Settlements and Releases: JAGO V. SPECIAL NEEDS HOME HEALTH CARE (COA; 3/10/2006)

JAGO V. SPECIAL NEEDS HOME HEALTH CARE
SETTLEMENTS AND RELEASES – CR 60.02 and evidentiary hearing whether attorney had authority to enter settlement
2004-CA-002569
PUBLISHED 
VACATING AND REMANDING (TACKETT)
DATE:  3/10/2006; Modified 4/21/2006

Home health care provider brought debt collection action against a patient to recover the cost of home health medical services provided to patient.  The circuit court entered an agreed judgment based on a settlement between the parties and signed by the attorneys. Patient claimed attorney did not have the authority and appealed from the denial of his motion for relief from the agreed judgment.   COA held due process required that client/patient be given a CR 60.02 hearing on issue of whether patient’s attorney exceeded his authority when he entered into binding settlement agreement.

The leading cases on settlement authority, Clark v. Burden, 917 S.W.2d 574 (Ky.1996), and recently Ford v. Beasley, 148 S.W.3d 808 (Ky.App.2004), both involved a decision made after an evidentiary hearing was conducted by the circuit court. The law is clear that express client authority must be had to enter into a settlement agreement, and apparent authority is insufficient. Where no express authority to settle exists, a settlement cannot bind the client.

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