People often think that leverage for a settlement decreases after a judgment is entered. After all, someone has already won the case. This is more true after an appellate court has issued an opinion. But cases can still be settled after judgment is entered and during, or even after, an appeal.
There are two primary considerations when seeking or responding to a settlement offer after the trial court’s judgment: what do I have to offer, and what is the proper procedure to get what I need.
What do I have to offer?
What you have to offer post-judgment depends, of course, on the outcome of the case, the procedural history of the case, and the nature of the parties. If you’ve won the case, you may see little benefit in settling. But you must consider whether your opponent is likely to be successful on appeal, the cost of defending an appeal, and the time value of monitoring the case as it progresses, among other things.
If you’ve lost in the trial court, you may be more incentivized to settle, but your opponent may not be receptive. You still have leverage, though, because litigating an appeal takes time and money, and often a party who has obtained a money judgment is interested in getting their money quickly. Even if you but you also may believe you have a good chance of getting the judgment overturned on appeal. You may also have more leverage as the appeal progresses, especially once the other party sees your briefing or participates in oral argument.
You should also consider the broader picture when moving forward with an appeal. Trial court judgments, at least in state court, do not alter the law. They are not precedential, and other judges are not required to follow them. Once an opinion is issued on appeal, however, it becomes law. It may be shortsighted to make an argument in one case that could undermine making a contrary argument in other cases.
Timing and creativity are key when determining whether to settle the case after judgment, but perhaps just as important is when and how to settle procedurally after judgment.
What are the available procedures?
The first and easiest way to settle after judgment is simply to agree not to file an appeal. The trial court’s judgment remains, but if the winning party files a satisfaction of judgment, the court generally doesn’t care what amount of money satisfied that judgment.
Similarly, once you’ve filed an appeal, settlement is straightforward. Several courts offer a settlement docket if settlement seems likely. Even without the special docket, between the time you’ve filed the appeal and the time the case is decided, the parties can dismiss the appeal. If the parties are fine with leaving the judgment in place, like settling before filing the notice of appeal, the parties can simply agree to file a satisfaction of judgment in the trial court after dismissing the appeal.
In both situations, if a party is concerned about the judgment being available to other parties or the general public, the parties could file a joint motion to seal the case in the trial court.
If however, one of the parties wants the trial court’s judgment to be set aside as a condition of settlement, the parties can file a joint dismissal and motion for an order from the appellate court remanding the case to the circuit court with instructions to set aside the judgment.
Once an appellate case is decided, a precedential opinion may exist. In some jurisdictions, that opinion may stand even if the parties opt to settle the case. In Missouri, however, there is a mechanism to effectively overturn the appellate court’s opinion by stipulating to transfer the matter to the Missouri Supreme Court to effectuate the settlement.
Indeed, the Missouri Supreme Court is willing to accept transfer of a case for the purpose of remanding the matter to the trial court. Once the case is transferred to the Missouri Supreme Court, the intermediate appellate court decision is vacated and ceases to hold any precedential value. See Garrett v. State Dept. of Pub. Health & Welfare, 558 S.W.2d 679, 682 (Mo. App. 1977). The Supreme Court can then send the case back to the trial court provide it with the jurisdiction to enter judgment in accordance with the settlement agreement.
In conclusion, appellate courts, especially in Missouri, view settlement of cases positively, even when those cases have already been decided.