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Hale v. Southeast Colorado Power Association.

2022 COA 36. NO. 21CA1757.  Statutory Offer of Settlement—Modification—Avoidance.

March 24, 2022

Hale, the Sandra Kay Mundell Revocable Trust (Trust), and the Estate of Sandra Kay Mundell (Estate) (collectively, plaintiffs) own thousands of acres of property that burned during the Badger Hole Fire. They sued defendant, Southeast Colorado Power Association (SECPA), alleging that its negligence caused the fire. Mediation was unsuccessful, and SECPA served plaintiffs with statutory offers of settlement. Estate and Trust accepted an offer of $1,241,677 plus court costs. Hale rejected an offer of $15,000 plus court costs. SECPA then filed a motion to enforce settlement. Plaintiffs filed a cross-motion to enforce as to Estate and Trust but not as to Hale. The Court denied SECPA’s motion and granted plaintiffs’ cross-motion. SECPA then moved for reconsideration and, in the alternative, for certification of an interlocutory appeal. The court denied the motion for reconsideration but granted the motion for certification for interlocutory review on (1) whether a trial court may alter or modify a settlement offer based on a mistake in drafting the offer by the offeror; and (2) whether enforcement of a purported settlement agreement can be avoided on the grounds of mistake, excusable neglect, or lack of authority by the offering party’s counsel.

The Court of Appeals granted the appeal under C.A R. 4.2 and determined that the matter is governed by CRS § 13-17-202, which provides that a timely accepted statutory offer becomes a “settlement agreement” that is “fully enforceable” by the court. Further, settlement agreements are interpreted by courts according to common law contract principles, which a court may apply when determining whether an accepted statutory offer is enforceable. The Court therefore answered both questions in the affirmative.

The order granting plaintiffs’ cross-motion to enforce settlement was reversed and the case was remanded for further proceedings.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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