Vol. 8, No. 2, Pg. 32. Protecting Settlement Agreements.

• Author: By Linda W. Rogers

South Carolina Lawyer

1996.

Vol. 8, No. 2, Pg. 32.

Protecting Settlement Agreements

32PROTECTING SETTLEMENT AGREEMENTSBy Linda W. RogersA good litigator approaches each case he or she handles with a dual purpose in mind. First, the litigator prepares the case from its inception as if trial were an inevitable end. Second, he or she begins making attempts towards an amicable resolution of the case as soon as he or she has gathered enough information to thoughtfully evaluate the case.

Most lawyers would agree that the settlement agreement serves as one of the most often used and one of the most valuable mechanisms to resolve a case in a manner which preserves judicial economy and serves the best interests of the client. Typically, when a settlement has been reached and an order of dismissal filed, the case is viewed as fully and finally conduded.

However, it is not uncommon for one of the parties to an action to become dissatisfied with an agreement. When this happens, the partiesoften must turn to the courts to resolve the issue of whether a settlement agreement is final and enforceable. This article will address the enforcement of settlements in South Carolina's state courts and in the federal courts.

SOUTH CAROLINA CIRCUIT COURTS

In South Carolina, the appellate courts have decided some very recent cases dealing with the issue of enforcing settlements. These cases have interpreted Rule 43(k) of the SCRCP to require lawyers to specify the terms of the settlement in the order of dismissailt seems to be common practice among members of the Bar to draft orders of dismissal that simply recite that the case has been settled, without outlining the terms of the agreement. Thus, lawyers practicing in the state courts should pay particular attention to Rule 43(k) and the cases discussed below.

34Rule 43(k) of the SCRCP states that "No agreement between counsel affecting the proceedings in an action shall be binding unless reduced to the form of a consent order or written stipulation signed by counsel and entered in the record, or unless made in open court and noted upon the record." The South Carolina Supreme Court applied Rule 43(k) in determining the enforceability of settlement agreements in Ashfort Corporation v. Palmetto Construction Group, Inc., S.C. , 458 S.E.2d 533 (1995) and in Widewater Square Associates v. Opening Break of America, Inc., S.C. _ , 460 S.E.2d 396 (1995).

In Ashfort, the parties reached an agreement to settle their case and advised the court the case had been settled. Thus, the circuit court dismissed the case. Subsequently, a dispute arose with regard to the terms of the settlement. As a result, Ashfort Corporation moved to have the case reinstated, and Palmetto Construction moved to compel settlement. The circuit court refused to grant the motion to compel settlement.

In affirming the circuit court, the Supreme Court found the parties had failed to reach a "meeting of the minds" with regard to the terms of the settlement. Specifically, the Court found the order of dismissal was deficient, because the terms of the settlement were not set out in the order. In reaching its decision, the court relied on Rule 43(k), SCRCP.

Palmetto Construction argued unsuccessfully that Rule 43(k) is inapplicable to settlement agreements. In finding the rule applicable, the court stated:

The purpose of rules such as 43(k) is:

[T]o prevent fraudulent claims of oral stipulations, and to prevent disputes as to the existence...