The vast majority of cases settle. Whether those settlements are on balance a “good deal” can always be questioned after the fact, potentially subjecting personal representatives to liability. To shield against this risk personal representatives commonly condition settlements of creditor claims on prior court approval pursuant to F.S. 733.708, which “relieve[s] the personal representative of liability or responsibility for the compromise.”
Can a probate judge retain jurisdiction to enforce a settlement? YES
But just because your probate judge “approves” your settlement agreement doesn’t mean she can also “enforce” it. If you want the same judge who approved your settlement to enforce it — your order needs to say so. As explained in Enforcement of Settlements: A Jurisdictional Perspective:
To enforce a settlement is to assert a claim upon a new contract — the settlement agreement — which did not exist at the time the court’s jurisdiction was initially invoked when the complaint was filed. The question of whether enforcement of a settlement agreement required the filing of an independent action, coupled with the effect of dismissal or entry of judgment following the settlement, gave rise to a jurisdictional quandary. …
The [Paulucci v. General Dynamics Corp., 842 So. 2d 797 (Fla. 2003)] opinion resolved virtually all of the conflicts that had previously plagued the lower courts. To be enforced via motion in the same proceeding post-judgment or post-dismissal, a settlement must be approved by the trial court or incorporated into an order or judgment and jurisdiction to enforce the agreement must be retained. However, enforcement of such a settlement in the same proceeding is limited to the specified terms set forth in the agreement; a claim for general damages resulting from a breach of the settlement contract requires a separate action. If, after the settlement, the parties merely voluntarily dismiss the case without an order, the trial court is divested of jurisdiction and a separate case is required to enforce the terms of the settlement. These general principles have been diligently followed in various decisions entered subsequent to Paulucci.
Must a probate judge enforce a settlement? NO
On the other hand, there can be perfectly valid reasons for not wanting to litigate your settlement agreement before the same judge who presided over the underlying lawsuit. In those cases you can skip the approval order altogether and simply voluntarily dismiss your case pursuant to Fla. R. Civ. P. 1.420(a) or, if the other side insists on an approval order, you’ll want to make sure the order doesn’t retain jurisdiction to enforce the settlement agreement. And if the other side tries to get your settlement agreement enforced by the same judge nonetheless, you need to affirmatively object on jurisdictional grounds and cite to Paulucci at the first available opportunity — or risk waiving this defense.
Here again from Enforcement of Settlements: A Jurisdictional Perspective:
In MCR Funding v. CMG Funding Corp., 771 So. 2d 32 (Fla. 4th DCA 2000), the Fourth District addressed the circumstance where, following a settlement, the parties simply filed a voluntary dismissal without an order of the court. The Fourth District found that the “voluntary dismissal terminated the trial court’s ‘case’ jurisdiction,” which is the “power of the court over a particular case that is within its subject matter jurisdiction.” However, because case jurisdiction differs from subject matter jurisdiction, the Fourth District found that the failure to object to enforcement of the settlement by motion constituted a waiver of such an objection.
In this case a charity filed creditor claims against an estate seeking to enforce the decedent’s charitable donations and guaranteed loans totaling millions of dollars. The estate objected. Before an independent action was filed by the creditor the parties negotiated what was, in effect, a pre-suit settlement of all claims. The probate court then entered an order approving the settlement pursuant to F.S. 733.708, which the 2d DCA described as follows:
The probate court entered an order (the Approval Order) finding the Agreement in the best interest of the Estate and its interested persons and authorizing the Personal Representative to enter into it. The Approval Order neither incorporated the Agreement nor reserved jurisdiction to enforce the Agreement.
Shortly thereafter post-settlement disputes broke out. The creditor then filed a motion in the probate proceeding to enforce the settlement agreement. The estate contested this motion, but never objected to the probate court’s lack of jurisdiction. The probate court then entered an order siding with the creditor, which the estate appealed.
Did the probate judge retain jurisdiction to enforce the settlement? NO
On appeal the estate argued for the first time that the probate court lacked jurisdiction to enforce the settlement. Here’s how this argument was framed by the estate, which the 2d DCA had no trouble accepting:
On appeal, the Personal Representative argues, among other things, that reversal is warranted pursuant to Paulucci v. General Dynamics Corp., 842 So. 2d 797, 799 (Fla. 2003). In that case, the supreme court held that “a court has jurisdiction to enforce a settlement agreement where the court has either incorporated the agreement into a final judgment or approved the agreement by order and retained jurisdiction to enforce it[s] terms.” Id. The Personal Representative argues that because the probate court neither incorporated the Agreement into a final judgment nor retained jurisdiction to enforce its terms, the court lacked jurisdiction to enforce the Agreement; rather, the Foundation should have sought enforcement through a separately filed civil suit.
Did the estate waive this defense? NO
The more interesting question on appeal was whether the estate had waived its objection to the probate court’s lack of jurisdiction by waiting until after the court had ruled against it to make this argument for the first time on appeal. I think we can all agree there’s a certain you-can’t-have-your-cake-and-eat-it-too appeal to the waiver argument. And as pointed out by the 2d DCA, there is some authority for the waiver argument:
But see MCR Funding v. CMG Funding Corp., 771 So. 2d 32, 35–36 & n.2 (Fla. 4th DCA 2000) (concluding that MCR had waived its challenge to the trial court’s continuing jurisdiction to enforce the parties’ settlement agreement by failing to object in the trial court and by asking court to decide the dispute over the agreement; certifying conflict with 84 Lumber Co., 656 So. 2d at 1297).
Lucky for the estate the 2d DCA felt bound by its precedent, ruling against waiver — but also recognizing the continued split in authority among our appellate courts on this issue.
[O]ur precedent dictates that the Personal Representative did not waive this jurisdictional challenge by failing to raise it below. … We therefore reverse and remand for the probate court to vacate its order granting the Foundation’s enforcement motion and to dismiss the motion for lack of jurisdiction. We also certify conflict with the Fourth District’s decision in MCR Funding, 771 So. 2d at 35–36 & n.2.
What’s the takeaway?
Our clients aren’t entitled to perfect decisions, but they are entitled to considered decisions. If you’re settling a case and someone pulls out a form agreement that says the parties are agreeing to the trial court’s retained jurisdiction to enforce the settlement — stop and consider what that means. Boilerplate contract clauses mean nothing if the trial court doesn’t enter an order both approving the settlement and retaining jurisdiction to enforce it.
On the other hand, if you’ve weighed the pros and cons of litigating your settlement in a separate stand-alone lawsuit and concluded that’s the best option — stop and consider what that means. You can’t have an order retaining jurisdiction of the settlement. And if you want to ensure this defense isn’t waived if tested, you can’t sit on your hands if the other side tries to sidestep filing a new stand-alone lawsuit and opts to simply file a motion to enforce in the existing underlying case. You need to affirmatively object on jurisdictional grounds and cite to Paulucci at the first available opportunity.