Fedders Corporation, Appellee, v. David Distributing Company, Eugene F. Alexander, and Rita M.alexander, Appellants, 710 F.2d 452 (8th Cir. 1983)

The issue in this case is whether a client is bound by a settlement agreement made by his lawyer. Fedders Corporation filed a diversity suit in the Eastern District of Missouri to collect debts allegedly owed to it by David Distributing Company and guaranteed by Eugene and Rita Alexander, David's owners. The defendants counterclaimed for breach of contract. The parties had several settlement discussions, and finally Fedders's attorney and the defendants' attorney agreed that the defendants would pay Fedders $105,000. The defendants' attorney drafted settlement documents and forwarded them to Fedders's attorney. When he objected that the Alexanders were not named as parties in the documents, the defendants' attorney told him to add them, that it would be "no problem." When the Alexanders refused to sign the documents, Fedders moved to enforce the settlement agreement. The court,¹  after a hearing, entered judgment in favor of Fedders.

The defendants appeal, arguing here, as they did below, that their attorney had no authority to agree to various terms in the settlement agreement, especially the waiver of counterclaims. After studying the record and the briefs, we conclude that the lower court, which was charged with judging the credibility of the witnesses, was entitled to find that the defendants did not carry their burden of proving that their attorney lacked actual authority to make the settlement agreement. See Leffler v. Bi-State Development Agency, 612 S.W.2d 835, 837 (Mo.App.1981). Accordingly, pursuant to 8th Cir.R. 14, we affirm on the basis of the lower court's opinion.