NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 THAI DUC LUU IN THE SUPERIOR COURT OF PENNSYLVANIA v. THAO THI NGUYEN AND EMMA KIM-AHN NGUYEN AND KHUE KIM NGUYEN APPEAL OF: EMMA KIM NGUYEN AND KHUE KIM NGUYEN No. 2113 EDA 2013 Appeal from the Order May 22, 2013 in the Court of Common Pleas of Philadelphia County Civil Division at No.: 04456 October Term, 2006 BEFORE: SHOGAN, J., STABILE, J., and PLATT, J. * MEMORANDUM BY PLATT, J.: FILED JUNE 24, 2014 Appellants, Emma Kim-Ahn Nguyen (Emma) and her sister, Khue Kim Nguyen (Khue), appeal from the trial court s order granting Appellee, Thai Duc Luu s, motion to enforce settlement. We affirm. A previous panel of this Court summarized the factual and procedural history of this case as follows: On June 23, 2005, [Appellee] and Thao [Thi Nguyen (Thao) 1 ] entered into a contract to purchase real property[,] with [Appellee] paying for 23.67% of the purchase price, and Thao * Retired Senior Judge assigned to the Superior Court. 1 Thao is Appellant Emma s sister-in-law. Thao is not a party to this appeal.
contributing 76.33% of the purchase. Each party maintained an interest in the property equal to their percentage of contribution. [Appellee] and Thao purchased the property with the intent of rehabilitating it into three family dwellings and one store front. [Appellee] and Thao took out a $220,000 mortgage on the property through Stonehedge Funding, LLC and its affiliate Greystone Holdings, LLC to finance the construction work, which was completed. Thao was allegedly under federal investigation for tax evasion, and had several outstanding liens against her. Thao transferred the entire property to her sister-in-law Emma for $214,000, far less than the fair market value, and used this money to clear the mortgage from Greystone. Emma then created a joint tenancy with right of survivorship between herself and her sister, Khue, for a rate below market value. On November 1, 2006, [Appellee] filed a lis pendens action against the property, alleging that these transactions were attempts to defraud both him and the IRS. On March 27, 2007, [Appellee] filed a complaint accusing Thao and Emma of breach of contract, unjust enrichment, negligent misrepresentation, and fraudulent transfer of property. Thao and Emma were originally represented by Cornell Moore, Esquire. However, Moore withdrew his appearance on February 19, 2008. On that same date, Jonathan Sobel, Esquire, entered his appearance on behalf of Thao and Emma. On March 6, 2008, [Appellee] filed a motion to amend the complaint to add Khue as a defendant. The trial court granted the motion and Sobel began representing Khue. A mandatory, court-ordered settlement conference took place on February 5, 2009.... Sobel claimed in a sworn affidavit that Thao, Emma and Khue were present in the next room during the negotiations, and that he gave them regular updates. He also attest[ed] that his clients gave him oral confirmation that they would accept a settlement for $60,000, payable to [Appellee] in secure installment judgment notes within 18 months and enforceable by the court. Emma and Khue dispute[d] Sobel s assertions, claiming that Thao alone agreed to settle with [Appellee]. Emma and Khue claim[ed] they expressly informed Sobel that they were - 2 -
not willing to settle. Emma allege[d] she became so concerned with Sobel s actions that she contacted her former attorney, [Cornell] Moore, and asked him to come to the settlement conference. In a sworn affidavit, Moore confirm[ed] that he came to the settlement conference. Moore stated that he heard both Emma and Khue tell Sobel they were unwilling to settle the case. Moore also aver[red] that he never heard Sobel inform Emma or Khue that they would be responsible for any portion of the settlement. Following the conference, [Appellee s] attorney, James A. Bell, IV sent letters to both Sobel and the trial court confirming the agreement to settle and informing the trial court that the parties had agreed to have the trial court supervise and administer the settlement. However, Thao, Emma and Khue refused to sign the settlement papers. In September 2009, Emma filed a complaint with the Disciplinary Board of the Supreme Court of Pennsylvania, which ultimately awarded Emma a partial refund of the fees paid to Sobel.[ 2 ] On May 28, 2010, [Appellee] moved to enforce the settlement. On June 21, 2010, Sobel filed a motion to withdraw as counsel.... On that same day, Attorney Chris Lombardo entered his appearance on behalf of Emma and Khue and filed a response to the motion to enforce settlement. Thao did not respond to the motions. On July 2, 2010, the trial court entered an order granting the motion to enforce settlement and denying as moot Sobel s motion[] to withdraw as counsel. On July 6, 2010, Christopher Lombardo, Esq. filed notices of appeal on behalf of Emma and Khue. On July 30, 2010, new counsel for Thao, Thomas P. Muldoon, Esq., simultaneously filed a notice of appeal and a request for reconsideration.... (Luu v. Nguyen, Nos. 2002 EDA 2010, 2236 EDA 2010, and 2237 EDA 2010, unpublished memorandum at 2-5 (Pa. Super. filed Sept. 12, 2011)). 2 The board made this award in connection with Mr. Sobel s representation of Emma in another case. (See N.T. Hearing, 5/21/13, at 38-40). - 3 -
On September 12, 2011, this Court quashed Thao s appeal, determining that she waived all issues because she failed to respond to Appellee s motion to enforce the settlement. (See id. at *7-8). This Court reversed the trial court s order with respect to Emma and Khue, and remanded to the trial court to hold an evidentiary hearing, stating that we were unable to reach the merits of the issues raised on appeal because the trial court had not made findings of fact with respect to the allegations raised by Emma and Khue. (See id. at *8-9). On May 21, 2013, the trial court held an evidentiary hearing on Appellee s motion to enforce settlement. Attorney Sobel, Attorney Moore, Emma, and Khue testified about the circumstances surrounding the February 5, 2009 settlement conference. On May 22, 2013, the court entered its order granting Appellee s motion, based on its determination that the record established that Mr. Sobel had express authority to bind Appellants to the oral settlement he negotiated with Appellee s counsel during the February 5, 2009 settlement conference. (See Trial Court Opinion, 8/06/13, at 13). The court s order directed Appellants to execute the written settlement agreement and installment judgment note within five days of the order, and - 4 -
to make the $60,000.00 settlement payment by September 6, 2013. (See Order, 5/22/13). This timely appeal followed. 3 Appellants raise one issue for our review: Did the evidence adduced at the evidentiary hearing prove [Appellants] had given express authority to their attorney to settle this case on their behalf? (Appellants Brief, at 1). Our standard of review is as follows: When reviewing a trial court s decision to enforce a settlement agreement, our scope of review is plenary as to questions of law, and we are free to draw our own inferences and reach our own conclusions from the facts as found by the court. However, we are only bound by the trial court s findings of fact which are supported by competent evidence. The prevailing party is entitled to have the evidence viewed in the light most favorable to its position. Thus, we will only overturn the trial court s decision when the factual findings of the court are against the weight of the evidence or its legal conclusions are erroneous. Salsman v. Brown, 51 A.3d 892, 893-94 (Pa. Super. 2012) (citation omitted). We are also cognizant that [t]his Court defers to the credibility determinations of the trial court with regard to the witnesses who appeared before it, as that court has had the opportunity to observe their demeanor. Habjan v. Habjan, 73 A.3d 630, 644 (Pa. Super. 2013) (citations omitted). On appeal, Appellants argue that the evidence presented at the May 21, 2013 hearing demonstrated that they did not grant Attorney Sobel express authority to settle the case on their behalf at the February 5, 2009 3 The trial court did not order Appellants to file a concise statement of errors complained of on appeal. It filed a Rule 1925(a) opinion on August 6, 2013. See Pa.R.A.P. 1925. - 5 -
settlement conference. (See Appellants Brief, at 9-13). They contend that, because they did not agree to the essential terms of the settlement, an enforceable agreement does not exist. (See id. at 9). We disagree. Preliminarily, we observe that, in Pennsylvania, there is a strong judicial policy favoring the settlement of lawsuits. See Felix v. Giuseppe Kitchens & Baths, Inc., 848 A.2d 943, 946 (Pa. Super. 2004). Courts enforce settlement agreements according to general principles of contract law. See id. at 947. Oral settlement agreements, which the parties have not reduced to writing, are ordinarily enforceable. See Bennett v. Juzelenos, 791 A.2d 403, 408 (Pa. Super. 2002). With respect to an attorney s ability to bind his or her client to a settlement agreement, our Supreme Court has explained: The law in this jurisdiction is clear and well-settled that an attorney must have express authority in order to bind a client to a settlement agreement. The rationale for this rule stems from the fact that parties settling legal disputes forfeit substantial legal rights, and such rights should only be forfeited knowingly. As such, a client s attorney may not settle a case without the client s grant of express authority, and such express authority can only exist where the principal specifically grants the agent the authority to perform a certain task on the principal s behalf. Reutzel v. Douglas, 870 A.2d 787, 789-90 (Pa. 2005) (citations omitted). Here, the record provides substantial evidence supporting the trial court s determination that counsel for the parties reached a settlement agreement at the February 9, 2009 conference, and that Appellants granted Mr. Sobel express authority to bind them to that agreement. (See Trial Ct. - 6 -
Op., at 9-10, 12-13). Specifically, at the May 21, 2013 hearing, Attorney Sobel testified that he represented Emma, Khue, and Thao during the February 2009 settlement conference at which the parties negotiated a dollar figure for the settlement, timeframe for payment, and security for the agreement. (See N.T. Hearing, 5/21/13, at 10-11, 13-14). The negotiations took place in the judge s chambers, while Emma, Khue, and Thao waited in a nearby conference room and Appellee remained in the courtroom. (See id. at 10-11, 13-14, 30). During the negotiations, the attorneys returned from chambers to discuss various settlement proposals and counteroffers with their respective clients. (See id. at 13, 51). Attorney Sobel testified that, during the negotiations, he never made a settlement offer that his clients had not previously authorized him to make. (See id. at 14-15). After several rounds of negotiations, Appellee proposed a settlement figure of $60,000.00, payable within eighteen months. (See id. at 32). Mr. Sobel testified that Emma, Khue, and Thao each agreed to settle the litigation on these terms, and authorized him to enter the agreement. (See id. at 15-16, 18, 34). At the conclusion of the conference, Mr. Sobel and counsel for Appellee recited the final terms of the agreement. (See id. at 15, 50). 4 Mr. Sobel indicated that Attorney Moore was present when counsel for the parties recited the final terms, and that he 4 They did not place the final terms of the agreement on the record. (See N.T. Hearing, 5/21/13, at 34-35). - 7 -
did not voice any objection to Sobel s authority to bind his clients. (See id. at 15, 19). Mr. Sobel further testified that, on March 1, 2009, he received a letter from Appellee s counsel attaching a written settlement agreement, mutual release, installment note, and installment judgment note reflecting the material terms agreed to by the parties at the February 5, 2009 conference. (See id. at 16-18). He forwarded copies of the documents to his clients for signature, but Emma and Khue, without explanation of their reasons, refused to sign the documents and indicated that they would not make the settlement payment. (See id. at 17-19, 35). Attorney Moore testified that Emma asked him to come to the settlement conference on February 5, 2009 because she believed that the negotiations were not going well. (See id. at 45). The conference was already in progress when he arrived. (See id. at 46). Mr. Moore indicated that, during the negotiations, Appellee and Thao talked privately in the hallway, and Thao agreed to accept responsibility for a $60,000.00 settlement payment. (See id. at 47-48). However, Mr. Moore also testified that, because Appellee and Thao were speaking in Vietnamese, he could not understand what they were saying. (See id. at 48). Mr. Moore stated that he never heard Emma or Khue expressly authorize Mr. Sobel to settle the matter on their behalf. (See id. at 49). However, his testimony reflects that he was not present during the entire conference, and he was not directly involved in the negotiations. (See id. at 46, 51). - 8 -
Emma and Khue testified that they did not grant Mr. Sobel authority to settle the matter on their behalf, and that they never agreed to take responsibility for any portion of the $60,000.00 settlement payment. (See id. at 56, 59, 61-62, 70-71). Emma indicated her understanding that Thao would be responsible for making the entire payment. (See id. at 61-62). The trial court, on consideration of the testimony presented at the hearing and the witnesses demeanors, found Mr. Sobel s testimony credible and the testimony of the remaining witnesses incredible on the issue of Mr. Sobel s authority to bind Appellants to the settlement agreement. (See Trial Ct. Op., at 12-13); see also Habjan, supra at 644. Based on the foregoing, and viewing the evidence in the light most favorable to Appellee, as we must under our standard of review, we conclude that the record amply supports the trial court s determination that Appellants specifically granted Attorney Sobel authority to bind them to the settlement agreement. See Reutzel, supra at 789-90; see also Salsman, supra at 893-94. Accordingly, we affirm the order of the trial court. Order affirmed. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 6/24/2014-9 -