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Friday, December 30, 2011

What Does "Full Authority to Settle" Really Mean?

While it is "true that a trial court may order the parties to appear for a settlement conference, MCR 2.401(A), and may order that the parties, including insurance companies, send a representative to the conference who possesses full authority to settle, MCL 2.401(F)(2); Henry v Prusak, 229 Mich App 162, 168; 582 NW2d 193 (1998), that does not mean that a court can willy nilly hold a representative in contempt of court. In Bencheck v Estate of Paille, the Michigan Court of Appeals overturned two contempt of court rulings against the same insurance company because the Court of Appeals found that the carrier was fully entitled to rely on contractual language in the insurance policy and to instruct its representatives not to settle until after the underlying policy limits had been offered or paid. The Court of Appeals added, in what must be of considerable comfort to insurance companies everywhere, that a court cannot “force” settlements upon parties and may not assess penalties against a party or its representative for failing to make a settlement offer. Bencheck v Estate of Paille, (Michigan Court of Appeals) (Lawyers Weekly No. 08-76568) (unpublished per curium).

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