Here is a 2025 opinion from the Northern District of Texas, Dallas Division. The case discusses whether a settlement agreement reached between a parties attorney and the Defendant is enforceable. The style of the opinion is, Farmers Lloyds Insurance Company Of Texas v. Herman Haynes and Sharla Haynes.
While this is a personal injury claim, the settlement issues apply to all types of cases. Briefly, the Haynes hired an attorney to represent them in a personal injury lawsuit. Negotiations between the attorney and Farmers began with an eventual agreed settlement. After the settlement, the Haynes refused to sign settlement documents. The Haynes refused the settlement and fired their attorney.
Farmers sued the Haynes for breach of contract and filed this motion for summary judgment.
This Court goes into a lengthy discussion about contracts and settlements and what follows is what the author believes is relevant to this opinion.
Farmers asserts a claim against Defendants for breach of contract. It alleges that Defendants breached the settlement agreement reached between their counsel and Farmers by refusing to sign the CSA or accept tender of the settlement checks.
Under Texas law, to succeed on a breach of contract claim, the plaintiff must show “(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.” “A breach occurs when a party fails or refuses to do something he has promised to do.”
“Forming a valid contract under Texas law requires: (1) an offer, (2) acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party’s consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding.” And, under Texas law, “courts have long held that the essential terms for a settlement agreement are the amount of compensation and the liability to be released.”
Counsel exchanged offers and counteroffers, until Defendants’ counsel accepted sums of $162,500 and $1,500 on his clients’ behalf and confirmed the settlement via e-mail.
Farmers’s counsel prepared the CSA, which provided for a full and final release of claims, and Defendants’ counsel executed the CSA. And Farmers provided Defendants’ counsel with the settlement checks to deliver to Defendants.
Based on the summary judgment evidence, there was an offer by Farmers, acceptance by Defendants’ counsel, a meeting of the minds, consent as shown by Defendants’ counsel’s execution of the CSA, and delivery of the CSA. And the CSA contains the material terms: the amount of compensation and the liabilities to be released.
And, so, Farmers has demonstrated that a valid, binding settlement agreement was formed.
“It is well settled that a party may clothe his attorney with actual or apparent authority to reach and sign a settlement agreement that binds the client.” And “the client will be bound by the settlement agreement when his attorney is clothed with actual or apparent authority to enter into the agreement.”
Farmers points to the attorney-client contract in which Defendants entered with their counsel, which states the “[c]lient hereby authorizes [a]ttorney to negotiate [c]lient’s claim/case.” And Farmers offers evidence of Defendants’ counsel’s correspondence showing (1) a December 7, 2022 letter announcing his representation of Defendants and revoking any previously signed medical releases, (2) separate settlement demands on behalf of both clients seeking to resolve their UM claims, and (3) a counteroffer, which states “I am authorized to counter your offer of $125k with a new demand for $200k.”
The attorney-client representation agreement and correspondence show Defendants’ counsel’s authority to act on Defendants’ behalf.
And, so, the Court should find that Farmers has met its summary judgment burden to establish there was no genuine dispute of material fact that Defendants’ counsel was authorized to enter a settlement on their behalf.