Lampe v. O'Toole

No. 2--96--1449

___________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT
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JOHN H. LAMPE and BECKY ) Appeal from the Circuit Court
S. LAMPE, ) of Lake County.
)
Plaintiffs-Appellants, )
)
v. ) No. 96--L--105
)
JOAN C. O'TOOLE, )
)
Defendant-Appellee )
) Honorable
(Sinnett Excavating, Inc., ) Bernard E. Drew, Jr.,
Defendant). ) Judge, Presiding.
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JUSTICE COLWELL delivered the opinion of the court:

Plaintiffs, John and Becky Lampe, sued defendants, Joan
O'Toole and Sinnett Excavating, Inc. (Sinnett), for personal
injuries. O'Toole moved to dismiss (see 735 ILCS 5/2--
619(a)(9)(West 1996)), alleging that plaintiffs had orally settled
their claim against her. The trial court granted the motion and
plaintiffs appeal (see 155 Ill. 2d R. 304(a)), arguing that the
dismissal was erroneous because plaintiffs and O'Toole never
reached a binding settlement agreement. We disagree and affirm.
We hold the agreement met the requisites for a valid contract and
was enforceable.
On February 9, 1996, plaintiffs filed this suit. Their
complaint alleges that, in July 1991, John Lampe was injured when
his car collided with a vehicle O'Toole negligently drove while
working for Sinnett.
On July 15, 1996, O'Toole moved to dismiss, alleging in part
the following facts. On February 7, 1995, after long negotiations,
the parties verbally agreed to settle all plaintiffs' claims for
$28,750 from O'Toole's insurer. That day, her attorney mailed
plaintiffs' attorney a release, a stipulation to dismiss, and a
letter confirming the settlement. On February 14, 1995, the case
was dismissed for want of prosecution. However, plaintiffs'
attorney did not return the release; he told O'Toole's attorney
that, despite his advice, plaintiffs refused to sign. On February
9, 1996, plaintiffs refiled the suit. On March 20, 1996, O'Toole's
attorney reminded their attorney of the settlement. Plaintiffs'
attorney responded that the case was settled, and he requested
another release. O'Toole's attorney sent one. As of June 17,
1996, plaintiffs had not returned the release; their attorney
reassured O'Toole's attorney that they would soon do so.
Responding to the motion to enforce the settlement, plaintiffs
asserted there was no such agreement because plaintiffs never
signed or delivered the release. On November 13, 1996, after a
hearing, the trial court dismissed the cause with prejudice,
ordered defendant to deposit the $28,750 settlement money, and
found no just reason to delay the enforcement or appeal of the
order (see 155 Ill. 2d R. 304(a)). Plaintiffs timely appealed.
Later, the parties stipulated to the following facts. In
March 1996, John Lampe agreed to O'Toole's settlement offer and
authorized his attorney to accept it. On March 20, 1996,
plaintiffs' attorney advised O'Toole's attorney of this and
requested another release and stipulation to dismiss. O'Toole's
attorney immediately sent these documents. At the hearing on the
motion to dismiss, plaintiffs' attorney told the court that John
Lampe authorized him to accept the settlement offer.
Plaintiffs argue that the settlement offer is not binding
because there was no meeting of the minds. They contend that,
because they refused to sign the release, the parties never agreed
on terms. Alternatively, plaintiffs assert that, because any
agreement was wholly executory, it was unenforceable and plaintiffs
were free to terminate it.
We hold that the parties entered a valid settlement agreement
by which both are bound and that the trial court properly enforced
it. A proper oral settlement agreement is enforceable and the lack
of a written release does not control unless the parties intended
to make a release a condition precedent to the agreement.
The case law recognizes that a settlement agreement is a
contract and its enforcement and construction are governed by
contract law. City of Chicago Heights v. Crotty, 287 Ill. App. 3d
883, 885 (1997); Solar v. Weinberg, 274 Ill. App. 3d 726, 731
(1995); Sementa v. Tylman, 230 Ill. App. 3d 701, 705 (1992). Thus,
an oral settlement agreement is enforceable absent mistake or
fraud. Brewer v. National R.R. Passenger Corp., 256 Ill. App. 3d
1083, 1088 (1993), rev'd on other grounds, 165 Ill. 2d 100 (1995);
Fishburn v. Barker, 165 Ill. App. 3d 229, 230 (1988); Sheffield
Poly-Glaz, Inc. v. Humboldt Glass Co., 42 Ill. App. 3d 865, 868
(1976). As with any contract, there must be an offer, an
acceptance, and a meeting of minds on terms. McAllister v. Hayes,
165 Ill. App. 3d 426, 427 (1988); Sheffield Poly-Glaz, 42 Ill.
App. 3d at 868-69.
The trial court found that the parties reached a valid oral
settlement agreement, and it enforced the agreement. We will not
disturb this decision unless it was against the manifest weight of
the evidence. See In re Estate of Glassman, 257 Ill. App. 3d 102,
107 (1993). The evidence supports the judgment here.
The parties stipulated that plaintiff John Lampe "agreed to
accept the Defendant's settlement offer of $28,750.00 and
authorized his attorney *** to accept the Defendant's settlement
offer." (Emphasis added.) With this stipulation, plaintiffs
conceded that there were an offer, an acceptance, and a meeting of
the minds on terms. No more was required to create a contract.
Plaintiffs insist there was no binding agreement because,
before the court entered judgment, they refused to complete a
release O'Toole's attorney sent them after they accepted the offer.
Plaintiffs' argument depends on the assumption that signing the
release was a condition precedent to the settlement. However, the
trial court found otherwise, and we believe its finding is not
against the manifest weight of the evidence.
Even where the parties contemplate the execution of a written
release or stipulation, this writing need not be a condition
precedent to a valid settlement agreement. Estate of Glassman, 257
Ill. App. 3d at 107; In re Marriage of Lorton, 203 Ill. App. 3d
823, 827 (1990); see also Wilson v. Wilson, 46 F.3d 660, 666-67
(7th Cir. 1995); Schaap v. Executive Industries, Inc., 760 F. Supp. 725, 727-28 (N.D. Ill. 1991). Obviously, to hold otherwise would
foreclose courts from ever recognizing or enforcing oral agreements
to settle. Whether the parties intended to condition a settlement
on the execution of a writing is a question of fact. See Estate of
Glassman, 257 Ill. App. 3d at 107-08; Mattingly v. City of Chicago,
897 F. Supp. 375, 377 (N.D. Ill. 1995). Here, the trial court
found the parties intended no such condition precedent.
Nothing in the limited record on appeal suggests that, during
their negotiations, either party specified that the agreement
hinged on the execution of a written release. The stipulation
strongly suggests otherwise. The form release, though prolix, does
not materially alter the settlement. It merely embodies the
agreement the parties had already reached: that, in return for
$28,750, plaintiffs would forego their suit against O'Toole.
Plaintiffs rely on Thornberry v. Board of Education, 8 Ill.
App. 3d 351 (1972), in which the appellate court held that the
plaintiff had failed to state a cause of action to enforce the
pretrial oral settlement of his personal injury claim. The court
explained that "[i]t is generally known in the legal profession
that the compromise is not considered final or concluded until
either a judgment has been entered, the case disposed or releases
have been signed." Thornberry, 8 Ill. App. 3d at 354.
Whatever the accuracy of this observation at the time it was
made, we believe it sets up an arbitrary presumption--or an
arbitrary per se rule--that an oral settlement agreement is
unenforceable. The weight of authority, including what we have
cited, encourages oral settlement agreements in tort suits and
endorses no such presumption. We agree with the Appellate Court,
Third District, that a properly proved oral agreement is
enforceable even without a signed release, an expression of a
party's willingness to sign a release, or a judgment incorporating
the settlement. Fishburn, 165 Ill. App. 3d at 230. Insofar as
Thornberry holds otherwise, we do not follow it.
We must also reject plaintiffs' assertion that, because any
agreement was purely executory, they could repudiate it at any
time. We have long recognized that an agreement to settle pending
litigation is effective when arrived at unless the parties have
subjected its effectiveness to contingencies. In re Marriage of
Maher, 95 Ill. App. 3d 1039, 1042 (1981). There need be no final
judgment incorporating the settlement agreement for a party to
enforce the agreement. Fishburn, 165 Ill. App. 3d at 230. If the
agreement is a valid contract, the parties may not repudiate it and
the trial court may enforce it summarily. Brewer, 256 Ill. App. 3d
at 1088; Lorton, 203 Ill. App. 3d at 827; Sheffield Poly-Glaz, 42
Ill. App. 3d at 868; Wilson, 46 F.3d at 666.
For the foregoing reasons, the judgment of the circuit court
of Lake County is affirmed.
Affirmed.
DOYLE and RATHJE, JJ., concur.