Settlement Agreements Iowa Law - Association of Corporate Counsel

November 21, 2014

S ETTLEMENT A GREEMENTS ;

S UBPOENA C OMPLIANCE

Timothy J. Hill

Raymond Rinkol, Jr

Copyright © 2014 Bradley & Riley PC - All rights reserved.

Settlement Agreements

• Iowa Law

• Key Terms

• Drafting Considerations

B RADLEY & R ILEY PC

A TTORNEYS AND COUNSELORS www.bradleyriley.com


Iowa Law

• Enforceability -- governed by contract law

– Peak v. Adams, 799 N.W.2d 535 (Iowa 2011)

• Failure to read does not invalidate

• Law favors settlement; terms not scrutinized

• Key consideration is mutual intent of parties




Iowa Law

• Absent reservation of rights, it disposes of all claims between the parties arising out of the event(s) related to the dispute

– Peak, 799 N.W.2d at 544

• It can release individuals not named, provided sufficiently identified

– Something more than saying “any other person, firm or corporation” required. Id. at 546

• NOTE: common practice – enforceable?




Iowa Law

• By contrast, pre-accident exculpatory clauses and liability waivers:

– strictly construed, require clear and unequivocal language to waive liability

• Sweeney v. City of Bettendorf, 762 N.W.2d 873 (Iowa 2009)

– E.g., to resolve utility claim v. property owner re: easement trespass, owner waives all claims v. utility

“existing or hereafter arising” – enforceable in IA?

– E.g., Cal. Code § 1542: general release does not extend to claims creditor does not know, suspect to exist in his/her favor at time of settlement




Key Terms

• Consideration. The settlement agreement must include consideration.

– E.g. “FOR THE SOLE CONSIDERATION OF a payment in the amount of _____ Dollars ($_____), the receipt and sufficiency of which is hereby acknowledged” (ISBA

Release)

• Releasing Party: clearly I.D. the releasing party or parties and their specific capacities as applicable.

– E.g. “the undersigned, [Releasor], on behalf of himself and all his heirs and assigns”




Key Terms

• Release: clearly state the releasing party is releasing the released party

– E.g. “the undersigned, _____, does hereby release, acquit, and forever discharge” (ISBA Release)

• Released Party: clearly ID the released parties, their specific capacities as applicable

– E.g. “forever discharge _____, together with, as appropriate, his/her/its/their past and present officers, directors, employees, related and affiliated entities, successors, agents, heirs, assigns, and insures, and all other persons, firms, and corporations” (ISBA Release)

• Note: Sufficiently ID’d?




Key Terms

• Specific and General Claims: clearly ID specific claims being released (e.g. “arising from or connected to” those alleged in the lawsuit):

– “from any and all liability, whatsoever, including all claims, demands, and causes of action of every nature affecting me, jointly or severally, which I have, may have, or ever claim to have . . . arising from or in any way

connected with the matter(s) above referred to and the claims, demands, and causes of action hereby released and discharged” (ISBA Release)




Key Terms

• Other Key Terms:

– Dismissal with prejudice?

– Liability expressly denied?

– Confidentiality? / Non-disparagement?

– Representations and warranties?

– Taxes?

– Attorneys’ fees if breach of agreement?

– Notice provisions?

– Entire agreement?

– No modifications without signed writing?

– Post-settlement construction avoidance?

– Applicable law?

– Reservation of claims? / Indemnification if further claims?




Drafting Considerations

• ADEA: for release of Age Discrimination in

Employment Act (ADEA) claim, specific rules to follow (29 U.S.C. § 626(f)):

– Knowing and voluntary

– In writing and understandable

– Specifically refer to ADEA rights and claims

– Not waive rights or claims that arise following execution of waiver





• ADEA (cont’d):

– Be supported by valuable consideration, in addition to anything already entitled

– Advise the employee in writing to consult with an attorney prior to execution

– Provide employee at least 21 days to consider (45 if group termination)

– Provide employee with 7 days to revoke after execution





• Pierringer Release:

– See Pierringer v. Hoger, 124 N.W.2d 106 (Wis. 1963);

Purpose: to discharge only a portion of a cause of action equal to the % of the settling Def.’s assigned fault

• while preserving the balance of PL’s claim v. non-settling

Defs.

– After Pierringer Release executed, PL limited to collecting damages equal to the % of fault attributed to non-settling

Defs, even if later determination that settled for too much or too little





• Pierringer Release:

– 3 elements --

• Release of settling Defs, equal to projected fault

• Reservation of remainder of PL cause of action

• PL’s agreement to indemnify settling Def. from later claims of contribution, indemnification from non-settling Defs.

– See also Iowa Code § 668.7 (release by claimant discharges settling Def. from liability for contribution, but does not discharge other persons liable on same claim, unless it so provides; however, claimant’s claim against non-settlors is reduced by settling Def.’s equitable share of obligation).




Drafting Considerations – Insurance

• Which Policies or portions of Policies discharged –

make sure entire Policy not released (instead limited to Policy’s contribution to settled claim)

• Assignment of Policy: if this involves assigning Def.

Policy rights to PL:

– Insurer consent not needed, if Insurer denying coverage; otherwise, Insurer consent most likely needed (policy language driven)




Drafting Considerations – Insurance

• Assignment of Policy (cont’d):

– Def. should not get release from PL

– Instead, Def. gives Stipulated Judgment in favor of PL

– + Def. receives covenant not to execute on Stip. Judg. from

PL , who promises to collect only from Def.’s Insurer

• Risk of release = invalidation of coverage; no longer insured claim v. Def.

• See Red Giant, 528 N.W.2d 524 (Iowa 1995); Clock, 564 N.W.2d

436 (where release of insured, no further liability owed by insurer to insured or its assignee)





• Release of Future Claims:

– While certainly want to release future claims, be aware of some public policy considerations

– “[C]ontracts exempting a party from its own negligence are enforceable” Huber v. Hovey, 501 N.W.2d 53, 54 (Iowa

1993)

– But see Baker v. Stewart’s Inc., 433 N.W.2d 706 (Iowa

1988) -- possibility of a public policy exception to the enforceability of releases





• Release of Future Claims (cont’d.):

– Baker -- an example, that a professional providing a service of great importance to the public, not allowed to contract to avoid liability for his/her own negligence

– See Iowa Code § 537A.5 -- prohibits as contrary to public policy broad form indemnification agreements in construction contracts = hard to enforce prospective waiver of claims re: your negligent acts



Subpoenas

• State Law Update

• Federal Law: Basics + 2013 Amendments

• Quash Motions

• Sanctions



Subpoenas

Iowa Law

• Subpoena Rules straight-forward --

– Iowa R. Civ. P. 1.1701 Subpoena Procedure

– To Testify at Deposition or Produce Documents (Form 13)

– To Testify at Hearing or Trial (Form 14)

– To Produce Documents or Permit Inspection of Premises

(Form 15)



Subpoenas

State Law Update

• Uniform Interstate Depositions and Discovery –

Iowa R. Civ. P. 1.1702 (eff. 2/4/13):

– Scenario: civil case pending in Omaha, NE. Parties seek to subpoena evidence in Linn County, Iowa. How?

– Nebraska counsel does not need Iowa counsel (unless motion to compel, quash, etc. re: subpoena). Rule

1.702(2)(a)(1).

– Obtaining, completing subpoena under this Rule does not constitute appearance in Iowa State Court. Rule

1.702(2)(a)(2).



Subpoenas


• Uniform Interstate Depo. and Discov. (cont’d):

– Request a signed, blank subpoena from the Clerk in the County where discovery is sought, or an Iowa attorney can issue and sign a subpoena as an officer of the court. Rule 1.702(2)(a)(1).

– The subpoena shall comply with the normal caption rules, except that the Iowa Court shall be listed as the Court from which the subpoena is issued and the title of the action and its document number from the foreign jurisdiction shall be used.

– It must contain names, addresses, and telephone numbers of all counsel of record and any party not represented.



Subpoenas


• Uniform Interstate Depo. and Discov. (cont’d):

– It must include a copy of the foreign subpoena as an attachment.

– Normal rules regarding service.

– If a motion filed re: subpoena (protective order, quash, compel), submit to Court in County where the discovery is sought, and by Iowa-licensed attorney. Rule 1.1702(6).



Subpoenas

Federal Law: Basics + 2013 Amendments

• Every subpoena must set out the text of Rule 45(d) and (e).

• The subpoena must issue from the court where the action is pending.

• It can be issued by an authorized attorney.



Subpoenas


• 2013 Amend. – Notice to Other Parties in Action

– Before Service of subpoena

– Include copy of subpoena

– E.g., USOV . Lazar (SDNY, 9/14) – quashed subpoenas because attorney serving did not provide advance notice to other parties

• Also – same day notice amounted to “little to no notice”



Subpoenas


• Geographic Limits

– Applies both to Parties and non-parties

– Subpoenas for Trial, Hearing, Deposition:

• Limited to commanding attendance w/in 100 miles of employment or

• Within the State where person resides or is employed, if a party or party’s officer

– Subpoenas for Documents, other Discovery:

• w/in 100 miles of where person employed, transaction business



Subpoenas


• Court of Issuance and Contest?

– Must issue from Court where action pending - R. 45(a)(2)

– Nationwide service - Rule 45(b)(2)

– Court of compliance is still primary jurisdiction for enforcing, challenging subpoena

– But – Court where compliance is required may transfer contested motion to issuing court

• If person subject to subpoena consents; or

• If Court finds exceptional circumstances -- Rule 45(f)



Subpoenas

Quash Motions

• On timely motion, must quash or modify if:

– Fails to allow a reasonable time to comply;

– Requires a person to comply beyond certain geographical limits;

– Requires disclosure of privileged or other protected matter; or

– Subjects a person to an undue burden.

– Timely motion = Objection due before compliance date or 14 days after service

• Rule 45(d)(2,3)



Subpoenas

Quash Motions

• Court may quash or modify if:

– Disclosure of a trade secret or other confidential information; or

– Disclosure of an unretained expert’s opinion.

• A court may order compliance under specified conditions if there is a substantial need for the information that cannot be met without undue hardship and the subpoenaed person will be reasonably compensated.



Subpoenas

Quash Motions

• Threshold matter for Court: is discovery sought by subpoena relevant?

– Court has broad discretion on this

• Burden-shifting:

– Party moving to quash has burden to provide subpoena seeks irrelevant material or is unduly burdensome

– If subpoena seeks confidential commercial information, then burden shifts to party seeking discovery, to show necessity



Subpoenas

Quash Motions

• Courts know pretrial discovery have “significant potential for abuse” – concern for non-parties

– Thus, Court will likely prohibit party from obtaining discovery from non-party, where it could obtain info from other party to action

• ABC v. Aereo v. Syncbak (ND Iowa 9/13)

• See also, Precourt (D.S.D. 2011); General Parts Distrib. (D. Minn.

2013)

– Where confidential commercial info sought, concern for burden on non-parties carries “special weight” -- Syncbak



Subpoenas

Quash Motions

• “Undue Burden”

– Party/attorney serving must takes steps to avoid –45(d)(1)

– If Court orders compliance, must protect non-party from

“significant expense” – Rule 45(d)(2)(B)(ii) -- thus shift costs:

• $20,000 cost of compliance significant (9 th Cir. 2013)

• $9,000 significant enough to justify cost-shifting (DC Cir. 2001)

• Legal work done to facilitate compliance considered in costshifting, reimburseable (ND Cal. 2002)



Subpoenas

Sanctions

• If Party/attorney fails to avoid imposing undue burden:

[t]he court . . . must enforce this duty and impose an

appropriate sanction – which may include lost earnings and reasonable attorney’s fees – on a party or attorney who fails to comply.” Rule 45(d)(1)



Subpoenas

Sanctions

• Syncbak (ND Iowa 2013):

– quash subpoena;

– then imposed attorney award

– “‘good faith’ will not avoid sanctions if the party failed to take reasonable steps to avoid imposing an undue burden”

– In other words, good faith attempt to avoid burden not an excuse – if unduly burdensome, then cost-shifting, other sanction imposed



Subpoenas

Sanctions

• Motion for Award of Attorneys’ Fees:

– analyzed under lodestar method = reasonable rate x reasonable hours

• Reasonable rate:

– Prevailing market rate for the “community” where the case is litigated -- “community” broadly defined

– Specialized areas of law = extension beyond local community



Subpoenas

Sanctions

• Reasonable rate (cont’d):

• Comply with ND, SD Local Rule 54.1 (Content Fee

Motions)

• Proof of reasonable hourly rate = attorney affidavit +

• affidavit of other attorney attesting to reasonable rates

– (ND Iowa 2013; 8 th Cir. 2002) +

• citations to cases approving certain rates, professional articles.



Subpoenas

Sanctions

• Reasonable rate (cont’d):

– Denial or Reduction of fee motion where:

• “Block-billing” – specifying only daily activities but not how much time is spent on each task

• Lack of specificity in billing descriptions

• Overstaffing

• Failure to comply with LR 54.1(a), requiring summary of time spent based on specific categories

– Consider strategy in moving for sanctions

• Discount going in, or voluntarily reduce portion



T

HANK YOU

Follow up questions can be directed to Timothy J. Hill and

Raymond R. Rinkol, Jr. at thill@bradleyriley.com

and rrinkol@bradleyriley.com

Cedar Rapids

2007 First Avenue SE

PO Box 2804

Cedar Rapids, Iowa 52406

Ph: 319.363.0101

Fax: 319.363.9824

Iowa City

Tower Place

One South Gilbert

Iowa City, Iowa 52240

Ph: 319.466.1511

Fax: 319.358.5560



Settlement Agreements Iowa Law - Association of Corporate Counsel

Settlement Agreements

Subpoenas

HANK YOU

Related documents

Products

Support

Settlement Agreements Iowa Law - Association of Corporate Counsel

Settlement Agreements

Subpoenas

HANK YOU

Related documents

Add this document to collection(s)

Add this document to saved

Suggest us how to improve StudyLib