Oscar Recio and Maria Recio v. Frederick M. Fridley, D.L. Peterson Trust, Securitas Security Services USA, Inc. and Doe Corporation

majority opinion

In the Iowa Supreme Court

No. 23–0990

Submitted October 8, 2025—Filed December 5, 2025

Oscar Recio and Maria Recio,

Appellants,

vs.

Frederick M. Fridley, D.L. Peterson Trust, Securitas Security

Services USA, Inc., and Doe Corporation,

Appellees.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Warren County, Thomas P.

Murphy, judge.

Plaintiffs, whose attorney settled a personal injury claim on their behalf,

seek further review of the court of appeals decision upholding the district court’s

order enforcing the settlement agreement. Decision of Court of Appeals and

District Court Judgment Affirmed.

Waterman, J., delivered the opinion of the court, in which all justices

joined except Oxley, J., who filed a dissenting opinion.

Christopher P. Welsh of Welsh & Welsh, PC, LLO, Omaha, Nebraska, for

appellants.

Spencer S. Cady of Nyemaster Goode, P.C., Des Moines, and Daniel R.

Sarther of Christensen Hsu Sipes, LLP, Chicago, Illinois, for appellees Frederick

M. Fridley, D.L. Peterson Trust, and Securitas Security Services USA, Inc.

Waterman, Justice.

Either Oscar Recio’s first Texas attorney had authority to settle his

personal injury claim, or he did not. We are asked to determine whether the

district court erred when it found that the attorney had settlement authority and

that the Recios are bound by the settlement their attorney negotiated.

Importantly, this matter was not resolved by summary judgment. Rather, with

no objection from the parties, the district court acted as the factfinder. Our court

of appeals found no error in the district court ruling. We agree and, therefore,

affirm.

I. Background Facts and Proceedings.

Oscar Recio is an over-the-road trucker. He lives in Hidalgo, Texas, with

his wife, Maria. On December 7, 2020, as Oscar was travelling through Adair,

Iowa, he stopped his truck to make repairs. He parked on the shoulder of an

Interstate 80 on-ramp, exited his truck, slid under the vehicle, and began

working.

Meanwhile, Frederick M. Fridley was driving a 2017 Ram utility van as

part of his employment with D.L. Peterson Trust.1 Fridley, as he was entering

the Interstate 80 on-ramp, dropped his cellphone. Distracted as he attempted to

retrieve the device, Fridley crashed his van into Recio’s parked semi. Recio, who

was still underneath his truck at the time of the wreck, suffered injuries.

Recio retained a Texas attorney, Cesar Palma, with the Tijerina Law Group,

to represent him on his personal injury claims. In October of 2021, Palma sent

Fridley’s insurer a pre-suit settlement demand for “the policy limits.” He received

no response. Another employee of Palma’s firm continued reaching out to the

1Unless noted otherwise, we will use “Fridley” as a synecdoche for the Defendants–

Appellees.

insurer until, in mid-January of 2022, an insurance representative, Trent

Merkley, responded with an offer of $105,000. Palma countered, requesting

$425,000. After several rounds of negotiations, Palma told Merkley to

“[g]et authority for [$125,000] and send me a release [of claims].” Shortly

thereafter, Merkley emailed Palma a release of claims for $125,000. Recio never

signed the release.

Later, Recio hired a new Texas attorney, Robert Cantu of Houston, who

claimed Palma lacked authority to settle Recio’s case. Cantu attempted to

negotiate a new settlement with the insurer. Those efforts failing, Recio, now

represented by Omaha counsel, filed this personal injury action in the Iowa

District Court for Warren County, where Fridley resides. The lawsuit also named

Fridley’s employer.

The defendants answered the petition, then filed a motion to enforce

settlement “pursuant to Iowa Rule 1.431,” which governs motion practice

generally. The motion did not cite Iowa Rule of Civil Procedure 1.981, governing

summary judgment, or use the term “summary judgment.” Neither did the

accompanying memorandum, which included as exhibits Palma’s emails settling

the case for $125,000 and the unsigned release. Nineteen days later, Recio’s

counsel filed a resistance denying that there was a prior settlement.

The resistance was accompanied by Oscar’s affidavit, which stated in full:

My name is Oscar Recio. I am of legal age, am in all ways

competent to make this affidavit, and have personal knowledge of all

facts recited herein.

I had previously retained attorneys the Tijerina Legal Group,

P.C. in McAllen, Texas to represent me for this accident. I was

specifically dealing with Mr. Cesar Palma with the Tijerina Legal

Group.

At no time did Mr. Palma inform me that a demand letter had

been sent to the insurance company to try and settle the case. At no

time did Mr. Palma get my authority to accept, reject, or negotiate

any offer on my behalf. At no time did Mr. Palma convey any offers

or numbers that the insurance company was sending over. At no

time did Mr. Palma get my authority to make counteroffers on my

behalf. At no time was I informed of any settlement talks or

negotiations for my case. I have never signed any release agreeing to

accept $125,000.00 to settle my case and I have never given verbal

or written approval to accept $125,000.00 to settle my case. I then

terminated the relationship with the Tijerina Law Group due to lack

of communication.

I then retained Mr. Rob Cantu with Roberts Markland LLP in

Houston, Texas to represent me for this accident. It wasn’t until this

time that Mr. Cantu Informed me that Mr. Palma asked the

insurance company for a release for $125,000.00 and that

Mr. Palma had been negotiating and making counteroffers without

my knowledge and authority.

All of this was done without my knowledge, consent, and

authority, and I never approved or gave verbal or written authority

to accept any offer or negotiate on my behalf.

Further Affiant sayeth not.

The affidavit nowhere states that Oscar told Palma he lacked authority to

negotiate with the opposing parties or that he was prohibited from such

negotiations. The resistance also included emails reflecting attorney Cantu’s

subsequent settlement efforts.

Nowhere did the resistance characterize the defendants’ motion as one for

summary judgment. The defendants filed a reply that argued the resistance was

untimely under Iowa Rule of Civil Procedure 1.431(4) (requiring a resistance

within ten days).2 The reply did not cite rule 1.981 or use the term

“summary judgment.” The reply argued that Recio’s affidavit was insufficient to

rebut Palma’s presumed settlement authority by the requisite “clear and

convincing evidence.”

2By contrast, Iowa Rule of Civil Procedure 1.981(3) allows fifteen days to file a resistance

to a motion for summary judgment.

The district court issued an order setting a hearing on the defendant’s

motion to enforce the settlement. The order stated, “This matter is set for 30 mins

on a Court Service Day. If more time is needed, the parties shall contact the court

immediately.” The Recios did not request more time, but their counsel asked to

participate in the hearing remotely, which the court allowed. The day before the

hearing, the court informed the lawyers for all parties: “If you plan on presenting

testimony, we need to continue [the hearing] to a non-court service day.

Tomorrow, we only have time for short arguments. Please let us know.”

The lawyers replied that they did not intend to present testimony.

The district court conducted the hearing by Zoom as though it were a

bench trial. The district court accepted exhibits. It asked for objections. It took

Oscar’s testimony by affidavit. It gave the parties an opportunity to present

further testimony, an opportunity both parties declined. It heard arguments on

the presented evidence. All this without any citation by the Recios—orally or in

writing—to rule 1.981 or any argument that the court should conduct the

proceedings like a hearing on a motion for summary judgment.

The district court entered an eight-page order enforcing the settlement.

The court found that the “emails clearly establish that Mr. Merkley accepted

Mr. Palma’s demand to settle the case for $125,000.” The court found that

Palma, as the Recios’ attorney at the time, was “presumed to act with their[]

authority” and that “[r]ebutting that presumption requires ‘clear and convincing’

proof.” The court, after reviewing the documentary evidence admitted into

evidence at the hearing, further found:

The affidavit from Mr. Recio is not clear and convincing

evidence that Mr. Palma acted without authority. The Recios opted

not to present testimony. There is no evidence that Mr. Palma is

subject to an ethics complaint. There was no submission from

Mr. Palma. The court cannot find, without “serious or substantial

uncertainty,” that Mr. Palma acted without authority.

The district court relied on Iowa precedent where the district court acted as

factfinder. The court did not mention Iowa Rule of Civil Procedure 1.981 or use

the term “summary judgment.”

The Recios filed a motion to reconsider, which disagreed with the court’s

findings without challenging the procedure the court used to adjudicate the

matter. The Recios’ motion to reconsider never cited rule 1.981 or argued that

the district court should not have decided the factual issues. Instead, the motion

to reconsider acknowledged that the court’s “[f]indings of fact in a law action are

binding on us if supported by substantial evidence” and that the evidence is to

be viewed in the “light most favorable to sustaining the court’s judgment.”

The court denied the motion to reconsider.

The Recios appealed. Their appellate brief raised for the first time the

argument that Oscar’s affidavit created a “genuine issue of material fact”

precluding “summary judgment” enforcing the settlement. The defendants’ brief

responded that the district court’s factual findings are supported by substantial

evidence and are binding on appeal. We transferred the case to our court of

appeals, which affirmed the district court’s order enforcing the settlement.

The court of appeals “rejected the premise that the [district] court made a

summary-judgment ruling.” Instead, the appellate panel examined the record to

determine whether the district court’s factual findings were supported by

substantial evidence. The appellate panel concluded that “under our deferential

review of the district court’s factual findings, we have little difficulty holding that

substantial evidence supports the finding that Palma had authority to settle the

case.” The panel reasoned,

True, the Recios presented the affidavit of Oscar Recio and

later email exchanges between the claims examiner and their new

attorney in an attempt to rebut the presumption of [Palma’s]

authority. But the district court was not required to believe the

affidavit. Nor was it required to find the claims examiner’s emails

ten months later—after being informed the Recios were not

recognizing the settlement—had any legal effect on whether Palma

in fact had authority. Given the references in Palma’s emails to

talking with his client, the seriousness of the ethical breach if Palma

had been lying and acting without authority, and the absence of any

corroborating evidence from Palma or otherwise, a reasonable mind

could conclude that this evidence was not clear and satisfactory

proof to rebut the presumption of attorney authority. And the

district court so found. We need not consider whether this evidence

could have supported the contrary finding because that is not the

question we ask in substantial evidence review.

The Recios applied for further review. We granted their application.

II. Standard of Review.

When reviewing the enforceability of settlement agreements, our courts

use an if-then approach. If the important facts are undisputed, then courts may

summarily enforce the agreement upon a party’s motion. Wende v. Orv Rocker

Ford Lincoln Mercury, Inc., 530 N.W.2d 92, 94 (Iowa Ct. App. 1995). And, on

appeal, we will review the district court’s decision using the same standards

applicable to a summary judgment ruling. Id.

If, however, the material facts are disputed, then the finder of fact must

resolve the dispute. Id. The matter may be tried as an additional claim in the

original action, or the court may hold a separate hearing on the validity of the

settlement. Id. When the matter is submitted to and decided by the court as the

finder of fact, we review the decision as we would a jury verdict, considering only

the parties’ assigned errors. Id. at 95. The findings made by the trial court are

binding if supported by substantial evidence. Id.

III. Analysis.

Because we take a divided approach when reviewing district court orders

enforcing settlement agreements, the first question we must answer is whether

we should review this case under our summary judgment rubric or under the

substantial evidence review that we apply when the district court is the

factfinder.3 We agree with the court of appeals that the substantial evidence

standard applies here.

In his filings to the district court, Oscar did not argue that there were

genuine factual disputes preventing the court from summarily adjudicating the

enforceability of the settlement agreement, but rather that his attorney lacked

authority to create a settlement agreement in the first place. In other words, he

argued the case on the merits, not on the procedure that the district court should

use in addressing the merits.4 So, in function—and in form—the district court’s

hearing on the motion to enforce the settlement was a bench trial on the issues

of the existence and enforceability of a settlement agreement. See Iowa R.

Civ. P. 1.914 (allowing a separate trial by the court on any issue). The district

court’s factual findings are binding on appeal if supported by substantial

evidence. Wende, 530 N.W.2d at 95; Iowa R. App. P. 904(3)(a).

3The Recios’ application for further review argues the district court lacked “subject matter

jurisdiction” to adjudicate the validity of the settlement reached in Texas. The argument appears to confuse subject matter jurisdiction over a type of case and personal jurisdiction over the parties. In any event, the district court clearly has subject matter jurisdiction over this common law tort action and has personal jurisdiction over the parties on claims arising from Oscar’s accident in Iowa, where Fridley resides.

4This conclusion is bolstered by the fact that the district court offered to continue the

hearing if the parties wished to present testimony; neither side accepted that offer. Had the Recios taken issue with the procedure, they could have requested a continuance or objected to the limited scope of the hearing. They did not. In fact, at the hearing, their counsel argued primarily that there had not been a “meeting of the minds”—an issue that goes to the settlement agreement’s validity, not the case’s procedural posture.

The Recios argue that the district court erred when it found that Palma

had authority to settle the personal injury claim. They focus on the absence of

evidence that Oscar extended express settlement authority to Palma; they also

note that Oscar never signed the release. We find no error in the district court’s

ruling.

Settlement agreements are contracts. See Sierra Club v. Wayne Weber LLC,

689 N.W.2d 696, 702 (Iowa 2004). Therefore, when determining whether a

settlement was formed and when interpreting its provisions, we apply principles

of contract law. Id. For an agreement to be binding on the parties, they must

manifest their mutual assent to the terms of the agreement. Id. As we have

stated,

The law favors settlements. “We have long held that voluntary

settlements of legal disputes should be encouraged, with the terms

of settlements not inordinately scrutinized.” Particularly with

settlement agreements, “in the absence of an express reservation of

rights, a settlement agreement disposes of all claims between the

parties arising out of the event to which the agreement related.”

McNeal v. Wapello County, 985 N.W.2d 484, 491 (Iowa 2023) (citation omitted)

(first quoting Walker v. Gribble, 689 N.W.2d 104, 109 (Iowa 2004); and then

quoting Waechter v. Aluminum Co. of Am., 454 N.W.2d 565, 568–69 (Iowa 1990)).

Attorneys are agents of their clients. Dillon v. City of Davenport, 366 N.W.2d 918,

924 (Iowa 1985). Agents, so long as they act within the scope of their authority,

can form agreements binding upon their principals (i.e., clients). Id. But, an

attorney cannot settle a case without authority. Id.

Authority comes in two categories: (1) actual authority and (2) apparent

authority. “An agent acts with actual authority when, at the time of taking action

that has legal consequences for the principal, the agent reasonably believes, in

accordance with the principal’s manifestations to the agent, that the principal

wishes the agent so to act.” Restatement (Third) of Agency § 2.01, at 80

(A.L.I. 2006). Actual authority may be “express” or “implied.” Express actual

authority exists when a principal provides explicit instructions directing the

agent to act or refrain from acting. Implied actual authority exists when,

“[a]n agent has actual authority to take action designated or implied in the

principal’s manifestations to the agent and acts necessary or incidental to

achieving the principal’s objectives, as the agent reasonably understands the

principal’s manifestations and objectives when the agent determines how to act.”

Id. § 2.02(1), at 89.

“Apparent authority is the power held by an agent or other actor to affect

a principal’s legal relations with third parties when a third party reasonably

believes the actor has authority to act on behalf of the principal and that belief

is traceable to the principal’s manifestations.” Id. § 2.03, at 113.

“Iowa Code section 602.10114 provides that an attorney has power to

‘[b]ind a client to any agreement, in respect to any proceeding within the scope

of the attorney’s or counselor’s proper duties and powers . . . .’ ” Gilbride v.

Trunnelle, 620 N.W.2d 244, 251 (Iowa 2000) (en banc) (alteration and omission

in original) (quoting Iowa Code § 602.10114(2) (1997)). “An attorney’s offer of

settlement is generally within the scope of the attorney’s litigation duties.” Id.

Attorneys are presumed to act with authority, although the presumption is

rebuttable. Dillon, 366 N.W.2d at 923. But, to overturn the presumption of

authority, the challenger must produce clear and satisfactory proof. Gilbride,

620 N.W.2d at 251.

In this case, the district court determined that Oscar had not rebutted the

presumption that Palma was acting on Oscar’s authority. On review, we ask only

whether that determination was supported by substantial evidence, meaning

that if reasonable minds would accept the evidence as adequate to reach the

same conclusion, then we will uphold the decision. Crow v. Simpson, 871 N.W.2d

98, 105 (Iowa 2015). “Evidence is not insubstantial merely because [courts] may

draw different conclusions from it; the ultimate question is whether it supports

the finding actually made, not whether the evidence would support a different

finding.” Id. (alteration in original) (quoting Postell v. Am. Family Mut. Ins.,

823 N.W.2d 35, 41 (Iowa 2012)). We conclude that the district court’s decision

was supported by substantial evidence.

Oscar’s affidavit confirms that Palma was his lawyer when he negotiated

the settlement. The affidavit faults Palma for not keeping Oscar in the loop on

settlement talks. But nowhere does Oscar’s affidavit assert that he ever told

Palma not to negotiate with the adverse parties or otherwise restricted his

authority to negotiate when he was hired. The district court had email

correspondence between Palma and the insurer’s representative, Merkley, that

supported its finding that Palma had consulted Oscar and received authority for

a $125,000 settlement. In the emails, Palma said he had been in touch with his

client. The Recios submitted no testimony from Palma or from the insurer to

rebut Palma’s presumed authority. And the Recios offered no evidence that they

had asserted a claim against Palma or made an ethics complaint against Palma.

See Iowa Sup. Ct. Att’y Disciplinary Bd. v. Sotak, 706 N.W.2d 385, 388–89,

390–91 (Iowa 2005) (imposing a two-year suspension on an attorney whose

ethical violations included settling his client’s personal injury claim without

authority); Bellino v. Comm’n for Law. Discipline, 124 S.W.3d 380, 386, 390

(Tex. App. 2003) (disbarring an attorney who failed to communicate settlement

offers to multiple clients, among other ethical violations).

The only evidence weighing against the presumption of Palma’s authority

was Oscar’s own affidavit. The district court could find it failed to rebut Palma’s

presumed authority—a finding that is binding on appeal. Plymouth Farmers Mut.

Ins. Ass’n v. Armour, 584 N.W.2d 289, 292 (Iowa 1998) (“On appeal in a law

action we are bound by such factual findings on the credibility of witnesses.”)

We agree with the court of appeals that a reasonable mind could accept

the evidence before the district court as adequate to conclude that Oscar failed

to rebut the presumption that Palma had authority to settle the personal injury

claim. “As an appellate court we are in no position to question the trial court’s

determination of this fact question anymore than we could question the findings

of a jury if the same question had been submitted to it.” Cunningham v. Iowa-Ill.

Gas & Elec. Co., 55 N.W.2d 552, 555 (Iowa 1952) (affirming order enforcing

settlement).

The Recios did not object to the submission of the motion to enforce the

settlement to the district court as factfinder. They thereby failed to preserve error

on their belated challenge to the procedure used to enforce the settlement,

including their claim that the issue of Palma’s authority should have been tried

to a jury. See Wende, 530 N.W.2d at 95 (“Since Wende did not object to the

submission of motion to the court as the finder of fact, she failed to preserve any

claim of error involving the procedure followed by the trial court.”); see also

Cunningham, 55 N.W.2d at 554 (affirming trial court order enforcing a settlement

because “both parties were apparently agreeable to having the trial court

determine the fact issues presented”). We therefore affirm the district court’s

ruling enforcing the settlement and dismissing the Recios’ action with prejudice

upon the defendants’ payment of $125,000.

IV. Disposition.

For the reasons set out above, we affirm the decision of the court of appeals

and the district court’s judgment enforcing the settlement.

Decision of Court of Appeals and District Court Judgment Affirmed.

All justices concur except Oxley, J., who files a dissenting opinion.

#23–0990, Recio v. Fridley

Oxley, Justice (dissenting).

Litigation is not a game of gotcha. “Our rules of procedure do not provide

for a motion to enforce a settlement agreement.” Wende v. Orv Rocker Ford

Lincoln Mercury, Inc., 530 N.W.2d 92, 94 n.1 (Iowa Ct. App. 1995). This case

demonstrates why they should. Even so, when the defendants asked for

summary enforcement, the district court should have treated it as such: a motion

for summary judgment. I respectfully dissent.

Instead of rummaging through the record and speculating whether the

parties treated the proceeding as more of a summary judgment hearing or more

of a bench trial, we should require a party moving to enforce a settlement

agreement to pick a path. Either seek summary enforcement and apply the

summary judgment standard, see Iowa R. Civ. P. 1.981, or ask for a bench trial

and let the judge make the necessary factfindings, see id. r. 1.914. The majority,

following what the court of appeals laid out thirty years ago in Wende v. Orv

Rocker Ford Lincoln Mercury, Inc., 530 N.W.2d at 94, must do a lot of rummaging

to try to determine the procedural posture of the district court proceedings—a

procedure that frankly had elements of both. That isn’t necessary. Wende hinted

at an easier path, but then it chose the harder one. It is time to steer our district

courts back to the clearer road.

I dissent for three reasons. First, Recio’s affidavit created a fact issue that

overcame the presumption about an attorney’s authority to enter a settlement

agreement. Second, in a case like this where the moving parties asked for a

summary proceeding to enforce a settlement, that’s all they should get; an issue

of material fact should defeat the motion. Finally, even following Wende, the

record shows the parties treated this proceeding more like summary judgment

than a bench trial.

I. Recio’s Own Testimony Creates a Fact Issue Concerning Palma’s

Authority.

I start by addressing whether the parties presented evidence to create a

factual dispute about Palma’s authority to settle the Recios’ claims. If there is no

genuine dispute, then the procedural posture of the case is immaterial because

the defendants are entitled to judgment as a matter of law either way.

Even though we presume that an attorney acts with his client’s authority

to settle a case, an attorney who negotiates and reaches a settlement without the

client’s authority does not bind the client. Gilbride v. Trunnelle, 620 N.W.2d 244,

251 (Iowa 2000) (en banc); Dillon v. City of Davenport, 366 N.W.2d 918, 923–24

(Iowa 1985). And the presumption doesn’t arise from the mere fact that an

attorney represents the client. Under Iowa Code section 602.10114, an attorney

has the authority to “[b]ind a client to any agreement, in respect to any

proceeding within the scope of the attorney’s or counselor’s proper duties and

powers.” Iowa Code § 602.10114(2) (2022). “[B]ut no evidence of any such

agreement is receivable, except the statement of the attorney in person, the

attorney’s or counselor’s written agreement signed and filed with the clerk, or an

entry thereof upon the records of the court.” Id. (emphasis added). We treat an

attorney’s professional statement as satisfying this standard. See Gilbride,

620 N.W.2d at 251 (explaining that the district court could consider the

attorney’s “statement to the district court regarding the extent of his authority”

as a professional statement for purposes of section 602.10114(2)).

Notably, Palma did not testify here. Nor did the defendants provide a

professional statement from Palma that Recio authorized him to negotiate a

settlement—for example, by submitting an affidavit. The lack of any evidence

directly from Palma that he had Recio’s authority to settle the claim distinguishes

this case from Gilbride v. Trunnelle and Wende, where both attorneys made

professional statements about their actual authority. See Gilbride, 620 N.W.2d

at 251 (“Hudson stated at the hearing that all of the defendants, including the

appellants, had agreed to the settlement. Hudson’s statement to the court was a

professional statement.”); Wende, 530 N.W.2d at 94 (“[T]he matter was submitted

to the court on the written motion, resistance, attachments, and a professional

statement by Engelhardt.” (emphasis added)).

Here, the defendants offered only the hearsay statements presented

through the plea negotiation emails. They used those statements to argue that

their perceptions of Palma’s authority were sufficient to summarily enforce the

settlement. But against those hearsay statements, Recio offered his own

testimony that he never authorized Palma to negotiate or enter a settlement with

the defendants: