Court Opinion

ID: 4350165
Source: CourtListenerOpinion
Date Created: 2018-12-13 16:01:56.608257+00
Date Added: 2024-06-11T14:29:34.281131
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                 AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE

                    EAGLE EXPRESS LINES, INC., and
                     EDWARD ALLEN CARHART,
                             Petitioners,

                                        v.

                   THE HONORABLE DANIEL KILEY,
                    Judge of the SUPERIOR COURT OF
                   THE STATE OF ARIZONA, in and for
                        the County of MARICOPA,
                              Respondent Judge,

                          JEVEDIA MUHAMMAD,
                            Real Party in Interest.

                             No. 1 CA-SA 18-0261
                               FILED 12-13-2018

 Petition for Special Action from the Superior Court in Maricopa County
                            No. CV2016-001060
                                 CV2016-001970
                   The Honorable Daniel J. Kiley, Judge

           JURISDICTION ACCEPTED; RELIEF GRANTED

                                   COUNSEL

Wood, Smith, Henning & Berman, LLP, Phoenix
By Jill Ann Herman, Samantha J. Kattau
Counsel for Petitioners
            EAGLE EXPRESS v. HON. KILEY/MUHAMMAD
                       Decision of the Court

                      MEMORANDUM DECISION

Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Maria Elena Cruz and Judge Randall M. Howe joined.

J O H N S E N, Judge:

¶1            Petitioners Eagle Express Lines, Inc. and Edward Allen
Carhart seek special action relief from the superior court's denial of their
motion to enforce a settlement agreement. For the reasons stated below, we
exercise our discretion to accept jurisdiction and grant relief.

             FACTS AND PROCEDURAL BACKGROUND

¶2             Represented by the Jenkins Law Firm, Jevedia Muhammad
and her husband, Eric Muhammad, sued Petitioners, alleging Mr.
Muhammad was injured in a car accident caused by Petitioners.
Eventually, the Muhammads and their counsel participated in an in-person
mediation with Petitioners' representatives. Ms. Muhammad left before the
mediation ended to pick up the couple's daughter, and the mediation
continued in her absence. Several weeks later, counsel for the Muhammads
prepared and delivered to Petitioners' counsel a draft joint motion to stay
the trial and vacate the final trial management conference. By email a little
more than an hour later, Petitioners' counsel asked the Muhammads'
counsel for written confirmation "that this matter will be resolved at" the
sum they had agreed upon, and the Muhammads' counsel responded,
"Confirmed."1 Petitioners' counsel then drafted a settlement agreement and
release and emailed it to the Muhammads' counsel, who responded the next
day with information about to whom the settlement check should be made
payable and the law firm's W-9. Within two hours, the Muhammads'
counsel emailed a copy of the finalized settlement agreement and release to
Petitioners' counsel saying, "This is what they will be signing. I will send
the scanned document as soon as they sign it."

1      The record shows that Petitioners, Mr. Muhammad and counsel for
the Muhammads all understood the parties had agreed on a particular
amount that Petitioners would pay to settle the matter. In the proceedings
at issue here, the superior court and the parties attempted to avoid
disclosing that amount in the public record, and we will do the same.

                                     2
            EAGLE EXPRESS v. HON. KILEY/MUHAMMAD
                       Decision of the Court

¶3           Thereafter, although Mr. Muhammad signed the settlement
agreement, Ms. Muhammad refused to do so. Petitioners filed a motion to
enforce the settlement agreement. The superior court set an evidentiary
hearing, at which Petitioners' counsel and Mr. and Ms. Muhammad
testified.

¶4            Petitioners' counsel testified that he understood the
Muhammads' counsel had authority to settle the case on their behalf and
that Petitioners relied on that authority. Mr. Muhammad testified he
understood that Ms. Muhammad would sign the agreement. Ms.
Muhammad testified she did not agree to settle at the specified amount.
She stated that amount was insufficient to compensate the family for her
husband's lost wages.

¶5             Ms. Muhammad offered in evidence a number of emails
between her counsel and herself about the settlement. Among the emails
was one to her and her husband, stating, "My understanding had always
been that Jevedia was in agreement with whatever Eric decided. The first
time I heard this was not the case was when I spoke with Jevedia to
coordinate her coming into the office to sign the release." In an email urging
Ms. Muhammad to sign the agreement, her counsel asserted that in his
presence during the mediation, she had told her husband that she would
be "okay with whatever Eric decided in terms of whether or not to settle the
case," and she never rescinded that authority. The court, however, declined
to admit the emails because some of them referenced the dollar amount
specified in the settlement agreement.

¶6            Citing Robertson v. Alling, 237 Ariz. 345 (2015), Petitioners
argued the evidence showed that the Muhammads' counsel had apparent
authority to settle the case on behalf of his clients. The court denied the
motion and also denied Petitioners' subsequent motion for reconsideration.

                              JURISDICTION

¶7             Because Petitioners have no adequate remedy by appeal, we
exercise our discretion to accept jurisdiction of this special action under
Article 6, Section 9, of the Arizona Constitution, Arizona Revised Statutes
section 12-120.21(A)(4) (2018) and Arizona Rules of Procedure for Special
Actions 1(a).2

2      Absent material revision after the relevant date, we cite the current
version of a statute or rule.

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            EAGLE EXPRESS v. HON. KILEY/MUHAMMAD
                       Decision of the Court

                               DISCUSSION

¶8           In Robertson, our supreme court held that a lawyer who lacks
actual authority may settle a case on behalf of the client if the other settling
party "reasonably assumes that the lawyer is authorized to do the act on the
basis of the client's (and not the lawyer's) manifestation of such
authorization." 237 Ariz. at 356, ¶ 17 (quoting Restatement (Third) of the
Law Governing Lawyers § 27 (2000)).

¶9            In Robertson, as here, the lawyer and his clients had
participated in an in-person mediation with representatives of the other
side, but the mediation ended without an agreement. 237 Ariz. at 346, ¶ 2.
As here, the two sets of lawyers thereafter continued to engage with each
other about a settlement. Id. The lawyer's clients had extended a settlement
offer that would be open for 48 hours after the mediation, but the offer
expired before the other side accepted it. Id. Mistakenly believing his
clients had authorized him to do so, the lawyer then sent the other side
another offer that "mirrored the prior offer," extending the deadline to
respond. Id. at 347, ¶¶ 3-4. After the other side accepted the offer, the
lawyer's clients objected, arguing they had not authorized their lawyer to
send the post-mediation offer. See id. at 347, ¶¶ 4-6.

¶10            The supreme court held the settlement was binding on the
lawyer's clients. Id. at 349, ¶ 20. The court reasoned that, by engaging in
settlement talks and then leaving their lawyer to negotiate the matter
further, the clients had manifested their intention to the other side that their
lawyer had authority to conclude a settlement. Id. at 349, ¶ 19; see
Restatement (Third) of the Law Governing Lawyers § 27 cmt. d, illus. 4.
Specifically, the clients' conduct allowed the other side to reasonably
assume the lawyer had authority to keep the offer "on the table or reoffer
the same settlement terms days after the agreement's expiration." Robertson,
237 Ariz. at 349, ¶ 20.

¶11          The evidence in the record here likewise demonstrated that
the Muhammads led Petitioners to reasonably understand that the
Muhammads' lawyer had authority to settle the case on their behalf. Both
Mr. Muhammad and Ms. Muhammad appeared at the in-person mediation
with Petitioners. Ms. Muhammad left the mediation before it concluded.
The mediation continued in her absence, as she knew it would. In the
absence of any evidence to the contrary, by leaving the ongoing mediation
to continue without her, she led Petitioners to reasonably believe that she
had authorized her lawyer and her husband to resolve the case on her
behalf.

                                       4
            EAGLE EXPRESS v. HON. KILEY/MUHAMMAD
                       Decision of the Court

¶12           In ruling that Petitioners had failed to show the lawyer had
apparent authority to settle the case, the superior court correctly focused on
the actions of Ms. Muhammad, not her lawyer. The court, however, erred
by disregarding Petitioners' showing that Ms. Muhammad allowed her
lawyer to negotiate on her behalf after she had left the mediation. As in
Robertson, Ms. Muhammad's conduct allowed Petitioners thereafter to
reasonably rely on her lawyer's apparent authority to settle the matter on
her behalf.

                              CONCLUSION

¶13           For the reasons stated, we accept jurisdiction of the petition
for special action and grant relief by directing the superior court to grant
Petitioners' motion to enforce the settlement agreement.3

                         AMY M. WOOD • Clerk of the Court
                         FILED: AA

3       Ms. Muhammad failed to file a response to the petition for special
action. Although we might regard her failure to respond as a confession of
error, in the exercise of our discretion, we choose to address the merits of
the matter. McDowell Mountain Ranch Cmty. Ass'n, Inc. v. Simons, 216 Ariz.
266, 269, ¶ 13 (App. 2007).

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