Opinion ID: 1187678
Heading Depth: 3
Heading Rank: 2

Heading: Compromise and Settlement

Text: We particularly note our long-standing support of compromise and settlement. As a general rule, a properly executed settlement precludes future litigation for its parties. See AIG Hawaii Ins. Co. v. Bateman, 82 Hawai`i 453, 458-59, 923 P.2d 395, 400-01, amended in part, 83 Hawai`i 203, 925 P.2d 373 (1996). Indeed, a settlement agreement is an agreement to terminate, by means of mutual concessions, a claim which is disputed in good faith or unliquidated. It is an amicable method of settling or resolving bona fide differences or uncertainties and is designed to prevent or put an end to litigation. 15A Am.Jur.2d Compromise and Settlement § 1 (1976). We acknowledge the well-settled rule that the law favors the resolution of controversies through compromise or settlement rather than by litigation. Dowsett v. Cashman, 2 Haw.App. 77, 82-83, 625 P.2d 1064, 1068 (1981). Such alternative to court litigation not only brings finality to the uncertainties of the parties, but is consistent with this court's policy to foster amicable, efficient, and inexpensive resolutions of disputes. In turn, it is advantageous to judicial administration and thus to government and its citizens as a whole. We agree with the policy and law of settlements which the Supreme Court of Arkansas succinctly sets forth in Ragland v. Davis, 301 Ark. 102, 106-107, 782 S.W.2d 560, 562 (1990) (citation omitted, emphasis added): Courts should, and do, so far as they can do so legally and properly, support agreements which have for their object the amicable settlement of doubtful rights by parties; the consideration for such agreements is not only valuable, but highly meritorious. Because they promote peace, voluntary settlements... must stand and be enforced if intended by the parties to be final, notwithstanding the settlement made might not be that which the court would have decreed if the controversy had been brought before it for decision. Such agreements are binding without regard to which party gets the best of the bargain or whether all the gain is in fact on one side and all the sacrifice on the other. .... A compromise or settlement agreement disposes of all issues the parties intended to settle. In re Estate of Engels, 10 Kan. App.2d 103, 692 P.2d 400 (1984).... .... Having found the settlement to be valid and enforceable, the terms of the settlement would control.... Sylvester v. Animal Emergency Clinic of Oahu, 72 Haw. 560, 565-71, 825 P.2d 1053, 1056-59 (1992) (emphases added); see also Gossinger v. Association of Apartment Owners of the Regency of Ala Wai, 73 Haw. 412, 423-24, 835 P.2d 627, 633-34 (1992); Han v. Yang, 84 Hawai`i 162, 167-68, 931 P.2d 604, 609-10 (App.1997). With respect to a judgment by consent or an oral settlement entered on the record, the ICA has explained that courts have the general power of entering judgment by consent of the parties for the purpose of executing a compromise and settlement of the action. 47 Am.Jur.2d Judgments § 1080 (1969). Although there is no case on point in Hawaii, the law of compromise and settlement and of judgment by consent is well-settled in other jurisdictions. For example, the Kansas Supreme Court has stated:  It is an elemental rule that the law favors compromise and settlement of disputes and generally, in the absence of bad faith or fraud, when parties enter into an agreement settling and adjusting a dispute, neither party is permitted to repudiate it.  Matter of Estates of Thompson, 226 Kan. 437, 440, 601 P.2d 1105, 1108 (1979). The Washington Supreme Court said it even more tersely: The law favors settlements and consequently it must favor their finality. Haller v. Wallis, 89 Wash.2d 539, 544, 573 P.2d 1302, 1305 (1978). A compromise agreement, like other contracts, requires an offer and acceptance, consideration, and parties who have the capacity and authority to agree as they do. 15A Am.Jur.2d Compromise and Settlement § 7 (1976). A judgment or decree entered by consent of the parties is in the nature of a contract, approved by the court, and cannot be set aside except on grounds adequate to justify the rescission of a contract. Nieminen v. Pitzer, 281 Or. 53, 57, 573 P.2d 1227, 1228 (1978). .... The Supreme Court of Colorado, quoting with approval from the case of Hansen v. Ryan, 186 S.W.2d 595 (Mo.1945), held: In the administration of justice and the prompt dispatch of business, courts must and do act upon the statements of counsel and upon the stipulations of parties to pending causes. Where the parties have voluntarily entered into a stipulation which appears fair and reasonable for the compromise and settlement of the issues of a pending cause and where the stipulation is spread upon the record with the consent and approval of the court, as here, the parties are bound thereby and the court may, thereafter, properly proceed to dispose of the case on the basis of the pleadings, the stipulations and the admitted facts.  Goltl v. Cummings, 152 Colo. 57, 380 P.2d 556, 559 (1963). Dowsett v. Cashman, 2 Haw.App. 77, 82-83, 625 P.2d 1064, 1068 (1981) (emphases added); accord Sylvester, 72 Haw. at 566, 825 P.2d at 1056.