Court of Appeals Reverses Grant of Summary Judgment Related to Settlement of Workers' Compensation Claim

O'Reilly Auto Enterprises v. Badia, No. 21-1871 (Iowa App. Dec. 21, 2022)

This action involved a settlement agreement in which the claimant, following the agreement to settle her case, attempted to propose alternative terms in the settlement agreement.  Defendants sought to enforce the settlement agreement it claimed to have with claimant.  During the course of these proceedings, claimant's counsel was deposed, with counsel not delving into matters that were the subject of attorney-client privilege.  Defendants moved for summary judgment, based on emails exchanged between counsel confirming the terms of the settlement.  Claimant resisted the motion for summary judgment, citing communication problems with counsel and an allegation to she did not authorize counsel to settle the matter on her behalf.  The district court granted defendants' motion for summary judgment.

On appeal, the Court noted that generally counsel has the power to bind a client to any agreement within the scope of the attorney's proper duties and powers.  Iowa Code 602.10114(2). However, an attorney cannot settle or compromise a case without authority.  The Court notes that an attorney is presumed to act with authority, but that this presumption is not conclusive an may be rebutted.  The Court concludes that there was a factual dispute in this case that led the grant of summary judgment to be improper.  Specifically, there was a factual dispute about counsel's authorization to approve the settlement, as well as factual disagreement as to whether claimant had agreed to all the terms of the settlement.  The Court also noted that an affidavit filed by claimant indicating that she had not authorized the settlement was sufficient to create a factual issue that defeated a motion for summary judgment. 

The Court noted that it did not indicate an opinion on the merits of the dispute, only on the "pitfalls and inefficiencies that come with prematurely requesting - and granting - summary judgment."  The Court also notes that because claimant was challenging her attorney's authority to enter into a settlement on her behalf, that the parties were free to discuss the claimant's attorney's communications with claimant.  The case was reversed and remanded to the district court for further proceedings.


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