Oral Settlement Agreement of Pending Litigation Will Be Enforced When Court Record Shows Parties’ Assent to Essential Terms of Agreement and No Mistake or Duress

Hogan Family Enterprises, Ltd. v. Town of Rye
Hogan Family Enterprises, Ltd. v. Town of Rye
No. 2007-744
Wednesday, July 2, 2008

The petitioner and the Town were involved in litigation regarding the operation of a drainage system over petitioner’s land. During the trial, counsel for the parties negotiated a settlement, and met with the court in chambers. With at least one principal member of the petitioner present, the court advised that the parties were not required to settle the case, assured itself that the terms of the settlement were understood and assented to, and signed an order that the case had settled, with a written settlement agreement to be filed within thirty days.

Counsel for the parties cooperated in the drafting of the settlement agreement, which was executed by the Town. The petitioner apparently reconsidered the propriety of the settlement, refused to sign the agreement, hired new counsel, and sought to return the matter to the trial docket. The Town sought relief and enforcement of the settlement agreement as drafted, which was granted by the trial court.

On appeal, the Supreme Court affirmed the order enforcing the settlement. It found the record in the trial court to be sufficiently clear that the original agreement was in fact voluntary; the terms were sufficiently developed to be enforceable; and there was no evidence of mistake or duress. Trial judges were cautioned that in the absence of a signed agreement the essential terms of an agreement should be contemporaneously placed upon the court record to facilitate future review.