ATTORNEY FOR APPELLANTS
Daniel G. Suber
ATTORNEY FOR APPELLEE
Jerry T. Jarrett
SUPREME COURT OF INDIANA
MICHAEL GEORGOS and )
PANGERE CORPORATION, )
Appellants (Defendants Below), ) Indiana Supreme Court
) Cause No. 45S03-0207-CV-401
) Indiana Court of Appeals
CLAUDE JACKSON, ) Cause No. 45A03-0106-CV-216
Appellee (Plaintiff Below). )
APPEAL FROM THE LAKE COUNTY SUPERIOR COURT
The Honorable Gerald N. Svetanoff, Judge
Cause No. 45DO4-9708-CT 00651
ON PETITION FOR TRANSFER
June 26, 2003
We hold that an order directing the parties to consummate a mediation settlement
agreement, without more, is not a final judgment, and that an attorney attending
a mediation settlement conference may bind the client to a settlement agreement despite
the clients absence.
Factual and Procedural Background
Claude Jackson was injured in a collision with a truck driven by Michael
Georgos, an employee of Pangere Corporation, and sued both Georgos and Pangere (collectively
The trial court ordered mediation. Although the order does not
appear in the record, it is clear that the mediation was to be
conducted under the Indiana Alternative Dispute Resolution Rules. Rule 2.7(B)(2) provides:
All parties, attorneys with settlement authority, representatives with settlement authority, and other necessary
individuals shall be present at each mediation conference to facilitate settlement of a
dispute unless excused by the court.
Jackson did not appear at the mediation. No party contends that his
attendance was excused by the trial court. His attorney and an attorney
representing both Defendants were present. Jacksons attorney stated at the mediation that
he had the authority to settle, and Jackson has never disputed that this
authority existed as of that time. The mediation resulted in a document
signed by both attorneys and the mediator. It reads in its entirety
C O N F I D E N T I A L
MEDIATION SETTLEMENT AGREEMENT
Come now the parties, by counsel, for mediation on November 2, 1998.
Mediation of the claims resulted in the following settlement:
1. Defendants insurer will pay the plaintiff $94,500.00 in exchange for a
2. Plaintiff agrees to be responsible for all liens.
3. Costs of mediation will be shared equally by the parties.
/s/ Frederick J. Ball
Attorney for [Defendants]
/s/ Robert L. Lewis
Attorney for [Jackson]
/s/ Daniel W. Glavin, Mediator
Date: November 2, 1998
The mediator reported to the court that the case had been settled.
At the time of the mediation Jackson had already incurred medical expenses of
approximately $85,000.00. At some point after the mediation Jackson advised the Defendants
that he had repudiated the settlement. The Defendants then filed a Motion
to Enforce Mediation Settlement Agreement. Jackson responded that at the time of
the mediation both he and his attorney had believed that the limit on
the policy covering the Defendants was $100,000 but they had subsequently learned that
the limit was $1 million. Based on this factual predicate, Jackson asserted
a variety of legal theories (fraud, mistake, etc.) he contended warranted voiding the
I. Appealability of Order Enforcing Settlement Agreement
On August 2, 1999, the trial court granted the Motion to Enforce, but
did not dismiss the complaint. Apparently treating the grant of the motion
as a final judgment, almost five months later, on December 31, 1999, Jackson
filed a Trial Rule 60(B)(8) Motion for Relief from Judgment, asserting that because
ADR Rule 2.7(B)(2) required the parties as well as the attorneys to be
present at a mediation, any agreement reached in the absence of the parties
was a nullity. The trial court agreed with Jackson and on February
22, 2000, granted Jacksons motion for relief from judgment. The case went to
trial and on April 9, 2001, the jury returned a verdict for Jackson
in the amount of $462,000. The Defendants appealed, asserting among other things
that the trial court lacked jurisdiction to grant the Motion for Relief from
Judgment because it was filed too late to be granted as a motion
to correct errors or for reconsideration of a final judgment, and, if viewed
as a Trial Rule 60 motion, stated no ground for relief under that
The Court of Appeals reversed. The Court of Appeals first held that
the August 2 order enforcing the settlement agreement was a final judgment.
Accordingly, the Court of Appeals reasoned that the trial court lost jurisdiction over
the case after thirty days when the time for appeal or a motion
to correct errors lapsed on September 1, 1999. The Court of Appeals
also held that Jacksons Trial Rule 60 motion was improperly granted because it
raised no facts not known at the time of the August 2 order.
As a result, the dispute was resolved by the August 2 order,
and the Court of Appeals ruling reinstated the order granting the Motion to
Enforce. This Court granted transfer on July 19, 2002. For the
reasons given below, we reach the same result as the Court of Appeals,
but for different reasons.
The Court of Appeals concluded that the grant of the Defendants Motion to
Enforce Mediation Settlement Agreement was appealable as a final judgment and also under
Trial Rule 54(B). For the reasons given below, we conclude it was
Succinctly stated, a final judgment disposes of all issues as to all parties
thereby ending the particular case. Doperalski v. City of Michigan City, 619
N.E.2d 584, 585 (Ind. Ct. App. 1993). It leaves nothing for future
determination. Thompson v. Thompson, 259 Ind. 266, 269, 286 N.E.2d 657, 659
(1972). This doctrine is now formalized in Indiana Rule of Appellate Procedure
2(H), which provides that a judgment is final if, (1) it disposes
of all claims as to all parties . . . . Ind.
Appellate Rule 2(H). The order did not call itself a judgment, and
did not enter judgment for $94,500. Rather, it merely ruled on a
motion and directed the parties to take all measures to consummate the settlement
. . . within (30) thirty days . . . .
Both the parties and the trial court treated Jacksons motion for relief from
judgment as properly filed under Trial Rule 60(B)(8). The Court of Appeals
concluded that because the parties and the trial court treated the trial courts
August 2 order as a final judgment, whatever defects existed in the ruling
as a final judgment were cured. We do not agree that the
views of the parties or the trial court resolve this issue. Whether
the order was a final judgment governs the appellate courts subject matter jurisdiction,
and unlike most contentions, lack of jurisdiction is not waived by the parties.
Neither the parties nor the trial court can confer appellate jurisdiction over
an order that is not appealable either as a final judgment or under
Trial Rule 54(B). To the contrary, the lack of appellate jurisdiction can
be raised at any time, and if the parties do not question subject
matter jurisdiction, the appellate court may consider the issue sua sponte. Albright
v. Pyle, 637 N.E.2d 1360, 1363 (Ind. Ct. App. 1994).
The trial courts grant of the Motion to Enforce was not a final
judgment because it did not end the case. The relief requested by
the Defendants was that the trial court uphold the validity of the settlement,
and order Jackson to enter into a joint stipulation of dismissal. By
its terms, the motion asked the trial court to order Jackson to sign
the settlement agreement, which had already been signed by his attorney, and asked
that the trial court order the Defendants to pay Jackson the agreed amount.
In granting the Defendants motion, the trial court order directed Jackson, to
take all measures necessary to consummate the settlement . . . within 30
days. This did not dismiss the case, and left open what would
happen if, as in fact turned out to be the case, Jackson did
not comply with the directive to consummate the settlement.
A disposition of all claims requires more than the entry of a ruling
on a motion without entry of judgment.
See Constantine v. City-County Council
of Marion County, 267 Ind. 279, 280, 369 N.E.2d 636, 637 (1977) (entry
granting a motion to dismiss under Rule 12(B)(6) for failure to state a
claim was not a final judgment, given the right under Trial Rule 12(B)(8)
to replead); compare Parrett v. Lebamoff, 179 Ind. App. 25, 26-27; 383 N.E.2d
1107, 1108-09 (1979) (entry stating grounds for dismissal, dismissing claim, and awarding costs
to plaintiff was a final judgment). A judgment that fails to determine
damages is not final. First Fed. Sav. & Loan Assn v. Stone,
467 N.E.2d 1226, 1231 (Ind. Ct. App. 1984).
The Court of Appeals concluded that even if the August 2 order was
not a final judgment it met the requirements of an order appealable under
Trial Rule 54(B) because had it been carried out, [it] would have led
to the entry of an ultimate determination . . . between Jackson and
the Appellants. Georgos v. Jackson, 762 N.E.2d 202, 206 (Ind. Ct. App.
2002). We disagree that this is sufficient. Many orders, if carried
out, will ultimately lead to a final judgment. Under this phrasing of
the issue many orders would be at least arguably appealable even though they
are plainly not final judgments and are subject to various contingencies, including whether
the parties do in fact carry the order out. But even if
it were the case that this order ended all disputes between Jackson and
the Defendants, it would not be appealable under Rule 54(B). Trial Rule
54(B) certification of an order that disposes of less than the entire case
must contain the magic language of the rule. This is intended to
provide a bright line so there is no mistaking whether an interim order
is or is not appealable. As we recently held in Martin v.
Amoco Oil Co., 696 N.E.2d 383 (Ind. 1998), an order becomes final and
appealable under Rule 54(B) only by meeting the requirements of T.R. 54(B).
These requirements are that the trial court, in writing, expressly determine that there
is no just reason for delay and, in writing, expressly direct entry of
judgment. Id. at 385. The trial court made no Rule 54(B)
finding here. As a result the August 2 order was not final
under Trial Rule 54.
Even though the trial courts August 2, 1999, ruling granting the Defendants Motion
to Enforce was an interlocutory order, it was arguably appealable as of right
under Appellate Rule 14(A)(2) because it required the execution of a document.
However, there is no requirement that an interlocutory appeal be taken, and Jackson
may elect to wait until the end of litigation to raise the issue
on appeal from a final judgment. In re Newman,
174 Ind. App.
537, 545-46, 369 N.E.2d 427, 432 (1977) (though party may have had an
interlocutory appeal of right for payment of money, it was not waived and
could be raised in appeal from final judgment).
For all of these reasons, the August 2, 1999, order was not required
to be appealed and the issues Jackson raises are properly before us in
this appeal from the final judgment entered after the jury trial.
II. The Effect of Mediation Settlement Agreement
Jackson does not argue that his attorney lacked the actual authority to enter
into a settlement at the mediation. Rather he contends that ADR Rule 2.7(B)(2),
which requires the parties to be present at a mediation, rendered unenforceable any
settlement in Jacksons absence. We agree that the rule required Jacksons presence,
but do not agree that his absence invalidates his attorneys agreement to settle
Koval v. Simon Telelect Inc., 693 N.E.2d 1299 (Ind. 1998), this Court
held that an attorney has the inherent authority to bind a client in
an in court proceeding, and a mediation session under the ADR rules is
in court for this purpose. Id. at 1306-07. Jackson attempts to
distinguish Koval because Koval did not involve a mediation conducted in violation of
the ADR rules. The violation Jackson cites is Jacksons own failure to
attend the mediation. As Chief Justice Brook observed, a party may not
take advantage of errors of its own making. Jackson further distinguishes Koval
on the basis that Koval did not involve a mediation under the ADR
rules. Koval expressly did not differentiate between settlement agreements made within or
outside the scope of the ADR Rules. It was not clear from
the record in Koval, which was a certified question from the federal court,
whether the mediation was . . . administered . . . pursuant to
. . . or . . . wholly outside the rules. Koval,
693 N.E.2d at 1307 n.12. But the opinion in Koval made clear
that the authority of the attorney depended on whether the proceeding was governed
by the ADR Rules. If so, the proceeding is in court for
purpose of the doctrine that an attorney appearing in court has inherent power
to settle the case. There is no dispute that the mediation was
under the ADR Rules in this case. Accordingly, under Koval, the attorney
at the mediation session had inherent authority to settle. But this presents
no issue in Jacksons case because actual authority is conceded. The issue
is not whether the attorney was authorized, but whether, despite that authority, the
settlement is unenforceable because of Jacksons absence.
Indiana strongly favors settlement agreements.
Scott v. Randle, 697 N.E.2d 60, 65
(Ind. Ct. App. 1998). And it is established law that if a
party agrees to settle a pending action, but then refuses to consummate his
settlement agreement, the opposing party may obtain a judgment enforcing the agreement.
Klebes v. Forest Lake Corp., 607 N.E.2d 978, 982 (Ind. Ct. App. 1993);
Brant Constr. Co. v. Lumen Constr. Inc., 515 N.E.2d 868, 876 (Ind. Ct.
App. 1988). Settlement agreements are governed by the same general principles of
contract law as any other agreement. Ind. State Highway Commn v. Curtis,
704 N.E.2d 1015, 1018 (Ind. 1998). Jackson argues for an exception to
this principle for agency doctrines incident to settlement agreements reached at mediation sessions.
Under basic principles of agency law Jackson is bound by the settlement
agreement. The Restatement (Second) of Agency states that:
If an agent of a disclosed . . . principal makes an authorized
contract with a third person, the liability of the principal thereon depends upon
the agreement between the agent and the other party as to the parties
to the transaction.
Restatement (Second) of Agency, § 146 (1958). The Restatement further states that
[u]nless otherwise agreed, a disclosed . . . principal is a party to
a contract . . . made by his agent within his authority.
Id. at § 147. In this case it is undisputed that Jacksons
attorney had the authority to settle, and of course Jackson, the principal, was
Jackson contends that an attorneys authority to bind the client to a settlement
agreement is nevertheless constrained by ADR Rule 2.7. He contends that ADR
Rule 2.7(B)(2) invalidates settlements entered into under mediations pursuant to ADR Rules if
a party is not present and refuses to sign an agreement reached by
the partys authorized attorney. We do not agree that Rule 2.7 suggests
that result. The purposes of the requirement that parties and their attorneys
be present at a mediation are several fold. They include assuring that
the authority to settle is available at the mediation, but they also include
facilitating settlement by creating an environment where the parties and their attorneys hopefully
receive and appreciate the points of view of the other parties and the
mediator. ADR 2.1 (role of mediator is to assist parties in exploring
areas of compromise, and finding points of agreement . . . .); State
v, Carter, 658 N.E.2d 618, 623 (Ind. Ct. App. 1995) (goals of mediation
include identifying areas of agreement and reducing misunderstandings). Thus, even if no
settlement is agreed, the understandings reached may facilitate a settlement in the future.
Attendance at the mediation may help to elevate the parties sense of
the fairness of the proceeding, and that purpose is frustrated if an agreement
is reached in their absence. But to permit a party to avoid
an agreement by failing to attend is to reward disregard of the rules.
If an agreement is reached at the meeting, these purposes are fully
served even with a partys unexcused absence. For that reason, and the
strong policy in favor of settlements, we hold that although the agreement may
be vulnerable to other attacks, if an attorney agrees in writing at a
mediation session to settle a claim, neither the presence of the client nor
ratification by the client is required to bind the client to the settlement
agreement. The attorney faced with an absent client can of course refuse
to agree. That risks exposure to the penalties for nonattendance or lack
of authority that are provided in ADR Rule 2.10, but that course is
ordinarily preferable to incurring an obligation on the part of the client to
which the client did not agree. If, as here, the issue is
not lack of authority, but a mistaken assumption that led the client to
confer actual authority, the grounds for relief from that circumstance are found in
bodies of law other than the ADR Rules.
Jackson also challenges the validity of the agreement because it was not signed
by the parties. ADR Rule 2.7(E)(2) states that [i]f an agreement is
reached, in whole or in part, it shall be reduced to writing and
signed by the parties and their counsel. This Court has emphasized the
importance of reducing any agreement reached to a signed written agreement. In
Vernon v. Acton, 732 N.E.2d 805 (Ind. 2000), we stated that:
Requiring written agreements, signed by the parties, is more likely to maintain mediation
as a viable avenue for clear and enduring dispute resolution rather than one
leading to further uncertainty and conflict. Once the full assent of the
parties is memorialized in a signed written agreement, the important goal of enforceability
Id. at 810. The requirement of signature by the attorneys and parties
is designed to avoid disputes over what was or was not agreed to
at the mediation. Subsequent cases interpreting Vernon have reached the same conclusion.
Spencer v. Spencer, 752 N.E.2d 661, 664 (Ind. Ct. App. 2001); Reno
v. Haler, 734 N.E.2d 1095, 1098 (Ind. Ct. App. 2000). Thus there
is no disputing the importance of a signed settlement agreement.
The Rules provision that the agreement is to be signed by both the
attorney and the party is consistent with the requirement of ADR Rule 2.7(B)
that both the attorney and the party are to be present. Nevertheless,
where the agent of the party is cloaked with the authority to enter
into the settlement agreement, and the partys presence is unexcused, the attorneys signature
is sufficient. To hold otherwise would give an incentive to frustrate the
mediation by boycott in hopes of renegotiating after the mediation in return for
the signature of the absent party. That action would of course be
sanctionable under ADR Rule 2.10, so it is not risk-free. But we
see no reason to reward or create an incentive to disregard the rules
by permitting the improperly absent party, Jackson, to turn his absence to his
advantage. In any event, it seems that Jacksons presence at the mediation
would have made no difference. At that time both Jackson and his
attorney were under the impression that the policy limit was $100,000. Jackson
offers no reason to believe that had Jackson been present at the mediation
there would have been no agreement, or that he would not have signed
the written settlement agreement along with his attorney.
We recognize that enforcing the settlement agreement gives Defendants insurer a windfall due
to opposing counsels misunderstanding as to the applicable insurance limits. In this
appeal the only issues raised are the effect of Jacksons absence from the
mediation. We are not presented in this appeal with the contentions Jackson
advanced in the trial court for avoiding the agreement based on that misunderstanding.
We note, however, that because the August 2 order was not a
final judgment, Defendants are not correct that any motion for reconsideration
be filed within thirty days. Hubbard v. Hubbard, 690 N.E.2d 1219, 1221
(Ind. Ct. App. 1998) (a trial court may reconsider previous orders until final
judgment is entered).
In sum, we hold that when an attorney attends a mediation under the
ADR Rules and executes a settlement agreement, that is sufficient to bind the
client who fails to attend without excuse.
This case is remanded to the trial court with instructions to enter judgment
pursuant to the terms of the settlement agreement.
SHEPARD, C.J., and DICKSON, and SULLIVAN, JJ., concur.
RUCKER, J. concurs in result.
This suit was originally filed by Luther Stewart, a passenger in Jacksons
car. Stewart filed a complaint against Georgos, Pangere, and Jackson, and Jackson
cross-claimed against Georgos and Pangere. Stewart then settled his claim, and is
not a party to this appeal. The cross-claim by Jackson against Georgos
and Pangere remains.
The appeal also contends the jury verdict was excessive, and that the
trial court abused its discretion by allowing an undisclosed expert witness to testify.
We understand this contention to be based on Trial Rule 59 and
the time constraints applicable to a motion to correct errors. Defendants
Chapin v. Hulse, 599 N.E.2d 217 (Ind. Ct. App. 1992), which held
that after the trial court denied a motion to correct errors it had
no jurisdiction to entertain a motion to reconsider that denial. In Jacksons
case, there was no motion to correct errors. If we view the
motion denominated as a TR 60 motion to be in substance a motion
to reconsider the August 2 order, it was properly before the trial court
because the trial court retained jurisdiction after the interlocutory order and there is
no time limit on motions to reconsider interlocutory orders. At the hearing
on the Rule 60/reconsideration motion, Jackson conceded the issues Jackson originally advanced to
avoid the agreement were correctly decided, and he does not present them in