United States: Louisiana Appellate Court Holds Exchange Of E-Mails Between Attorneys Insufficient To Bind Settlement

On May 11, 2017, the First Circuit Court of Appeals upheld the lower court's denial of a Joint Motion to Enforce Settlement filed by Plaintiffs and Defendants/Appellants/JR Logging Inc., Jerry Avants, Jr. and Indemnity Insurance Company of North America. Said defendants had fully funded the settlement based upon an exchange of e-mails between counsel of record for said defendants and counsel of record for Defendants/Cross-claimants/Appellees, Thomas Keaty Jr. and Fair Hills Farms, LLC, in which the parties agreed that Defendants/JR Logging Inc., Jerry Avants, Jr. and Indemnity Insurance Company of North America would fully fund the settlement and that all incidental demands would be dismissed.

The e-mail from counsel for Defendants/Cross-claimants/Appellees, Thomas Keaty Jr. and Fair Hills Farms, LLC read, in part: "After much thought, my clients have agreed to the settlement proposal by the JR Logging/Avants Defendants whereby the entire settlement amount will be paid by the JR Logging/Avants Defendants and no payment made will be made by Fair Hills Farms LLC and Thomas Keaty Jr. This settlement requires all parties are to dismiss the claims against each other, including the Cross Claims between the JR Logging/Avants Defendants and the Fair Hills Farms/Keaty Defendants..." In response, counsel for Plaintiffs and Defendants/Appellants/JR Logging Inc., Jerry Avants, Jr. and Indemnity Insurance Company of North America confirmed "...[w]e will prepare the settlement agreement per your e-mail. All claims, all parties, released and dismissed with prejudice...."

The Appellate Court's ruling makes it clear that the exchange of e-mail was insufficient to bind settlement, as there was nothing in the record to indicate that counsel for the Fair Hills defendants had the authority to bind settlement for his clients.

An Application for Rehearing is pending on two issues: (1) the decision effectively overrules the same Appellate Court's 2009 decision in Dozier v. Rhodus, 2008 CA 1813 (La. App. 1st Cir. 5/5/09); 17 So.3d 402, on the pivotal issue of whether the "express consent" for an attorney to settle a lawsuit under Civil Code Article 2997 must be "in writing"; and (2) to address the issue of burden of proof, arguing the burden is on the party which disputes its attorney did not have consent to bind settlement.

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