11 Effect of Settlement

Despite parties’ broad statutory authority to compromise their disputes, Louisiana law places additional restrictions on IFP litigants’ ability to settle their claims. Applying general contract rules,1  Louisiana statutes provide no specific requirements for extra-judicial settlements of claims other than they be in writing or recited in open court2  and indicate the parties’ intent to extinguish obligations.3  However, a case involving an IFP litigant has an additional requirement: “No compromise shall be effected unless all costs due these officers have been paid.”4  If the settlement agreement is silent on this clear requirement, the Louisiana Code of Civil Procedure provides that each party is liable for all court costs.5  Further, no action may be dismissed by the court without payment of the costs first, with the clerk of court having the power to place a “lien for the payment of such costs superior to that of any other party on any monies or other assets transferred in settlement of such claim or satisfaction of such judgment” and even to “be entitled to collect reasonable attorney’s fees in any action to enforce this lien for the payment of such costs.”6

• 1See La. C.C. art. 3071 (“A compromise is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship.” (emphasis added)).
• 2La. C.C. art. 3072; see also Feingerts v. State Farm Mut. Auto. Ins. Co., 2012-1598, p. 11 (La. App. 4 Cir. 6/26/13), 117 So. 3d 1294, 1301 (“[N]o specific form is required for written compromises.”).
• 3See Alexius v. Booth, 2020-0332, p. 3 (La. App. 4 Cir. 1/13/21), 312 So. 3d 1122, 1124; Morris, Lee & Bayle, LLC v. Macquet, 2014-1080, pp. 15–16 (La. App. 4 Cir. 3/23/16), 192 So. 3d 198, 209 (citing Trahan v. Coca Cola Bottling Co. United, Inc., 04–0100, p. 10 (La. 3/2/05), 894 So. 2d 1096, 1104) (“An enforceable compromise agreement has two essential elements: (1) mutual intention of preventing or putting an end to the litigation and (2) reciprocal concessions of the parties to adjust their differences.”).
• 4La. C.C.P. art. 5187.
• 5Id.
• 6Id.