EDUARDO LECHUGA, APPELLANT,
v.
FLANIGAN'S ENTERPRISES, INC., D/B/A BIG DADDY'S LOUNGE, APPELLEE
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Lechuga sued Flanigan's Enterprises for injuries from an attack at its lounge. During settlement negotiations, Flanigan's represented it would file for liquidation bankruptcy, leading Lechuga's attorney to settle for $4,500. When Flanigan's instead filed for reorganization, Lechuga refused to sign the settlement. The court reversed the trial court's enforcement order, holding that the attorney lacked authority to settle on different terms and that rescission was available based on unilateral mistake.
The court held that there was no evidence supporting the trial court's finding that Lechuga's counsel had blanket authority to unconditionally settle for $4,500, and that an attorney has no authority to settle on conditions other than those unequivocally approved by the client. Additionally, the settlement could be rescinded based on unilateral mistake induced by Flanigan's misrepresentation about the type of bankruptcy filing.
[1] An attorney's employment does not, in itself, grant authority to compromise a client's cause of action or settle the client's claim, absent an emergency.
[2] An attorney has no authority to settle a client's claim on conditions other than those unequivocally approved by the client.
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Establishes the foundational principle that settlement authority must be expressly granted by the client
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Join FLexlaw to unlock all legal intelligenceLechuga suffered injuries from an attack in the parking lot of Big Daddy's Lounge, owned by Flanigan's Enterprises. During settlement negotiations on …
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PER CURIAM.
Lechuga instituted a lawsuit against Flanigan’s, seeking $45,000 in damages for injuries suffered when he was attacked and beaten in the parking lot of a Big Daddy’s liquor lounge, owned and operated by Flan-igan’s.
On or about October 31, 1985, during settlement negotiations, Flanigan’s counsel informed Lechuga’s attorney that Flani-gan’s would be filing a bankruptcy petition on November 4,1985. Based on that representation, Lechuga’s attorney advised Mr. Lechuga and obtained authorization to accept a $4,500 settlement. The case was dismissed after the trial court was apprised of the negotiations and settlement.
Later, Lechuga’s attorney learned that Flanigan’s did not file for a liquidation in bankruptcy, as was represented to Lechu-ga, but instead filed for reorganization under the bankruptcy laws. When the settlement and release documents were offered for execution, Lechuga refused to sign contending that (1) he was misled concerning Flanigan’s intentions, (2) his attorney was authorized to settle only if Flanigan’s was going into liquidation under the bankruptcy laws, (3) his attorney had no authorization to settle on terms and conditions other than as specified, (4) the settlement is unreasonable, and (5) there was a unilateral mistake as to the defendant’s ability to satisfy a judgment.
This appeal is brought from a trial court order compelling enforcement of the $4,500 settlement agreement.
There is no evidence in the record which supports the trial court’s finding that Lechuga’s counsel had blanket authority to unconditionally settle the case for $4,500. In fact, the unrebutted testimony is to the contrary. The employment of an attorney does not, of itself, give the attorney authority to compromise the client’s cause of action or settle the client’s claim, Palm Beach Royal Hotel, Inc. v. Breese, 154 So. 2d 698 (Fla. 2d DCA 1963), absent an emergency situation. Bursten v. Green, 172 So. 2d 472 (Fla. 2d DCA 1965). It follows that an attorney has no authority to settle a client’s claim on conditions other than those unequivocally approved by the client.
Even if Lechuga had given his attorney authority to settle, the agreement could still be rescinded on the basis of a unilateral mistake. Where it is shown that (1) the mistake was induced by the party seeking to benefit from the mistake, (2) there is no negligence or want of due care on the part of the party seeking a return to the status quo, (3) denial of release from the agreement would be inequitable, and (4) the position of the opposing party has not so changed that granting the relief would be unjust, a unilateral mistake may provide a basis for rescission of a contract. Maryland Casualty Co. v. Krasnek, 174 So. 2d 541 (Fla.1965); compare Department of Transp. v. Ronlee, Inc., 518 So. 2d 1326 (Fla. 3d DCA 1987) (rescission not available for unilateral mistake where bidder on public contract is negligent and tardy), rev. denied, 528 So. 2d 1183 (Fla.1988).
For the reasons stated herein, the trial court should have denied the defendant’s motion for enforcement of the settlement agreement and reset the cause for trial.
REVERSED AND REMANDED.
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Henson v. James M. Barker Co., Inc., 555 So. 2d 901 (Fla. 1st DCA 1990)…ction can be set aside or rescinded on the ground of a unilateral mistake of fact where the evidence supports the requisite elements of that claim. Maryland Casualty Co. v. Krasnek, 174 So. 2d 541 (Fla.1965); Lechuga v. Flanigan’s Enterprises, Inc., 533 So. 2d 856 (Fla. 3d DCA 1988); Pennsylvania National Mutual Casualty Ins. Co. v. Anderson, 445 So. 2d 612 (Fla. 3d DCA), rev. denied, 453 So. 2d 43 (Fla.1984); cf. Smiles v. Young, 271 So. 2d 798 (Fla. 3d DCA), cert. denied, 279 So. 2d 305 (Fla.1973). The equ…
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Moralinda Rachid v. Omaira Torres Perez, 26 So. 3d 70 (Fla. 3d DCA 2010)…he party seeking a return to the status quo, (3) denial of release from the agreement would be inequitable, and (4) the position of the opposing party has not so changed that granting the relief would be unjust. Lechuga v. Flanigan’s Enters., Inc., 533 So. 2d 856, 857 (Fla. 3d DCA 1988). Here, Rachid does not claim that any party misled or induced her to enter into the settlement agreement. Rather, she contends that her attorney misled or induced her. Thus, her claim fails as a matter of law. Rachid also can…
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DePRINCE v. Starboard Cruise Servs., Inc., 163 So. 3d 586 (Fla. 3d DCA 2015)…status quo, (3) denial of release from the agreement would be inequitable, and (4) the position of the opposing party has not so changed that granting the relief would be unjust. Rachid, 26 So. 3d at 72 (quoting Lechuga v. Flanigan’s Enters., Inc., 533 So. 2d 856, 857 (Fla. 3d DCA 1988)); Ali R. Ghahramani, M.D., P.A. v. Pablo A. Guzman, M.D., P.A., 768 So. 2d 535, 537 n. 1 (Fla. 4th DCA 2000). Examining the facts as alleged and supported by DePrince, Starboard did not conclusively demonstrate either of the.…
Previewing 3 of 9 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Md. Cas. Co. v. Krasnek, 174 So. 2d 541 (Fla. 1965)
- Bursten v. Hyman Green and Irving Green, 172 So. 2d 472 (Fla. 2d DCA 1965)
- Palm Beach Royal Hotel, Inc. v. Breese, 154 So. 2d 698 (Fla. 2d DCA 1963)
- Dep't OF Transp. v. Ronlee, Inc., 518 So. 2d 1326 (Fla. 3d DCA 1987)