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Effective Out Of Court Settlements

Updated: Jul 12, 2023

Author: Larry S. Lofgren, Family Law Attorney


WHAT IS COURT RULE 2A?

Courts prefer when people in a legal dispute are able to settle a case on their own. Court rule 2A (CR2A) sets out ways a settlement is enforceable. The rule was written to avoid disputes and to give certainty and finality to settlements and compromises. The rule establishes strict requirements to be enforceable, allowing for negotiations toward the goal of a clear, understandable agreement where no other perceived agreements from the negotiations are allowed. Negotiations should not result in new disputes over what was said during negotiations but result in a clear agreement that avoids disputes. Evidentiary Rule 408 prohibits using settlement offers as evidence later in court.


The text of CR2A reads:

No agreement or consent between parties or attorneys in respect to the proceedings in a cause, the purport of which is disputed, will be regarded by the court unless the same shall have been made and assented to in open court on the record, or entered in the minutes, or unless the evidence thereof shall be in writing and subscribed by the attorneys denying the same.


REQUIREMENTS FOR A CR2A


Most CR2As are made in writing. An attorney may agree to minor procedural rules without a client’s signature, but any substantive issue requires both parties’ signatures. An attorney’s signature may not be necessary, but it is good practice to include both parties’ signatures and the signatures of the attorneys. Often the CR2A is made after a long negotiating session when it is reduced to writing. Even if the negotiations were exhausting and the agreement was made in a rush to finalize the case, care should be taken to make sure the agreement says what was intended. Changing it once it is signed is not easy.


FINALITY OF CR2A


The agreement is subject to court approval and may not be approved if there was fraud, misunderstanding, or a mistake; or is unfair based on a new situation. Even if the case is not final and the CR2A is not translated into a signed court order, the agreement will be binding. In one case, a party to a divorce case died without a will after the CR2A was signed but before the divorce orders were entered. The court ruled that the CR2A controlled and, though the surviving spouse could have received all the property because there was no will before the divorce was final, the CR2A already gave half the property to the deceased spouse, which would go to her heirs, not the spouse.

According to CR2A, the parties to a dispute can enter into a binding settlement agreement without putting it in writing only if the agreement is made in open court. If a party tries to enforce a supposed agreement by claiming a statement was made out of court or in negotiations, the court will not enforce it. When reading an agreement into the record in court after negotiations, great care should be taken to read everything that was agreed into the court record. Agreements reached but not put on the record will not be enforceable.


Contact us today at View Ridge Family Law & Estate Planning at (206) 237-5604 to discuss your case.




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