Reversal: Trial court erred in rescinding settlement

The Indiana Court of Appeals reversed a trial court’s rescission of an order it gave enforcing a settlement agreement in a negligence suit. The appellate panel found the order contradicted itself. 

After more than a year of trying to come to a settlement agreement after Tonji Coleman’s car crash-related negligence suit against Jacob Todd, counsel for both parties verbally negotiated and agreed to settle the case for $10,000.

Several months later and with new counsel, Coleman stated she no longer wanted to settle, leading Todd to file a motion to enforce the original agreement. A trial court granted Todd’s motion but later rescinded the original order per Coleman’s request, based on her argument that she neither agreed to nor signed the $10,000 settlement agreement. It also found that Coleman’s initial counsel had “actual and apparent authority to enter into the settlement agreement.”

In an interlocutory appeal, Todd contended that the trial court’s latter finding contradicted the trial court’s order compelling Coleman to comply with the settlement agreement. The Indiana Court of Appeals agreed in Jacob Todd v. Tonji Coleman and Amos Johnson, 18A-CT-2138, finding fault with Coleman’s assertion under Bay v. Pulliam, 872 N.E.2d 666, 668 (Ind. Ct. App. 2007), that her decision to retain her initial counsel did not automatically constitute implied authority to settle her claim.

First, the appellate court noted that, unlike in Bay, the trial court specifically found that Coleman’s initial counsel had “actual and apparent authority to enter into the settlement agreement that is the subject of this dispute,” and that both testified at the hearing concerning the settlement offer.

Additionally, it found that Coleman’s statement that her initial counsel “could do whatever they have been doing” to settle her case was sufficient to support the trial court’s specific finding that initial counsel had actual and apparent authority to enter into the settlement agreement on Coleman’s behalf. 

“As for the second tier of our review, we conclude that the trial court’s ultimate decision to rescind its original order is not supported by the findings,” Judge Terry Crone wrote for the court. “Because the court’s order is internally contradictory, we reverse and remand for proceedings consistent with this decision.”