No. 93 Philadelphia, 1981, Appeal from the Order of the Court of Common Pleas of Philadelphia County, Civil Division, at No. 5193 October Term, 1972
Alan H. Ross, Philadelphia, for appellants.
Edgar R. Einhorn, Philadelphia, for appellee.
Beck, Watkins and Hoffman, JJ.
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Appellants contend the lower court erred in striking an order to settle, discontinue and end appellee's personal injury action. Finding no abuse of discretion, we affirm the order of the lower court.
Appellee, injured in a 1971 automobile accident, brought suit in trespass in 1972. His attorney negotiated with appellants' insurer, and, in 1974, agreed to a $7000 settlement. The attorney delivered a release, accepted a draft, and filed a praecipe to mark the case settled. Unaware of
[ 305 Pa. Super. Page 31]
these events and believing his case would eventually go to trial, appellee maintained contact with his attorney until 1979, when he discovered that the case had been marked "settled", and his attorney had appropriated the settlement proceeds. Appellee immediately engaged a new attorney and promptly petitioned to strike the settlement order. The lower court granted the petition, finding appellee's attorney lacked authority to settle the claim and had forged his client's signature on both the release and draft. This appeal followed.
"As between the parties involved, the settlement and discontinuance had the same effect as the entry of a judgment for the defendant in the proceedings." Sustrik v. Jones & Laughlin Steel Corp., 413 Pa. 324, 326-27, 197 A.2d 44, 46 (1964). Accord, Miller v. Commonwealth, Department of Highways, 52 Pa. Commonwealth Ct. 127, 129, 415 A.2d 709, 710 (1980). A petition to strike a settlement and reopen a case is addressed to the discretion of the lower court, whose decision will not be reversed absent an abuse of discretion. Yarnall v. Yorkshire Worsted Mills, 370 Pa. 93, 87 A.2d 192 (1952) (petition to set aside stipulation settling suit and to reopen case). "[A] settlement is a contract which may be attacked only for want of consideration or authority or on the usual equitable grounds." Baumgartner v. Whinney, 156 Pa. Superior Ct. 167, 171, 39 A.2d 738, 739-40 (1944). Accord, Berg v. Cypher, 291 Pa. 276, 281, 139 A. 844, 846 (1927) (fraud or imposition); Greentree Cinemas, Inc. v. Hakim, 289 Pa. Superior Ct. 39, 42, 432 A.2d 1039, 1041 (1981) (fraud or mistake). Therefore, we must decide whether the court below abused its discretion in holding that appellee could avoid the unauthorized, fraudulent settlement by his attorney.
Appellants contend that appellee was bound by the settlement because he had impliedly authorized his attorney's action or is estopped from denying his agency. See generally, Apex Financial Corp. v. Decker, 245 Pa. Superior Ct. 439, 443, 369 A.2d 483, 485 (1976) (principal may be liable for acts of agent on the basis of estoppel or express, implied,
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or apparent authority). The Pennsylvania rule concerning an attorney's authority, however, is quite explicit: absent express authorization from the client, an attorney cannot compromise his client's claim or release his cause of action, see, e.g., Tucker v. Tucker, 370 Pa. 8, 19, 87 A.2d 650, 656 (1952), or settle litigation, International Organization Masters, Mates & Pilots of America, Local No. 2 v. International Organization Masters, Mates & Pilots of America, Inc., 456 Pa. 436, 441, 318 A.2d 918, 921 (1974).*fn1 See generally, Archbishop v. Karlak (Senyshyn v. Karlak), 450 Pa. 535, 539-41, 299 A.2d 294, 296-97 (1973); McLaughlin v. Monaghan, 290 Pa. 74, 78, 138 A. 79, 80 (1927); Township of North Whitehall v. Keller, 100 Pa. (4 Outerbridge) 105, 108 (1882); Chambers v. Miller, 7 Watts 63, 63-64 (Pa.1838); Lodowski v. O'Malley (Lodowski v. Roenick), 227 Pa. Superior Ct. 568, 570-573, 307 A.2d 439, 440-41 (1973); Baumgartner v. Whinney, supra, 156 Pa. Super. at 171, 39 A.2d at 739; Garnet v. D'Alonzo, 55 Pa. Commonwealth Ct. 263, 265, 422 A.2d 1241, 1242 (1980); 2 S. Feldman, Pennsylvania Trial Guide § 24.6 (1978). Although "the authority to conduct a ...