Settlement Hearing: McKay v. Banister
The Baltimore Medical Malpractice Lawyer Blog examines issues in cases from Maryland appellate court opinions. In this post, the issue is whether a trial court erred by enforcing an alleged settlement agreement without holding an evidentiary hearing when a party disputes their attorney’s authority to settle. The case is Felix McKay, et al. v. Banister Ford of Marlow Heights, LLC, et al., No. 1928, September Term, 2024 (filed August 21, 2026). The Appellate Court of Maryland issued this unreported opinion.
Factual Background on Disputed Settlement
The background to the disputed settlement and hearing issue began when, on June 10, 2021, two spouses brought their 2007 car for repair. They took the vehicle to an auto shop in Camp Springs, Maryland. On June 21, a repair shop worker called the couple. The worker said the car would be ready soon. However, two hours later, the worker called again. She told them that the car was missing. The husband called the local police to report the missing car. Then, the couple met a police officer at the repair shop. The staff told them that thieves stole the car overnight.
On June 23, police officers in Virginia found the missing car. A tow yard in Woodbridge, Virginia had the vehicle. The car was chopped up. Many parts were missing or broken. An officer told the couple that the tow yard bought the car. The couple received a paper from the tow yard dated June 22, 2021. The paper named an agent of the tow yard as the buyer. It also named a car dealership as the seller. On July 2, workers brought the car back to the couple’s house.
The Lawsuit
The couple filed a court case on February 24, 2023. They filed the suit in the Circuit Court for Prince George’s County. The couple claimed civil theft, fault, breach of duty, and wrongful plan. They sued both the repair shop and the tow yard. The repair shop filed an answer to the suit. But the tow yard did not answer. Therefore, the court entered a default judgment against the tow yard for $100,991.41. This money included $20,991.41 in real loss and $80,000 in punitive damages.
Before trial, the repair shop filed motions to block certain facts. They wanted to block a bill of sale. They also wanted to block evidence of a transport contract. The couple had made that contract with their son.
A jury trial started on June 26, 2024. First, the court picked a jury. Next, the judge held a talk with the lawyers. During this talk, the judge granted the repair shop’s motions. The judge ruled that the bill of sale was unfair. He also ruled that the transport contract was uncertain. After this ruling, the lawyer for the couple asked for a short break.
The Issue of Disputed Settlement and Hearing
When the break ended, the lawyers returned to court. They told the judge that they reached a deal. The judge said he would dismiss the case under court rules. However, he did not ask for the terms in open court. At the same time, a second judge filed orders. Those orders actually denied the repair shop’s earlier motions. But the parties did not know this yet.
Soon after, the husband wrote letters to the judge. He asked for a meeting right away. He said his lawyer made the deal without his consent. Also, he said he never agreed to take $14,000. He said his lawyer pressed him to settle. Because of this dispute, the lawyer moved to step down.
Next, the husband filed papers on his own to reopen the case. He explained that he never gave his lawyer consent to settle. In addition, he said his lawyer dropped the demand from $20,000 to $14,000 without approval. He stated that he wanted to continue the jury trial. Nevertheless, the trial judge denied these requests without holding a hearing on the supposed settlement.
Later, the repair shop moved to enforce the deal. They asked for lawyer fees too. They filed a sworn statement from the former lawyer. The lawyer claimed he had full power to settle. The husband filed an answer to oppose the motion. He gave a sworn statement from his son as well. He repeated that he never gave verbal or written consent.
Trial Court’s Ruling
On November 27, 2024, the court granted the motion to enforce the deal. The judge did not hold a fact-finding hearing on the disputed settlement. He ordered the husband to sign the deal in five days. He also dismissed the case with prejudice. Finally, he ordered the husband to pay $1,665 in lawyer fees. The husband then filed a timely appeal.
Parties’ Arguments
On appeal, the plaintiff argued that the trial court made a mistake. He asserted that the court erred by enforcing the deal without a hearing. Furthermore, he argued that a full hearing was necessary under the law. He had filed sworn papers showing he never gave his lawyer power to settle. Thus, he argued that real factual disputes existed. The court needed to decide if a binding deal existed. The court also needed to check if the lawyer had express power to bind him.
In response, the defendant argued that the trial court acted correctly. The defendant claimed that the record showed a binding contract. Furthermore, the defendant asserted that the former lawyer had express authority to settle the claim. The defendant also argued that the statements in court proved mutual assent. They claimed the draft papers showed an intent to be bound.
Court’s Ruling on Hearing on Disputed Settlement
The appeals court ruled that the trial court made an error. The trial court should not have enforced the deal without holding a fact-finding hearing. So, the appeals court sent the case back for more steps. They did so without affirming or reversing the trial court judgment.
In its legal opinion, the appeals court explained the governing law. Settlement deals are contracts under Maryland law. However, a motion to enforce a settlement is not a routine request. When a lawyer settles a case, the party moving to enforce must prove two things. First, they must show that counsel acted with client power. Second, they must show that this power expressly covered the settlement.
Furthermore, the court stated clear rules for settlement disputes. When parties dispute the existence of a deal, the court must act. If they dispute the lawyer’s authority, a simple ruling is not enough. Instead, the trial court must hold a full fact-finding hearing to resolve the facts. A summary ruling is proper only when the material facts are clear and undisputed.
Applying these rules, the appeals court looked at the record. The record had no signed written agreement. Thus, the record showed at most an oral talk with unwritten terms. In addition, the plaintiff disputed the deal from the start. He filed sworn papers denying his lawyer’s power. Therefore, a major dispute of fact existed. The trial court could not resolve this dispute using only lawyer statements or cold papers. Instead, the court needed a formal hearing with witness testimony.
Because the court remanded the case, it did not address the second issue. It declined to rule on the award of lawyer fees.
Commentary by Baltimore Medical Malpractice Lawyer Mark Kopec on Hearing on Disputed Settlement
Under basic contract rules, a lawyer cannot settle a lawsuit without clear power from the client. When a client files sworn papers stating that a lawyer settled a case without consent, a real dispute of fact exists. The trial court erred by enforcing an unwritten deal based only on cold court filings and conflicting lawyer talks. The law requires a trial court to resolve such factual disputes through a full fact-finding hearing. At this hearing, witnesses can testify under oath. Then, the court can check truthfulness before taking away a person’s day in court.
As a key practice tip, whenever lawyers settle a case in court, the lawyer should always ask to put the deal on the record in open court. The lawyer should do this with the client present in the courtroom. Placing the terms on the record while the client is present ensures that the client hears and accepts the deal. Counsel should ask the client on the record if they understand the terms. The lawyer should also ask if the client agrees to the settlement amount and gives power to settle. Doing so creates an official record that protects both the lawyer and the client. It also stops future disagreements and avoids motions to enforce or undo the deal. Hopefully, there will be no need for a hearing because there won’t be any disputed settlement.
You can read other Blog posts on the topic of Settlement, including Enforcing Settlement: Kolbe v. McKnew.
Mark Kopec is a top-rated Baltimore medical malpractice lawyer. Contact us at 800-604-0704 to speak directly with Attorney Kopec in a free consultation. The Kopec Law Firm is in Baltimore and helps clients throughout Maryland and Washington, D.C. Thank you for reading the Baltimore Medical Malpractice Lawyer Blog.