January 11, 2022
Summary: Need to enforce a settlement agreement? Find out all you need to know about how to file a motion to enforce a settlement agreement.
Most debt collection lawsuits settle before going to trial. When that happens, both parties agree to sign a settlement agreement. A settlement agreement is a legally binding written document showing that both parties have agreed to a particular outcome to settle the lawsuit.
In most cases, it means that the defendant agrees to pay money owed to the plaintiff, and the plaintiff forfeits the right to take further legal action against the defendant. A settlement agreement ends disputes between the defendant and the plaintiff. However, one party may fail to fulfill the terms of the agreement due to any of the following reasons:
It's frustrating to reach a settlement agreement only for one party to breach the terms. When this happens, the other party might seek further legal action to ensure the opposing party is held responsible for breaching the settlement agreement.
Breach of settlement agreements have three primary remedies. They include:
The first two options aren't ideal because the plaintiff will have to incur additional expenses, and it may take time for the case to be closed. Filing another lawsuit for breach of contract against the opposing party means starting from scratch, hence a less preferred option.
If starting a new lawsuit doesn't sound appealing, filing a motion to enforce a settlement agreement is preferable. It's simpler and more efficient than the other two options. This is because motions to enforce settlement agreements occur via a motion practice instead of a new lawsuit.
Suppose you file a motion to enforce the settlement agreement. In that case, there's no need to amend the pleadings to seek enforcement of the settlement because the motion accomplishes the same result. You can only commence a new action if the court that handled the original claim has no jurisdiction over the underlying action and settlement.
When filing a motion to enforce the settlement agreement, you'll need to prove to the court that the settlement occurred and the opposing party breached it. Therefore, you should file the motion before the court that had jurisdiction over the original claim because it knows the procedural background of the case and may even have been part of the settlement discussions.
You can ask the court to enter a judgment according to the settlement terms. The judge may examine the evidence presented, listen to oral testimony, and resolve factual disputes between the parties.
Suppose the judge finds that the settlement terms are clear, the judge may enter a judgment pursuant to the agreement terms. In that case, the court will give you the court's power over the other party that breached the terms of the agreement.
In most cases where two parties sign a settlement agreement, the court usually enters an order dismissing the case or places it in an inactive file. The party seeking to file a motion to enforce a settlement agreement may first need to file a motion requesting the court to vacate the earlier action or reinstate the action.
If you're the party filing the motion to enforce the settlement agreement, you'll need to file a short motion requesting the earlier action vacated or reinstated. The following supporting documents should accompany the short motion:
Submission of a proposed order may not be necessary for some courts, but this depends on the jurisdiction. For this reason, confirm with the court clerk if it's essential to include a proposed order.
You should seek both the reinstatement of the action and enforcement of the settlement in a combined motion rather than filing a separate motion to vacate and reinstate. If the court denies the motion to enforce, you can then reopen the original action and file a separate motion to reinstate the motion.
Ensure you include the opposing party's affidavits or other individuals who negotiated or witnessed the settlement. This information helps determine whether the settlement exists and its credibility, discouraging the opposing party from denying the claim. In addition, affidavits often eliminate factual disputes and are more likely to enforce the settlement agreement according to the stipulated terms.
If you're the movant of the motion, you should obtain the hearing date and time from the court before serving the motion. For example, suppose the court is reluctant to schedule a hearing before your service and file the motion to enforce the settlement agreement. In that case, you should press the court to schedule a hearing date immediately after filing the motion to enforce the settlement agreement.
On the hearing day, ensure you arrive with witnesses and exhibits necessary to prove your claim just in case the opposing party contests the motion. If you're the party opposing the motion, you should inform the court that you didn't reach or agree to the settlement. You can do this by proving that the counsel or agent who agreed to the settlement terms lacked the authority to do so.
Suppose the judge rules in favor of the party that files the motion to enforce the settlement agreement. In that case, the party may recover both the amount of the settlement agreement and damages for the opposing party's failure to timely pay the settlement. Damages may include court costs and attorney's fees associated with the case.
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