Failure To Make Offer Of Proof Dooms Appellate Argument Opposing Oral Settlement Agreement

K4 Enterprises sued Grater, Inc. and James Zavacki During the trial, the parties met with the judge, but without attorneys, to discuss settlement of the case. The case was settled, at least everyone thought so at the time. But over the following weeks, the parties could not agree on the terms of a written agreement.

K4 asked the trial judge to enforce the oral agreement made during the settlement discussions in the court’s chambers. Grater and Zavacki opposed the motion, and asked for an evidentiary hearing. They wanted to question the judge as a witness to the settlement negotiations. The judge denied the request for an evidentiary hearing, and said he would not give testimony. Instead, the judge ruled that Grater and Zavacki could make an offer of proof to show what their other witnesses would say. Grater and Zavacki declined to make the offer of proof, saying they were unable to do so without the testimony of the trial judge. The court then granted K4’s request to enforce the oral settlement agreement.

On appeal, Grater and Zavacki claimed the trial court was wrong to refuse to hold an evidentiary hearing. But the First District Illinois Appellate Court disagreed, and ruled that Grater and Zavacki forfeited the argument by declining to make an offer of proof. Here’s how the appellate court explained it:

Generally, when a trial court refuses evidence, no appealable issues remain unless a formal offer of proof is made … The purpose of an offer of proof is to inform the trial court, opposing counsel, and a reviewing court of the nature and substance of the evidence sought to be introduced … An adequate offer of proof is the key to preserving a trial court’s error in excluding evidence.

… 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 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 …

The appellate court affirmed the order to enforce the settlement, a sum of $2 million plus interest. Read the whole case, K4 Enterprises v. Grater, Inc., No. 1-07-2792 (8/19/09), by clicking here.

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