Friday, April 7, 2017
The Iowa Supreme Court declined to enforce a settlement agreement in a legal malpractice matter, concluding that the evidence did not establish the mutual consent to the deal.
Because there was "no deal," the court did not address whether the disputed confidentiality provision violates ethics rules.
In this case, we are asked to determine whether the parties in a legal malpractice case entered into a binding settlement agreement, and if so, whether the settlement’s confidentiality provision would result in a violation of our rules of professional conduct. Here, following mediation, the parties agreed on what would be paid to settle the case. They also exchanged versions of a confidentiality provision to be included in the settlement agreement, although they never settled on the same version at the same time. The defendant law firm nonetheless asked the district court to enforce the settlement.
Following a hearing, the court concluded that the parties had reached a final settlement and dismissed the underlying malpractice case. Plaintiffs now appeal, arguing (1) there was no meeting of the minds on settlement; (2) the confidentiality provision in the settlement as approved by the district court restricts the right of plaintiffs’ counsel to practice law in violation of Iowa Rule of Professional Conduct 32:5.6(b); (3) the court had no authority to seal documents relating to the settlement; and (4) because the defendant law firm practices primarily in Black Hawk County, this case should have been heard by a judge from a different judicial district.
For the reasons discussed below, we hold that the parties never mutually assented to the same settlement agreement. We therefore do not reach the question whether a confidentiality provision requiring the attorneys not to disclose the existence and terms of the settlement may violate Iowa Rule of Professional Conduct 32:5.6(b). We also conclude the district court did not abuse its discretion in sealing documents related to the parties’ mediation and follow-up negotiations or in declining to arrange for an out-of-state district judge to preside over the case.
Accordingly, we reverse the judgment enforcing the settlement, we affirm the court’s orders sealing portions of the file and declining to arrange for an out-of-district judge, and we remand for further proceedings.
The underlying allegations of legal malpractice involved a prenuptial agreement. (Mike Frisch)