter they hand-delivered to their former counsel
on the morning of July 27, 2016, along with Vasilis’ testimony at the
evidentiary hearing, in support of their argument that their former counsel
lacked the express authority to settle their case for $26,194.31. This evidence
would support a factual finding that Appellants’ former counsel lacked such
express authority. However, there is equally competent evidence which
supports the actual finding made by the trial court in this matter.
At the evidentiary hearing, Appellants’ former counsel testified that
when he spoke to Appellants on the afternoon of July 27, 2016, they gave him
express authority to settle their case for between $25,000.00 and $30,000.00.
See N.T., 1/23/17, at 15. This testimony was supported by Appellants’ former
counsel’s notes during the telephone conversation. See Neighbors’ Exhibit 2,
at 5.
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The only cases cited by Appellants in support of their position that their
former counsel lacked express authority to settle the case are inapposite. In
those cases, the trial courts made factual findings that counsel lacked express
authority to settle the cases for the amounts at issue. See Gatto v. Verizon
Pa., Inc., 2009 WL 3062316, *8-10 (W.D. Pa. 2009); Ruetzel v. Douglas,
870 A.2d 787, 788 (Pa. 2005). That is not what occurred in the case sub
judice.
The trial court was presented with conflicting testimony and conflicting
documentary evidence regarding whether Appellants expressly authorized
their former counsel to settle the case for between $25,000.00 and
$30,000.00. The trial court, who presided at the evidentiary hearing, made a
credibility determination and found that Appellants’ former counsel was more
credible than Vasilis. “Credibility determinations are for the [factfinder]. As
long as sufficient evidence exists in the record to support the credibility
findings, this Court may not overturn those findings.” In re Merlo, 58 A.3d
1, 16 (Pa. 2012) (citation omitted). As noted above, sufficient evidence exists
in the record to support this credibility determination, i.e., the
contemporaneous notes taken by Appellants’ former counsel. Hence, we
decline to overturn the trial court’s credibility determination and conclude that
the trial court’s factual finding that Appellants’ former counsel had express
authority to settle the case for between $25,000.00 and $30,000.00 is
supported by the record.
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In their second issue, Appellants argue that, even if their former counsel
had express authority to settle the case for $26,194.21 on July 29, 2016, no
binding settlement agreement existed prior to them revoking that express
authority. According to Appellants, the oral settlement agreement that their
former counsel agreed to on July 29, 2016 was not legally enforceable because
the amount of the medical lien was unknown. Before the amount of the
medical lien was known, Appellants argue that they unequivocally revoked
their former counsel’s express authority to settle the case for between
$25,000.00 and $30,000.00. Neighbors, on the other hand, argue that an
enforceable oral settlement agreement was entered into on July 29, 2016.
According to Neighbors, the exact amount of the medical lien was known on
that date.
We reject Neighbors’ argument that the exact amount of the lien was
known at the time the oral settlement agreement was reached. The trial court
found that the agreement was for $25,000.00 plus the medical lien. See Trial
Court Opinion, 5/5/17, at 3. Nonetheless, an enforceable oral settlement
agreement was reached on July 29, 2016; prior to Appellants revoking their
former counsel’s express authority to settle the case for between $25,000.00
and $30,000.00. In Pennsylvania, “principles of contract law govern the
interpretation and applicability of settlement agreements.” Prof’l Flooring
Co., Inc. v. Bushar Corp., 152 A.3d 292, 299 (Pa. Super. 2016), appeal
denied, 170 A.3d 1036 (Pa. 2017) (citation omitted). Therefore, “[i]f all of
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the material terms of a bargain are agreed upon, the settlement agreement
will be enforced.” Commerce Bank/Pennsylvania v. First Union Nat.
Bank, 911 A.2d 133, 145 (Pa. Super. 2006) (citation omitted).4
In this case, all the material terms of settlement were orally agreed to
by Appellants’ former counsel and Neighbors’ counsel. Specifically, Appellants
agreed to discontinue their case against Neighbors with prejudice and
Neighbors agreed to pay Appellants $25,000.00 plus the cost of the medical
lien. The fact that the exact amount of the medical lien was unknown is
irrelevant. A material term need only provide a court a “reasonably certain
basis for giving an appropriate remedy.” Jeannette Paper Co. v. Longview
Fibre Co., 548 A.2d 319, 324 (Pa. Super. 1988), appeal denied, 559 A.2d 38
(1989). In this case, the parties’ oral agreement provided a reasonably
certain basis for giving an appropriate remedy. The amount of the medical
lien was easily and readily ascertainable. As such, the oral settlement
agreement to pay $25,000.00 plus the medical lien is the same as if the oral
settlement agreement was phrased as exactly $26,194.21. In both cases, the
oral settlement agreement included all material terms necessary for formation
of an enforceable contract.
4Appellants’ citation to Muhammad v. Strassburger, McKenna, Messer,
Shilobod & Gutnick, 587 A.2d 1346 (Pa. 1991) is inapposite. In that case,
our Supreme Court merely stated that an offer must included a settlement
amount. Id. at 1349. In this case, Neighbors’ offer did include a settlement
amount, i.e., $25,000.00 plus the medical lien.
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Appellants rely heavily on their former counsel’s testimony at the
evidentiary hearing. At that hearing, he testified that he believed the amount
of the medical lien still needed to be resolved. This argument, however, is
unpersuasive. Whether an enforceable contract (in this case an oral
settlement agreement) was formed “is generally one of law for the court to
decide.” Delaware River Pres. Co., Inc. v. Miskin, 923 A.2d 1177, 1182
(Pa. Super. 2007) (citation omitted). Thus, Appellants’ former counsel’s
testimony was not regarding a fact at issue in the case. Instead, it was a legal
conclusion to which the trial court owed no deference. Instead, the trial court
was required to make factual findings based on the testimony and
documentary evidence produced at the hearing and make a legal conclusion
regarding whether an enforceable oral settlement agreement was entered into
on July 29, 2016. We ascertain no error in the trial court’s legal conclusion
that an enforceable settlement agreement was entered into on July 29, 2016.
In their final issue, Appellants argue that the trial court erred by
enforcing the oral settlement agreement because there was no signed
settlement release. This argument is without merit. “Pursuant to well-settled
Pennsylvania law, oral agreements to settle are enforceable without a writing.”
Step Plan Servs., Inc. v. Koresko, 12 A.3d 401, 409 (Pa. Super. 2010)
(citation omitted). As discussed above, we conclude that the trial court’s
factual findings regarding an oral settlement agreement are supported by the
record.
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Appellants also argue that, because the written settlement release
tendered by Neighbors included an integration clause, their failure to execute
the written settlement release renders the oral settlement agreement
unenforceable. Although the written settlement release tendered to
Appellants included an integration clause, the oral settlement agreement was
enforceable. So long as the parties’ oral settlement agreement was not
contingent upon later execution of a written settlement release, the failure of
a party to sign a release which includes an integration clause does not render
the oral settlement agreement unenforceable. Mastroni-Mucker v. Allstate
Ins. Co., 976 A.2d 510, 522 (Pa. Super. 2009), appeal denied, 991 A.2d 313
(Pa. 2010) (citations omitted).
Appellants cite their former counsel’s testimony that he does not “know
of any other way to settle a case with an insurance company without having
a release signed,” N.T., 1/23/17, at 38, as support for their argument that the
oral settlement agreement was contingent upon the execution of a written
settlement release. Appellants fail to acknowledge, however, that their former
counsel also testified that the oral settlement agreement was not contingent
upon the signing of a written settlement release. Id. The trial court credited
this testimony and this factual finding is supported by the record. Therefore,
the trial court’s conclusion that the oral settlement was enforceable is free of
legal error. Accordingly, we affirm the order enforcing the oral settlement
agreement.
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Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 01/19/2018
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