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ALFRED and MARY W LAMBERT,
plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 9S - "1017 CIVIL TERM
BREACH OF CONTRACT
v.
JACOBSEN DIVISION OF
TEXTRON, INC. and DE~O M.
LANTZ, ESQUIRE,
Defendants
COMPLaIIft'
1. plaintiffs Alfred and Mary Lu Lambert are adults residing
in carlisle, cumberland County, pennsylvania.
2. Defendant The Jacobsen Division of Textron, Inc., is a
profit-making corporation engaged in the manufacture of lawn mowers
and other equipment, headquartered in Racine, Wisconsin.
3. Defendant Delano M. Lantz, Esquire, is an adult residing
in Carlisle, CUmberland County, pennsylvania.
4. In January 1992, plaintiffs Alfred Lambert and Mary Lu
Lambert initiated a products liability lawsuit against Defendant
Jacob.en Division of Textron, Inc. and its dealer, J'R Ford Tractor
Inc., in CUmberland county Common Pleas Court under Docket Number
280 civil 1992.
5. On February 28, 1992, Defendant Delano M. Lantz entered
hi. appearance on behalf of Jacobsen Division of Textron, Inc.
6. At all times during the litigation Delano M. Lantz acted
as the attorney for Jacobsen Division of Textron, Inc., defending
1,',5/PJG
their intere.t. and exeroi.inQ apparent authority to aot on their
behalf.
7. ^fter three and one-half years of discovery the trial of
Mr. Lallbert'. produot liability oa.e cOMenoed on November 13,
19'5, before the Court of cOll\lllon Pleu of Cumberland County,
Penn.Ylvania.
e. Prior to trial Plaintiff. reached a Joint Torttea.or
Settle.ent with the Co-Defendant in the action, J'R Ford Tractor
Sale., repre.ented by Timothy I. Mark, I.quire.
9. On Monday, November 13, 1995, Plaintiffs' counsel, Terry
S. Hraen, I.quire, .ade a de.and to Defendant Lantz of $95,000.00
to .ettle the Lambert.' olaim aqain.t Jacob.en, continqent upon
approval of the .ettlement by plaintiff'S employer's workere'
co.pen.ation carrier who had a subroqation interest in the caee.
10. On Monday eveninq, November 13, 1995, Mr. Lantz,
operatinQ with the apparant authority of Jacobsen, ofrered
$95,000.00 continqent upon approval by the workers' compensation
carrier. Mr. Lantz also required as a term of settlement that J'R
Tractor drop any claim against Jacobsen for indemnity or
contribution a. part of the .ettlement. As stated by Mr. Lantz,
Jacob.en'. offer waG " $95,000.00 to settle everything."
11. On Wedne.day, November 15, 1995, Terry S. Hyman, on
behalf ~f Mr. Lambert, informed Mr. Lantz that he had been able to
obtain approval from the workers' compensation carrier but that Mr.
2
,
,
Mark had not agreed to withdraw the indemnity claim asserted by J&R
Pord. plaintiff, therefore, asked Jacobsen to consider settling
the ca.e .olely again.t plaintiff and the subrogation carrier for
$gS,ooo.oo, and allowing the indemnity claim to continue to
verdict.
12. On Wedne.day evening, November 15, 1995, at 9:30 p.m.,
Defendant Lantz, indicated he had spoken to Robert Beakley, the
peraon at Jacobsen with settlement authority.
13. During the Wednesday evening discussion, Defendant Lantz,
with the apparent authority of Jacobsen, declined the offer to
aettle with plaintiffs alone, but explicitlY re-asserted and
confirmed Jacob.en's offer to settle the case for $95,000.00 if it
would .ettle the entire matter.
14. In response to the renewed offer, Plaintiffs' counael,
Terry S. Hyman, stated on November 15, 1995, that he did not have
authority from J&R at 9:30 on a Wednesday evening to settle the
case, and, therefore, he would see Mr. Lantz at trial on Thursday.
.
15. In the November 16, 1995 conversation, Mr. Lantz did not
place any time restriction on his offer to settle the entire case
for $95,000.00.
16. At no time during the negotiations did Defendant Lantz or
anyone representing Jacobsen make any statement that their offer of
settlement must be accepted within a specified time period, by a
certain date, or prior to the testimony of any particular witness.
3
,
Mark had not aqreed to withdraw the indemnity claim asserted by J&R
Ford. Plaintiff, therefore, aeked Jacobsen to consider settling
the ca.e .olely aqain.t plaintiff and the subrogation carrier for
"5,000.00, and allowinq the indemnity claim to continue to
verdict.
12. On Wedne.day evening, November 15, 1995, at 9:30 p.m.,
Defendant Lentl, indicated he had spoken to Robert Beakley, the
per.on .t Jacob.en with .ettlement authority.
13. Durinq the Wedne.day evening discussion, Defendant Lantz,
with the apparent authority of Jacobsen, declined the offer to
.ettle with Plaintiff. alone, but explicitly re-asserted and
confir.ld Jecob.en'. offer to settle the case for $95,000.00 it it
would .ettle the entire matter.
14. In re.pon.e to the renewed ofter, Plaintiffs' counsel,
Terry 8. H~an, .tated on November 15, 1995, that he did not have
authority from J&R at 9:30 on a Wednesday evening to settle the
ca.e, and, therefore, he would see Mr. Lantz at trial on Thursday.
15. In the November 16, 1995 conversation, Mr. Lantz did not
plaoa any time re.triotion on his offer to settle the entire oase
for "5,000.00.
16. At no time during the negotiations did Defendant Lantz or
anyone repre.enting Jacobsen make any statement that their offer of
.ettlement must be accepted within a specified time period, by a
certain date, or prior to the testimony of any particular witness.
3
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17. At no time up to and including the conversation at
9:30 p.m. on November 15, 1995, did Defendant in any fa.hion
.ugge.t to Plaintiffs that timing was of the essence in the
.ettlement of the ca.., nor was any indication given that the offer
in any way was limited in time or would expire with the occurr.nc.
of any particular tivent.
18. During the noon lunch break on November 16, 19915,
plaintiffs' counsel, Terry S. Hyman, obtained J&R's con..nt to
..ttle their indemnity claim as part of the $95,000 offered by
Jacobsen.
19. At approximately 1:00 p.m. Plaintiff's counsel explicitly
.tat.d to D.lano M. Lantz and Jacobsen's trial representative that
the Lambert. " accepted the $95,000.00 offer" to settle the ca.e
in it. entir.ty, including voluntary dismissal of J&R's claim. for
indemnity or contribution.
20. At no time between the conversation on Wednesday night
r.-affirming the offer to settle the entire case for $95,000.00 and
Plaintiffs' acceptance of that offer at the lunch break on Thursday
did any person from Jacobsen inform Plaintiffs' counsel that the
offer had been withdrawn nor that the offer was contingent in any
fa.hion on the passage of time or the appearance of any particular
witn....
21. At no time between the conversation on Wednesday night
re-affirming the offer to settle the entire case for $95,000.00 and
4
Plaintiff.' acc.ptanc. ot that otter at the lunch break on
Thur.day, did Plaintitt'. coun.el decline or seek to vary the term.
ot Jacob.en'. otter. In tact, settlement was not discu.sed in any
fa.hion until plaintiff's counsel intormed Defendants of his
acceptance of the offer in preci.ely the term. .et out by Jacob.en.
20. At approximatelY 2:30 p.m. on November 16, 1995,
Mr. Lantz informed Plaintiff.' coun.el that Jacob.en wouleS not
honor plaintifts' acceptance ot Jacobsen's otfer of settlement for
$95,000.00.
21. The only reason given for Jacobsen's refusal to go
through with the accepteeS settlement was that the offer "haeS been
..eSe la.t night."
22. On Friday, November 17, 1995 prior to clo.ing argument.,
Plaintiff.' counsel, Terry S. Hyman, informed Mr. Lantz of hi.
intention to file an action to enforce what he considereeS to be a
valid .ettlement contract for $95,000.00.
23. Neither Mr. Lantz nor Jacobsen availed themselves of the
opportunity prior to the case going to verdict to avoid the lawsuit
by complying with the settlement terms.
24. Where a Defendant makes an otter of settlement which is
not witheSrawn nor limiteeS in the perioeS of time in which the offer
can be accepted, and plaintitfs accept the offer on preciselY the
term. proposed, a contract has been formed.
5
v.
IN THE COURT OF COMMON PLEAS or
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
ALFRED and MARY LU LAMBERT,
plaintiffs
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
NO.
CIVIL TERM
BREACH OF CONTRACT
NOTICE OF DEPOSITION
TOl Defendants The Jacobsen Division of Textron, Inc. and
Delano M. Lantz, Esquire
PLEASE TAKE NOTICE that pursuant to Rules of Civil proc.dure,
the Plaintiffs in the above matter will talce the deposition of
Def..'aat., Del~o K. Laatl, .squire, Pbilip '.uater aa4 Robert
.eule" ..quire. The individual shall appear for oral examination
for the purpose of di.covery and/or for use at trial, at the
offic.. of ANGINO , ROVNER, P.C., 4503 North Front street,
Harri.burq, pennsylvania, on February 14, 1996, beginning at
10100 a.1II. The Court Reporter/Notary Public will be an employee of
Hugh.., Albright, Foltz , Natale Reporting Service.
ANGINO ~ ROVNER, P.C.
,'"
~/.~ /~
Terry IV- It, Esquire
I.D. No. 36807
4503 North Front Street
Harrisburg, PA 17110
(717) 238-6791
Counsel for Plaintiff.
DATED: December 8, 1995
11!3lIIPJG
v.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
ALFRED and MARY LU LAMBERT,
Plaintiffs
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
NO.
CIVIL TERM
BREACH OF CONTRACT
.LA%~%"8' "OU.8~ ~R ADM%88%O.8 TO D...KDAMT8
plaintiffs request that Defendants admit, pursuant to the
provi.ion. of the Pennsylvania Rule. of Civil procedure, the
matter. ..t forth below.
The facts set forth below shall be deemed admitted unless
Defendant. .erve upon Plaintiffs a sworn answer or objection within
fortyfive (45) days after Defendants are served with this Request
for AcSlIIi..ions.
If objection is made to any fact whose admission is requested,
the reason for that objection shall be stated.
Each answer shall admit or deny the matter or set forth in
detail the reason(s) why an admission or denial cannot truthfully
be made.
A denial of any matter shall fairly meet the substance of the
requested admission.
When good faith requires Defendants to qualify their answer,
or to deny only a part of the matter of which an admission is
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'.
reque.ted, Defendants shall specify which part of the requ..t
.dmi..ion is truthful and qualify or deny the remainder.
Defendant. may not give lack of knowledge or information as a
rea.on for failure to admit or deny unless they state that they
have made reasonable inquiry and that the information known or
readily obtained to them is insufficient to enable them to admit or
deny the requested admission.
Defendants may not object to a requested admission on the
ground. that the request presents a genuine issue for trial.
Plaintiff., by their attorneys, Angino & Rovner, P.C., hereby
requellt that Defendants admit the following facts pursuant to
Rule 4014 of the Pennsylvania Rules of Civil Procedure I
1. Delano M. Lantz, Esquire, acted as Jacobsen's attorney in
the action of Lalllbert v. J&R Tractor Sales and The Jacobsen
JU,vi.ion of Textron. Inc., Cumberland County Court of Common Ple..,
civil Action No. 280 civil 1992.
2. Delano M. Lantz, EScluire, on November 15, 1995, at
approximately 9130 p.m., offered to settle the case for $95,000.00
provided that the settlement would "settle the whole case",
including both Mr. Lambert's action and any actions brought against
Jacobsen for contribution or indemnity by J&R Ford, Inc.
3. When discussing the settlement offer on the evening of
November 15, 1995, Mr. Lantz did not make any mention that the
offer was only open for any particular time period.
2
4. When ~i.cussing the settlement otfer on the evening ot
November 15, 1995, Mr. Lantz did not indicate the offer was open
only until a particular witness testified.
5. When discussing the settlement offer on the evening ot
November 15, 1995, Mr. Lantz did not state that the offer had to be
accepte~ the evening ot the 15th subject to with~rawal.
6. At no time between the evening of November 15, 1995 and
the end of the trial lunch break on November 16, 1995, did Mr.
Lantz inform plaintiffs' counsel that the offer to settle the
entire case for $95,000 had been withdrawn.
7. Plaintiffs' counsel intormed Mr. Lantz and Mr. Smucker
that the offer of $95,000 to settle the whole case was accepted at
during the trial lunch break on November 16, 1995.
8. At no time trom the end ot telephone conversation between
Mr. Lantz and plaintiff's counsel on the evening of November 15,
1995, up to Plaintifts' counsel's statement to Mr. Lantz and Mr.
Smucker during the lunch break on November 16, 1995 that plaintitts
accepted the settlement terms proposed by Jacobsen, did Mr. Lantz,
Mr. Smucker, or any person from Jacobsen, discuss the settlement or
its terms in any fashion with Plaintiff or his counsel.
3
9. At no time from 9:30 p.rn on November 15, 1995 until the
end of lunch break on November 16, 1995, did Defendant. inform
plaintitt. in any ta.hion that the offer would be or had been
withdrawn.
ANGINO , ROVNER, P.C.
~
~~.
1.0. o. 3
4503'Nort
Harrisburg A' 17110
(717) 238-6791
counsel tor plaintitt
DATED: November 29, 1995
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v.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 95-7019 CIVIL TERM
BREACH OF CONTRACT
ALFRED and MARY LU LAMBERT,
Plaintiffs
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
PLAINTIFFS' BRII' IN OPPOSITION
TO DI,mmAHTS' COUNTIR-STATIDIINT 0' Tal FACTS
ANGINO & ROVNER, P.C.
DATED I \.~:lCJ-~~
.
.
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TAIILI 01' CONTDTS
Table of Citations
IAU
iv
. . . . . . . . . . . . . . . . . . .
I . ITA'l'-1IW1ft' O. 'l'IIIl CUB
. 1
II . Q1JJISTIOHS PUSDTm)
A. ..... PLAINTI"S HAW PUSDTm) SUJ'I'ICIDT
I'AC'1'S IIY WHICH A I'AC'1'I'IHDIR COULl) CONCLunl
THAT A SIIT'1'LDIIINT AOUDIIINT WAS RDCJmD
lI."".a TIIII PUTUS, WHICH DII'DDANT DaIIS
OCCURS, IS TIIIIU ANY RDSON TO DIPRIW
PLAINTIFFS 01' TIIII RIOBT TO HAW TIIII MATTIR
Al)JUDICATID ON ITS MlRITS?
5-6
1. P.nn.ylvania law r.colJni...
'laintiff.' rilJht to .nforc. a
..tt1..-nt contract upon proof that
.utual alJr...-nt ... r.ach.d by the
parti...
2. UDd.r w.ll-..tabli.h.d law, a
..ttl_nt alJr...-nt con.~t.d
b.tween attorn.y. r.pr...ntinlJ
parti.. 1& enforc.abl. wh.th.r or
not the .attl_nt ha. b.en r.duc.d
to writinlJ or b..n _d. of r.cord
b.for. the Court.
3. N.ith.r the doctrin. of ..topp.l or
..rlJ.r of :ludlJll.nt ha. any
application to the fact. at bar nor
do.. it .xtinlJU1&h ,1aintUfa' rilJht
to .nforc. a valid ..ttl...nt
alJr._nt.
4. '.DD.ylvania law do.. not pr.clud. a
contract clai. for br.ach of a
..ttl..ent alJr._nt which ha. b..n
broulJht in pr.ci..ly the .... Court
a. the und.rlyinlJ litilJation lJivinlJ
ri.. to the ..ttl...nt alJr....nt.
i
II
,
~
~,
5.
If attQrDey. ~ep~e.enting the
pa~ti.. ~.ach a .utual .g~...ent on
th. t.~ of a ..ttl..ent, th.
..ttl...nt i. binding on thei~
client. .v.n if con.umaat.d by out-
of-cou~t o~al negotiation.. .., .
. t . . .
23
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TAIL. O. CITATIONS
,..... LAW
DlHl
BowAr v. Bower,
531 Pa. 54, 57, 611 A.2d 181, 182 (1992)
. , . . . , . .
. 6
Card v. Penn8vlvania,
83 Pa. cmwlth. 602, 478 A.2d 510 (1984)
. . . . . . .
17
con.tantino v. McCawlev,
23 D. & C. 3d 579 (Del. Co. 1982)
. . .
. . . . . . .
8, 10
curti v. OchodBki,
361 Pa. Super. 115, 521 A.2d 954 (1987)
. . . . . .
21
Danko v. State Farm Insurance Co.,
15 D. & C. 4d 615 (Fayette Co. 1992)
. . . . . . . .
15, 16
Green v. J.H. Lewis & Co.,
436 F.2d 389, 390 (3d Cir. 1970)
. . . I . . . . . . . .
11
Good v. Pennsylvania Railroad Co.,
384 F.2d 989 (3d Cir. 1967)
. . . . . . . . . . . . .
10
GraB. v. Penn Mutual Life Insurance ComDanv,
396 F.Supp. 373 (E.D. Pa. 1975) ....
. . .
8, 10, 11
Kazan~ian v. New Enaland Petroleum Corn.,
332 Pa. Super. 1, 480 A.2d 1153, 1158 (1984)
8, 10, 11
Limmer v. CountrY Belle Coocerative Farmers,
220 Pa. Super. 171, 286 A.2d 669 (1971)
. . . . .
. . . . 7
Main Line Theaters. Inc. v. Paramount Film
Distributina Core., 298 F.2d 801, 803
(3d Cir. 1962) . . . . . . . . . . . .
. . . . . 8, 10, 11
Marine Midland Realtv Credit Corn v.
LLMD of Michiaan. Inc., 821 F.Supp. 370,
373 (1993) . . I . . , . . . . . , . . . . . . . . . . . . 7
iv
,..,i~f:t!:~fj;~~-i,t~~\~r':"L~_~,:,?"",':;'-~tV""O';7,f'itf" :1~ft.:: r~f:~"',,;'1 ,l,,_.~.:
"
',-
.
...
Melnick v. Binenstock,
318 Pa. 533, 179 A. 77 (1935)
. . . . . . .
13, 14, 16, 21
puah v. SQoer Fresh Food Markets. Inc.,
640 F.Supp. 1306 (E.D. Pa. 1986) .
. . .
. . . . . . . .
10
Rudinaer v. Insurance Data ProcesBina. Inc.,
816 F. Supp. 371 (E.D. Pa. 1993) . . . .
I . I I
22
Bchulzendorf v. pittsburah & Lake Erie Railroad Co.,
340 Pa. super. 230, 489 A.2d 927 (1985) ... 13, 14, 16
Snrinaer v. Snrinaer,
255 Pa. super. 35, 386 A.2d 122 (1978) .
. . . . . . . .
23
Woodbridae v. Hall,
366 Pa. 46, 76 A.2d 205 (1950)
I I I .
. . . . . .
7, 10, 11
Zaaer v. Gubernick,
205 Pa. Super. 168, 208 A.2d 45 (1965)
. . . . . 8, 21, 23
Zitelli v. Dermatoloav Education and Research Foundation,
, 534 Pa. 360, 633 A.2d 134 (1993) . . . . . . . . . .
. .
17
8'1'A.'l'U'fII8
DO
Pa.R.C.P. 201,
. . . .
11, 12, 13
14 P.L.E. Estoppel 526
. . I .
17
v
"
I. CO~.-.TA.T-~ O. '!'1m cu.
As alleged in the Complaint, this case arises out of Defendant
Jacobsen's decision to renege on a settlement agreement which
Plaintiffs explicitly and properly accepted, but Defendants refused
to honor. The relevant facts are as follows:
Alfred and Mary Lu Lambert sued Defendants Jacobsen Division
of Textron, Inc. (hereinafter "Jacobsen") and J&R Ford for the
severe mutilation of his right hand in a lawn mower accident.
Plaintiffs and Defendant J&R reached a settlement prior to trial.
On the first day of trial, Jacobsen initiated settlement
negotiations which resulted ultimately in an offer by Jacobsen to
settle the case for $95,000 contingent upon three conditions:
(1) Plaintiffs accept the settlement; (2) Plaintiff's workers'
compensation carrier, who had a lien in excess of the offer, also
accept the settlement; and (3) Defendant J&R Ford waive any claim
for contribution for indemnity from Jacobsen.
On the third day of trial, Plaintiffs' counsel informed
Defendant the first two conditions had been met but that no
authority had been received from J&R to settle their indemnity
claim. plaintiffs therefore proposed that the parties settle
without J&R's participation in the settlement.
At 9: 00 p. m. on the evening of the third day of trial,
Attorney Lantz, with the apparent authority of his client, declined
Plaintiffs' offer of a more limited settlement, but again
84580/PJG
4,
explicitly made an offer to settle the case for $95,000 if the
settlement resolved all claims, including J&R's. Plaintiffs'
counsel made no further counteroffer nor did Plaintiffs decline it.
Mr. Lantz placed no further conditions on settlement, made no
mention that the offer would be withdrawn if not accepted within
any particular time period, nor upon the testimony of any
particular witness.
On the fourth day of trial, during the lunch break,
Plaintiffs' counsel informed Defendant that he accepted the offer
under the terms proposed on the night before, including settlement
of J&R's claims.
At approximately 2:30 p.m., Plaintiffs advised everyone that
Plaintiffs had accepted Defendant's offer of settlement in every
particular and as far Plaintiff was concerned the case was over.
This conversation took place in Judge Sheely's chambers in t.he
presence of Attorney Mark, Mr. Lantz and the Court. Therefore,
everyone was informed that Plaintiffs' counsel considered the case
to be settled and that no further proceedings were necessary.
At the Court's direction, Mr. Lantz was told to contact his
carrier to see whether further proceedings were necessary in the
morning. Mr. Lantz then informed both the Court and counsel that
his client had decided the case would have to go to the jury.
2
.
Judge Sheely then directed the parties to reappear for closing
argument the following morning.1
Having informed the Court and counsel of acceptance of
Defendant's offer and that Plaintiffs believed the matter was now
completed, plaintiffs believe they did inform everyone present,
including the Court, that a legitimate settlement agreement had
been reached as far as Plaintiffs were concerned.
On the morning of the fifth day of trial, immediately prior to
closings, Plaintiffs' counsel again informed Defendant that he
believed a binding settlement had been reached while offering
Defendant the opportunity to end the trial. Plaintiffs explicitly
informed Defendant of his intention to sue on the settlement
contract Drior to closings or the verdict. (Complaint, paragraph
22). Defendant responded by denying the agreement existed because
it had not been accepted on the night it was offered. Plaintiff
brought his intention to enforce the agreement through suit to
Jacobsen's attention before closings, precisely to avoid any
The facts regarding what occurred in Chambers are not
I
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pled in the Complaint, but only appear in Defendants' Brief in
Support of its Preliminary objections. plaintiff felt it necessary
to include its version in this Brief to be sure the Court
understands that a factual disDute does exist concerning whether
Plaintiffs made the settlement known to the Court. plaintiffs are
prepared to amend the Complaint if this is an issue, as well as
present testimony from Attorney Mark to corroborate Plaintiffs'
position.
3
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argument that Plaintiffs waited until after the verdict before
asserting the validity of the agreement.
Having gone through five days of trial and with defense
counsel fully aware of Plaintiffs' intention to enforce the
agreement through litigation, and having had the Defendant
unequivocally state the case had to go to the jury, Plaintiffs'
counsel saw minimal practical alternatives and no harm whatsoever
to Defendants in proceeding, as Deiendants demanded, with closings.
As promised, Plaintiffs immediately filed this action to
determine the validity of the settlement contract between the
Lamberts and Jacobsen.
Jacobsen has now filed Preliminary Objections in the form of
a Demurrer. The Preliminary Objections do not challenge the
formation of the settlement contract, but rather seek to prevent
any iudicial determination of the issue. Put another way, as it
must be assumed for the purposes of a Demurrer that the Lamberts
properly accepted Jacobsen's settlement offer, the only issue
before this Court is whether a party to litigation who, in good
faith, accepts a settlement offer, which the adverse party claims
it need not honor, has a right to have a Court determine whether
the settlement contract is valid.
According to Defendants, the issues of the validity of the
settlement agreement should not be reached on its merits.
According to Defendants no factual disputes need be examined to
4
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dispose of plaintiff's claim. While Plaintiffs' Brief will address
Jacobsen's arguments and their support, it must be noted at the
onset Defendant has not cited a single case which dismisses a
controversy over the validity of a settlement agreement in a
fashion which deprives the party of a hearing on the merits. No
case under any of the legal theories asserted by Defendant has, in
fact, granted the relief Defendant seeks in this case. For the
reasons argued below, that harsh result is not warranted in this
case.
II . OOllSTIONS PR.SKNTIID
A. ....U PLAIMTUPS RAn PR.SIINTIID SUPPICIIINT PACTS BY
nICK A PACTPIND.R COULD CONCLUDI THAT A SITTLDIIHT
MUIIIIHT WAS RDCRID BI'l'WI1N TRI PUTIIS, nICK
DIPIDU'lANT DINIIS OCCURS, IS TRIRI ANY RlASON TO
DIPRIn PLAINTIPPS OP TRI RIGHT TO RAn TRI MATTIR
ADJUDICATID ON ITS IIIRITS?
1. p.DD.ylvani. l.w i".aognb.. Plaintiff.' i"igbt to
.nfoi"a. . ..ttl...nt aonti".at upon pi"oof tbat
mutu.l .gi"....nt w.. i"..ah.d by the p.i"ti...
2. and.i" w.ll-..tabli.b.d l.w, . ..ttl...nt .gi".eaent
aon.~t.d b.tw..n .ttorn.y. i".pi"...nting p.i"ti..
i. .nfoi"a.abl. wh.th.i" Oi" not the ..ttl...nt baa
b..n i".dua.d to WZ'iting Oi" b..n _d. of i".aoi"d
b.foi". the COUi"t.
3. N.itb.i" the doati"in. of ..topp.l Oi" ..i"g.i" of
judgaant h.. .ny .pplia.tion to the f.at. .t b.i"
nOi" do.. it .xtingui.h Pl.intiff.' i"ight to .nfoi"a.
. v.lid ..ttl...nt .gi"....nt.
". p.DD.ylv.ni. l.w do.. not pi".alud. . aonti".at al.i.
fOi" bi"..ah of . ..ttl...nt .gi"....nt whiah h.. b..n
bi"ought in pi".ai..ly th. .... COUi"t .. th.
5
und.rlying litigation giving ri.. to the ..ttl...nt
.gr....nt.
5. If attorn.y. r.pr...nting the p.rti.. r..ch a
~tu.l .gr....nt on the t.~ of . ..ttl...nt, the
..ttl...nt ia binding on their cli.nt. .v.n if
con.u.aat.d by out-of-court or.l n.gotiation..
III. UGUJIIBI'I'
A. .... PLAINTIFFS HAW PR.SINTIID SUI'FICIDT FACTS BY
WHICK FACT FINDUS CAN CONCLUD. THAT A S.-rTLDmHT
AO..DIDT WAS RUCJmD B.TWJ:IIN TH. PUTI.S, WHICK
D.FDDAIIT DIDfI.S OCCURS, m.R. IS NO RUSON TO
D.PRIW PLAINTIFFS OF ~ RIOHT TO HAW ~ MATT.R
ADJUDlCATIID ON ITS DRITS.
1. P.nn.ylvani. law r.coQui... a cau.. of action
to .nforc. . contr.ct of ..ttl...nt.
Defendant's Preliminary Objections seek to dismiss Plaintiffs'
action in its entirety. Preliminary Objections, the end result of
which would be dismissal of a cause of action, should be sustained
only in cases that are clear and free from doubt. The test of
Preliminary Objections is whether it is free from doubt, from all
of the facts pleaded that the pleader will be unable to prove facts
legally sufficient to establish his right to relief. To determine
whether Preliminary Objections are proper, the Court must consider
as true all of the well-pleaded material facts set forth in the
Complaint and all reasonable inferences that can be drawn from the
facts. Bower v. Bower, 531 Pa. 54, 57, 611 A.2d 181, 182 (1992).
Pennsylvania law regards settlement agreements as contracts
between parties applying contract principles to their construction
6
and validity. Marine Midland Realtv Credit COrD. v. LLMD of
Michiaan. Inc., 821 F.Supp. 370, 373 (1993) (applying Pennsylvania
law) .
Pennsylvania has long recogni7.ed a cause of acticn to enforce
settlement agreements between parties during litigation. The Court
is first directed to Limmer v. Country Belle Coooerative Farmers,
220 Pa. Super. 171, 286 A.2d 669 (1971), which contains many facts
similar to the case at bar. In Limmer, the plaintiff claimed the
defendants had made an offer of settlement shortly before a
pretrial conference. The plaintiff proceeded through the pretrial
and jury selection, then accepted the offer. The defendants,
however, denied that any such offer of settlement was ever made
and, in addition, claimed the acceptance was "too late" because
Plaintiff's proceeded to trial despite the offer. The Limmer Court
held that a valid cause of action existed necessitating a full
evidentiary hearing to determine the merits of whether factually a
settlement contract existed. Relevant to Defendants' arguments,
the Limmer Court, citing Woodbridqe Y. Hall, 366 Pa. 46, 76 A.2d
205 (1950), held that oral settlements between opposing attorneys
are enforceable, even where no writing is present.
Under Pennsylvania law, the only prerequisite for a valid
settlement agreement is that the parties mutually consent to the
terms and conditions of the settlement. Where a settlement is made
conditional upon termination upon other related lawsuits, a party
7
may not repudiate thp. contract while negotiations are ongoing to
resolve the related litigation. Main Line Theaters. Inc. v.
Paramount Film Distributina Core., 298 F.2d 801, 803 (3d Cir.
1962) .
Under Pennsylvania agency law, parties represented by counsel
are bound by terms of a settlement orally agreed to by their
attorneys even if one of the parties has expressly tried to disavow
the settlement within a few days after the oral agreement was made.
A change of heart by one of the parties is not a valid basis to
invalidate contractual terms which have already been accepted by
the adverse party. Kazaniian v. New Enaland Petroleum CorD., 332
Pa. Super. 1, 480 A.2d 1153, 1158 (1984), accepting and citing
Gross v. Penn Mutual Life Insurance ComDanv, 396 F.Supp_ 373 (E.D.
Pa. 1975).
A plaintiff was permitted to bring an assumesit action to
enforce a settlement contract against an insurance company, where
the insurance carrier tries to withdraw the offer after acceptance
claiming the adjuster handling the claim had no authority to
consummate the deal. Zaaer v. Gubernick, 205 Pa. Super. 168, 208
A.2d 45 (1965). Likewise, an insurer can not renege on a
settlement where, it subsequently determines it has no coverage.
Constantino v. McCawlev, 23 D. & ~. 3d 579 (Del. Co. 1982).
Plaintiffs submit the above-cited cases are controlling. Each
of the cases recognize what appears, at least to this writer, to be
8
obvious: where an attorney from one party makes an offer which the
other party accepts, but the party then fails to perform, the
accepting party has a cause of action to enforce the contract. The
adverse party then has a right to contest the Plaintiffs'
allegation by denying the existence of the agreement or by any
other legal defense. A judicial determination is then made as to
who is right.
The Complaint in this case alleges an unwithdrawn offer which
was accepted, followed by a "change of heart" and a twice-repeated
refusal to perform. Defendant claims no agreement was reachod.
The controversy, then, should go to a fact-finder to determine the
validity of the settlement. A Demurrer is not warranted.
2. p.nn.y1v.ni. do.. not, .. . matt.r of law, r.quir.
that a ..tt1...nt .gr....nt b. in writing or mad.
in th. pr...nc. of th. Court to b. .nforc.ab1..
Defendant's argument that Pa.R.C.P. 201 invalidates any
settlement agreement which is not in writing is a startling one, to
say the least.
The customary practice in hundreds, if not
thousands, of settlements of personal injury litigation before the
Common pleas Court of Cumberland County is for two attorneys,
either during a pretrial or in a telephone call, to orally agree to
the terms of settlement. The settlement is almost always reached
without a writing at the time the lawyers reach agreement.
Witnesses are sent home and the matter deemed terminated. The
9
plaintiff will contact the Court Administrator to indicate a
settlement has been reached but the settlement is not made of
record. This is how settlements are done. This is how settlements
have always been done.
Yet, according to Defendant, such
settlements are not valid or enforceable because Pa. R. C. P. 201
requires a "writing" or that the settlement be made in open Court.
That has never been the law of Pennsylvania nor is it today.
An agreement to settle a law suit voluntarily
entered into, is binding upon the parties, whether or not
made in the nreBence of the court. even in the absence of
a writina.
Green v. J.H. Lewis & Co., 436 F.2d 389, 390 (3d Cir. 1970).
(Emphasis added.)
The above holding in Green has been uniformly and repeatedly
applied in both Federal and Pennsylvania Courts. ~, Constantino
v. McCawlev, 23 D. & c. 3d 579, 582 (Del. Co. 1982); puah v. Sueer
Fresh Food Markets. Inc., 640 F.Supp. 1306 (E.D. Pa. 1986); Main
Line Theaters. Inc. v. Paramount Film Distributina Comeanv, 298
F.2d 801, 803 (3d Cir. 1962). See also, Woodbridae v. Hall, 366
Pa. 46, 76 A.2d 205 (1950), and Good v. Pennsylvania Railroad Co.,
384 F.2d 989 (3d Cir. 1967) for the same proposition.
The Court is directed to Kazaniian v. New Enaland Petroleum
Core., 332 Pa. super. 1, 480 A.2d 1153 (1984), which resolves any
question as to the enforceability of an oral settlement between
attorneys under Pennsylvania law. The Kazaniian Court extensively
reviewed the law governing enforceability of oral contracts.
10
'I
Favorably citing Green, Gross, ~, Main Line, Woodbridae v. Hall,
as well as several other Pennsylvania cases, the Kazaniian Court
held that if the parties reach an oral agreement encompassing all
of the relevant terms, the contract is in fact enforceable. It is
only where one of the parties makes reduction of the agreement to
. writing, a condition of settlement that a writing is required.
Defendant has offered no evidence nor reason for this Court to
reach the conclusion that the settlement negotiations in this case
differed from those in any other personal injury suit. The
customary practice in virtually every personal injury settlement is
an oral agreement on the terms of settlement with a Release and
related document executed at a much later date. To say that a
writing at the time of acceptance was essential to Jacobsen is to
make a presumption outside the record.
At a minimum, under Kazaniian, Plaintiffs are entitled to a
hearing as to whether the parties intended a writing to be a
condition of settlement.
A Demurrer is inappropriate on this
ground as wel1.1
lThe cases cited by Defendant do not justify a different
conclusion. Pa.R.C.P. 201 by it own terms applies to the business
of the Courts. It has generally been construed as applying to
matters such as Stipulations between counsel, questions of
admissibility of evidence, agreements to vary from the rules of
discovery, and the like. ~, Goodrich-Amram 2d, ~201:1. In both
cases cited in Defendant's Brief, the use of Rule 201 was
incidental rather than controlling. In one case, the Court based
it decision on absence of consideration; in the other, the Court
invoked the Parole Evidence Rule, as well as Rule 201, in refusing
11
After all, Rule 201 applies to all civil cases in all courts.
To accept Defendant's argument that the Rule mandates a writing
would be to in effect impose a Statute of Frauds upon the
settlement agreements of every litigated case in Pennsylvania. If
a settlement is not valid until reduced to writing, then a
plaintiff or defendant who gets second thoughts about a settlement
after the pressures of imminent trial are relieved, can refuse to
execute the settlement release, forcing the parties back to trial.
surely, such an application of Rule 201 serves no useful purpose in
this Court or any other.
Attorneys know what they're doing when they make an offer and
when they accept it. A Statute of Frauds is not necessary for
officers of the Court dealing in good faith.
When Plaintiffs'
counsel accepted Mr. Lantz's offer, Mr. Lambert, his compensation
carrier, and J&R Ford stood ready, willing and able to execute any
Release embodying the terms of settlement. The only reason the
matter was not reduced to writing was Defendant's refusal to honor
the offer which it had freely and voluntarily made. It should not
be permitted to reap the benefits of its refusal by twisting an
to admit negotiation terms which were not encompassed in the actual
written agreement. To the degree ~he cases the stand for the
proposition advocated by Defendants, they are inconsistent with the
vast majority of cases and factually inapplicable to the case at
bar.
12
inapplicable Rule of Court into a requirement which would do far
more harm than good.
3. N.ith.r th. doctrin. of ..toppa1 or ..rgar of
judp.nt h.. any applic.tion to the f.ct. .t b.r
nor do.. it .xtingui.h p1.intiff.' right to .nforc.
. v.1id .att1...nt .gr....nt.
Just as Defendant attempts to mold Rule 201 into a Statute of
Frauds, Defendant tries to bend the doctrines of estoppel and
merger into an absolute bar to this litigation.
No Court has
applied either doctrine under facts similar to that at bar. No
Court has deprived a plaintiff of the right to have a question of
the validity of a settlement adjudicated on its merits.
Most of the cases cited by Defendant in support of its so.
called "merger" argument do not actually use the term "merger", nor
do they deal with the final effect of a judgment. To the contrary,
virtually every case cited by Jacobsen deals with the iurisdiction
of a Court to hear claims to modify or set aside a settlement
agreement which a different Equity or other Court has incorporated
into an actual Court Order.
The issue discussed in Melnick v. Binenstock, 318 Pa. 533, 179
A. 77 (1935), and its progeny as cited in Defendant's Brief on
pages 6-7, concerns which Court should hear a claim that a
settlement agreement incorporated in a Court's Order is for some
13
reason invalid or must be modified. They do not dismiss the claim
without providing some forum for its resolution.
Schulzendorf v. pittsburah & Lake Erie Railroad Co., 340 Pa.
super. 230, 489 A.2d 927 (1985), a case emphasized in Defendant's
Brief, provides the perfect example of this entire line of cases.
In Schulzendorf, the plaintiff brought an action in state court
claiming that his agreement to a settlement incorporated into an
Order of a Federal District Court was induced by fraud. Citing
Melnick v. Binenstock, among others, the Superior Court did not
dismiss the claim in a manner that precluded a hearing on the
merits, but rather stated explicitly that: "questions as to the
resolution of the suit must be referred to the Court in which
jurisdiction was originally vested by appellant's own choice." 489
A.2d at 929.
Indeed, the seminal case of Melnick v. Binenstock, 318 Pa.
533, 179 A. 77 (1935), itself reached precisely the same holding in
addressing a claim that a settlement outside of Court modified an
Equity Order. While dismissing an action brought in a different
forum, the Melnick Court nonetheless preserved plaintiff's right to
a hearing on the merits stating:
Equity does not lose its grasp on that subject-matter
even though an agreement of compromise or settlement
affected it. Where diSDutes~rise as to the comeromise.
th~t court by. !~titioD~r o~~~~!... must intereret it
ang o~der what shall be done.
Melnick at 318 Pa. 537. (Emphasis added.)
14
Danko v. State Farm Insurance Co., 15 D. & C. 4d 615 (Fayette
Co. 1992), likewise involves a suit brought in Fayette county
alleging that a settlement reached in a case adjudicated in
Washington County Common Pleas was induced by fraud. The Court
once again applied Melnick solely for the proposition that the
question of fraud should be dealt with by the Court which
originally issued the order.
Consequently, the Fayette County
Court issued an Order reading as follows:
It is ordered and directed that the preliminary
objections of defendants are granted in this case, at
No. 1253 of 1990, G.D. Fayette County, pennsylvania be
transferred to the civil docket of the Washington county
Court of Common Pleas for proper disposition.
Danko, at 622-623. (Emphasis added.)
While plaintiff will not go through all the cases cited in
Defendant's so-called merger argument, what is crucial to the case
at bar is that none of the cases cited by Defendant actually
dismissed the underlying claim or precluded a resolution on the
merits.
Plaintiffs, therefore, are at a loss to understand how these
cases lead to the remedy sought by Jacobsen. First, plaintiffs are
not changing Courts. The original action was brought in Cumberland
county Common Pleas; so is the instant action. If plaintiffs are
challenging the Order, then plaintiffs appear to be in the proper
venue. Relying on the cases cited by Defendant himself, it appears
this Court has both the right and the duty to determine if a valid
15
settlement was reached between the parties. Melnick, Schulzendorf,
and Danko, if they apply to the case at bar at all, support a
hearing on the merits, rather than bar it.
At the heart of Defendant's argument is not the doctrine of
merger but Defendant's contention that Plaintiffs should be
precluded, as a matter of law, from asserting Defendant's refusal
to perform the settlement agreement because plaintiffs did not
demand a hearing on the validity of the agreement prior to closing
arguments and verdict. According to Defendant, even though
plaintiffs reasserted the existence of the agreement and their
intention to sue thereunder to defense counsel immediately before
closing and were told the case had to go to the jury, Plaintiffs
are estopped from this suit, or any other similar action, because
they did not stop the trial in its tracks and demand an immediate
hearing on the existence of a settlement.
Unfortunately, Defendant has no law supporting this
proposition. Neither the cases cited under its merger argument nor
those under estoppel impose a duty upon plaintiffs to stop all
proceedings on the underlying case after Defendant has continuously
refused to honor the settlement agreement, at the risk of losing
the benefits of. the agreement in their entirety. such a
proposition is not consistent with the principles of estoppel nor,
with the practical realities of litigation.
16
The doctrine of estoppel or waiver-estoppel has more than one
element. It is not merely acting in consistent with one's asserted
position that gives rise to estoppel, but it is axiomatic that a
finding of estoppel must always be predicated on some detrimental
reliance by the person asserting the doctrine. Card v.
Pennsvlvania, 83 Pa. Cmwlth. 602, 478 A.2d 510 (1984). The two
essential elements of estoppel are inducement and reliance.
Zitelli v. Dermatoloav Education and Research Foundation, 534 Pa.
360, 633 A.2d 134 (1993). There must an actual, detrimental change
of position based on one party's conduct before estoppel arises.
Put simply, Jacobson must show some harm to it from Plaintiffs'
alleged inconsistent conduct in order to assert estoppel as bar to
suit.
Moreover, where there is an attempt to apply the doctrine of
equitable estoppel, it is essential that the party in whose favor
the doctrine is invoked must himself act in good faith. "Under the
equitable principle that one cannot erofit from his own
wronadoina," a wrongdoer cannot invoke an estoppel. 14 P. L. E.
Estoppel 526. (Emphasis added).
For the purposes of the instant Motion, the Court must assume
Defendant wronafullv refused to consummate a valid agreement.
Consequently, it is Defendant's own wrongful failure to follow
through on negotiations in which Plaintiffs had acted entirely in
17
good faith, that in turn created the situation of which Jacobsen
now complains.
Further, Defendant clearly made no detrimental change in its
position based on the fact that Plaintiff did exactly what
Defendant requested, namely submit the case to the jury.
Defendant, both before and after the verdict, asserted no
settlement was reached. Therefore, JacoDsen did not change its
position in any fashion based on the plaintiffs' actions in face of
the refusal to settle. Certainly, Defendant is not now claiming it
would have honored the settlement had Plaintiffs somehow raised it
before the Court rather than just to defense counsel prior to the
verdict. If anyone is subject to estoppel it ought to be
Defendant.
Further, to accept Defendant's position is to ignore the
practical reality of the situation Defendant created. Defendant's
refusal, after two requests, to honor the agreement placed
plaintiffs' counsel in an untenable position. The case was four
days old and ready for closing. All of the witnesses and expenses
for the trial were completed at the time Defendant refused to honor
its obligations.
At that point, what alternative did Plaintiffs really have.
If, as Defendants assert, Plaintiffs should have requested an
immediate resolution of the validity of the settlement, under well-
established law Judge sheely would have been required to hold an
18
evidentiary hearing on the entirely separate issue of the contract
between the parties and the facts surrounding the alleged offer and
acceptance.
As the settlement involves $95,000, the parties could hardly
take it lightly. At a minimum the very attorneys who were trying
the tort case would be the major witnesses. Jacobsen's liaison
person, who was in another state, might well be needed as a witness
since he was the one who told Mr. Lantz not to go through with the
deal. Presumably he would be the only one with first-hand
knowledge of the reason for that decision.
A proper evidentiary hearing involves direct and cross-
examination of the attorney witnesses, who would likely require
other attorneys from their firm to represent them in order to ask
the questions and conduct cross. Further, the Court would likely
want legal briefs regarding the law of offer and acceptance in
order to resolve the dispute.
What, then, would be done with the tort jury if this hearing
was conducted prior to verdict? After all, if the Court found no
valid settlement agreement had been reached, the case would still
have to be tried. would the jury who had heard a week of evidence
have to sit around until the entire evidentiary hearing conducted
and a decision reached, or would the jury be discharged and the
case have to be retried in its entirety. How does the rule urged
by Defendant that the hearing be held immediately possibly help the
19
judicial system? Conversely, what h.rm did letting the jury decide
the case and go home cause Defendant?
If the agreement is valid, then Defendant owes plaintiffS
$95,000 whether or not the agreement is enforced before the verdict
or after it. If the agreement is not valid, then Jacobsen as well
as plaintiffS are bound by the jury's verdict. How does letting
the jury decide the case before having a hearing on the merits make
any difference to Jacobsen? Defendant is in no different position
today then it was on the day it chose not to honor its offer.
Defendant seems to forget that the decision to go to the jury was
made by Jacobsen, not by plaintiffs. plaintiffs stood ready to
stop the proceedings upon acknowledgment that Defendants would
honor their obligation. How can plaintiffs, then, be estopped from
asserting the agreement simply because they did exactly what
Defendants forced them to do? How can Jacobsen bar plaintiffs'
claim on conduct which caused Defendant no harm or prejudice?
Defendant's position is without support in the law or in equity.
... p.nn.y1vani. 1.w do.. not pr.c1ud. . contr.ct cl.im
for br.ach of . ..tt1...nt .gr....nt which h.. b..n
brought in pr.ci..1y the .... Court .. th.
und.r1ying litigation giving ri.. to th. ..ttl...nt
.gr....nt.
Unfortunately, after reviewing the case law, the issue of
whether plaintiffs can bring a separate contract cause of action at
law to enforce the settlement agreement is not clear under
20
Pennsylvania law. While most of the cases cited in both Briefs
involved Petitions to Enforce Settlement Agreements which are
actions under the equity powers of the Court, a few cases seem to
have permitted at law contract claims. In Curti v. Ochodski, 361
Pa. Super. 115, 521 A.2d 954 (1987), the plaintiff attempted to
invoke the contempt equity powers of the Court to enforce a
settlement agreement. The defendant, on appeal, claimed the trial
court erred in assuming equity jurisdiction when there was an
adequate remedy at law. In reversing, the superior Court held that
a consent decree is not a legal determination of the Court but "a
contract binding to the parties thereto to the terms thereof".
Consequently, where the trial judge had no familiarity with the
settlement agreement, the plaintiff's remedy was not an action in
contempt but rather "a proceeding under agreement". Curti at 521
A.2d 995. Curti, then, can be interpreted as holding that action
at law rather than equitable proceedings is the proper format for
breach of a settlement agreement.
similarly, as mentioned above, Zaaer v. Gubernick, 205 Pa.
super. 168, 208 A.2d 45 (1965), permitted an assumpsit action
against an insurance company for breach of a personal injury
settlement agreement.
Melnick v. Binenstock, 318 Pa. 533, 537, 179 A. 77 (1935),
held the action to resolve questions related to settlement offers
21
could be brought by "Petition or otherwise", thereby suggesting
actions other than a Petition are permissible.
Finally, in Rudinaer v. Insurance Data Processina. Inc., 816
F. Supp. 371 (E.D. Pa. 1993), the plaintiff asked the trial court
to exercise jurisdiction over a motion to enforce a settlement
reached in a case which had been originally tried before that
Court. The trial judge first found that his jurisdiction over a
settlement reached in the underlying case was present only if the
Court intended to retain such jurisdiction. Holding that the Court
had no such intention, the Court declared plaintiff "may file a
separate diversity action for breach of contract and Droceed from
there." Rudinaer at 816 F. Supp. 373. (Emphasis added.)
On the other hand, Plaintiffs must concede that most of the
cases cited in both parties' Briefs involve Petitions to Enforce a
Judgment brought under the caption of the underlying tort case.
Therefore, to avoid any difficulties in this regard, Plaintiffs
have, concurrent with filing this Brief, filed a separate Petition
ann Rule under the original caption, which duplicates the
allegations of the instant complaint. Should Your Honorable Court
decide that the only basis for jurisdiction is under the Court's
equity powers, rather than in an action at law the matter may
proceed under the Petition. However, as the allegations of the
Petition and Complaint are the same, it would appear to be in both
the Court's and the parties' interests to resolve Defendant's
22
claims arising out of merger, estoppel, and the lack of a writing
at this juncture, no matter which caption is used for the case.
5. If .ttorn.y. r.pr..anting tha partia. ra.ch a
mutual .gr....nt on tha t.rm. of . ..tt1..ant, the
.att1...nt i. binding on th.ir cliant. avan if
con.ummat.d by out-of-court or.1 n.goti.tion..
To briefly respond to Defendant's claim that the out-of-court
conversations of attorneys cannot bind their principals, the Court
is directed to Sprinaer v. SDrinaer, 255 Pa. Super. 35, 386 A.2d
122 (1978). In Serinaer, Preliminary Objections were filed by the
Defendant asserting that the oral agreement made by his attorney
was without the principal's authority. Finding that the Complaint
explicitly alleged the attorney had the authority to consummate the
agreement, the Court rejected any such argument contrary to the
pleading as without merit.
In the case at bar, Plaintiffs have averred that Mr. Lantz had
the authority or apparent authcrity to settle the case on the terms
which Plaintiff accepted.
If those facts are believed, then,
Defendants
are
bound by the
representations
of
their
representative.
If, on the other hand, Mr. Lantz did not have such authority,
then Plaintiffs may still proceed under the doctrine of apparent
authority.
~, Zaaer v. Gubernick, SUDra.
Mr. Lantz may be
23
.
personally liable for actions exceeding the authority granted by
his client.
ANGINO & ROVNER, P.C.
~-
er . . , Es~ire
I . No.3
4503 North Front Street
Harrisburg PA 17110
(717) 238-6791
Counsel for Plaintiff
DATED: \- ~~-~~
'I
24
, . .
.
. . ,
CERTIFICATE OF SERVICE
AND NOW, this '!{:J.{A, day of January, 1996, I, Pamela J.
Gillespie, an employee of Angino & Rovner, P.C., do hereby certify
that I have caused to be served a true and correct copy of the
PLAINTIFFS' BRIEF IN OPPOSITION TO DEFENDANTS' COUNTER-STATEMENT OF
THE FACTS by hand delivery, at Harrisburg, Pennsylvania, addressed
as follows:
Delano M. Lantz, Esquire
McNEES, WALLACE & NURICK
100 Pine Street
P.O. Box 1166
Harrisburg, PA 17108-1166
~ .
~ CJ a ~9.
pame a J ~es~ "~
"
I"
~~
21
i.
.~
(,J
McNElIS, WALLACE llo NURlCK
100 riNK aTRElItT
P. O. .0. II..
H....UU..UftO. I'A 1710.
..
v.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 95-7019 CIVIL TERM
ALFRED and MARY LU LAMBERT,
Plaintiffs
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
IIULDlINARY a.JIlCTIONS TO PLAIHTIP.S' COMPLAINT
Defendants, the Jacobsen Division of Textron, Inc.
("Textron") and Delano M. Lantz, Esquire ("Lantz"), by and
through their undersigned attorneys, McNees, Wallace & Nurick,
preliminarily object to Plaintiffs' complaint as follows:
I . DEMURRER:
1. Plaintiffs aver in their Complaint that a products
liability action was brought by Plaintiffs against Defendant
Jacobsen Division of Textron, Inc. in this Court to No. 280 Civil
1992 and then go on to aver as follows:
(a) Th~t Defendant Lantz represented Textron in
the products liability litigation;
(b) That the trial of the case commenced on
November 13, 1995 in this Court;
(c) That Defendant Lantz, on Wednesday evening,
November 15, 1995 at 9:30 p.m., with the apparent au-
thority of Jacobsen, reasserted and confirmed Jacob-
sen's offer to settle the case for $95,000 if it would
settle the entire matter;
(d) That no discussion whatsoever regarding
settlement occurred the following day until 1:00 p.m.
on November 16, 1995 when plaintiffs' counsel stated to
Defendant Lantz that the Lamberts "accepted the $95,000
offer'" ;
(e) That at approximately 2:30 p.m. on November
16, 1995, Mr. Lantz informed Defendants' counsel that
Jacobsen would not honor Plaintiffs' acceptance of
Jacobsen's offer because the offer "had been made last
night"; and
(f) That prior to closing arguments on Friday,
November 17, 1995, plaintiffs' counsel advised Defen-
dant Lantz of his intention to file an action to
enforce what he considered to be a valid settlement
contract for $95,000.
2. Although referring to the closing arguments on November
17, 1995 (Complaint, p. 22), the Complaint does not set forth the
results of the jury trial. This Court's records show that the
, The averments in the Complaint must be taken as true for
purposes of a demurrer. However, if this matter must be pursued,
Defendants will establish that Textron's offer was rejected by
Plaintiffs, and no offer existed as of 1:00 p.m. on November 16,
1995.
- 2 -
jury returned a verdict (after 30 minutes of deliberation) on
Friday, November 17, 1995, finding that the product was not
defective, thereby exonerating Defendants of any liability
whatsoever to Plaintiffs. No post-trial motions were filed and,
as reflected in the records of this Court, judgment was entered
on the verdict on December 5, 1995.
3. The present action for breach of contract to settle the
underlying case based upon oral conversations between counsel and
which is brought after judgment has been entered in the under-
lying action is legally insufficient for several reasons. These
reasons are as follows:
A. Alleged off The Record Oral Agreements of Counsel
Relating To Settlement of Pending Litigation
Are Unenforceable.
Pa. R. civ. P. 201 provides:
Agreements of attorneys relating to the business of the
court shall be in writing, except such agreements at
bar as are noted by the prothonotary upon the minutes
or by the stenographer on his notes.
Pa. R. Civ. P. 201. Under this rule alleged oral settlement
agreements between counsel are not enforceable. commonwealth
Deeartment of TraI1SDortation v. Kruee, 66 Pa. Commw. 397, 399,
444 A.2d 841 (1982) (oral settlement agreement between counsel
regarding a license suspension not binding on DOT); Albriaht v.
R.J. ReYnolds Tobacco Co., 350 F. Supp. 341, 348 (W.D. Pa. 1972)
(off the record understanding of a term of a settlement not
- 3 -
enforceable in part because of Pa. R. Civ. P. 201). For this
reason alone, Plaintiff's Complaint fails to state a cause of
action since it seeks to enforce an alleged oral agreement
between counsel that is not alleged to be in writing and is not
alleged to be on the record. Therefore, as a matter of law it is
unenforceable pursuant to Rule 201 of the Pennsylvania Rules of
Civil Procedure.
B. Plaintiffs' Cause Of Action Is Barred By The Doc-
trine Of Meraer.
This Court may take judicial notice, and there can be no
dispute, of the fact that the jury returned a verdict in favor of
the Defendants in the action to No. 280 Civil 1992 and that
judgment was entered on the verdict on December 5, 1995. The
merger doctrine precludes Plaintiffs' present cause of action.
As stated in Pennsvlvania Law EncvcloDedia:
Under the doctrine of merger, a claim or demand which
is the subject of litigation is merged into the judg-
ment, and the judgment then evidences a new obligation.
The claim or demand in its original form is at an end
and cannot again be the subject of litigation, but in
its new form as a judgment it may be enforced by
judicial process, and it can be pleaded only in its new
form. Those principles have been applied to preclude
an action on an agreement compromising an action in
equity when the final decree was subsequently
entered....
20A Pennsvlvania Law Encvcloeedia, Judgments 5228, p. 119.
As stated in Lance v. Mann, 360 Pa. 26, 60 A.2d 35 (1948) I
- 4 -
It is elementary that judgment settles everything
involved in the right to recover, not only all matters
that were raised, but those which might have been
raised: [citations omitted] The cause of action is
merged in the judgment which then evidences a new
obligation.
360 Pa. at 28; DUQUesne Liaht Co. v. Pittsburah Railwavs Co., 413
Pa. 1, 5, 194 A.2d 319 (1963) (final determination by a court of
competent jurisdiction settles not only the defenses actually
raised, but also those which might have been raised") .
plaintiffs' contention that a settlement had been reached in
the underlying litigation on Thursday, November 16, 1995 is a
matter that not only "might have been raised" in the action to
No. 280 Civil 1992, but which was reauired to be raised in that
action. As stated in Melnick v. Binenstock, 318 Pa. 533, 179 A.
77 (1935) I
where the right of one of the parties to such an agree-
ment compromising pending litigation is contested, the
true interpretation of the agreement should be found by
the court in which the litigation was pending or if in
equity within the terms of the decree entered in accor-
dance with the compromise. A party seeking to enforce
an agreement compromising pending litigation is not at
liberty to institute in any court any action he sees
fit; especially is this true as here where the agree-
ment has been in part performed. A compromise or
settlement of litigation is always referable to the
action or proceeding in the court where the compromise
was effected. It is through that court that carrying
out of the agreement should thereafter be controlled.
Otherwise, the compromise, instead of being an aid to
litigation would be only productive of litigation as a
separate and additional impetus.
318 Pa. at 536. Accord: Lance v. Mann, 360 Pa. 26, 60 A.2d 35
(1948) (separate petition relating to matter that was subject of
- 5 -
earlier judgment dismissed); Duauesne Liaht Co. v. Pittsburah
Railwavs Co., 413 Pa. ~, ~94 A.2d 319 (1963) (petition to open
judgment improper where earlier ruling of arbitrators was final);
Get Set Oraanization v. Philadelehia Federation of Teachers, 446
Pa. 174, 182, 286 A.2d 633 (1971) (matters dealing with
settlement of litigation referable to the matter where the
settlement was made); Advanced Manaaement Research. Inc. v. ~
Emanuel, 439 Pa. 385, 266 A.2d 673 (1970) (court retains juris-
diction over agreement compromising pending litigation even
though case had been marked settled, discontinued and ended) ,
citing Melnick, suera; Schulzendorf v. Pittsburah & Lake Erie
Railroad Co., 340 Pa. Super. 230, 489 A.2d 927 (1985) (prelim-
inary objections challenging the jurisdiction of the court below
properly sustained where later state court action alleged that
fraud was involved in the settlement of a federal court action;
appellant's argument that the settlement was a contract separate
and apart from the original cause of action and subject to attack
in trespass for fraud dismissed); Bronstein Estate (No.2), 31
Pa. D. & C.2d 664 (C.P. Phila. 1963) (issue whether settlement
had been breached to be determined by the Orphans' Court where
the action was pending); Danko v. State Farm Ins. Co., 15 Pa. D.
& C.4th 615 (C.P. Fayette 1992) (new action claiming fraud in
connection with settlement of earlier litigation improper; issues
must be raised in the original action); Limmer v. Countrv Bell
- 6 -
CooDerative Farmers, 220 Pa. Super. 171, 286 A.2d 669 (1971)
(proper procedure where party alleges a settlement has been
reached is for the court, upon motion of the party seeking to
prove the setlement, to hold a hearing in the pending action to
determine whether in fact a binding compromise and settlement was
reached and whether any such alleged agreement should be en-
forced); Zlotziver v. Zlotziver, 169 Pa. Super. 588, 592-93, 83
A.2d 429 (1951) (a plaintiff cannot go behind a decree entered in
a prior action and introduce new matter and have the suit revived
and the investigation renewed) .
Under the above principles, the alleged settlement was a
matter that could have and should have been raised in the action
to No. 280 Civil 1992. Therefore, the present action is preclud-
ed by the Doctrine of Merger.
C. Plaintiffs' Claim Is Barred By principles Of
~BtoDDel And Waiver.
Under the above authorities, if Plaintiffs indeed believed a
settlement was reached prior to closing argument in the under-
lying action, then Plaintiffs had a duty to bring the matter
before the Court for a hearing on the issue. Further, if in fact
the case had been settled, there was no case left to present to
the jury. If a controversy is settled, then the cause of action
is extinguished and all that is left is the settlement. Melnick
v. Binenstock, sUDra, 318 Pa. 533, 536, 179 A. 77 (1935).
- 7 -
Instead of pursuing the claimed settlement, Plaintiffs' counsel
went forward with closing arguments (Complaint, p. 22) and
permitted the case to go to jury verdict and the entry of judg-
ment. By so doing, Plaintiffs waived any right to claim a
settlement occurred and are now estoppped from pursuing this
action.
As stated in 28 Am. Jur.2d EstoeDel and Waiver:
The rule that a party will not be allowed to maintain
inconsistent poeitions is applied in respect to posi-
tions in judicial actions and proceedings. As thus
applied, it may be regarded not strictly as a question
of estoppel, but as a matter in the nature of a eosi-
tive rule of eroci8;du;e ~;;~d on manifest iustice and.
t~~ g!!!!t~!: Q!: _ Beer ge~!:;e. on considerations of
orderliness. regui;;itv ~nd excedition in litiaa-
t.1gn. . . .
The rule against inconsistent positions applies
generally to positions assumed not only in the course
of the same action or proceeding, but also in proceed-
ings supplemental thereto .,. and even in separate
actions or proceedings involving the same parties and
questions.
28 Am. Jur.2d, EstoeDel and Waiver, 569 at p. 696-98 (emphasis
added). Accord: Danko v. State Farm Ins. Co., 15 Pa. D. & C.4th
615 (C.P. Fayette 1992) (plaintiffs not allowed to collaterally
attack jurisdiction of court in another action brought by plain-
tiffs) .
Under the above principle, Plaintiffs are estopped from
bringing this action.
- 8 -
D. As A Matter Of Law, Mr. Lantz, As Attorney For
Jacobsen, Lacked Authority To Bind Textron To A
Settlement By Verbal Discussions with counsel That
Were Not On The Record Or In Writina.
An attorney does not have the authority as a matter of law
to bind his client to a settlement by off the record discussions
with opposing counsel.
senvshvn v. Karlak, 450 Pa. 535, 540-41,
299 A.2d 294 (1973) (an attorney does not have apparent authority
to settle litigation); school District of philadelehia v. Fram1au
COrD., 15 Pa. Commw. 621, 328 A.2d 866 (1974); Lodowski v.
O'Malley, 227 Pa. Super. 568, 307 A.2d 439 (1973). The complaint
bases the allleged settlement on oral, off the record discussions
with counsel. Therefore the complaint is deficient and fails to
state a cause of action.
E. The Allegations Of The Complaint, As A Matter Of
Law Do Not Constitute A compromise And Settlement,
But At Most constitute preliminarv NeaotiationBo
Informal discussions of counsel that are off the record and
not ratified on the record or in writing do not constitute a
settlement. OnYX oils & Resins. Inc. v. MosS, 367 Pa. 416, 420-
21, 80 A.2d 815 (1951) (IIWe cannot enforce a portion of an agree-
ment which failed to materialize .. ."). The facts alleged in the
complaint could be construed, at most, as an accord which has no
binding effect until a settlement agreement is executed. 1
P.L.E. Accords and Comeromises, ~1, pp. 40-42; Nash v. Atlantic
White Tower Svstem. Inc., 404 Pa. 83, 89-90, 170 A.2d 341 (1961)
- 9 -
not have jurisdiction in the present action to consider those
issues.
WHEREFORE, the Complaint should be dismissed for lack of
subject matter jurisdiction, any such jurisdiction being in the
action docketed to No. 280 Civil 1992.
III. FAILURE OF THE PLEADING TO CONFORM TO LAW OR
R~EOFCOURT
7. Paragraphs 1 through 6 are incorporated herein by
reference.
8. As set forth above, the Complaint in this matter does
not conform to law or rule of court in the following respects:
(a) Under the authority set forth above, the
claim that a settlement was reached in the action filed
to No. 280 Civil 1992 must be raised in that action and
not in a new action; and
(b) The Complaint violates Rule 201 which re-
quires that agreements between attorneys bp. in writing
or made on the record before the court.
WHEREFORE, the Complaint should be dismissed for lack of
conformity to law or rule of court and for the inclusion of
scandalous or impertinent matter.
- 11 -
.
IV. MISJOINDER OF A CAUSE OF ACTION
9. Paragraphs 1 through 8 are incorporated herein by
reference.
10. As set forth above, the claim of an alleged settlement
of the action to No. 280 Civil 1992 must be raised in that action
and not in a new action. The Complaint, therefore, has misjoined
a cause of action by attempting to bring a new action to the
present term and number.
WHEREFORE, the Complaint should be dismissed for misjoinder
of a cause of action.
V. PENDENCY OF A PRIOR ACTION
11. Paragraphs 1 through 10 are incorporated herein by
reference.
12. As set forth in the Complaint, a prior action was
brought to No. 280 Civil 1992.
13. As set forth above, any matters pertaining to an
alleged settlement of that action must be brought in that action.
14. Even though the prior action has been reduced to
judgment pursuant to the verdict of the jury, the said action
constitutes a prior action which precludes the prese,nt action.
- 12 -
WHEREFORE, the Con~laint should be dismissed due to pendency
of a prior action.
Respectfully submitted,
McNEES,
17108-1166
Attorneys for Defendants
Dated: January .J, 1996
- 13 -
.
.
.
CERTIFICATE OF SERVICE
I hereby certify that on this date a true and correct copy
of the foregoing document was served by first-class mail, postage
prepaid, upon the following:
Terry S. Hyman, Esquire
ANGINO & ROVNER, P,C.
4503 North Front Street
Harrisburg, PA 17110
Timothy I. Mark, Esquire
CALDWELL & KEARNS
3631 North Front Street
Harrisburg, PA 17110
Dated:
January 3, 1996
.
. ~.. -. . .
".":,r~t;,::",:,,~<4.':t-' ,'-' c."
c~
JAN 1 9 1996 ~
.
'"
ALFRED and MARY LU LAMBERT,
plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 95-7019 CIVIL TERM
v.
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
DI'IHDANTS' BRII' IN SUPPORT 0'
PRILllllNARY OBJlC'l'IONS TO
PLAINTlrrS' COMPLAINT
Harvey Freedenberg
J.D. No. 23152
Delano M. Lantz
J.D. No. 21401
Debra P. Fourlas
J.D. No. 62047
McNEES, WALLACE & NURICK
100 Pine Street
P. O. Box 1166
Harrisburg, PA 17108-1166
(717) 232-8000
Attorneys for Defendants
Dated: January 19, 1996
Tun 01' CONTmn'S
lAD
Table of Citations .... I . . . . . . . I . . . . . . . . . I . . I . I . . . . . . . . . . ., i
Questions Presented ....................................... 1
Statement of Facts ...... I . . , . . . . . . , . . . . . I . . . . . . . . I . . . . . . .. 2
Discussion .. I . . I . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . I . . . . . . . . . .. 3
A. AN ACTION FOR BREACH OF CONTRACT TO SETTLE AN
EARLIER ACTION, BASED UPON ALLEGED ORAL
CONVERSATIONS BETWEEN COUNSEL, WHICH IS
BROUGHT AFTER JUDGMENT HAS BEEN ENTERED IN
THE EARLIER CASE, FAILS AS A MATTER OF LAW TO
STATE A CLAIM UPON WHICH RELIEF CAN BE
GRANTED.... I'" I....... I........... I............ 4
1. The Doctrine of Merger Bars A Separate
Action Alleging Settlement of a Prior
Action. . . I . . . . . . . I . . . . . . . . . . .. . . . . . . . . . . . . . 4
2. As a Matter of Law, An Attorney Lacks
Authority To Enter Into A Binding
Settlement By Verbal Discussions With
Opposing counsel Which Are Not On The
Record. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. Alleged Off The Record Oral Agreements of
Counsel Relating To Settlement of Pending
Litigation Are Unenforceable............... 8
B. THE COURT LACKS SUBJECT MATTER JURISDICTION
TO HEAR, IN A SEPARATE ACTION, A CLAIM THAT
THERE WAS A SETTLEMENT IN A PRIOR ACTION....... 10
C. THE FACTS ALLEGED IN THE COMPLAINT FAIL TO
STATE THE BASIS FOR AN ENFORCEABLE SETTLEMENT
AGREEMENT, BUT INSTEAD ALLEGE A MERE ACCORD
THAT IS NOT ENFORCEABLE................ ........ 11
D. PLAINTIFFS HAVE WAIVED ANY ARGUMENT THAT THERE
WAS A SETTLEMENT SO THAT THEY ARE NOW JUDICIALLY
ESTOPPED FROM ASSERTING SUCH A CLAIM........... 12
".aal.)
6
9
7
9
7,13
5,6
6
4
5,6
6 ,.
8
5,6,13
12
11
8
IfUL. o. eI'l'Alflmr8
e....
Advan~ed Manaaement Research. Inc. v. Emanuel,
439 Pa. 385, 266 A.2d 673 (1970)
Albriaht v. R.J. Revnolds Tobacco Co., 350 F.
SUpp. 341 (W.O. Pa. 1972)
Bron.tein SBtate (No. 21,310. & C.2d 664 (C.P.
Phila. 1963)
Commonwealth. D~D't of TranSD. v. Kr~DD, 66 Pa.
Commw. 397, 444 A.2d 841 (1982)
Qanko v. State Farm Ins. Co., 15 D. & C.4th 615
(C.P. Fayette 1992)
DuQUesne Liaht Co. v. Pittsburah Rvs. Co., 413
Pa. 1, 194 A.2d 319 (1963)
Get Set Ora. v. Philade19hia Fed'n of Tea~hers,
446 Pa. 174, 286 A.2d 633 (1971)
Gulentz v. Schanno TransD.. Inc., 355 Pa. Super. 302,
513 A.2d 440 (1986)
Lance v. Mann, 360 Pa. 26, 60 A.2d 35 (1948)
Limmer v. CountrY Bell COOD. Farmers, 220
Pa. Super. 171, 286 A.2d 669 (1971)
Lodow.ki v. O'Mallev, 227 Pa, Super. 568, 307 A.2d
439 (1973)
Melnick v. Binenstock, 318 Pa. 533, 179 A. 77
(1935)
Nash v. Atlantic White Tower SVB.. Inc., 404 Pa. 83,
170 A.2d 341 (1961)
OnYX oils & Resins. Inc. v. MOBB, 367 Pa. 416, 80
A.2d 815 (1951)
School Dist. of Phila. v. Framlau CO~D.,
15 Pa. Commw. 621, 328 A.2d 866 (1974)
i
, .
"
,
Schulzendorf v. pittsburah & Lake Erie R3ilroad Co.,
340 Pa. Super. 230, 489 A.2d 927 (1985)
SenvBhvn v. Karlak, 450 Pa. 535, 299 A.2d 294 (1973)
Vernon D. Cox & Co. v. Giles, 267 Pa. Super. 411, 406
A.2d 1107 (1979)
7,8
8
14
Zlotziver v. Zlotziver, 169 Pa. Super. 588, 83 A.2d
429 (1951)
7
.ul.. af Caur~
Pa. R. Civ. P. 201
8,9
O~.r Au~hariti..
28 Am. Jur.2d, Estoppel and Waiver ~ 69
13
1 PennBvlvania Law Encvclonedia, Accords and
Compromises S 1
12
5
20A Pennsylvania Law Encvcloeedia, Judgments S 228
ii
, '--;'i..'.S:~
I. Otm8TIONS pusmrrm
A. DOES AN ACTION FOR BREACH OF CONTRACT TO SETTLE AN EARLIER
CASE, BASED UPON ALLEGED ORAL CONVERSATIONS BETWEEN COUNSEL,
WHICH IS BROUGHT AFTER JUDGMENT HAS BEEN ENTERED IN THE
EARLIER ACTION, FAIL AS A MATTER OF LAW TO STATE A CLAIM
UPON WHICH RELIEF CAN BE GRANTED?
(Suggested Answer: YES)
B. DOES THE COURT LACK SUBJECT MATTER JURISDICTION TO HEAR, IN
A SEPARATE ACTION, A CLAIM THAT THERE WAS A SETTLEMENT IN A
PRIOR ACTION?
(Suggested Answer: YES)
C. DO THE FACTS ALLEGED IN THE COMPLAINT FAIL TO STATE THE
BASIS FOR AN ENFORCEABLE SETTLEMENT AGREEMENT, OR INSTEAD
ALLEGE A MERE ACCORD THAT IS NOT ENFORCEABLE?
(Suggested Answer: YES)
D. HAVE PLAINTIFFS WAIVED ANY ARGUMENT THAT THERE WAS A
SETTLEMENT SO THAT THEY ARE NOW JUDICIALLY ESTOPPED FROM
ASSERTING SUCH A CLAIM?
(Suggested Answer: YES)
E. DOES THE COMPLAINT FAIL TO STATE A CAUSE OF ACTION AGAINST
MR. LANTZ BECAUSE HE WAS ACTING AS AGENT FOR A DISCLOSED
PRINCIPAL?
(Suggested Answer: YES)
F. DOES A COMPLAINT FAIL TO CONFORM TO RULE OF COURT, WHERE IT
IS BASED ON AN ALLEGED ORAL AGREEMENT OF ATTORNEYS WHICH IS
PROSCRIBED ay RULE 201 OF THE PENNSYLVANIA RULES OF CIVIL
PROCEDURE?
(Suggested Answer: YES)
G. DOES AN ATTEMPT TO BRING A SEPARATE CLAIM ALLEGING
SETTLEMENT OF A PRIOR ACTION THAT HAS BEEN REDUCED TO
JUDGMENT CONSTITUTE MISJOINDER OF A CAUSE OF ACTION?
(Suggested Answer: YES)
H. IS A SEPARATE CLAIM ALLEGING SETTLEMENT OF A PRIOR ACTION
BARRED BY THE PENDENCY OF THE PRIOR ACTION, EVEN THOUGH THE
PRIOR ACTION HAS BEEN REDUCED TO JUDGMENT?
(Suggested Answer: YES)
II. 8TJo- o. .ACT8
plaintiffs in the instant action brought a previous products
liability action against Defendant Jacobsen Division of Textron,
Inc. ["Textron") and J & R Ford Tractor Sales in this Court at
No. 280 Civil 1992. Defondant Delano M. Lantz, Esquire ["Lantz")
represented Textron in the products liability litigation. Mr.
Hyman, Plaintiffs' present counsel, represented plaintiffs.
Timothy Mark, Esquire represented J & R Ford. plaintiffs and J &
R Ford entered into a joint tortfeasors settlement prior to the
start of trial. At trial, J & R sought indemnity or contribution
from Textron. Trial in that action commenced on November 13,
1995 and resulted in a jury verdict (after 30 minutes of
deliberation) in favor of Textron on November 17, 1995. The
Honorable Harold E. Sheeley presided over the trial.
plaintiffs then commenced the instant action, No. 95-7019,
for breach of contract, alleging that a settlement agreement was
reached in the products liability action on November 16, 1995,
prior to the end of the trial. plaintiffs allege, in essence,
that Lantz, as agent for Textron, made an oral settlement offer
on the evening of November 15, 1995, which plaintiffs accepted
the following afternoon. Defendants filed Preliminary objections
to the complaint.
- 2 -
Although not part of the record in this action, the status
of settlement negotiations was discussed in chambers after the
close of the evidence and after all parties rested on the after-
noon of November 16, 1995. Mr. Hyman indicated that his client
was now willing to settle for $95,000 and that Mr. Mark's client
(J & R Ford) was willing to waive its claims for contribution or
indemnity. While other counsel waited in Chambers with Judge
Sheeley, Mr. Lantz contacted Textron's decision maker, Mr. Robert
Buechele. Mr. Lantz reported back to Judge Sheeley, Mr. Hyman
and Mr. Mark that Textron was no longer interested in settling
for $95,000 and had decided to let the jury decide the outcome of
the case. At that time, while in the presence of Judge Sheeley,
Mr. Hyman did ~ claim that a binding settlement was reached.
At no time did he place a statement on the record to that effect.
At no time did he request a hearing on the issue of whether a
binding settlement was reached. Instead, he made a closing
argument where he urged the jury to find for Plaintiffs and
against Textron and to award substantial damages. If this case
is required to go forward, the facts will establish beyond doubt
that Plaintiffs' contentions in this case are without factual
merit.
The matter is presently before this Court for disposition of
Defendants' Preliminary Objections to Plaintiffs' Complaint.
- 3 -
III. DISCUSSIOH
A. AN ACTION FOR BREACH OF CONTRACT TO SETTLE AN EARLIER
ACTION, BASED UPON ALLEGED ORAL CONVERSATIONS BETWEEN
COUNSEL, WHICH IS BROUGHT AFTER JUDGMENT HAS BEEN ENTERED IN
THE EARLIER CASE, FAILS AS A MATTER OF LAW TO STATE A CLAIM
UPON WHICH RELIEF CAN BE GRANTED.
1. The Doctrine Of Merger Bars A Separate Action Alleging
88ttlement Of A Prior Action.
The jury returned a verdict in favor of the Defendants in
the prior action, No. 280 Civil 1992, and judgment was entered on
the verdict on December 5, 1995. The Court may take judicial
notice of the verdict and judgment. ~ Gulentz v. Schanno
Transe.. Inc., 355 Pa. Super. 302, 307, 513 A.2d 440, 443 (1986).
(In ruling on Preliminary Objections, the Court stated that: The
sufficiency of a complaint which refers to a separate and
distinct proceeding is determined by a consideration of all
relevant matters therein set forth".) The trial court took
judicial notice of the judgment in the prior action. The merger
doctrine therefore precludes plaintiffs' present cause of action.
The merger doctrine provides as follows:
Under the doctrine of merger, a claim or demand which is the
subject of litigation is merged into the judgment, and the
judgment then evidences a new obligation. The claim or
demand in its original form is at an end and cannot again be
the subject of litigation, but in its new form as a judgment
it may be enforced by judicial process, and it can be
pleaded only in its new form. Those principles have been
applied to preclude an action on an agreement compromising
an action in equity when the final decree was subsequently
entered. . . .
- 4 -
20A Pennsvlvania Law EncvcloDedia, Judgments S 228 at 119.
Appellate case law in Pennsylvania is consistent in
upholding this principle. As stated by one court:
It is elementary that judgment settles everything
involved in the right to recover, not only .11 matt.r.
that _r. r.ia.d, but tho.. which might h.v. b..n
r.i..dl [citations omitted] The cause of action is
merged in the judgment which then evidences a new
obligation.
Lance v. Mann, 360 Pa. 26, 28, 60 A.2d 35, 36 (1948) (emphasis
added). Accord; Duauesne Liaht Co. v. Pittsburah Rvs. Co., 413
Pa. 1, 5, 194 A.2d 319, 321 (1963) (final determination by a
court of competent jurisdiction settles not only the defenses
actually raised, but also those which might have been raised") .
Plaintiffs' contention that a settlement had been reached in
the prior litigation on Thursday, November 16, 1995 not only
"might have been raised" in the action to No. 280 Civil 1992, but
was r.quir.d to be raised in that action. In Melnick v.
Binenstock, 318 Pa. 533, 179 A. 77 (1935), Pennsylvania's Supreme
Court held:
Where the right of one of the parties to such an agree-
ment compromising pending litigation is contested, the
true interpretation of the agreement should be found by
the court in which the litigation was pending or if in
equity within the terms of the decree entered in
accordance with the compromise. A party ...king to
.nforc. an .gr....nt compromi.ing p.nding 1itig.tion i.
not .t 1ib.rty to in.titut. in any court any .ction h.
.... fit, especially is this true as here where the
agreement has been in part performed. A compromi.. or
..tt1...nt of 1itig.tion i. .1way. r.f.rab1. to th.
- 5 -
action or proc.eding in tha court whara tba c~~aai.a
we. effactad. It is through that court that carrying
out of the agreement should thereafter be controlled.
Otherwise, the compromise, instead of being an aid to
litigation, would be only productive of litigation as a
separate and additional impetus.
Melnick v. Binenstock, supra, 318 Pa. at 536, 179 A. at 78 (1935)
(emphasis added) .
The line of cases supporting this principle is extensive.
SAA, ~, Advanced Manaaement Research. Inc. v. Emanuel, 439 Pat
385, 391-92, 266 A.2d 673, 676 (1970) (citing Melnick) (court
retains jurisdiction over agreement compromising pending
litigation even though case had been marked settled, discontinued
and ended); Duauesne Liaht Co. v. Pittsburah Rvs. co., 413 Pa. 1,
5, 194 A.2d 319, 321 (1963) (petition to open judgment improper
where earlier ruling of arbitrators was final); Get Set Ora. v.
Philadelphia Fed'n of Teachers, 446 Pa. 174, 182, 286 A.2d 633,
636-37 (1971) (matters dealing with settlement of litigation
referable to the matter where the settlement was made); Lance v.
t5Ann, 360 Pa. 26, 28, 60 A.2d 35, 36 (1948) (separate petition
relating to matter that was subject of earlier judgment
dismissed); Limmer v. CountrY Bell Cooe. Farmers, 220 Pa. Super.
171, 173-74, 286 A.2d 669, 670 (1971) (proper procedure where
party alleges a settlement has been reached is for the court,
upon motion of the party seeking to prove the settlement, to hold
a hearing in the pending action to determine whether in fact a
- 6 -
binding compromise and settlement was reached and whether any
such alleged agreement should be enforced); Schulzendorf v.
Pittsburah & Lake Erie R.R. Co., 340 Pa. Super. 230, 232-33, 489
A.2d 927, 928-29 (1985) (preliminary objections challenging the
jurisdiction of the court below properly sustained where later
state court action alleged that fraud was involved in the
settlement of a federal court action; appellant's argument that
the settlement was a contract separate and apart from the
original cause of action and subject to attack in trespass for
fraud dismissed); Zlotziver v. Zlotziver, 169 Pa. Super. 588,
592-93, 83 A.2d 429, 431 (1951) (a plaintiff cannot go behind a
decree entered in a prior action and introduce new matter and
have the suit revived and the investigation renewed); Bronstein
Estate (No.2), 31 Pa. D. & C.2d 664, 665-66 (C.P. Phila. 1963)
(issue whether settlement had been breached to be determined by
the orphans' Court where the action was pending); Danko v. State
Farm Ins. Co., 15 Pa. D. & C.4th 615, 620-21 (C.P. Fayette 1992)
(new action claiming fraud in connection with settlement of
earlier litigation improper; issues must be raised in the
original action) .
As this extensive line of cases demonstrates, the alleged
settlement in the earlier case could have and must have been
raised in the earlier action to No. 280 Civil 1992. Therefore,
- 7 -
the present action is precluded as a matter of law by the
Doctrine of Merger. Dismissal on preliminary objections is
appropriate. See, e.g. Schulzendorf v. Pittsburah & Lake Erie
R.R. Co., 340 Pa. Super 230, 489 A.2d 927 (1985).
2. As A Matter Of Law, An Attorney Lacks Authority To
Enter Into A Binding Settlement By Verbal Discussions
With QDoosina Counsel which Are Not On The Record.
An attorney does not have the authority as a matter of law
to bind his client to a settlement by off the record discussions
with opposing counsel.
Senvshvn v. Karlak, 450 Pa. 535, 540-41,
299 A.2d 294, 296 (1973) (an attorney does not have apparent
authority to settle litigation); Lodowski v. O'Mallev, 227 Pa.
Super. 568, 570-71, 307 A.2d 439, 440 (1973); School Dist. of
Phila. v. Framlau Core., 15 Pa. Commw. 621, 628-29, 328 A.2d 866,
870 (1974). The Complaint in the instant action alleges a
settlement based on oral, off the record discussions between
counsel. The complaint is therefore deficient as a matter of law
and fails to state a cause of action upon which relief can be
granted.
3. Alleged Off The Record Oral Agreements of Counsel
Relating To Settlement Of Pending Litigation Are
UnenforceabJe.
Rule 201 of the pennsylvania Rules of civil Procedure
provides:
- 8 -
Agreements of attorneys relating to the business of the
court shall be in writing, except such agreements at
bar as are noted by the prothonotary upon the minutes
or by the stenographer on his notes.
Pa. R. Civ. P. 201. Under this rule alleged oral settlement
agreements between counsel are not enforceable.
In Commonwealth. DeD't of TranSD. v. KruDD, 66 Pa. Commw.
397, 444 A.2d 841, (1982), the Commonwealth Court refused to
allow enforcement of an oral settlement agreement between counsel
regarding a license suspension. Notably, in KrueD, there was no
dispute that the settlement agreement existed, as the trial court
itself had arranged the agreement. Nevertheless, on appeal, the
Commonwealth Court enforced the letter of Rule 201, noting that
there was neither a written agreement nor a written record of the
trial court's proceedings in arranging the settlement. ~ at
399, 444 A.2d at 842.
Similarly, in Albriaht v. R.J. ReYnolds Tobacco Co., 350 F.
Supp. 341, (W.D. Pa. 1972), an off the record understanding of a
term of a settlement was not enforceable, in part because of Pa.
R. civ. P. 201. In Albriaht, the plaintiff sought to introduce
evidence of an oral understanding between counsel that was at
variance with the final written settlement agreement. Noting
that the proffered evidence was also barred by the parol evidence
rule, the court stressed that neither the testimony nor the
documentary evidence which the plaintiff wanted to introduce was
- 9 -
a part of the record in the trial court; the evidence was
therefore barred by Pa. R. civ. P. 201. ~ at 348.
Plaintiffs' Complaint in the instant action seeks to enforce
an alleged oral agreement between counsel. Plaintiffs cannot and
do not allege that the agreement is in writing, nor do they
allege that any settlement agreement appears on the record in the
underlying action. As a matter of law, such a settlement
agreement, assuming it existed (which is not true), is
unenforceable pursuant to Rule 201 of the Pennsylvania Rules of
Civil Procedure. Plaintiffs' Complaint therefore fails to state
a cause of action.
For all of the reasons set forth above, Plaintiffs are
incapable as a matter of law of stating a claim for which relief
can be granted. Defendants' demurrer should therefore be granted
and the Complaint should be dismissed with prejudice for failure
to state a cause of action.
B. THE COURT LACKS SUBJECT MATTER JURISDICTION TO HEAR, IN A
SEPARATE ACTION, A CLAIM THAT THERE WAS A SETTLEMENT IN A
PRIOR ACTION.
As discussed in Section III (A) (1) above, the claim that
there was a settlement of the action filed to No. 280 Civil 1992
must be brought in that action and not in a separate action.
Thus, this Court does not have jurisdiction in the present action
to consider those issues. ~ Section III (A) (1) SUDra and
- 10 -
authorities cited therein. In addition to failing to state a
cause of action, the Complaint should be dismissed for lack of
subject matter jurisdiction, any such jurisdiction being in the
action docketed to No. 280 Civil 1992.
C. THE FACTS ALLEGED IN THE COMPLAINT FAIL TO STATE THE BASIS
FOR AN ENFORCEABLE SETTLEMENT AGREEMENT, BUT INSTEAD ALLEGE
A MERE ACCORD THAT IS NOT ENFORCEABLE.
The rule of law in Pennsylvania, separate and apart from
Rule 201, has long held that informal off the record discussions
of counsel that are not ratified on the record or in writing do
not constitute a settlement. For example, in OnYX oils & Resins.
Inc. v. Moss, 367 Pa. 416, 80 A.2d 815 (1951), the parties to a
proposed stock purchase agreement had repeated discussions and
even entered into a written preliminary agreement. The final
agreement, however, was never reduced to writing. In refusing to
give effect to the alleged agreement, the Pennsylvania Supreme
Court held:
We cannot enforce a portion of an agreement which failed to
materialize .... "An arrangement of terms, in contemplation
of a written contract, is not a perfect agreement upon which
an action can be maintained. To produce this effect, it
must be shown, by the acts or declaration of the parties,
that they intended the agreement to be operative before
execution, and without regard to the writing." [Citation
omitted. ]
- 11 -
~ at 420-21, 80 A.2d at 817. Plaintiffs in the instant case
have not pleaded any facts which would establish the required
acts or declarations of the parties.
The facts alleged in the complaint can be construed, at
most, as an accord which has no binding effect until a settlement
agreement is executed or some further actions taken. ~ 1
pennsvlvania Law Encvcloeedia, Accords and Compromises Slat 40-
42. In Nash v. Atlantic White Tower Svs.. Inc., 404 Pa. 83, 170
A.2d 341 (1961), the Pennsylvania Supreme Court observed:
.'Until satisfaction, an accord is revocable at the pleasure of
either party. An unexecuted accord is not enforceable by
action....'. [Citations omitted.] ~ at 89-90, 170 A.2d at
344. Therefore, the Complaint in the instant action fails to
allege an enforceable agreement.
D. PLAINTIFFS HAVE WAIVED ANY ARGUMENT THAT THERE WAS A
SETTLEMENT SO THAT THEY ARE NOW JUDICIALLY ESTOPPED FROM
ASSERTING SUCH A CLAIM.
Plaintiffs are judicially estopped from pursuing this
action. Under the above authorities, if Plaintiffs indeed
believed a settlement was reached prior to closing argument in
the earlier action, then Plaintiffs had a duty to bring the
matter before the Court for a hearing on the issue.
If in fact the earlier case had been settled, there was no
case left to present to the jury. If a controversy is settled,
- 12 -
then the cause of action is extinguished and all that is left is
the settlement. Melnick v. Binenstock, 318 Pa. 533, 536, 179 A.
77, 78 (1935). Instead of pursuing the claimed settlement,
however, Plaintiffs' counsel went forward with closing arguments
and permitted the case to go to jury verdict and the entry of
judgment. By so doing, Plaintiffs waived any right to claim a
settlement occurred and are now estopped from pursuing the
instant separate action, wnich is wholly inconsistent with their
actions in pursuing the first case to its conclusion.
The rule that a party will not be allowed to maintain
inconsistent positions is applied in respect to positions in
judicial actions and proceedings. As thus applied, it may
be regarded not strictly as a question of estoppel, but as a
matter in the nature of a positive rule of procedure based
on manifest justice and, to a greater or lesser degree, on
considerations of orderliness, regularity and expedition in
litigation....
Tha ru1. again.t incon.i.tant po.itioa. appli..
gen.ral1y to po.ition. ...umad not only in the cour..
of the .... action or proca.ding, but a1.0 in proc.ed-
ing. .uppl...nta1 th.r.to ... end av.n in ..parat.
action. or proc.ading. involving the .... parti.. and
qu..tioa..
(Emphasis added). 28 Am. Jur.2d, Estoppel and Waiver, S 69 at p.
696-98. Accord Danko v. State Farm Ins. Co., 15 Pa. D. & C.4th
615 (C.P. Fayette 1992) (plaintiffs not allowed to collaterally
attack jurisdiction of court in another action brought by plain-
tiffs). Plaintiffs' action in preDenting a closing argument and
seeking a jury verdict is inconsistent with their claim in this
- 13 -
case. Under this principle, plaintiffs are estopped from
bringing this action.
E. THE COMPLAINT FAILS TO STATE A CAUSE OF ACTION AGAINST MR.
LANTZ BECAUSE HE WAS ACTING AS AGENT FOR A DISCLOSED
PRINCIPAL.
The Complaint in the instant action avers that Lantz acted
with either actual or apparent authority throughout his
representation of Textron. Under pennsylvania law, the agent in
such a situation has no independent liability: "It is a basic
tenet of agency law that an individual acting as an agent for a
disclosed principle [sic] is not personally liable on a contract
between the principle [sic] and a third party unless the agent
specifically agrees to assume liability." Vernon D. Cox" Co. v.
Giles, 267 Pa. Super. 411, 415, 406 A.2d 1107, 1110 (1979). The
Complaint clearly demonstrates plaintiffs' awareness of Lantz's
representative capacity as Textron's attorney. There is no
allegation that Lantz ever agreed to assume personal liability.
Therefore, as a matter of law, Mr. Lantz can have no personal
liability to plaintiffs.
F. THE COMPLAINT FAILS TO CONFORM TO LAW ~D RULE OF COURT,
WHERE IT IS A SEPARATE ACTION BASED ON AN ALLEGED ORAL
AGREEMENT OF ATTORNEYS IN AN UNDERLYING ACTION, WHICH
AGREEMENT IS PROSCRIBED BY THE PENNSYLVANIA RULES OF CIVIL
PROCEDURE.
- 14 -
As explained in section III (A) above, the Complaint in this
matter does not conform to law because the claim that a
settlement was reached in the action filed to No. 280 Civil 1992
must be raised in that action and not in a new action. aAA
Section III (A) (1) SUDra and authorities cited therein.
In addition, as discussed in Section III (A) (3) above, the
Complaint contravenes Pa. R. Civ. P. 201, which requires that
agreements between attorneys be in writing or made on the record
before the court. ~ Section III (A) (3) suera and authorities
cited therein.
Therefore, the Complaint should be dismissed for lack of
conformity to law or rule of court.
G. AN ATTEMPT TO BRING A SEPARATE CLAIM ALLEGING SETTLEMENT OF
A PRIOR ACTION CONSTITUTES MISJOINDER OF A CAUSE OF ACTION.
As discussed in Section III (A) above, the claim of an
alleged settlement of the action to No. 280 Civil 1992 must be
raised in that action and not in a new action. ~ Section
III (A) (1) SUDra and authorities cited therein. The Complaint in
the instant action, therefore, has misjoined a cause of action by
attempting to bring a new action to the present term and number.
Accordingly, the Complaint should be dismissed for misjoinder of
a cause of action.
- 15 -
H. A SEPARATE CLAIM ALLEGING SETTLEMENT OF AN UNDERLYING ACTION
IS BARRED BY THE PENDENCY OF THE PRIOR ACTION, EVEN THOUGH
THE PRIOR ACTION HAS BEEN REDUCED TO JUDGMENT.
As set forth in the Complaint, a prior action was brought to
No. 280 Civil 1992. As detailed in Section III(A) above, any
matters pertaining to an alleged settlement of that action must
be brought in that action. ~ Section III(A) (1) suera and.
authorities cited therein. Even though the prior action has been
reduced to judgment pursuant to the verdict of the jury, that
case constitutes a prior action which precludes the instant
Complaint. Therefore, the Complaint should be dismissed due to
pendency of a prior action.
- 16 -
.
CERTIFICATE OF SERVICE
I hereby certify that on this date a true and correct copy
of the foregoing document was served by first-class mail, postage
prepaid, upon the following:
Terry S. Hyman, Esquire
ANGINO & ROVNER, P.C.
4503 North Front Street
Harrisburg, PA 17110
~LI'" / r;~_t~
Debra P. Fourlas
. Dated:
January 19, 1996
- 1 B -
~
ALFRED LAMBERT and MARY LU
LAMBERT, his wife,
plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
CIVIL ACTION - LAW
NO. 280 CIVIL 1992
J&R FORD TRACTOR SALES, INC.
and JACOBSEN DIVISION OF
TEXTRON, INC.,
JURY TRIAL DEMANDED
Defendants
RUL. TO SHOW CAUS.
AND NOW, a Rule is hereby issued upon Defendant Jacobsen
Division of Textron, Inc. to show cause why plaintiffs' Petition to
Enforce the Settlement Agreement between Alfred and Mary Lu Lambert
and Jacobsen, Division of Textron, Inc., should not be granted.
RULE RETURNABLE in twenty (20) days.
BY THE COURT:
J.
U592/PJG
ALFRED LAMBERT and MARY LU
LAMBERT, his wife,
plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
CIVIL ACTION - LAW
NO. 280 CIVIL 1992
J&R FORD TRACTOR SALES, INC.
and JACOBSEN DIYISION OF
TEXTRON, INC.,
JURY TRIAL DEMANDED
Defendants
AND
..r::=N .::.~:x.:~ROW CAUSIl WRY THIl
~~ ~~ ~ AND IWtY LU U-=T
JA.CO I Il ;;~N: life. SBOUL NOT BIl Dll'ORCIlD
1. plaintiffs Alfred and Mary Lu Lambert are adults residing
in Carlisle, cumberland County, Pennsylvania.
2. Defendant The Jacobsen Division of Textron, Inc., is a
profit-making corporation engaged in the manufacture of lawn mowers
and other equipment, headquartered in Racine, Wisconsin.
3. In January 1992, plaintiffs Alfred Lambert and Mary Lu
Lambert initiated a products liability lawsuit against Defendant
Jacobsen Division of Textron, Inc. and its dealer, J&R Ford Tractor
Inc., in cumberland County Common pleas Court under Docket Number
280 Civil 1992.
4. On February 28, 1992, Defendant Delano M. Lantz entered
his appearance on behalf of Jacobsen Division of Textron, Inc.
5. At all times during the litigation Delano M. Lantz acted
as the attorney for Jacobsen Division of Textron, Inc., defending
their interests and exercising apparent authority to act on their
behalf .
U59~/PJG
6. After three and one-half years of discovery the trial of
Mr. Lambert's product liability case commenced on November 13,
1995, before the Court of Common pleas of Cumberland county,
Pennsylvania.
9. Prior to trial Plaintiffs reached a Joint Tortfeasor
Settlement with the Co-Defendant in the action, J&R Ford Tractor
Sales, represented by Timothy I. Mark, Esquire.
10. On Monday, November 13, 1995, Plaintiffs' counsel, Terry
S. Hyman, Esquire, made a demand to Defendant Lantz of $95,000.00
to settle the Lamberts' claim against Jacobsen, contingent upon
approval of the settlement by Plaintiff's employer's workers'
compensation carrier who had a aubrogation interest in the case.
11. On Monday evening, November 13, 1995, Mr. Lantz,
operating with the apparent authority of Jacobsen, offered
$95,000.00 contingent upon approval by the workers' compensation
carrier. Mr. Lantz also required as a term of settlement that J&R
Tractor drop any claim against Jacobsen for indemnity or
contribution as part of the settlement. As stated by Mr. Lantz,
Jacobsen's offer was" $95,000.00 to settle everything."
12. On Wednesday, November 15, 1995, Terry S. Hyman, on
behalf of Mr. Lambert, informed Mr. Lantz that he had been able to
obtain approval from the workers' compensation carrier but that Mr.
Mark had not agreed to withdraw the indemnity claim asserted by J&R
Ford. Plaintiff, therefore, asked Jacobsen to consider settling
2
the case solely against Plaintiff and the subrogation carrier for
$95,000.00, and allowing the indemnity claim to continue to
verdict.
13. On Wednesday evening, November 15, 1995, at 9:30 p.m.,
Defendant Lantz, indicated he had spoken to Robert Beakley, the
person at Jacobsen with settlement authority.
14. During the Wednesday evening discussion, Defendant Lantz,
with the apparent authority of Jacobsen, declined the offer to
settle with Plaintiffs alone, but explicitly re-asserted and
confirmed Jacobsen's offer to settle the case for $95,000.00 if it
would settle the entire matter.
15. In response to the renewed offer, Plaintiffs' counsel,
Terry s. Hyman, stated on November 15, 1995, that he did not have
authority from J&R at 9:30 on a Wednesday evening to settle the
case, and, therefore, he would see Mr. Lantz at trial on Thursday.
16. In the November 16, 1995 conversation, Mr. Lantz did not
place any time restriction on his offer to settle the entire case
for $95,000.00.
17. At no time during the negotiations did Defendant Lantz or
anyone representing Jacobsen make any statement that their offer of
settlement must be accepted within a specified time period, by a
certain date, or prior to the testimony of any particular witness.
18. At no time up to and including the conversation at
9:30 p.m. on November 15, 1995, did Defendant in any fashion
3
suggest to Plaintiffs that timing was of the eesence in the
settlement of the case, nor was any indication given that the offer
in any way was limited in time or would expire with the occurrence
of any particular event.
19. During the noon lunch break on November 16, 1995,
Plaintiffs' counsel, Terry S. Hyman, obtained J&R's consent to
settle their indemnity claim as part of the $95,000 offered by
Jacobsen.
20. At approximately 1:00 p.m. Plaintiff's counsel explicitly
stated to Delano M. Lantz and Jacobsen's trial representative that
the Lamberts 11 accepted the $95,000.00 offer 11 to settle the case
in its entirety, including voluntary dismissal of J&R's claims for
indemnity or contribution.
21. At no time between the conversation on Wednesday night
re-affirming the offer to settle the entire case for $95,000.00 and
plaintiffs' acceptance of that offer at the lunch break on
Thursday, did any person from Jacobsen inform Plaintiffs' counsel
that the offer had been withdrawn nor that the offer was contingent
in any fashion on the passage of time or the appearance of any
particular witness.
22. At no time between the conversation on Wednesday night
re-affirming the offer to settle the entire case for $95,000.00 and
Plaintiffs' acceptance of that offer at the lunch break on
Thursday, did Plaintiff's counsel decline or seek to vary the terms
4
of Jacobsen's offer. In fact, settlement was not discussed in any
fashion until Plaintiff's counsel informed Defendants of his
acceptance of the offer in precisely the terms set out by Jacobsen.
23. At approximately 2:30 p.m. on November 16, 1995,
Mr. Lantz informed Plaintiffs' counsel that Jacobsen would not
honor Plaintiffs' acceptance of Jacobsen's offer of settlement for
$95,000.00.
24. The only reason given for Jacobsen's refusal to go
through with the accepted settlement was that the offer "had been
made last night."
25. On Friday, November 17, 1995, prior to closing arguments,
plaintiffs' counsel, Terry S. Hyman, informed Mr. Lantz of his
intention to file an action to enforce what he conside~ed to be a
valid settlement contract for $95,000.00.
26. Neither Mr. Lantz nor Jacobsen availed themselves of the
opportunity prior to the case going to verdict to avoid the lawsuit
by complying with the settlement terms.
25. Where a Defendant makes an offer of settlement which is
not withdrawn nor limited in the period of time in which the offer
can be accepted, and Plaintiffs accept the offer on precisely the
terms proposed, a contract has been formed.
26. Under Pennsylvania law, a party may not withdraw an offer
after it has been accepted.
5
27. Under the facts of this case, plaintiffs did accept
Defendant's offer to settle the case for $95,000.00 within a half-
The contract is valid and
day of the offer being made.
enforceable.
28. Defendant Jacobsen is liable for the offers made on its
behalf by its attorney who had the authority or apparent authority
to make such offers during trial.
29. Attorney Lantz is liable to Plaintiffs if he made an
offer with the apparent authority to do so, even if the actual
authority does not exist.
WHEREFORE, Plaintiffs prays Your Honorable Court will grant a
judgment against Defendants in the sum of $95,000.00 plus interest
and costs associated with this enforcement action.
ANGINO & ROVNER, P.C.
-,-
--
T ry S.
I. D. N. 6807
4503 th Front Street
Harrisburg PA 17110
(717) 238-6791
Counsel for Plaintiff
DATED: \-~CJ-C\lc
6
ALFRED LAMBERT and MARY LU
LAMBERT, his wife,
plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
CIVIL ACTION - LAW
NO. 280 CIVIL 1992
J'R FORD TRACTOR SALES, INC.
and JACOBSEN DI~ISION OF
TEXTRON, INC.,
JURY TRIAL DEMANDED
Defendants
ANI)
~=:N ::. RUL. TO SHOW ClAUS. WHY TH.
S~ u . _ D AL..1m ANI) MARY LU LAMB.aT
JACOB ~ ~ISION OP ;r.XTRON. INC. SHOULD NOT .. DPORCm)
1. Plaintiffs Alfred and Mary Lu Lambert are adults residing
in Carlisle, CUmberland County, Pennsylvania.
2. Defendant The Jacobsen Division of Textron, Inc., is a
profit-making corporation engaged in the manufacture of lawn mowers
and other equipment, headquartered in Racine, Wisconsin.
3. In January 1992, Plaintiffs Alfred Lambert and Mary Lu
Lambert initiated a products liability lawsuit against Defendant
Jacobsen Division of Textron, Inc. and its dealer, J&R Ford Tractor
Inc., in CUmberland county Common Pleas Court under Docket Number
280 Civil 1992.
4. On February 28, 1992, Defendant Delano M. Lantz entered
his appearance on behalf of Jacobsen Division of Textron, Inc.
5. At all times during the litigation Delano M. Lantz acted
as the attorney for Jacobsen Division of Textron, Inc., defending
their interests and exercising apparent authority to act on their
behalf.
U59~/PJG
6. After three and one-half years of discovery the trial of
Mr. Lambert's product liability case commenced on November 13,
1995, before the Court of Common pleas of CUmberland County,
Pennsylvania.
9. Prior to trial Plaintiffs reached a Joint Tortfeasor
Settlement with the Co-Defendant in the action, J&R Ford Tractor
Sales, represented by Timothy I. Mark, Esquire.
10. On Monday, November 13, 1995, Plaintiffs' counsel, Terry
S. Hyman, Esquire, made a demand to Defendant Lantz of $95,000.00
to settle the Lamberts' claim against Jacobsen, contingent upon
approval of the settlement by Plaint iff's employer's workers'
compensation carrier who had a subrogation interest in the case.
11. On Monday evening, November 13, 1995, Mr. Lantz,
operating with the apparent authority of Jacobsen, offered
$95,000.00 contingent upon approval by the workers' compensation
carrier. Mr. Lantz also required as a term of settlement that J&R
Tractor drop any claim against Jacobsen for indemnity or
contribution as part of the settlement. As stated by Mr. Lantz,
Jacobsen's offer was" $95,000.00 to settle everything."
12. On Wednesday, November 15, 1995, Terry S. Hyman, on
behalf of Mr. Lambert, informed Mr. Lantz that he had been able to
obtain approval from the workers' compensation carrier but that Mr.
Mark had not agreed to withdraw the indemnity claim asserted by J&R
Ford. Plaintiff, therefore, asked Jacobsen to consider settling
2
..
the case solely against Plaintiff and the subrogation carrier for
$95,000.00, and allowing the indemnity claim to continue to
verdict.
13. On Wednesday evening, November 15, 1995, at 9:30 p.m.,
Defendant Lantz, indicated he had spoken to Robert Beakley, the
per.on at Jacobsen with settlement authority.
14. During the Wednesday evening discussion, Defendant Lantz,
with the apparent authority of Jacobsen, declined the offer to
settle with Plaintiffs a1on~, but explicitly re-asserted and
confirmed Jacobsen's offer to settle the case for $95,000.00 if it
would settle the entire matter.
15. In response to the renewed offer, Plaintiffs' counsel,
Terry S. Hyman, stated on November 15, 1995, that he did not have
authority from J&R at 9:30 on a Wednesday evening to settle the
ca.e, and, therefore, he would see Mr. Lantz at trial on Thursday.
16. In the November 16, 1995 conversation, Mr. Lantz did not
place any time restriction on his offer to settle the entire case
for $95,000.00.
17. At no time during the negotiations did Defendant Lantz or
anyone representing Jacobsen make any statement that their offer of
settlement must be accepted within a specified time period, by a
certain date, or prior to the testimony of any particular witness.
18. At no time up to and including the conversation at
9: 30 p. m. on November 15, 1995, did Defendant in any fashion
3
,
.t
auggeat to Plaintiffs that timing was of the essence in the
aettlement of the case, nor was any indication given that the offer
in any way wae limited in time or would expire with the occurrenc~
of any particular event.
19. During the noon lunch break on November 16, 1995,
P1aintiffe' counsel, Terry S. Hyman, obtained J&R's consent to
settle their indemnity claim as part of the $95,000 offered by
Jacobsen.
20. At approximately 1:00 p.m. Plaintiff's counsel explicitly
stated to Delano M. Lantz and Jacobsen's trial representative that
the Lamberts " accepted the $95,000.00 offer" to settle the caee
in its entirety, including voluntary dismissal of J&R's claims for
indemnity or contribution.
21. At no time between the conversation on Wednesday night
re-affirming the offer to settle the entire case for $95,000.00 and
Plaintiffs' acceptance of that offer at the lunch break on
Thursday, did any person from Jacobsen inform Plaintiffs' counsel
that the offer had been withdrawn nor that the offer was contingent
in any fashion on the passage of time or the appearance of any
particular witness.
2~. At no time between the conversation on Wednesday night
re-affirming the offer to settle the entire case for $95,000.00 and
Plaintiffs' acceptance of that offer at the lunch break on
Thursday, did Plaintiff's counsel decline or seek to vary the terms
4
.
4
of Jacobsen's offer. In fact, settlement was not discussed in any
fashion until Plaintiff's counsel informed Defendants of his
acceptance of the offer in precisely the terms set out by Jacobsen.
23. At approximately 2:30 p.m. on November 16, 1995,
Mr. Lantz informed Plaintiffs' counsel that Jacobsen would not
honor Plaintiffs' acceptance of Jacobsen's offer of settlement for
$95,000.00.
24. The only reason given for Jacobsen's refusal to go
through with the accepted settlement was that the offer "had been
made last night."
25. On Friday, November 17, 1995, prior to closing arguments,
Plaintiffs' counsel, Terry S. Hyman, informed Mr. Lantz of his
intention to file an action to enforce what he considered to be a
valid settlement contract for $95,000.00.
26. Neither Mr. Lantz nor Jacobsen availed themselves of the
opportunity prior to the case going to verdict to avoid the lawsuit
by complying with the settlement terms.
25. Where a Defendant makes an offer of settlement which is
not withdrawn nor limited in the period of time in which the offer
can be accepted, and Plaintiffs accept the offer on precisely the
terms proposed, a contract has been formed.
26. Under Pennsylvania law, a party may not withdraw an offer
after it has been accepted.
5
..."'_.
27. Under the facts of this case, Plaintiffs did accept
Defendant'. offer to settle the case for $95,000.00 within a half-
day of the offer being made.
enforceable.
28. Defendant Jacobs~n is liable for the offers made on its
The contract is valid and
behalf by it. attorney who had the authority or apparent authority
to make .uch offers during trial.
29. Attorney Lantz is liable to Plaintiffs if he made an
offer with the apparent authority to do so, even if the actual
authority does not exist.
WHEREFORE, Plaintiffs prays Your Honorable Court will grant a
judgment against Defendants in the sum of $95,000.00 plus intere.t
and costs associated with this enforcement action.
ANGINO &. ROVNER, P.C.
..
T ry S.
I.D. N. 6807
4503 th Front Street
Harrisburg PA 17110
(717) 238-6791
Counsel for plaintiff
DATED: \ - ~-l:\l.a
6
CERTIFICATE OF SERVICE
AND NOW, this ~
day of January, 1996, I, Pamela J.
Gilleapie, an employee of Angino & Rovner, P.C., do hereby certify
that I have cauaed to be served a true and correct copy of the
PETITION AND RULE TO SHOW CAUSE WHY THE SETTLEMENT BETWEEN ALFRED
AND MARY LU LAMBERT AND JACOBSEN DIVISION OF TEXTRON, INC. SHOULD
NOT BE ENFORCED by hand delivery, at Harrisburg, Pennsylvania,
addressed as follows:
Delano M. Lantz, Esquire
McNEES, WALLACE & NURICK
100 Pine Street
P.O. Box 1166
Harrisburg, PA 17108-1166
~~(~\::)C\ '
p:~l€st.. Gill:S~' u
ALFRED LAMBERT and MARY LU
LAMBERT, his wife,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
CIVIL ACTION - LAW
NO. 280 CIVIL 1992
J~R FORD TRACTOR SALES, INC.
and JACOBSEN DIYISION OF
TEXTRON, INC.,
JURY TRIAL DEMANDED
Defendants
_.,~!I,!~~N ANIl Rn. TO SHOW CAUS. WHY Tal
SInLJIPIIT B.'l'IfIImI ALI'Rm) ANIl MARY LU LAIOl.RT
ANIl "ACOBSmI DIVISION OP TIXTRON. INC. SHOULD NOT BI DPORCID
1. Plaintiffs Alfred and Mary Lu Lambert are adults residing
in Carlisle, Cumberland County, pennsylvania.
2. Defendant The Jacobsen Division of Textron, Inc., is a
profit-making corporation engaged in the manufacture of lawn mowers
and other equipment, headquartered in Racine, Wisconsin.
3. In January 1992, Plaintiffs Alfred Lambert and Mary Lu
Lambert initiated a products liability lawsuit against Defendant
Jacobsen Division of Textron, Inc. and its dealer, J&R Ford Tractor
Inc., in CUmberland County Common Pleas Court under Docket Number
280 Civil 1992.
4. On February 28, 1992, Defendant Delano M. Lantz entered
his appearance on behalf of Jacobsen Division of Textron, Inc.
5. At all times during the litigation Delano M. Lantz acted
as the attorney for Jacobsen Division of Textron, Inc., defending
their interests and exercising apparent authority to act on their
behalf.
U592/PJG
.
6. After three and one-half years of discovery the trial of
Mr. Lambert's product liability case commenced on November 13,
1995, before the Court of I':ommon Pleas of CUmberland county,
Pennsylvania.
9. Prior to trial Plaintiffs reached a Joint Tortfeasor
Settlement with the Co-Defendant in the action, J&R Ford Tractor
Sales, represented by Timothy I. Mark, Esquire.
10. On Monday, November 13, 1995, Plaintiffs' counsel, Terry
s. Hyman, Esquire, made a demand to Defendant Lantz of $95,000.00
to settle the Lamberts' claim against Jacobsen, contingent upon
approval of the settlement by Plaintiff's employer's workers'
compensation carrier who had a subrogation interest in the case.
11. On Monday evening, November 13, 1995, Mr. Lantz,
operating with the apparent authority of Jacoboen, offered
$95,000.00 contingent upon approval by the workers' compensation
carrier. Mr. Lantz also required as a term of settlement that J&R
Tractor drop any claim against Jacobsen for indemnity or
contribution as part of the settlement. As stated by Mr. Lantz,
Jacobsen's offer was" $95,000.00 to settle everything."
12. On Wednesday, November 15, 1995, Terry S. Hyman, on
behalf of Mr. Lambert, informed Mr. Lantz that he had been able to
obtain approval from the workers' compensation carrier but that Mr.
Mark had not agreed to withdraw the indemnity claim asserted by J&R
Ford. Plaintiff, therefore, asked Jacobsen to consider settling
2
the case solely against plaintiff and the subrogation carrier for
$95,000.00, and allowing the indemnity claim to continue to
verdict.
13. On Wednesday evening, Novembp.r 15, 1995, at 9:30 p.m.,
Defendant Lantz, indicated he had spoken to Robert Beakley, the
peraon at Jacobsen with settlement authority.
14. During the Wednesday evening discussion, Defendant Lantz,
with the apparent authority of Jacobsen, declined the offer to
settle with plaintiffs alone, but explicitly re-asserted and
confirmed Jacobsen's offer to settle the case for $95,000.00 if it
would settle the entire matter.
15. In response to the renewed offer, plaintiffs' counsel,
Terry S. Hyman, stated on November 15, 1995, that he did not have
authority from J&R at 9130 on a Wednesday evening to settle the
case, and, therefore, he would see Mr. Lantz at trial on Thursday.
16. In the November 16, 1995 conversation, Mr. Lantz did not
place any time restriction on his offer to settle the entire case
for $95,000.00.
17. At no time during the negotiations did Defendant Lantz or
anyone representing Jacobsen make any statement that their offer of
settlement must be accepted within a specified time period, by a
certain date, or prior to the testimony of any particular witness.
18. At no time up to and including the conversation at
9:30 p.m. on November 15, 1995, did Defendant in any fashion
3
suggest to plaintiffs that timing was of the essence in the
settlement of the case, nor was any indication given that the offer
in any way was limited in time or would expire with the occurrence
of any particular event.
19. During the noon lunch break on November 16, 1995,
Plaintiffs' counsel, Terry S. Hyman, obtained J&R' s consent to
settle their indemnity claim as part of the $95,000 offered by
Jacobsen.
20. At approximately 1:00 p.m. Plaintiff's counsel explicitly
stated to Delano M. Lantz and Jacobsen's trial representative that
the Lamberts " accepted the $95,000.00 offer" to settle the case
in its entirety, including voluntary dismissal of J&R's claims for
indemnity or contribution.
21. At no time between the conversation on Wednesday night
re-affirming the offer to settle the entire case for $95,000.00 and
Plaintiffs' acceptance of that offer at th~ lunch break on
Thursday, did any person from Jacobsen inform Plaintiffs' counsel
that the offer had been withdrawn nor that the offer was contingent
in any fashion on the passage of time or the appearance of any
particular witness.
22. At no time between the conversation on Wednesday night
re-affirming the offer to settle the entire case for $95,000.00 and
Plaintiffs' acceptance of that offer at the lunch break on
Thursday, did plaintiff's counsel decline or seek to vary the terms
4
J
of Jacobsen's offer. In fact, settlement was not discussed in any
fashion until Plaintiff's counsel informed Defendants of his
acceptance of the offer in precisely the terms set out by .Tacobsen.
23. At approximately 2:30 p.m. on November 16, 1995,
Mr. Lantz informed Plaintiffs' counsel that Jacobsen would not
honor Plaintiffs' acceptance of Jacobsen's offer of settlement for
$95,000.00.
24. The only reason given for Jacobsen's refusal to go
through with the accepted settlement was that the offer "had been
made last night."
25. On Friday, November 17, 1995, prior to closing arguments,
Plaintiffs' counsel, Terry S. Hyman, informed Mr. Lantz of his
intention to file an action to enforce what he considered to be a
valid settlement contract for $95,000.00.
26. Neither Mr. Lantz nor Jacobsen availed themselves of the
opportunity prior to the case going to verdict to avoid the lawsuit
by complying with the settlement terms.
25. Where a Defendant makes an offer of settlement which is
not withdrawn nor limited in the period of time in which the offer
can be accepted, and Plaintiffs accept the offer on precisely the
terms proposed, a contract has been formed.
26. Under Pennsylvania law, a party may not withdraw an offer
after it has been accepted.
5
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NO POSTAGE NECESSARY
POSTAGE HAS BEEN PRE-PAID BY
DELANO M LANTZ ESQUIRE
MCNEES WALLACE & NURICK
100 PINE STREET
POBOX 1166
HARRISBURG PA 17108-1166
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4503 N. FRONT ST.
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ALFRED and MARY LU LAMBERT,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 95-7019 CIVIL TERM
v.
THE JACOBSEN DIVISION OF
TlXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
om..
AND NOW, this ~day of January, 1996, upon consideration
of Defendants' Motion for Protective Order, a discovery
~...",J.
conference is scheduled for T_~.._~~, 1996, in Courtroom No.
~, at J;3~ ~.m. In the meantime, all discovery in this
matter is stayed.
BY THE COURT,
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. .
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ALFRED and MARY LU LAMBERT,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
v.
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
NO. 95-7019 CIVIL TERM
CElD U I D..IllmAN'l'S' KOTZON .OR PRCT.CTZW OEl.R
AND NOW, this day of January, 1996, upon
consideration of Defendants' Motion for Protective Order, it is
hereby ordered as follows:
(a) Defendants are not required to respond to
Plaintiffs' Request for Admissions until 30 days after the
court has entered an order ruling on Defendants' Preliminary
Objections to plaintiffs' Complaint, and then only if the
case is not dismissed;
(b) Delano M. Lantz, Esquire, need not submit to any
deposition in this matter until at least 30 days after the
court has ruled on Defendants' Preliminary Objections, and
then only if the case is not dismissed;
(c) Philip Smucker is not required to submit to a
deposition until at least 30 days after the Preliminary
Objections are ruled on in this matter and then only in
Racine, Wisconsin, and only if the case is not dismissed;
and
.. . ~.
.
.a
.
,
(d) Robert Buechele need not submit to a deposition
until at least 30 days after the Preliminary Objections have
been ruled on this matter and then only in Cincinnati, Ohio,
and only if the case is not dismissed.
BY THE COURT,
J.
,,*' if
.
.
,
.
ALFRED and MARY LU LAMBERT,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 95-7019 CIVIL TERM
v.
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
DI'DDANT8' NOTION '0. PROTICTIVI oml.
R. PLA.%II'1'%...' D%ICOVD.Y DOUIII'1'8
AND NOW COME Defendants, The Jacobsen Division of Textron,
Inc. and Delano M. Lantz, Esquire, by and through their
attorneys, McNees, Wallace & Nurick, and move for a protective
order pursuant to Rule 4012 and 4013 for the reasons set forth
below:
1. Plaintiffs, Alfred and Mary Lu Lambert, brought the
present action claiming breach of contract against The Jacobsen
Division of Textron, Inc. and Delano M. Lantz, Textron's counsel
in previous litigation filed to No. 280 Civil 1992. The earlier
litigation involved a products liability claim brought by
Plaintiffs against Jacobsen Division of Textron, Inc. and J & R
Ford Tractor Sales, Inc.
2. Plaintiffs aver in their Complaint that the above-
referenced products liability action was brought by Plaintiffs
against Defendant Jacobsen Division of Textron, Inc. in this
Court to No. 280 Civil 1992 and then go on to aver as follows I
. .
~
.
.
,
,
(a) That Defendant Lantz represented Textron in
the products liability litigation;
(b) That the trial of the case commenced pn
November 13, 1995 in this Court;
(c) That Defendant Lantz, on Wednesday evening,
November 15, 1995 at 9:30 p.m., with the apparent au-
thority of Jacobsen, reasserted and confirmed Jacob-
sen's offer to settle the case for $95,000 if it would
settle the entire matter;
(d) That no discussion whatsoever regarding
settlement occurred the following day until 1:00 p.m.
on November 16, 1995 when Plaintiffs' counsel stated to
Defendant Lantz that the Lamberts "accepted the $95,000
offer" ;
(e) That at approximately 2:30 p.m. on November
16, 1995, Mr. Lantz informed Defendants' counsel that
Jacobsen would not honor Plaintiffs' acceptance of
Jacobsen's offer because the offer "had been made last
night"; and
(f) That prior to closing arguments on Friday,
November 17, 1995, Plaintiffs' counsel advised
Defendant Lantz of his intention to file an action to
- 2 -
.
.
.
.
enforce what he considered to be a valid settlement
contract for $95,000.
3. Although referring to the closing arguments on November
17, 1995 (Complaint, p. 22), the complaint does not set forth the
results of the jury trial. This Court's record show that the
jury returned a verdict (after 30 minutes of deliberation) on
Friday, November 17, 1995 finding that the product was not
defective thereby exonerating Defendants of any liability whatso-
ever to Plaintiffs. No post-trial motions were filed and, as
reflected in the records of this Court, judgment was entered on
the verdict on December 5, 1995.
4. Plaintiffs served with their Complaint Requests for
Admission Directed to Defendants, a copy of which is attached
hereto as Exhibit "A", and a notice for the depositions of Delano
M. Lantz, Esquire, Philip Smucker and Robert Buechele. (Mr.
Buechele's name is erroneously spelled "Beakley" in the notice.)
The deposition notice schedules the depositions in Harrisburg on
February 14, 1996, at 10:00 a.m. A copy of the deposition notice
is attached hereto as Exhibit "B".
5. Mr. Philip Smucker is employed by Jacobsen Division of
Textron, Inc., and lives and works in Racine, Wisconsin.
6. Mr. Robert Buechele lives and works in Cincinnati,
Ohio, and is an employee of Textron, Inc.
- 3 -
.
,
.
7. Defendants have filed Preliminary Objections to
Plaintiffs' Complaint, a copy of which are attached hereto as
Exhibit "C". As more fully set forth in the Preliminary
Objections, Plaintiffs' Complaint is void of legal merit for
several reasons as follows:
(a) an alleged off-the-record oral agreement of
counsel relating to settlement of pending litigation is
unenforceable pursuant to Pa.R.Civ.P. 201. See Paragraph
3(a), pp. 3-4 of Preliminary Objections;
(b) Plaintiffs' cause of action is barred by the
doctrine of merger which precludes a party from seeking to
litigate matters in later litigation that could and should
have been litigated in the original action that has gone to
judgment. See Paragraph 3(b), pp. 4-7 of Preliminary
Objections;
(c) Plaintiffs' claim is barred by principles of
estoppel and waiver. Plaintiffs, despite the alleged
settlement, proceeded to make closing arguments and
requested the jury to return a verdict in their favor.
Plaintiffs filed no post-trial motions. Under settled legal
principles, plaintiffs are barred from pursuing the present
complaint. See Paragraph 3(c), pp. 7-8 of Preliminary
Objections;
- 4 -
.
.
(d) as a matter of law, Mr. Lantz, as attorney for
Jacobsen, lacked authority to bind Textron to a settlement
by verbal discussions with counsel that were not on the
record or in writing under settled case law. See paragraphs
3 (d), pp. 8-9 of Preliminary Objections;
(e) the averments of the complaint are insufficient as
a matter of law to constitute a compromise and settlement
and constitute merely preliminary negotiations. See
Paragraph 3(e), p. 9 of Preliminary Objections.
(f) Mr. Lantz has no personal liability since he acted
for a disclosed principal. See Paragraph 3(f), pp. 9-10 of
preliminary Objections.
(g) the court should not assume jurisdiction in this
separate action since all matters relating to the claim of a
settlement must be brought within the action filed to No.
280 Civil 1992 and not in the new action. See Paragraph 6,
p. 10 of preliminary Objections.
(h) the complaint fails to conform to law or rule of
court. See Paragraph 8, p. 11 of Preliminary Objections.
(i) Plaintiffs have misjoined a cause of action in
that the claim of an alleged settlement should be brought in
the underlying action, namely, the action filed to No. 280
- 5 -
.
Civil 1992, and not a new action. See Paragraph 10, p. 11
of Preliminary Objections.
(j) the action filed to No. 280 Civil 1992 constitutes
a prior action which precludes the present action. See
Paragraphs 12-14 of the Preliminary Objections.
8. No discovery should b~ permitted to be undertaken by
the Plaintiffs in the present action until the substantial
Preliminary Objections filed by Defendants have been ruled on by
the court. Because the Preliminary Objections have substantial
legal merit, and should result in the dismissal of Plaintiffs'
Complaint, Defendants should not be subjected to the burdens and
harassment of discovery until, at a minimum, the Preliminary
Objections are decided by the court. No discovery is required to
resolve the preliminary objections which raise legal issues only.
9. The filing of the present action after Jacobsen
Division of Textron, Inc. has been forced to defend the products
liability case filed in 1992 in this court and which resulted in
a jury verdict in favor of Jacobsen on November 17, 1995,
constitutes unreasonable annoyance, oppression, burden,
harassment and expense to Textron as well as its counsel in the
previous action, Delano M. Lantz, Esquire. Further, such
discovery is sought in bad faith. Finally, if Mr. Smucker and
- 6 -
.
Mr. Buechele must be deposed, their depositions should be taken
where they live and work.
10. For the reasons set forth above, Defendants request the
court to enter a protective order pursuant to Rules 4012 and 4013
of the Pennsylvania Rules of Civil Procedure ordering that
Defendants are not required to serve answers to Plaintiffs'
Request for Admissions or to submit to any depositions until at
least 30 days after the court has ruled on Defendants'
Preliminary Objections and then only in the event that the court
dismisses the Preliminary Objections. As to Mr. Buechele and Mr.
Smucker, their depositions, if ever permitted, should be required
to be taken where they live and work.
WHEREFORE, Defendants, The Jacobsen Division of Textron,
Inc. and Delano M. Lantz, Esquire, request the court to enter a
Protective Order granting the following relief:
(a) ordering that Defendants are not required to
respond to Plaintiffs' Request for Admissions until 30 days
after the court has entered an order ruling on Defendants'
Preliminary Objections to Plaintiffs' Complaint and then
only if the case is not dismissed;
(b) that Delano M. Lantz, Esquire, need not submit to
any deposition in this matter until at least 30 days after
.~
- 7 -
.
the court has ruled on Defendants' preliminary Objections
and then only if the case is not dismissed;
(c) that Philip Smucker is not required to submit to a
deposition until at least 30 days after the preliminary
Objections are ruled on in this matter and then only in
Racine, Wisconsin and only if the case is not dismissed; and
(d) that Robert Buechele need not submit to a
deposition until at least 30 days after the preliminary
Objections have been ruled on this matter and then only in
Cincinnati, Ohio, and only if the case is not dismissed.
Respectfully submitted,
17108-1166
Attorneys for Defendants
Dated: January ~, 1996
- 8 -
"..
v.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
ALFRED and MARY LU LAMBERT,
plaintiffs
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
NO.
CIVIL TERM
BREACH OF CONTRACT
PLAINTIFFS' REOUEST FOR ~DHIBSIONS TO DEFENDANTS
Plaintiffs request that Defendants admit, pursuant to the
provisions of the Pennsylvania Rules of civil Procedure, the
matters set forth below.
The facts set forth below shall be deemed admitted unless
Defendants serve upon Plaintiffs a sworn answer or objection within
fortyfive (45) days after Defendants are served with this Request
for Admissions.
If objection is made to any fact whose admission is requested,
the reason for that objection shall be stated.
Each answer shall admit or deny the matter or set forth in
detail the reason(s) why an admission or denial cannot truthfully
. be made.
A denial of any matter shall fairly meet the substance of the
requested admission.
When good faith requires Defendants to qualify their answer,
or to deny only a part of the matter of which an admission is
113Z!/PJG
Exhibit "A"
. .
.
.
.
, ,
requested, Defendants shall specify which part of the request
admission is truthful and qualify or deny the remainder.
Defendants may not give lack of knowledge or information as a
reason for failure to admit or deny unless they state that they
have made reasonable inquiry and that the information known or
readily obtained to them is insufficient to enable them to admit 0+
deny the requested admission.
Defendants may not object to a requested admission on the
grounds that the request presents a genuine issue for trial.
plaintiffs, by their attorneys, Angino & Rovner, P.C., hereby
request that Defendants admit the following facts pursuant to
Rule 4014 of the Pennsylvania Rules of civil Procedure:
1. Delano M. Lantz, Esquire, acted as Jacobsen's attorney in
the action of Lambert v. J&R Tractor Sales and The Jacobsen
pivision of Textron. Inc., cum1:lerland county Court of Common Pleas,
civil Action No. 280 civil 1992.
2. Delano M. Lantz, Esquire, on November 15, 1995, at
approximatelY 9:30 p.m., offered to settle the case for $95,000.00
provided that the settlement ~Iould "settle the whole case",
including both Mr. Lambert's action and any actions brought against
Jacobsen for contribution or indemnity by J&R Ford, Inc.
3. When discussing the settlement offer on the evening of
November 15, 1995, Mr. Lantz did not make any mention that the
offer was only open for any particular time period.
2
('~
.
..
4.
When discussing the settlement offer on the evening of
November 15, 1995, Mr. Lantz did not indicate the offer was open
only until a particular witness testified.
5. When discussing the settlement offer on the evening of
N.:lVembllr 15, 1995, Mr. Lantz did not state that the offer had to be
accepted the evening of the 15th subject to withdrawal.
6. At no time between the avening of November 15, 1995 and
the end of the trial lunch break on November 16, 1995, did Mr.
Lantz inform Plaintiffs' counsel that the offer to settle the
entire case for $95,000 had been withdrawn.
7. Plaintiffs' counsel informed Mr. Lantz and Mr. Smucker
that the offer of $95,000 to settle the whole case was accepted at
during the trial lunch break on November 16, 1995.
8. At no time from the end of telephone conversation between
Mr. Lantz and plaintiff's counsel on the evening of November 15,
1995, up to Plaintiffs' counsel's statement to Mr. Lantz and Mr.
Smucker during the lunch break on November 16, '1995 that plaintiffs
accepted the settlement terms proposed by Jacobsen, did Mr. Lantz,
Mr. SmUCKer, or any person frcm Jacobsen, discuss the settlement or
its terms in any fashion with Plaintiff or his counsel.
3
(,.
ALFRED and MARY LU LAMBERT,
plaintiffs
: IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
v.
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
NO.
CIVIL TERM
BREACH OF CONTRACT
NOTICE OF DEPOSITION
TO: Defendants The Jacobsen Division of Textron, Inc. and
Delano M. Lantz, Esquire .
PLEASE TAKE NOTICE that pursuant to Rules of civil Procedure,
the plaintiffs in the above matter will take the deposition of
Defendants, Oelano H. Lantz, Esquire, Philip Smucker and Ro~ert
.ealtley, Esquire. The individual shall appear for oral examination
for the purpose 0: discovery and/or for use at trial, at the
offices of ANGINO & ROVNER, P.C., 4503 North Front street,
Harrisburg, Pennsylvania, on February 14, 1996, beginning at
10: 00 a. m. The Court Reporter/Notary public will be an employee of
Hughes, Albright, Foltz & Natale Reporting service.
AlIGINO & ROVNER, P.C.
Terry S. Hyman, Esquire
I.D. No. 36807
4503 North Front Street
Harrisburg, PA 17110
(717) 238-6791
counsel for PlaintiffS
DATED: November 29, 1995
11331IPJG
Exhibit liB"
ALFRED and MARY LU LAMBERT,
plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
v.
THE JACOBSEN DIVISION OF
TEXTRON, INC. and DELANO M.
LANTZ, ESQUIRE,
Defendants
NO. 95-7019 CIVIL TERM
PRIILIIIINARY OBJJ:C'l'IONS TO PLAINTIFFS' COMPLAINT
Defendants, the Jacobsen Division of Textron, Inc.
("Textron") and Delano M. Lantz, Esquire ("Lantz"), by and
through their undersigned attorneys, McNees, Wallace & Nurick,
preliminarily object to Plaintiffs' Complaint as follows:
I. DEMURRER:
1. plaintiffs aver in their Complaint that a products
liability action was brought by Plaintiffs against Defendant
Jacobsen Division of Textron, Inc. in this Court to No. 280 Civil
1992 and then go on to aver as follows:
(a) That Defendant Lantz represented Textron in
the products liability litigation;
(b) That the trial of the case commenced on
November 13, 1995 in this Court;
(c) That Defendant Lantz, on Wednesday evening,
November 15, 1995 at 9:30 p.m., with the apparent au-
thority of Jacobsen, reasserted and confirmed Jacob-
Exhibit "c"
sen'e offer to settle the case for $95,000 if it would
settle the entire matter;
(d) That no discussion whatsoever regarding
settlement occurred the following day until 1:00 p.m.
on November 16, 1995 when plaintiffs' counsel stated to
Defendant Lantz that the Lamberts "accepted the $95,000
offer"l;
(e) That at approximately 2:30 p.m. on November
16, 1995, Mr. Lantz informed Defendants' counsel that
Jacobsen would not honor Plaintiffs' acceptance of
Jacobsen's offer because the offer "had been made last
night"; and
(f) That prior to closing arguments on Friday,
November 17, 1995, Plaintiffs' counsel advised Defen-
dant Lantz of his intention to file an action to
enforce what he considered to be a valid settlement
contract for $95,000.
2. Although referring to the closing arguments on November
17, 1995 (Complaint, p. 22), the Complaint does not set forth the
results of the jury trial. This Court's records show that the
1 The averments in the Complaint must be taken as true for
purposes of a demurrer. However, if this matter must be pursued,
Defendants will establish that Textron's offer was rejected by
Plaintiffs, and no offer existed as of 1:00 p.m. on November 16,
1995.
- 2 -
jury returned a verdict (after 30 minutes of deliberation) on
Friday, November 17, 1995, finding that the product was not
defective, thereby exonerating Defendants of any liability
whatsoever to plaintiffs. No post-trial motions were filed and,
as reflected in the records of this Court, judgment was entered
on the verdict on December 5, 1995.
3. The present action for breach of contract to settle the
underlying case based upon oral conversations between counsel and
which is brought after judgment has been entered in the under-
lying action is legally insufficient for several reasons. These
reasons are as follows:
A. Alleged off The Record Oral Agreements Of Counsel
Relating To Settlement Of Pending Litigation
Are Unenforceable.
Pa. R. civ. P. 201 provides:
Agreements of attorneys relating to the business of the
court shall be in writing, except such agreements at
bar as are noted by the prothonotary upon the minutes
or by the stenographer on his notes.
Pa. R. Civ. P. 201. Under this rule alleged oral settlement
agreements between counsel are not enforceable. Commonwealth
Deoartment of Transoortation v. Kruoo, 66 Pa. Commw. 397, 399,
444 A.2d 841 (1982) (oral settlement agreement between counsel
regarding a license suspension not binding on DOT); Albriaht v.
R.J. Revnolds Tobacco Co., 350 F. Supp. 341, 348 (W.D. Pa, 1972)
(off the record understanding of a term of a settlement not
- 3 -
enforceable in part because of Pa. R. civ. P. 201). For this
reason alone, Plaintiff's Complaint fails to state a cause of
action since it seeks to enforce an alleged oral agreement
between counsel that is not alleged to be in writing and is not
alleged to be on the record. Therefore, as a matter of law it is
unenforceable pursuant to Rule 201 of the Pennsylvania Rules of
Civil Procedure.
B. plaintiffs' Cause of Action Is Barred By The Doc-
trine Of Meraer.
This Court may take judicial notice, and there can be no
dispute, of the fact that the jury returned a verdict in favor of
the Defendants in the action to No. 280 Civil 1992 and that
judgment was entered on the verdict on December 5, 1995. The
merger doctrine precludes Plaintiffs' present cause of action.
As stated in Pennsylvania Law Encvclooedia:
Under the doctrine of merger, a claim or demand which
is the subject of litigation is merged into the judg-
ment, and the judgment then evidences a new obligation.
The claim or demand in its original form is at an end
and cannot again be the subject of litigatiun, but in
its new form as a judgment it may be enforced by
judicial process, and it can be pleaded only in its new
form. Those principles have been applied to preclude
an action on an agreement compromising an action in
equity when the final decree was subsequently
entered....
20A pennsvlvania Law Encvclooedia, Judgments 5228, p. 119.
As stated in Lance v. Mann, 360 Pa. 26, 60 A.2d 35 (1948):
- 4 -
.
It is elementary that judgment settles everything
involved in the right to recover, not only all matters
that were raised, but those which might have been
raised: [citations omitted] The cause of action is
merged in the judgment which then evidences a new
obligation.
360 Pa. at 28; Duauesne Licht Co. v. Pittsburch Railwavs Co., 413
Pa. 1, 5, 194 A.2d 319 (1963) (final determination by a court of
competent jurisdiction settles not only the defenses actually
raised, but also those which might have been raised") .
Plaintiffs' contention that a settlement had been reached in
the underlying litigation on Thursday, November 16, 1995 is a
matter that not only "might have been raised" in the action to
No. 280 Civil 1992, but which was reauired to be raised in that
action. As stated in Melnick v. Binenstock, 318 Pa. 533, 179 A.
77 (1935):
Where the right of one of the parties to such an agree-
ment compromising pending litigation is contested, the
true interpretation of the agreement should be found by
the court in which the litigation was pending or if in
equity within the terms of the decree entered in accor-
dance with the compromise. A party seeking to enforce
an agreement compromising pending litigation is not at
liberty to institute in any court any action he sees
fit; especially is this true as here where the agree-
ment has been in part performed. A compromise or
settlement of litigation is always referable to the
action or proceeding in the court where the compromise
was effected. It is through that court that carrying
out of the agreement should thereafter be controlled.
Otherwise, the compromise, instead of being an aid to
litigation would be only productive of litigation as a
separate and additional impetus.
318 Pa. at 536. Accord: Lance v. Mann, 360 Pa. 26, 60 A.2d 35
(1948) (separate petition relating to matter that was subject of
- 5 -
.
earlier judgment dismissed); Duauesne Liaht Co. v. Pittsburah
Railwavs Co., 413 Pa. 1, 194 A.2d 319 (1963) (petition to open
judgment improper where earlier ruling of arbitrators was final);
Get Set Oraanization v. Philadelohia Federation of Teachers, 446
Pa. 174, 182, 286 A.2d 633 (1971) (matters dealing with
settlement of litigation referable to the matter where the
settlement was made); Advanced Manaaement Research. Inc. v.
Emanuel, 439 Pa. 385, 266 A.2d 673 (1970) (court retains juris-
diction over agreement compromising pending litigation even
though case had been marked settled, discontinued and ended),
citing Melnick, suora; Schulzendorf v. Pittsburah & Lake Erie
Railroad co., 340 Pa, Super. 230, 489 A.2d 927 (1985) (prelim-
inary objections challenging the jurisdiction of the court below
properly sustained where later state court action alleged that
fraud was involved in the settlement of a federal court action;
appellant's argument that the settlement was a contract separate
and apart from the original cause of action and subject to attack
in trespass for fraud dismissed); Bronstein Estate (No. 21, 31
Pa. D. & C.2d 664 (C.P. Phila. 1963) (issue whether settlement
had been breached to be determined by the Orphans' Court where
the action was pending); Danko v. State Farm Ins. Co., 15 Pa. D.
& C.4th 615 (C.P. Fayette 1992) (new action claiming fraud in
connection with settlement of earlier litigation improper; issues
must be raised in the original action); Limmer v. Country Bel]
- 6 -
.
.
.
~perative Farmers, 220 Pa. Super. 171, 286 A.2d 669 (1971)
(proper procedure where party alleges a settlement has been
reached is for the court, upon motion of the party seeking to
prove the setlement, to hold a hearing in the pending action to
determine whether in fact a binding compromise and eettlement was
reached and whether any such alleged agreement should be en-
forced); Zlotziver v. Zlotziver, 169 Pa. Super. 588, 592-93, 83
A.2d 429 (1951) (a plaintiff cannot go behind a decree entered in
a prior action and introduce new matter and have the suit revived
and the investigation renewed) .
Under the above principles, the alleged settlement was a
matter that could have and should have been raised in the action
to No. 280 civil 1992. Therefore, the present action is preclud-
ed by the Doctrine of Merger.
C. plaintiffs' Claim Is Barred By principles of
Estoccel And Waiver.
Under the above authorities, if plaintiffs indeed believed a
settlement was reached prior to closing argument in the under-
lying action, then plaintiffs had a duty to bring the matter
before the Court for a hearing on the issue. Further, if in fact
the case had been settled, there was no case left to present to
the jury. If a controversy ie settled, then the cause of action
is extinguished and all that is left is the settlement. Melnick
v. Binenstock, sucra, 318 Pa. 533, 536, 179 A. 77 (1935).
- 7 -
.
,
.
.
Instead of pursuing the claimed settlement, Plaintiffs' counsel
went forward with closing arguments (Complaint, p. 22) and
permitted the case to go to jury verdict and the entry of judg-
ment. By so doing, Plaintiffs waived any right to claim a
settlement occurred and are now estoppped from pursuing this
action.
As stated in 28 Am. Jur.2d Estoooel and Waiver:
The rule that a party will not be allowed to maintain
inconsistent positions is applied in respect to posi-
tions in judicial actions and proceedings. As thus
applied, it may be regarded not strictly as a question
of estoppel, but as a matter in the nature of a oosi-
tive rule of orocedure based on manifeet iustice and.
to a qreater or lesser deqree. on considerations of
orderliness. reqularitv and exoedition in litiaa-
.t..i.!;2n... .
The rule against inconsistent positions applies
generally to positions assumed not only in the course
of the same action or proceeding, but also in proceed-
ings supplemental thereto ... and even in separate
actions or proceedings involving the same parties and
questions.
28 Am. Jur.2d, Estoooel and Waiver, ~69 at p. 696-98 (emphasis
added). Accord: Danko v. State Farm Ins. Co., 15 Pa. D. & c.4th
615 (C.P. Fayette 1992) (plaintiffs not allowed to collaterally
attack jurisdiction of court in another action brought by plain-
tiffs) .
Under the above principle, plaintiffs are estopped from
bringing this action.
- 8 -
,
.
,
.
D. As A Matter Of Law, Mr. Lantz, As Attorney For
Jacobsen, Lacked Authority To Bind Textron To A
Settlement By Verbal Discuseions With Counsel That
Were Not On The Record Or In Writinq.
An attorney does not have the authority as a matter of law
to bind his client to a settlement by off the record discussions
with opposing counsel.
senvshvn v. Karlak, 450 Pa. 535, 540-41,
299 A.2d 294 (1973) (an attorney does not have apparent authority
to settle litigation); School District of Philadelehia v. Framlau
Core., 15 Pa. Commw. 621, 328 A.2d 866 (1974); Lodowski v.
O'Mallev, 227 Pa. Super. 568, 307 A.2d 439 (1973). The complaint
baees the allleged settlement on oral, off the record discussions
with counsel. Therefore the complaint is deficient and fails to
state a cause of action.
E. The Allegations Of The Complaint, As A Matter of
Law Do Not Constitute A Compromise And Settlement,
But At Most Constitute preliminarv Neqotiations.
Informal discussions of counsel that are off the record and
not ratified on the record or in writing do not constitute a
eettlement. Onvx Oils & Resins. Inc. v. Moss, 367 Pa. 416, 420-
21, 80 A.2d S15 (1951) ("We cannot enforce a portion of an agree-
ment which failed to materialize ..."). The facts alleged in the
complaint could be construed, at most, as an accord which has no
binding effect until a settlement agreement is executed. 1
P.L.E. Accords and Comeromises, ~1, pp. 40-42; Nash v. Atlantic
White Tower System. Inc., 404 Pa. 83, 89-90, 170 A.2d 341 (1961)
- 9 -
,
.
.
(an accord is revocable by either party until a binding settle-
ment is executed).
F. As To The Claim Against Mr. Lantz, He Has No Per-
sonal Liability since He Acted For A Disclosed
PrinciDal.
The Complaint avers that Mr. Lantz acted with either actual
or apparant authority. In such a situation, the agent has no
independent liability. Vernon D. Cox & Co.. Inc. v. Giles, 267
Par Super. 411, 415, 406 A.2d 1107, 1110 (1979) (individual
acting as an agent for a disclosed principal has no personal
liability unless the agent specifically agrees to assume euch
liability) .
4. For all of the reasons set forth above, the Complaint
fails to state a cause of action and Defendante' demurrer should
be granted.
WHEREFORE, the Complaint should be dismissed for failure to
etate a cauee of action.
II. LACK OF JURISDICTION
5. Paragraphs 1 through 4 are incorporated herein by
reference.
6. As set forth above, the claim that there was a settle-
ment of the action filed to No. 280 civil 1992 must be brought in
that action and not in a separate action. Thus, this Court does
- 10 -
.
.
.
.
.
.
not have jurisdiction in the present action to consider those
issues.
WHEREFORE, the Complaint should be dismissed for lack of
subject matter jurisdiction, any such jurisdiction being in the
action docketed to No. 280 Civil 1992.
III. FAILURE OF THE PLEADING TO CONFORM TO LAW OR
Jl.ULE OF COURT
7. Paragraphs 1 through 6 are incorporated herein by
reference.
8. As set forth above, the Complaint in this matter does
not conform to law or rule of court in the following respects:
(a) Under the authority set forth above, the
claim that a settlement was reached in the action filed
to No. 280 Civil 1992 must be raised in that action and
not in a new action; and
(b) The complaint viola tee Rule 201 which re-
quires that agreements between attorneys be in writing
or made on the record before the court.
WHEREFORE, the Complaint should be dismissed for lack of
conformity to law or rule of court and for the inclusion of
ecandaloue or impertinent matter.
- 11 -
,
~
.
.
.
IV. MISJOINDER OF A CAUSE OF ACTION
9. Paragraphs 1 through 8 are incorporated herein by
reference.
10. As set forth above, the claim of an alleged settlement
of the action to No. 280 Civil 1992 must be raised in that action
and not in a new action. The Complaint, therefore, has misjoined
a cause of action by attempting to bring a new action to the
present term and number.
WHEREFORE, the Complai.nt should be di.smissed for misjoinder
of a cause of action.
V. PENDENCY OF A PRIOR ACTION
11. Paragraphs 1 through 10 ar~ incorporated herein by
reference.
12. As set forth in the Complaint, a prior action was
brought to No. 280 civil 1992.
13. As set forth above, any matters pertaining to an
alleged settlement of that action must be brought in that action.
14. Even though the prior action has been reduced to
judgment pursuant to the verdict of the jury, the said action
constitutes a prior action which precludes the present action.
- 12 -
-'.,';
In The Court Of C=mmc;,\ P1e=:s Of C:Jr.'::::~It'!::nd C,:u:;~'YI pSMr:sylvcni:
Alfred 8nd M8ry Lu Lambert
'IS.
De18no M. L8ntz, Esq.,'
~o.
95-7019...Civil Term
.~
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December 11, 1995
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ALrRIlD and MARY LU 'IN THI COURT or COIOlON PLUS or
LIJIBIRT, I CUMBIlRLAHD COUNTY, PINlfSYLVAIIIA
Plaintiffa ,
I
v. I
,
'l'BI JACOBSIN DIVISION ,NO. 95-7019 CIVIL TERN
OP '1'II'1'IlON, IIIC . and ,
DILAllO M. LAllTI, ISQUID, CIVIL ACTIOII - LAW
Defendant. I
III RB I DIPIlHDAlI'l'S' PDLIMlllARY OBJJ!CTImIi
BIPOD SB_IILY. P.J AltD BAYLBY. J.
ORDBR
AIID liON, thi. J~~y of July, 1996, the pre1t.!nary
objection of Defendant., the Jacob.en Divi.ion of Textron, Inc.,
and Delano M. Lantz, I.q., in the fora of a demurrer, i. GRAB'l'ID.
By the Court,
Terry S. B,..n, I.quire
por the Plaintiff.
.arvey rreedenberg, I.quire
por the Defendant.
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ALFRED and MARY LU
LAMBBRT,
I
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THB JACOBSBN DIVISION I
or TBXTRON, INC. and I
DBLANO M. LANTI, BSQUlRE I
Defendante I
IN THE COURT or COMMON PLBAS or
CUMBBRLAND COUNTY, PBNNSYLVANIA
Plaintiffe
V.
NO. 95-7019 CIVIL TERM
CIVIL ACTION - LAW
IN HE I DBpENDANTS' PRELIMINARY OBJECTIONS
BBPORB SHBILY. P.J AND BAYLBY. J.
OPINION AND ORDER OF COURT
Before the court are the preliminary objection. of
Defendant., Jacob.en Divi.ion of Textron, Inc. (Jacob.en) and
Delano M. Lantz, B.q. (Atty. Lantz). The preliminary objection.
are pre.ented in the form of a demurrer, objection to lack of
juri.diction, failure of a pleading to conform to law or rule of
court, mi.joinder of a cau.e of action, and pendency of a prior
aation.1 The matter ha. been argued and i. now ripe for
deci.ion.
A. .tated above, Defendante' initial preliminary objection
i. in the form of a demurrer. Our .tandard for ruling on .uch a
preliminary objection ie well-e.tabli.hedl
lThe demurrer i. grounded on .everal ba.e.1 (1) non-
enforceability of off-the-record agreement. between coun.el, (2)
the aau.e of action i. barred by the doctrine of merger, (3)
Plaintiff.' claim i. barred by the principle. of e.toppel and
waiver, (4) Attorney Lantz'. lack of authority to bind Jacob.en,
(5) the allegation. of the complaint are onlI of preliminary
negotiation. and do not .tate a caule of act on in breach of
contract, (6) Attorney Lantz'e lack of perlonal liability becau.e
he acted al an agent for a dilcloeed principal.
..~~
NO. 95-7019 CIVIL TBRM
All mat.rial f.ct. ..t forth in the compl.int
.. w.ll .. .11 the inf.r.nc.. re..on.bly
d.ducibl. th.r.from .r. .dmitt.d .. true for
the purpo.. of thi. r.vi.w. The qu..tion
pr...nt.d by the d.murr.r i. wh.ther, on the
f.ct. .v.rr.d, the law ..y. with cert.inty
th.t no r.covery i. po..ible. Wh.r.. doubt
.xi.t. .. to wh.th.r . demurr.r .hould be
.u.t.in.d, thi. doubt .hould be in f.vor of
ov.rruling it.
Jon.. v. w.an.r, 425 p..Super. 102, 104-105, 624 A.2d 166, 167
(1993). Th. mat.ri.l f.ct. .et forth in the complaint, nec....ry
for the di.po.ition of the prelimin.ry objection., are a.
follow..
w. not. initially, and recognize a. the main r...on th.t w.
.re .t thi. point, th.t the p.rti.. do not .gree on the f.ct..
However, .. .t.ted in the above .t.ndard, we mu.t accept the
well-pl..d.d f.ct. from the complaint. In January, 1992,
Pl.intiff. (th. Lamb.rt.) initiated a product. liability .uit
.g.in.t J.cob.en, among other.. Atty. Lantz repr..ented J.cob.en
in th.t .ction. Tri.l in the action commenced in thi. court on
November 13, 1995, and .ettlement di.cu..ion. took place
throughout. On that date, plaintiff'. coun.el, Terry S. Hyman,
B.q. (Atty. Hyman) made a .ettlem.nt demand of $95,000 on
J.cob.en, contingent upon approval of the .ettlem.nt by the
work.r'. compen.ation carrier. That evening, according to the
complaint, Atty. Lantz offered $95,000 depending upon approval by
the worker'. compen.ation carrier. On Wedne.day, November 15,
Atty. Hyman informed Atty. Lantz that the .ettlement had been
approved by the worker'. compen.ation carrier, but that Attorney
2
.
NO. 95-7019 CIVIL THRM
Tt.othy I. Mark (Atty. Mark), on behalf of J'R Ford Tractor Sale.
(with whom the Lambert. had previou.ly .ettled), had not agreed
to withdraw an indemnity claim. Ba.ed on Atty. Mark'.
repre.entation, Atty. Hyman a.ked Jacob.en to con.ider .ettling
the ca.e .olely a. to the Lambert. and the worker'. compen.ation
carrier for $95,000. On the evening of Wedne.day, November 15,
Atty. Lantz declined that offer but indicated that Jacob..n would
be willing to .ettle all claim. involved in the .uit for the .um
of $95,000. Atty. Hyman .tated that he did not have authority to
agree to that, but that he would extend Atty. Lantz'. offer and
.peak with him at trial on Thur.day, November 16.
On Thur.day, November 16, at the lunch break of the trial,
Atty. Hyman obtained con.ent from J'R Ford Tractor to .ettle
their ind..nity claim a. part of the $95,000 .ettlement. At
approximately 1100 p.m., Atty. Hyman indicated that the Lambert.
accepted the $95,000 offer to .ettle the ca.e, including
voluntary di.mi..al of J'R Ford Tractor'. claim for indemnity or
contribution. At approximately 2130 p.m. on November 16, Atty.
Lantz informed Atty. Hyman that Jacob.en would not honor the
Lambert. acceptance of Jacob.en'. $95,000 .ett~ement offer.
The trial progre.eed, and before clo.ing argument. on
Friday, November 17, 1995, Atty. Hyman informed Atty. Lantz of
hi. intention to file an action to enforce what he con.idered to
be a valid .ettlement agreement. The dieputed .ettlement wa.
never communicated to the court or placed on the record. Trial
3
RO. 95-7019 CIVIL TBRM
continu.d .nd the jury r.turn.d . v.rdict in f.vor of J.cob..n.
Jud~nt w.. .nt.r.d on the v.rdict on Decemb.r 5, 1995. Th.
L.-bert. fil.d the in.tant complaint on D.c.mber 7, 1995.
DISCUSSION
Def.nd.nt. cont.nd initially that the d.murr.r .hould b.
gr.nt.d b.c.u.., ba..d on Pa.R.C.P. 201, alleged off-th.-r.cord
or.l .gr....nt. b.tw..n coun..l r.l.ting to ..ttl.ment of pending
litig.tion .re un.nforc.able. P..R.C.P. 201 .t.t..,
Agre...nt. of .ttorn.y. r.lating to the
bu.in... of the court .h.ll be in writing,
.xc.pt .uch .gr..ment. at bar .. are not.d by
the prothonotary on the minute. or by the
.t.nogr.ph.r in hi. note..
OUr r....rch .nd our r.vi.w of the brief. of the partie. f.il. to
r.v.al any c... in which Rule 201 ha. b..n u..d to .olv. ·
probl.. of thi. natur.. Por th.t metter, our r....rch h.. f.il.d
to r.v..l ADr ca.e. with .imilar fact.. Bow.ver, D.fendant.'
w.ll-r....rched brief do.. point out on. int.r..ting ca.. d..ling
with Rul. 201.
Commonwealth. D.oart..nt of Tran.oortation v.
XrUDD, 66 Pa.Commw. 397, 399, 444 A.2d 841 (1982). In XrUDD, .n
.ll.g.d or.l .ettl.ment agr..ment b.twe.n coun..l r.g.rding ·
lic.n.. .u.p.n.ion w.. held not binding on the D.partm.nt of
Tr.n.portation wh.n it wa. not evid.nced anywh.r. on the r.cord.
Th. Court cited Rul. 201 a. r.quiring that the propo..d
.ettl...nt be in writing. It ..em. therefore that the in.tant
c... i. ju.t the type for which Rule 201 wa. written.
Con.id.ring the event. out of which thi. .uit aro.e, we c.n
4
HO. 95-7019 CIVIL THRM
cert.inly ... why a rule .uch a. Rule 201 i. n.ce...ry. Bowever,
bec.u.e of the dearth of ca.e law on thi. i..ue, we c.nnot
confidently .ay that it i. clear that Rule 201 operate. to
inv.lid.te thi. cau.e of action.
Defendant. next claim that plaintiff'. cau.e of action i.
barred by the lonq-e.tabli.hed doctrine of merqer. The doctrine
h.. been d..cribed a. follow..
Under the doctrine of merqer, . claim or
demand which i. the .ubject of litiqation i.
..rqed into the judgment, .nd the jud~nt
then evid.nc.. . new obliq.tion. The claim
or demand in it. oriqin.l form i. at an end
and c.nnot aqain be the .ubject of
litiqation, but in it. new form a. a judqment
it may be enforced by judici.l proce.., and
it can be pleaded in it. new form. Tho.e
principle. have been .pplied to preclude .n
action on an .qreemant compromi.inq an action
in equity when the final decree wa.
.ub.equently entered.
20A Pennevlvania Law BncvcloDedia, Judqment. 1228 at 119. In the
in.t.nt ca.e, Defendant. contend that when the jury returned a
verdict in Jacob.en'. favor, and judqment wa. entered thereon,
any litiqation involvinq the alleqed .ettlement wa. precluded.
Plaintiff. re.pond that the merqer doctrine .imply doe. not apply
in thi. matter.
with reqard to the merqer i..ue, we believe that the ca.e of
Lance v. Mann, 360 Pa. 26, 60 A.2d 35 (1948), i. in.tructive. In
Lance, the plaintiff eued for money due upon the .ale of a
p.rtner.hip intere.t. The court entered judgment in an amount
ba.ed on plaintiff's income as shown on his tax return. After
5
BO. 95-7019 CIVIL TIRM
the jud~nt w.. marked p.id .nd ..ti.fied by defend.nt, the IRS
ruled th.t pl.intiff'. income .hou1d h.ve been .et .t . higher
.-aunt. A higher income ..cribed to plaintiff would h.ve .erved
to d.cr.... def.nd.nt'. liability to him. Defendant therefor.
petition.d for re.titution from pl.intiff. The penn.ylv.ni.
Supr." Court di.mi..ed the p.tition, .tatingl
It i. el.ment.ry th.t judgment ..ttl..
.verything involved in the right to recover,
not only all matter. th.t were r.i.ed, but
tho.. which might h.ve been r.i.ed...The
c.u.. of action i. merged in the judgment
which then .vidence. . new oblig.tion. That
oblig.tion, in thi. c..e, h.. been .ati.fied.
(Citation. omitted).
Lanc. .t 28, 60 A.2d at 36. In the inat.nt ca.e, we b.lieve th.t
it i. ab.olutely clear that the merger doctrine appli.., .nd th.t
the .ntry of judgment preolud.. a .epar.te action by the L.-bart.
to .nforc. the alleged .ett1.ment agreement.
The procedure that .hould have been followed in thi. matter
i. not difficult to di.cern. The matter of the conte.ted
.ettlement .hould have been rai.ed before the court, on the
record, a. .oon a. it became apparent that one party believed
th.t an .nforceab1e agreement had been reached and the other did
not. p.nn.ylvania ca.e law i. clear on the proper procedure to
be u.ed when thi. type of di.pute ari.e. between two partie.
during litigation I there muet be an evidentiary hearing to allow
the court to decide whether a .ettlement ha. in fact been
re.ched.
6
HO. 95-7019 CIVIL TlRM
In thi. regard, the ca.e of Lfmmar v. Country Belle
COQDarative p.~r., 220 Pa.Super. 171, 286 A.2d 669 (1971),
while not directly on point, i. illuminating. In Limmer, the
trial court .ntered judgment again.t the d.fendant. for $25,000,
.tating that an off.r of ..ttlement in that amount wa. made by
the defendant. and accepted by the plaintiff. Th. defendant.
then appeal.d from that judgment, .tating that no off.r wa. med.
and that ev.n if an offer wa. made, it wa. not accept.d in a
tt..ly fa.hion. On appeal, the P.nn.ylvania Superior Court h.ld
that it could not rule upon whether a valid .ettlement wa.
.ffected becau.. no record wa. made in the court below a. to the
factual i..ue. involved. The Court .tated,
That an evidentiary hearing into the
exi.tence .nd binding .ffect of the
..ttlement .gr....nt i. the .ppropriate
procedure to be followed in matter. of
cont..t.d .ettlement agre.ment. ha. been
clearly e.tabli.hed by the court..
*
*
*
*
*
*
*
*
...[T)he proper procedure for the lower court
to follow i. to have a hearing in the matter
.nd thereafter make finding. of fact to
.upport it. conclu.ion..
Lf---r at 173, 175, 286 A.2d at 670, 671. Thereupon, the
Superior Court rever.ed and remanded for an evidentiary hearing
to determine the propriety of the .ettlement.
In the in.tant ca.e, a. .oon a. coun.el for the Lambert.
beli.ved that an enforceable .ettlement agreement had been
r.ached, he .hould have informed the court. Then, if Defendant.'
7
10. g5-70lg CIVIL TBRM
coun..l h.d indic.t.d hi. di..gr....nt, w. would h.v. h.ld .n
.vid.nti.ry h..ring on the i..u.. In.t.ad, coun..l for the
~.rt. d.cid.d to t.k. . ri.k. ae informed coun..l for
d.f.nd.nt th.t h. b.li.v.d th.t th.y h.d .n enforc..ble
..ttl...nt .gr....nt, but in.te.d of informing the court and
t.king .ction to .nforc. th.t ..ttle..nt, h. proc..ded with tri.l
. .nd .llow.d the c... to go to the jury. Only .ft.r the v.rdict
c... back in f.vor of J.cob.en did coun.el for the Lamb.rt. t.k.
.ction with r.g.~d to the .ettl...nt. To .llow the Lambert. to
r.turn to court .fter f.iling in front of . jury and .tt.mpt to
.nforc. the .lleg.d ..ttl.m.nt in . ..par.te action i. not the
type of litigation conduct th.t thi. court will endor.. or .v.n
.llow. W. believe that it would cripple efficient litig.tion of
civil c.... to permit p.rtie. involved in litig.tion, who .ng.g.
in ..ttl...nt n.goti.tion. during tri.l, to t.ke th.ir ch.nc..
with. jury .nd then, when the verdict i. not in their f.vor, to
bring . ..p.r.t. .uit to enforce the l..t ..ttl...nt amount th.t
th.y h.d di.cu...d. Therefore, for the rea. on. .t.ted .bov.,
D.f.nd.nt.' demurr.r to the Lambert. complaint will b. grant.d.
Bec.u.. the demurrer will be granted, we .hall not addre..
D.fendant'. other preliminary objection..
8