ESTATE OF MICHAEL G. COX II by Executors, JOLEEN COX and MICHAEL G. COX SR., and JOLEEN COX, Individually and MICHAEL G. COX SR., Individually. Appellants,
DUNAKEY & KLATT, P.C. n/k/a KLATT, ODEKIRK, AUGUSTINE, SAYER, TREINEN & RASTEDE, P.C., Appellee.
from the Iowa District Court for Black Hawk County, Richard
D. Stochl (trial judge) and Kellyann M. Lekar (order denying
plaintiffs' motion for out-of-district judge), Judges.
appeal a district court order granting the defendant's
motion to enforce a settlement agreement. AFFIRMED IN PART,
REVERSED IN PART, AND REMANDED.
S. Harding of Harding Law Office, Des Moines, for appellants.
J. Joensen and Catherine M. Lucas of Bradshaw, Fowler,
Proctor & Fairgrave, P.C., Des Moines, for appellee.
case, we are asked to determine whether the parties in a
legal malpractice case entered into a binding settlement
agreement, and if so, whether the settlement's
confidentiality provision would result in a violation of our
rules of professional conduct. Here, following mediation, the
parties agreed on what would be paid to settle the case. They
also exchanged versions of a confidentiality provision to be
included in the settlement agreement, although they never
settled on the same version at the same time. The defendant
law firm nonetheless asked the district court to enforce the
a hearing, the court concluded that the parties had reached a
final settlement and dismissed the underlying malpractice
case. Plaintiffs now appeal, arguing (1) there was no meeting
of the minds on settlement; (2) the confidentiality provision
in the settlement as approved by the district court restricts
the right of plaintiffs' counsel to practice law in
violation of Iowa Rule of Professional Conduct 32:5.6(b); (3)
the court had no authority to seal documents relating to the
settlement; and (4) because the defendant law firm practices
primarily in Black Hawk County, this case should have been
heard by a judge from a different judicial district.
reasons discussed below, we hold that the parties never
mutually assented to the same settlement agreement. We
therefore do not reach the question whether a confidentiality
provision requiring the attorneys not to disclose the
existence and terms of the settlement may violate Iowa Rule
of Professional Conduct 32:5.6(b). We also conclude the
district court did not abuse its discretion in sealing
documents related to the parties' mediation and follow-up
negotiations or in declining to arrange for an
out-of-district judge to preside over the case.
we reverse the judgment enforcing the settlement, we affirm
the court's orders sealing portions of the file and
declining to arrange for an out-of-district judge, and we
remand for further proceedings.
Background Facts and Proceedings.
The Malpractice Suit.
legal malpractice case arises from work performed by the
Dunakey & Klatt law firm for Michael Cox II. The law firm
is based in Waterloo and regularly practices in Black Hawk
County. In early 2010, the law firm drafted a prenuptial
agreement purporting to waive the rights of Cox's future
spouse to Cox's 401(k) plan. The prenuptial agreement was
executed, and approximately fourteen months later, a petition
for dissolution of marriage was filed. However, before the
divorce was finalized, Cox died in May 2011. A dispute arose
as to whether the prenuptial agreement operated as a valid
waiver of spousal rights to the 401(k) account. The matter
was litigated in the federal courts, and ultimately any
waiver was determined to be ineffective. Hence, the 401(k)
account passed to Cox's widow rather than his parents.
February 2014, Michael Cox II's parents, Michael and
Joleen, filed this action for legal malpractice against the
law firm and the two attorneys in the firm who had worked on
the prenuptial agreement. Although the action was brought in Bremer
County, the parties jointly requested the matter be
transferred to Black Hawk County. In November, a district
judge who regularly offices in Chickasaw County was assigned
to preside over the case.
Mediation and Settlement Negotiations.
2015, after several months of discovery had occurred and a
motion for summary judgment had been filed by the law firm,
the parties agreed to mediate their dispute. On May 29,
Michael and Joleen Cox attended the mediation session along
with their attorney, Marc Harding. Troy Miller, an insurance
claims adjuster, appeared on behalf of the law firm's
insurer. The parties did not reach a settlement during the
mediation; however, Harding, Miller, and the law firm's
attorney, Tom Joensen, agreed to continue working with the
mediator in the ensuing days to try to resolve the case.
4, the court received an email from Joensen stating his
understanding that the case had settled. Harding replied,
disputing that the case had settled and instead noting that
the parties still disagreed whether a confidentiality
provision would be included in the agreement. Nevertheless,
Harding wrote he was "cautiously optimistic [the case]
that correspondence with the court, a series of emails was
sent among Harding, Miller, and Joensen discussing the
possibility of including a confidentiality provision in the
settlement agreement. Harding wrote that the Coxes
"would be willing to enter into a bilateral
confidentiality agreement on the amounts paid only, subject
to disclosure for tax purposes and if ordered by a
court." Harding indicated that if the scope of the
confidentiality agreement were any broader, it may cause tax
and ethical implications. Several more emails were sent on
this subject. Finally, late on June 4, Miller wrote to
I've attached a couple of releases but need to have
approval of my insured as well. Once you review them if you
have any issues with them please return with any proposed
alternative language and I can run it by [Joensen] and my
insured for approval. The next morning, June 5, at around
10:30 a.m., Harding responded:
Pursuant to our discussion, please replace paragraph 15 of
the settlement with the exact language from your shorter
release, reading as follows:
The existence and terms of this Release shall be and remain
confidential between the parties hereto and shall not be
disclosed by Releasors, except as required by law or order of
court, without the prior written consent of each of the named
Releasees, which consent may be withheld for any reason
whatsoever. The parties agree that the terms of this
settlement may be disclosed to any Court, (only) as required
We would also agree to an additional line that Plaintiffs are
permitted to state that the matter has been concluded to
their satisfaction or similar language.
hours later, still on June 5, Joensen emailed Harding a
document titled "SETTLEMENT AND FULL AND FINAL RELEASE,
" which incorporated the confidentiality language
requested by Harding. Joensen wrote, "Let us know if you
agree to this document." Miller added that he would
"of course need to have [his] insured's OK as well,
" to which Joensen replied that he "fully
expect[ed] them to agree to it, but that is one last moving
days then passed while Harding was away on a Boy Scout trip
to the Boundary Waters. Having returned on June 15, Harding
replied that "the Settlement and Full and Final Release,
as revised, is agreeable." However, at that point, the
law firm had not confirmed acceptance of the settlement.
on June 16, Joensen emailed Harding a different version of
the settlement, which included changes to the confidentiality
provision. Although the provision previously stated that the
settlement "shall not be disclosed by Releasors"
(the Coxes), the new language provided that the settlement
"shall not be disclosed by Releasors, their agents,
assigns, wards, executors, successors, administrators, and
attorneys." Joensen wrote that it was Harding's
decision "whether you have your clients sign" this
on June 17, Harding wrote back. He objected to the new
language, maintaining that it was overly broad and unethical.
Harding stated that the Coxes "want the June 5 agreement
which complies with the [ethical] Rule by 2 pm, or they want
to try the case."
11:34 a.m. that day, Joensen responded. He questioned why the
parties would proceed to trial if they had already agreed to
a settlement on June 15. He offered to remove the word
"attorneys" but not the word "agents, "
and insisted that " 'agents' includes, in its
did not respond further by 2 p.m. and, at 3:55 p.m., the
Coxes filed a motion to set a new trial date. The Coxes'
motion stated there had been "no meeting of the
minds" on the proposed settlement agreement.
response, the law firm promptly filed a motion to enforce a
settlement agreement. The law firm did not identify
which version of the settlement agreement it
believed the parties had agreed on, but stated that the
"[t]he Plaintiffs' concerns regarding the
Confidentiality Agreement are unfounded."
days later, the law firm filed an additional motion
requesting that the court seal all transcripts, exhibits, and
filings related to its motion to enforce the settlement. The
law firm asserted that its request was necessary "to
prevent the de facto disclosure of the very matters
the settlement agreement is intended to keep
Sealing the ...