One common issue in today’s litigation is when one party wishes to back out of a settlement agreement. The Wisconsin Statutes permit parties to enter into settlement agreements to end litigation. The statutes allow parties, or their authorized attorneys, to enter into stipulations or agreements, either in court, or by signing a written instrument.
The relevant portion of the statute provides that:
No agreement, stipulation, or consent between the parties or their attorneys, in respect to the proceedings in an action or special proceeding shall be binding unless made in court or during a proceeding conducted under s. 807.13 or 967.08 and entered in the minutes or recorded by the reporter, or made in writing and subscribed by the party to be bound thereby or the party’s attorney. Wis. Stat. §807.05.
Essentially, a settlement agreement is a contract and is governed by the traditional requirements for contracts. American Nat. Prop. and Cas. Co. v. Nersesian, 2004 WI App 215. When a contract is unambiguous, a court has no authority to relieve a party from terms to which the party agreed. Rosplock v. Rosplock, 217 Wis. 2d 22 (1998). Settlement agreements are based on the principle of accord and satisfaction. The Wisconsin Supreme Court described accord and satisfaction as “an agreement to discharge an existing disputed claim, whether the claim be one arising in contract, tort, or otherwise.” Hoffman v. Ralston Purina Co., 86 Wis. 2d 445 (1979). The Court continued that “assent does not necessarily, however, require mental assent or a ‘meeting of the minds.’” The Court seems to value actions louder than words, so even when parties are perhaps unhappy with a settlement, signing the agreement and cashing the settlement check makes the deal official in the eyes of the Court. Such a precedent means that even if a party changes her mind later, she cannot simply void the agreement if the statutory requirements are met.
As the State of Wisconsin moves towards mandatory alternative dispute resolution techniques, mediation settlements are becoming more commonplace and vital to litigation. These cases often involve multiple parties, represented by multiple attorneys, acting without the presence of their clients at the negotiation table. Even if the attorney agrees to a settlement, the client needs to agree as well. In instances where the client does not actually sign the settlement paperwork, the mediated settlement will not comply with the Wisconsin Statutes. Affordable Erecting, Inc. v. Neosho Trompler, Inc., 2006 WI 67. However, in extenuating circumstances, courts could uphold an agreement based on other legal theories, such as equitable estoppel, if one or more party relied on the perceived agreement to her detriment.
Some issues arise when parties do not speak the same language. In other contexts, such as the recitation of Miranda Rights in criminal law, verbal instructions in Spanish that were substantially similar to the English version were insufficient. State v. Santiago, 206 Wis. 2d 3 (1996). This suggests that Wisconsin Courts will be very strict as to the accuracy of the law when it is translated into another language. However, in the context of child custody, courts have signaled, although not provided precedent, that verbal communications in a different language might even be better than written communications based on the party’s cognitive abilities. In re Jesus D.P., 2004 WI App 244 (unpublished opinion). Regardless of the situation, it is important to make sure the parties understand the agreement, no matter what language the form of the agreement needs to take. As Spanish and other language speaking clients become more common, attorneys and insurance companies should consider the necessity of putting agreements in writing in more than one language to avoid confusion. Regardless of circumstance, the best way to avoid the need to bring a motion to enforce a settlement is to ensure that all parties fully comprehend the deal at the time the agreement is reached and that the agreement itself complies with state law.