January 14, 2023

Determining if a settlement agreement is binding

A settlement agreement signed by an attorney may bind a client even where it exceeds the attorney's actual authority, if the attorney had apparent authority to enter into the agreement (see Hallock v State of New York, 64 NY2d 224, 230 [1984]; Popovic v New York City Health & Hosps. Corp., 180 AD2d 493 [1st Dept 1992]). Under the relevant circumstances in this action, plaintiffs' attorney had, at least, apparent authority to enter into the settlement agreement, and it is binding upon plaintiffs (see Hallock, 64 NY2d at 231). The Appellate Division also opined that plaintiffs implicitly ratified the settlement agreement by making no formal objection for nearly two years before asserting that the attorney's acceptance was unauthorized (see Hawkins v City of New York, 40 AD3d 327). Further, said the court, plaintiffs were unable to demonstrate that the settlement agreement was the result of fraud, collusion, or mistake. Click on the URL below to access this decision posted on the Internet:

https://www.nycourts.gov/reporter/3dseries/2023/2023_00174.htm