delivered the opinion of the court:
Defendants Grater, Inc., and James T. Zavacki appeal from an order of the circuit court requiring them to comply with terms of an oral settlement agreement that the court found they entered into with plaintiffs K4 Enterprises, Inc., and MS Produce, Inc., and from an order granting plaintiffs’ motion to accelerate payment and entering judgment in the amount of $2,800,000, the full amount due under that agreement. On appeal, defendants contend that the parties did not have an oral settlement agreement because there was no meeting of the minds, and alternatively, that if the parties did have a settlement agreement, the trial court erred in ordering that payments due under that agreement be accelerated. Defendants also contend that the trial court erred in granting plaintiffs’ motion to enforce the settlement agreement without first holding an evidentiary hearing and that the trial judge should not have heard the motion to enforce because he was a material witness and had engaged in arbitrary and injudicious conduct during the proceedings. For the reasons set forth below, we affirm the trial court’s order finding that the parties had an oral settlement agreement but vacate its subsequent order accelerating payment.
BACKGROUND
On June 7, 2007, plaintiffs and defendants were engaged in a jury trial 1 in the circuit court of Cook County in the courtroom of Judge William Taylor. On that date, James Kubeck, plaintiffs’ principle, and James Zavacki, owner of Grater, Inc., met with Judge Taylor in his chambers to negotiate an oral settlement agreement. Their respective attorneys were not present. After the settlement negotiations were completed, Judge Taylor reconvened the trial, informed the jury that the matter had been settled, discharged the jurors, and entered an order dismissing the case in its entirety. Neither the parties nor the judge made a written record of the terms of the June 7 oral settlement agreement.
On June 20, 2007, plaintiffs’ counsel sent a letter to Judge Taylor along with a draft of the settlement agreement. In the letter, plaintiffs’ counsel asked the court to continue the status scheduled for June 21, 2007, and stated, “Last week I circulated the enclosed settlement agreement. There has been considerable disagreement as to the terms.” In the letter, plaintiffs’ counsel also requested that “the status quo
The case was continued until July 3, 2007, when the plaintiffs made an oral motion to enforce the settlement agreement. Defendants contend that on that date the parties advised the trial court that there was some disagreement regarding the terms of the oral settlement agreement, that the court attempted to mediate a new settlement and that, afterwards, Judge Taylor entered an agreed order as follows:
“This matter coming to be heard on status regarding oral settlement agreement of June 7, 2007, by agreement of the parties who are all present,
It is ordered that Plaintiffs’ motion to enforce settlement is entered and continued to Thursday, September 6, 2007 at 10:30 a.m. In the event Defendants tender $2,400,000 in cash by wire transfer to Johnson & Bell before said date, Plaintiffs will be satisfied and the parties shall execute mutual releases and stipulations to dismiss all cases with prejudice.”
No report of the July 3 proceedings was made, and plaintiffs contend that there is nothing in the record to support defendants’ assertion that the parties entered into a new settlement agreement on that date. Instead, plaintiffs maintain that the July 3 order simply continued the hearing on the enforcement of the June 7, 2007, settlement agreement until September 6, 2007.
On September 5, 2007, plaintiffs filed a motion to enforce the settlement, stating that “Plaintiffs request, due to repeated defiance of Defendants and their attorneys to Your Honor’s brokered settlement agreements and Your Honor’s representations of the consequences if they defaulted, as follows” (emphasis in original):
“Judgment in the amount of $4.3 million dollars (the $2.4 million and the default penalties) for Plaintiffs’ [sic] against all Defendants, jointly and individually; monetary and other sanctions as Your Honor deems just; award of attorneys fees and costs to Plaintiffs, for the June trial, July 3rd appearance, and this hearing; and an Order that Grater, Inc. and James T. Zavacki Jr., jointly and individually, are responsible for settling Castle Cheese, Inc. v. MS Produce, Inc., et al (2- — 04—cv—878 WD Penn) and CVS Foods, Inc. and MD Produce, Inc. v. Whitehall Specialties, Inc. and Grater, Inc. (05 CH 14982).”
On September 10, 2007, defendants filed a motion to substitute counsel. At a status hearing on September 13, 2007, the court asked defendants if they were prepared to proceed on a hearing on the motion to enforce. When substitute counsel said they were not, the court denied their motion to substitute stating, “I will not allow you to delay the case because the motion today is to enforce the settlement. So the motion for substitution is denied.” As part of the September 13 order, the court also entered an order, on its own motion, enjoining defendants from transferring assets until the completion of the hearing on the motion to enforce.
On September 19, 2007, the parties appeared before Judge Taylor on plaintiffs’ motion to enforce the settlement agreement. At that time, defendants presented an emergency petition for substitution of judge. That matter was transferred to Presiding Judge William D. Maddux, who denied the motion and transferred the case back to Judge Taylor.
When Judge Taylor reconvened proceedings later that day, he granted defendants’ new counsel leave to appear and defendants’ motion to vacate the September
“THE COURT: I don’t understand the evidentiary hearing because this is a motion to enforce a settlement which was done in chambers in front of me. And while the parties disagree on what the terms were, all I have to do is tell you what the terms were. And while the attorneys wrote up very nice legalese documents and while both sides objected to the extra legalese, the terms are the terms.
DEFENSE COUNSEL: My concern with respect to that, Judge, is your understanding of the terms and the definition, more importantly, of the terms, may not—
THE COURT: It’s a money amount, not a definition. A dollar is a dollar.
DEFENSE COUNSEL: Murphy: With respect to who is paying and how it is paid— *** and certain issues brought up before Your Honor with respect to I don’t know that I can answer that question right now because there are tax consequences of the payment.
THE COURT: Here’s the problem that you had with that is that we have two settlement agreements. We have one that’s for $2.8 million and some other terms and we have one for $2.4 million that was contingent on being paid by September 4 or whatever it was. Your client is confusing the two settlements. The tax consequences question didn’t come up until the second discussion. The motion today is enforcing the first one, which had no tax discussions at all. So while you guys would like to go around and look for the different tax consequences and how it would help your client, it was not part of the negotiations. So it’s not an issue.
MR. MURPHY: If there was — By virtue of there being a second settlement conference, Judge, means that there wasn’t an agreement in the first settlement agreement—
THE COURT: There was.”
The court then denied defense counsel’s request to provide evidentiary testimony but offered defendants the opportunity to make an offer of proof. Defense counsel, however, stated that he wanted to call the judge as a witness and that without the judge’s testimony he was unable to make an offer of proof, because he would be speculating as to who he would call as witnesses.
Afterwards, Judge Taylor announced the terms of the settlement agreement in open court as follows:
“Since there were two settlement agreements and I find that the parties have somewhat confused one settlement agreement versus the second attempt to settle and that if the second settlement was not paid by September 4, that I was going to have a hearing on the first settlement and only to the terms that both parties in my chambers had agreed to.
They agreed to, Point 1, that the defendant would pay $1.2 million on or before September 4, 2007. And that will be equal payments of $100,000 on or before October 1, 2007; January 1, 2008; April 1; July 1; October 1, 2008; January 1, 2009; April 1, 2009; July 1; October 1, of 2009; then January 1 of 2010; April 1, July 1; October 1 of 2010. And then there would be payment of 100,000 on January 1, 2011; April 1; and July 1, 2011, which would be a total amount of $2.8 million.
*** If there was a breach, there was an agreement that all payments would be accelerated. Since, technically, there is already a breach of the September 4, 2007 payment, I’m going — and the cost of the litigation that’s been going on since that time, I’m going to give Mr. Zavacki another week to make that payment, which will be due then on September 26th. If he does not make the payment by September 26, then all payments are accelerated and the full amount will be judgment for the 2.8 million.”
Judge Taylor also stated that the amounts due under this settlement agreement were owed solely by defendants Grater, Inc., and James T. Zavacki, in case number 04 L 3746, and not the defendants in the other related cases involving this matter. He then dismissed case number 04 L 3746 with leave to reinstate in the event the judgment was not satisfied. Judge Taylor subsequently entered a written order stating that the judgment was effective immediately on the terms and conditions announced in open court.
On September 26, 2007, defendants filed a motion to reconsider the denial of their motion for substitution of judge, which Judge Maddux denied. Defendants also filed a motion to reconsider the granting of motion to enforce and a motion for a finding pursuant to Supreme Court Rule 304(a) (210 Ill. 2d R. 304(a)), to set an amount of an appeal bond and to stay enforcement of judgment pending appeal. On October 1, 2007, plaintiff filed a motion to accelerate payments pursuant to the judgment of September 19, 2007. On October 3, 2007, Judge Taylor issued an order denying defendants’ motion to reconsider and their request for a Rule 304(a) finding, for an appeal bond amount and for a stay of enforcement of the judgment pending appeal. The court granted plaintiffs’ motion for acceleration of payment, entering judgment against defendants in the amount of $2,800,000 plus interest. Defendants filed their notice of appeal on October 9, 2007. On October 19, 2007, this court set the amount of defendants’ appeal bond at $3,640,000 and stayed enforcement of the judgment until November 9, 2007. Defendants posted the appeal bond, and on November 21, 2007, this court entered an order continuing the stay of enforcement of the judgment pending this appeal.
STANDARD OF REVIEW
When presented with a challenge to a trial court’s determination that parties reached an oral settlement agreement, a reviewing court will not overturn that finding unless it is against the manifest weight of the evidence. Webster v. Hartman,
ANALYSIS
Plaintiffs initially assert that defendants waived any objections to the oral settlement agreement by failing to preserve the record of the settlement negotiations or make any objections to the settlement process. Plaintiffs argue that the absence of a draft order, transcript or bystander’s report of the June 7 proceedings means this court must presume that the trial court’s ruling was correct. Our supreme court has held that “an appellant has the burden to present a sufficiently complete record of the proceedings at trial to support a claim of error, and in the absence of
The sufficiency of the record to address a claim of error turns on the question presented on appeal. In Foutch, the question was whether the trial court abused its discretion in denying the motion to vacate an ex parte judgment. Foutch,
We now turn to the primary question raised before this court: whether the trial court erred in finding that the parties entered into an enforceable settlement agreement in its chambers on June 7, 2007. A settlement agreement is in the nature of a contract and is governed by principles of contract law. Solar v. Weinberg,
Defendants rely on Quinlan v. Stouffe,
Defendants appealed, and this court affirmed, finding that the parties did not have an enforceable settlement agreement because they did not have a meeting of the minds on all material terms. Quinlan,
Defendants contend that in this case, as in Quinlan, the parties’ actions after the June 7 settlement conference indicate that there was no meeting of the minds as to what the parties had agreed to and, therefore, no settlement agreement. First, defendants maintain that the record shows that there were at least three different versions of the purported June 7 settlement agreement: the draft written by plaintiffs’ counsel and enclosed in a letter to the trial judge on June 20, 2007, the agreement entered by the trial court on September 19, 2007, and the defendants’ version, which was not provided in writing, but which defendants claim was discussed with Judge Taylor. According to defendants, these disparate views of the oral settlement agreement cannot be reconciled.
Defendants also contend that when plaintiffs’ counsel circulated a draft of the settlement agreement to all of the parties, counsel for two codefendants sent responses to plaintiffs’ counsel stating that their clients did not agree with certain terms. This was reflected, defendants assert, in the June 20 letter plaintiffs’ counsel sent to the judge stating that there had been “considerable disagreement as to the terms” of the oral agreement. Furthermore, defendants contend that on July 3, 2007, after being informed that the parties had a disagreement over the terms of the June 7 agreement, the trial court attempted to broker a new settlement agreement. Defendants contend that the trial court memorialized the new settlement agreement in an order but maintain that in doing so, the judge imposed his own version of the settlement agreement, which differs from every other version in the record. According to defendants, the trial court’s lack of clarity regarding the terms of the agreement and the court’s contradictory statements in open court confirm the lack of mutual consent regarding the terms of the oral agreement. Therefore, defendants assert, as in Quinlan, this court should find that the parties’ actions after June 7 indicate that there was no mutual assent as to what the parties agreed to.
However, the case before this court can be distinguished from Quinlan in one key respect: Judge Taylor was present during the settlement negotiations and found that the parties had
The trial court granted the motion to enforce the settlement agreement because “extensive pretrial settlement conferences” had been conducted in his chambers, that “at times” the attorneys for all parties were present and “at times” the parties themselves were present in chambers while the settlement conference took place. The judge acknowledged that he was not always present during the settlement conference, but found that an agreement had been reached “as to the essential terms of a settlement.” Rose,
On appeal, appellants asserted that the trial court erred in ordering the parties to perform under the oral settlement agreement because it did not contain certain material terms and, as such, did not constitute a contract. The appellate court affirmed the trial court, finding that a settlement agreement that sets forth essential and material obligations of the parties is enforceable even if some of the terms are missing or left to be agreed upon. Rose,
Defendants correctly contend that this case is distinguishable from Rose in that the parties in that case did not dispute that an oral settlement agreement had been reached in chambers. However, in affirming the trial court’s finding that the parties had an enforceable agreement as to “the essential terms of settlement,” this court stated that “[wjhen parties reach a settlement agreement during a court-mandated settlement conference conducted in the judge’s chambers and state the terms of that agreement in the judge’s presence, there is no danger of enforcement of a contract which was, in fact, never made. This is so even if no transcript or written order memorializing the agreement is prepared on the date the agreement is reached. The possibility of fraud is negated in that the trial judge can, as here, resolve any disputes as to whether an agreement was in fact reached or the content of that agreement.” Rose,
A recent decision of the Seventh Circuit Court of Appeals in Gevas v. Ghosh,
On appeal, Gevas argued that he never actually agreed to the terms of the settlement. The court of appeals held that “Gevas’s argument fails because we have no way in which to substantiate his denial that he ever agreed to a settlement.” Gevas,
Similarly, we find in this case that the trial court’s failure to record the parties’ June 7 oral settlement agreement does not invalidate that agreement. Defendants had opportunities to place the settlement discussions on the record, either by asking that a court reporter be present in chambers to record the discussions or by asking that the terms of the agreement be placed on the record at the time the trial court dismissed the underlying lawsuit and informed the jury that the case had settled. In both instances, defendants failed to make any such request. Moreover, during the September 19 hearing on the motion to enforce, the trial
Defendants also contend that the trial court erred in refusing to hold an evidentiary hearing on plaintiffs’ motion to enforce the judgment. Generally, when a trial court refuses evidence, no appealable issues remain unless a formal offer of proof is made. Torres v. Midwest Development Co.,
During the hearing on the September 19, 2007, motion to enforce the settlement agreement, defense counsel sought leave to provide evidentiary testimony. The trial judge denied that request but offered defense counsel an opportunity to make an offer of proof. In response, defense counsel informed the judge that he wanted to call the judge as a witness. The trial judge stated that he would not be a witness, but offered defendants an opportunity to make an offer of proof regarding the testimony of other witnesses. Defense counsel declined to do so, stating that “without the actual testimony of Your Honor, I’m unable to make a proffer. With Your Honor’s unwillingness to provide the testimony, I’m unable to make a proffer.” Defense counsel had an opportunity to place on the record, for review by this court, what other witnesses, namely, his client, James Zavacki, would testify to with regard to what occurred during the oral settlement negotiations in the judge’s chambers. Defense counsel refused to do so and cannot now be heard to complain that the trial court’s recollection of those settlement negotiations was inaccurate. Therefore, because defendants refused to make an offer of proof when given the opportunity to do so, we find that they forfeited their objection to the trial court’s denial of an evidentiary hearing. Torres,
Defendants next assert that even if the trial court did not err in finding that the parties had a settlement agreement, the trial court did err in granting plaintiff’s motion to accelerate payments owed under the terms of the oral settlement agreement and entering a judgment for $2,800,000 on October 3, 2007. Defendants assert that
On June 20, 2007, plaintiffs counsel sent a letter to Judge Taylor stating that there had been “considerable disagreement as to the terms” of the settlement agreement and requesting “that the status quo should be maintained until these details are worked out and the settlement agreement is signed.” Then during the September 19, 2007, hearing on plaintiffs’ motion to enforce the settlement agreement, in response to a question from plaintiffs’ counsel regarding acceleration, the trial court stated, “Acceleration was discussed. It was absolutely discussed by plaintiffs’ counsel. I did not get an agreement from Mr. Zavacki that he would do the accelerator, and I believe — I’m not so clear on that, but I know that there was not an agreement on that between the parties in front of me. There could have been an agreement later off to the side, but it was not stated in front of me.” Then, despite finding that the parties had not agreed on an acceleration clause, on October 3, 2007, the trial court granted plaintiff’s request to accelerate payment and when defense counsel objected, stated that he “misspoke” when he said on September 19 that defendants had not agreed to an acceleration clause but had meant to say that they had not agreed to a “penalty clause.”
Because we find that the June 20 letter from plaintiffs’ counsel indicates that plaintiffs did not contemplate acceleration of payments and the transcript of the September 19 hearing shows that the trial judge did not clearly recollect whether the parties agreed to an acceleration clause during settlement negotiations in the judge’s chambers, we find that the trial court erred in entering judgment in the amount of $2,800,000, the full amount due under that agreement. Therefore, the trial court’s October 3, 2007, order accelerating payment is vacated.
Defendants also raise issues regarding the propriety of Judge Taylor hearing the motion to enforce in light of his participation in settlement discussion and his in-court conduct and his statements to defense counsel. First, defendants maintain that Judge Taylor should not have considered the motion to enforce the settlement agreement because he was a material witness regarding disputed evidentiary facts.
Section 2 — 1001(a)(3)(iii) of the Code of Civil Procedure provides as follows with respect to substitution for cause:
“Upon the filing of a petition for substitution of judge for cause, a hearing to determine whether the cause exists shall be conducted as soon as possible by a judge other than the judge named in the petition. *** If the petition is allowed, the case shall be assigned to a judge not named in the petition. If the petition is denied, the case shall be assigned back to the judge named in the petition.” 735 ILCS 5/2 — 1001 (a)(3)(Hi) (West 2006).
Here, defendants’ motion for substitution of judge was referred to and denied by Judge Maddux, who sent the
“(1) A judge shall disqualify himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned, including but not limited to instances where:
(a) the judge has a personal bias or prejudice concerning a party or a party’s lawyer, or personal knowledge of disputed evidentiary facts concerning the proceeding; [or]
:]i *
(e) the judge ***
(iv) is to the judge’s knowledge likely to be a material witness in the proceeding.” 210 Ill. 2d Rs. 63(C)(1)(a), (e)(iv).
Defendants assert that Judge Taylor was a material witness regarding disputed evidentiary facts, because he was the only nonparty witness to the settlement negotiations, and therefore, should not have presided over the motion to enforce. Defendants, however, cite no cases that would require a judge to recuse himself because he was present during settlement negotiations. In an analogous case, People v. B.R. MacKay & Sons, Inc.,
Defendants also contend that Judge Taylor should not have heard the motion to enforce judgment because his conduct in this case created an appearance of impropriety in violation of Supreme
For comments by a trial judge to constitute reversible error, the defendant must show that the remarks were prejudicial and that he was harmed by the comments. People v. Pecka,
Defendants also assert that Judge Taylor’s order enjoining defendants from transferring assets until the completion of the hearing violated Rule 63(A)(4). Defendants describe this order as ex parte-, however, there is no evidence of any improper communication between plaintiffs and the court and nothing in the record indicates that the plaintiffs filed a motion requesting that the court issue this order. Therefore, it would be more appropriately categorized as a sua sponte order. Since there is nothing to indicate that Judge Taylor engaged in improper ex parte communications with plaintiffs when deciding to issue the injunction, we find that he did not violate Rule 63(A)(4).
Lastly, defendants contend that the trial court’s orders should be vacated because Judge Taylor engaged in threats of jail time, shortened deadlines and accelerated payments in order to coerce the parties into settling, which is impermissible under Illinois law. For support, defendants cite Gevas,
CONCLUSION
For the foregoing reasons, we affirm the trial court order of September 19, 2007, enforcing the oral settlement agreement reached on June 7, 2007. However, we also find that the trial court erred in finding that the parties agreed to an acceleration clause as part of the settlement agreement. Therefore, we vacate that part of the trial court’s October 3, 2007, order requiring defendants to immediately make all payments due under the agreement. As of July 1, 2009, defendants owed plaintiffs $2 million plus applicable interest. This cause is remanded to the circuit court with instructions to enforce the settlement agreement as set forth herein.
Remanded with instructions.
MURPHY, EJ., and COLEMAN, J., concur.
Notes
Since 2004, plaintiffs, third-party defendant and defendants have been engaged in a lawsuit in the circuit court of Cook County entitled K4 Enterprises, Inc. v. Grater, Inc., Nos. 04 L 3746, 06 CH 17421, 05 L 5223 (Cir. Ct. Cook Co.).
For the same reason, we cannot address defendants’ assertion that on July 3, 2007, the court attempted to negotiate a new settlement agreement with the parties, since neither party made a record of the proceedings that occurred on that date.
Rule 63(A) provides, in part:
“(2) A judge should maintain order and decorum in proceedings before the judge.
(3) A judge should be patient, dignified, and courteous to litigants, jurors, witnesses, lawyers, and others with whom the judge deals in an official capacity, and should require similar conduct of lawyers, and of staff, court officials, and others subject to the judge’s direction and control.
(4) A judge shall accord to every person who has a legal interest in a proceeding, or that person’s lawyer, the right to be heard according to law. A judge shall not initiate, permit, or consider ex parte communications, or consider other communications made to the judge outside the presence of the parties concerning a pending or impending proceeding except that:
(a) Where circumstances require, ex parte communications for scheduling, administrative purposes or emergencies that do not deal with substantive matters or issues on the merits are authorized; provided:
(i) the judge reasonably believes that no party will gain a procedural or tactical advantage as a result of the ex parte communication, and
(ii) the judge makes provisioin promptly to notify all other parties of the substance of the ex parte communication and allows an opportunity to respond.
* ** *
(7) Proceedings in court should be conducted with fitting dignity, decorum, and without distraction. ***
(8) A judge shall perform judicial duties without bias or prejudice. A judge shall not, in the performance of judicial duties, by words or conduct manifest bias or prejudice, including but not limited to bias or prejudice based upon race, sex, religion, national origin, disability, age, sexual orientation or socioeconomic status, and shall not permit staff, court officials and others subject to the judge’s direction and control to do so.” 210 Ill. 2d Rs. 63(A)(2), (A)(3), (A)(4), (A)(7), (A)(8).