Enforcement of Settlement Agreement – Material Breach

The Lem Harris Rainwater Family Trust, et al., v. Rainwater, [Ms. 1210106, Sep. 30, 2022] __ So. 3d __ (Ala. 2022). The Court (Parker, C.J.; Bolin, Shaw, Wise, Bryan, Sellers, Mendheim, Stewart, and Mitchell, JJ., concur) reverses the St. Clair Circuit Court’s judgment enforcing a settlement agreement in litigation involving siblings and disputes over family trusts.

The Court first rejects Lenn Rainwater’s argument that Charles and Jean’s failure to appeal from an interlocutory order enforcing aspects of the settlement precluded them from appealing a subsequent final judgment enforcing the settlement agreement. On an issue of first impression, the Court holds that “the fact that Rule 4(a)(1)(A) [Ala. R. App.] provides an opportunity for interlocutory appeal of certain injunction-related orders does not prevent a party that does not file such an appeal from later challenging the trial court’s rulings in those orders.” Ms. *12.

The Court also rejects Lenn’s argument “that a party’s breach of a settlement agreement is no defense to that party’s enforcement of it.” Ibid. “[T]he general rule is that ‘[a] party’s material breach or failure to fulfill a substantial condition of a settlement agreement excuses the other party’s obligation to perform its end of the bargain.’ 15B Am. Jur. 2d Compromise and Settlement § 40 (2021) (footnotes omitted).” Ms.*13.

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