Davila v. Nickell10/26/2005
to avoid the Louies' statute of limitations/res judicata defenses. For the reasons explained below, we find no prejudicial error.
A. Background Summary
Within one year after the accident, on July 24, 1997, Barraza brought a personal injury action against Sun Villa Inc., Nickell, Rumjahn, Joadd, and the Louies. The Sun Villa Inc. board of directors (which included the Louies, Nickell, and Rumjahn) voted to join with Joadd and other related parties "to hire [attorneys] Donald Scoville and Eric Beaudikofer" to "resist and defend" the lawsuit, and to "take such actions as is deemed necessary in furtherance thereof . . . ."
Shortly thereafter, Barraza returned to work for Joadd on construction jobs. Two or three months later, Barraza was told that if he did not dismiss his lawsuit, Joadd could not stay in business and Joadd could no longer employ Barraza. The parties then began settlement discussions. During these negotiations, Nickell and Rumjahn convinced Barraza to fire his attorney because they told Barraza that his attorney was interfering with settlement attempts. Defense counsel Scoville then revised a settlement agreement that had been proposed by Barraza's counsel. Barraza understood, and was told, that Nickell and Rumjahn were acting on behalf of all the defendants named in the complaint and all defendants were equally bound by the agreement. Barraza also understood that if defendants breached any terms of the agreement, he would be allowed to refile his lawsuit without limitation.
In October 1997, the parties agreed to a final settlement agreement, that read as follows:
"1. [Joadd], defendants shall pay $5,000.00, plus 10% annual interest, to [Barraza], on or before November 1, 1997.
"2. In the event the funds cannot be collected for any reason, [Joadd], defendants, both waive the statute of limitations and agree that this case may be re-opened and that prosecution may once again commence this action against them. I the event the case is re-opened, there shall be no limit on the amounts sought by plaintiff, that is, the plaintiff shall be able to proceed on his original complaint with no limitation on his recovery. Any additional recovery against [Joadd], defendants, shall also be secured by the deeds of trust, hereinabove mentioned.
"3. In consideration of the above, [Barraza] will issue a dismiss as to all defendants.
"4. [Joadd], defendants, shall also pay all past and future medical bills associated or connected with the injuries received by [Barraza].
"5. [Joadd], defendants, shall also employ [Barraza], as long as they remain in construction business.
"6. [Joadd], defendants, both have consulted with their attorneys and agree to this stipulation after such consultation."
The agreement was signed by Barraza and by Nickell, "for Joadd Construction Company." Based on the agreement, Barraza voluntarily dismissed the July 1997 lawsuit with prejudice.
Thereafter, defendants paid Barraza $5,000, but did not pay Barraza's medical bills. At trial, Rumjahn testified that he did not pay Barraza's medical bills because shortly after the written settlement agreement was signed, Barraza agreed to a verbal modification-that if defendants paid Barraza an additional $3,000, "we don't have to be responsible for the past medical bills." Barraza denied entering into this agreement. Moreover, the evidence showed that this additional $3,000 was never paid to Barraza.
Barraza then brought a second action in July 2000 that asserted claims against the same defendants. In response to this lawsuit, the defendants asserted numerous affirmative defenses,
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