Environmental Abatement, Inc. v. Astrum R.E. Corp.

27 S.W.3d 530, 2000 Tenn. App. LEXIS 126, 2000 WL 225581
CourtCourt of Appeals of Tennessee
DecidedFebruary 29, 2000
DocketM1998-00871-COA-R3-CV
StatusPublished
Cited by59 cases

This text of 27 S.W.3d 530 (Environmental Abatement, Inc. v. Astrum R.E. Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Environmental Abatement, Inc. v. Astrum R.E. Corp., 27 S.W.3d 530, 2000 Tenn. App. LEXIS 126, 2000 WL 225581 (Tenn. Ct. App. 2000).

Opinion

OPINION

PATRICIA J. COTTRELL, Judge.

This case raises the issue of whether a chancellor designated to serve as a “settlement judge” under local rules of court can enter a consent decree with the knowledge that one of the parties has withdrawn its consent to an oral agreement reached at a “judicial settlement conference” but not reduced to a writing, transcribed or otherwise entered on the record at the time of the oral agreement. We answer that question in the negative and reverse.

The parties were engaged in litigation arising out of a construction project. Ast-rum R.E. Corporation (“Astrum”) owned a factory in Rutherford County. Astrum entered into an agreement with a general contractor, Mahan Roofing and Sheet Metal Company, Inc. (“Mahan”), to replace the roof on its factory. Mahan engaged a subcontractor, Environmental Abatement Inc. (“EAI”), to remove hazardous material from the roof. While removing the hazardous materials, EAI’s workers damaged the side walls of Astrum’s building. Ast-rum responded by withholding payment to Mahan. EAI filed a mechanics’ and mate-rialmen’s lien on Astrum’s property.

EAI then filed a lawsuit to enforce these liens pursuant to Tenn.Code Ann. § 66-11-115. Astrum filed a counterclaim against EAI for damages to the factory, and a third party complaint against the general contractor, Mahan. Mahan filed a cross complaint against EAI.

A court-ordered and judicial officer-mediated settlement conference was held pursuant to the local rules of court. After approximately five hours of negotiation *533 during which the settlement judge 1 acted as mediator, a verbal agreement was reached. No court reporter was present at the mediation. At the close of the mediation, the settlement judge restated and confirmed the settlement’s terms. Then he directed EAI’s counsel to prepare the consent decree.

Early the following morning Mahan notified all parties that it was withdrawing its consent to the agreement. Nonetheless, EAI prepared and circulated to all counsel a proposed order reflecting the agreement. Mahan notified the other parties that it would not sign the order and had withdrawn its consent. Astrum submitted the proposed consent decree to the settlement judge with Mahan’s letter indicating its withdrawal of consent. Days later, fully aware of Mahan’s withdrawn consent, the settlement judge entered the Order of Compromise and Settlement prepared by counsel for EAI. This order was not signed by any representative of Ma-han.

Thereafter, Mahan filed a motion to set aside the decree, asserting that it no longer assented to the terms of the proposed settlement at the time of entry of the order and also asserting that the order did not accurately reflect the oral agreement reached at the conclusion of the settlement conference. The trial judge denied this motion. Mahan renewed this motion before the settlement judge who presided over the mediation, and it was again denied. Mahan then brought this appeal, claiming that the trial court erred in entering a consent decree when the court was aware that one of the parties had withdrawn its consent.

Our review of this case must begin with the acknowledgment that the oral settlement agreement announced at the conclusion of the mediation is not part of the record on appeal. No court reporter was present and no contemporaneously prepared written document formalized the agreement. No entry in the court’s record reflecting the conference or the agreement has been presented to us. No statement of the evidence was provided to memorialize the unrecorded settlement conference. 2 See Tenn.R.App.P. 24(c). This lack of formality, of course, is due to the fact that the proceeding was a settlement conference, a fact that has other consequences on our decision.

I.

The procedure followed below plays an important part in our determination and, therefore, must be set out in some detail. This case was filed in the Chancery Court of Rutherford County. Under a local rule, 3 “when a case is filed, the clerk shall assign a judge (other than the designated trial judge) for purposes of settlement.” The designated trial judge herein conducted a status conference and entered an order, which, among other things, referred the matter to the settlement judge to “conduct a settlement conference.” Additionally, the settlement judge entered an order at about the same time setting the case for settlement conference. That order stated, “The role of the undersigned is to preside over settlement discussions totally and completely separate and apart from the trial aspects of the case.”

The Order of Compromise and Settlement was signed and entered by the settlement judge. In pertinent part it recited that “all matters and controversy by and between the parties hereto have been compromised and settled under the terms of *534 provisions set forth above.” It then directed all parties to fulfill and comply with the provisions and terms of the Settlement Agreement. 4

Mahan’s Motion to Set Aside Order of Compromise and Settlement was heard by the trial judge. The motion stated that Mahan had withdrawn its consent to the agreement prior to the entry of the Order. The motion and the oppositions thereto were accompanied by various affidavits from the lawyers involved in the settlement conference. In denying the motion, the trial judge found there was not sufficient basis to set aside the order entered by the settlement judge.

Mahan renewed its Motion to Set Aside the Order of Compromise and Settlement, wherein it reiterated that all counsel, prior to the drafting of the order and entry of the order were advised that Mahan had withdrawn its consent to the compromise and that this withdrawal of consent was conveyed to the court. For reasons not apparent in the record, the renewed Motion to Set Aside Order of Compromise and Settlement filed by Mahan was then heard by the settlement judge. In the order entered by the settlement judge denying the Renewed Motion to Set Aside, the settlement judge made certain findings. Included among those were:

After conducting settlement negotiations involving all of the parties both collectively and individually, all parties through their representatives and attor--neys indicated their agreement to the terms of the settlement negotiated with the assistance of [the settlement judge].
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The Court then assembled together in open court 5 the representatives of the parties and their attorneys for the purpose of reviewing the provisions of the settlement. The terms of the settlement were stated and re-stated in the presence of all parties and their attorneys. Every person present fully understood the gravity of the issues and the complexity of the issues before the Court. All counsel and party representatives understood the terms of the settlement and expressed their assent to the terms.

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Cite This Page — Counsel Stack

Bluebook (online)
27 S.W.3d 530, 2000 Tenn. App. LEXIS 126, 2000 WL 225581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/environmental-abatement-inc-v-astrum-re-corp-tennctapp-2000.