Court Opinion

ID: 9517173
Source: CourtListenerOpinion
Date Created: 2023-08-07 00:07:07.61813+00
Date Added: 2024-06-11T09:43:49.492755
License: Public Domain

OPINION
Debtor appeals entry of a consent judgment of nondischargeability against her for $1,000, based on credit card charges made shortly before she. filed a chapter 7 petition.1 Because the bankruptcy court erred *304in approving a settlement that led to entry of the judgment, we REVERSE AND REMAND.
FACTS
Debtor filed a chapter 7 petition in September 2002. First National Bank of Omaha (plaintiff) filed a complaint in December 2002, seeking a determination that charges of approximately $4,500 on debt- or’s bank credit card are nondischargeable for fraud under § 523(a)(2)(A). The trial was originally set for May 6, 2003. On May 6, the trial was reset for June 3, 2003,. apparently based on a possible settlement of the adversary proceeding. On June 3, the court reset the trial for July 16, 2003, still awaiting the stipulation. On July 16, the trial was continued to September 10, 2003. The docket notes that plaintiff was to file a motion to approve the settlement, which also would be heard on September 10.
Plaintiff filed a motion to approve the settlement, which represented that debtor had offered to settle for $1,000, that plaintiff had accepted the settlement offer, but that debtor had failed to sign the consent judgment or to respond to plaintiffs inquiries. Debtor did not respond to the motion to approve the settlement, and did not appear at the September 10 hearing.
At the September 10 hearing, the court approved the settlement for $1,000 and said that it would enter the stipulated judgment, rendering the trial moot. On September 16, 2003, the court entered the stipulated judgment, which was not signed by debtor, and the order approving the settlement.
On September 10, 2003, after the time set for the trial, debtor filed a motion for reconsideration in which she said that she had been 10 to 15 minutes late for the September 10 hearing due to a medical condition and that she wanted a trial on the complaint.
Debtor appeared for. the court’s hearing on debtor’s motion to reconsider. She told the court that she never agreed to the settlement and that she had missed the September 10 hearing because she had gone to the wrong courtroom, where she had been informed the hearing would be held, but no one was there. The court denied the motion, concluding that debtor had known the time, date and courtroom for the hearing, that she admitted she had been late for the hearing, and that she had failed to file any opposition to the request to approve the settlement and enter the consent judgment.
Debtor appeals.
ISSUE
Whether the bankruptcy court abused its discretion in approving the settlement and entering the consent judgment.
STANDARD OF REVIEW
We review the bankruptcy court’s approval of the settlement for abuse of discretion. Callie v. Near, 829 F.2d 888, 890 (9th Cir.1987). The court has no discretion to enforce a settlement where there are facts in dispute; the court must hold a hearing. In re City Equities Anaheim, Ltd., 22 F.3d 954, 958 (9th Cir.1994).
DISCUSSION
The bankruptcy court approved the purported settlement in this adversary proceeding based on plaintiffs representation that debtor’s husband was authorized to negotiate on debtor’s behalf and had made an offer to settle for $1,000, which plaintiff accepted, and on the court’s apparently mistaken impression that debtor had already performed pursuant to the settle*305ment. Transcript of September 10, 2003 hearing at 3:9-10.
It was plaintiffs burden, as the party seeking to enforce the settlement agreement, to prove that an agreement existed. 15A Am.Jur.2d “Compromise and Settlement” § 57 (2000). However, plaintiff did not provide any competent evidence that debtor’s husband had authority to negotiate the settlement, that debtor herself had made an offer to settle, or that debtor had agreed to the alleged settlement. Although a party may authorize another to negotiate a settlement on the party’s behalf, the evidence in this case falls far short of establishing that debtor’s husband had either actual or apparent authority to act on her behalf. The only mention of the circumstances of the purported agreement is contained in plaintiffs declaration in support of its Motion to Approve Settlement, in which plaintiff states that, “Prior to the trial, Defendant made an offer to settle, the terms of which are reflected in Exhibit ‘1’.” Declaration Re: Plaintiffs Motion to Approve Settlement at 1. Exhibit 1 is a copy of a letter sent from counsel for plaintiff to debtor, in which he says, “The Plaintiff accepted your settlement offer of May 5, 2003, conveyed by your husband, who you authorized to negotiate on your behalf .... ” Declaration of Dennis Winters at ¶ 3. That is not competent evidence that debtor authorized her husband to negotiate on her behalf or to enter into an agreement to settle.
Further, there is no evidence that debt- or had performed the settlement. In fact, the letters to debtor attached to plaintiffs motion to approve the settlement showed that debtor had not responded to plaintiff’s requests for payment as late as July 2, 2003.
On debtor’s motion for reconsideration, plaintiff argued that debtor had failed to oppose the motion for settlement and, therefore, under Local Rule 9014-l(f)(l)(ii), she had waived any opposition to the motion. Even in the absence of any opposition to plaintiffs motion, however, plaintiff had to come forward with a showing that debtor had agreed to the settlement. Plaintiff failed to prove any agreement by debtor to the settlement. Accordingly, debtor’s lack of opposition does not support the court’s ruling.
Plaintiff argues that debtor’s failure to appear at the hearing on the motion to approve settlement supports the court’s entry of judgment. This was not a default judgment or judgment entered as a sanction for debtor’s failure to appear. The court entered the judgment based on its understanding that debtor had agreed to the settlement and that the settlement had been performed. In light of the absence of any showing that debtor had agreed to entry of a judgment of nondischargeability, the court abused its discretion in approving the settlement and entering the judgment. The fact that the court appears to have relied on a mistake of fact, that is, that the settlement had been performed, further supports reversal.
CONCLUSION
The bankruptcy court abused its discretion in approving the settlement. Therefore, we REVERSE AND REMAND.

. Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330.