Jeremy J. Cobb, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1785

Jeremy J. Cobb,
Appellant,

vs.

Dwight J. Schultz, et al.,
Respondents.

Filed July 22, 2019
Affirmed
Bjorkman, Judge

Hennepin County District Court
File No. 27-CV-17-14407

Jeremy J. Cobb, Cobb Chaucer PLLC, Minneapolis, Minnesota (attorney pro se)

James T. Smith, Huffman, Usem, Crawford & Greenberg, P.A., Minneapolis, Minnesota
(for respondents)

Considered and decided by Reyes, Presiding Judge; Cleary, Chief Judge; and
Bjorkman, Judge.
U N P U B L I S H E D O P I N I O N
BJORKMAN, Judge
Appellant-attorney challenges the district court’s enforcement of his mediated
settlement agreement wi th respondents, his putative former clients, and dismissal of this
action. We affirm.

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FACTS
Appellant Jeremy J. Cobb, a licensed attorney, sued respondents Patti M. Schultz
and Dwight J. Schultz, alleging that in mid-June 2017 they sought his advice and
representation in a matter arising under the Fair Credit Reporting Act (FCRA). The
Schultzes did not sign a contingent -fee agreement or approve a draft complaint that Cobb
sent to them later that month. Instead, on July 15, the Schultzes informed Cobb that Patti
successfully resolved the FCRA issue herself. After the Schultzes refused his payment
requests, Cobb commenced this action seeking to recover damages for “numerous hours”
of unpaid work under the theories of quantum meruit, breach of i mplied contract, and
unjust enrichment.
The case proceeded to mediation that concluded with the parties signing a settlement
agreement. Key provisions of the mediated settlement agreement (agreement) require
(1) Patti to assign her interest in the FCRA claim to Cobb , (2) Cobb to dismiss his
complaint against the Schultzes with prejudice, and (3) the Schultzes to pay Cobb $500 as
a “settlement,” from which Cobb will pay his share of the mediation fees. The agreement
also requires Cobb to prepare the assignment document and the parties to waive any
conflicts of interest. And the agreement includes a notice that it “is a binding and
enforceable agreement and contract” and “the mediator has no duty to protect their interests
or provide them with information about their legal rights.” The Schultzes paid Cobb $500
pursuant to the agreement.
When Cobb refused to dismiss the action, t he Schultzes moved to enforce the
agreement, arguing that they mediated in good faith and fully performed their contractual

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obligations. At the motion hearing, Cobb explained that after entering into the agreement,
he became concerned about taking an assignment of Patti’s FCRA claim. In particular, he
pointed to a rule of professional conduct that prohibits an attorney from “acquir[ing] a
proprietary interest in the cause of action or subject matter of litigation the lawyer is
conducting for a client.” Minn. R. Prof. Conduct 1.8(i).1 He argued that the agreement is
invalid or unenforceable because it could potentially violate Minnesota law.
The district court granted the Schultzes’ motion and dismissed Cobb’s action with
prejudice. The court concluded that Cobb had failed to establish a basis for invalidating
the agreement and summarily rejected Cobb’s contention that the agreement is void based
on an arguable violation of the ethics rule. Cobb appeals.
D E C I S I O N
Settlement agreements are favored in the l aw and not set aside lightly. Beach v.
Anderson, 417 N.W.2d 709, 711 -12 (Minn. App. 1988), review denied (Minn. Mar. 23,
1988). They are presumed to be valid. Skalbeck v. Agristor Leasing , 384 N.W.2d 209,
212 (Minn. App. 1986). And they will be upheld even if the parties’ “rights were different
from what [the parties] supposed them to be” as long as “there was no fraud, no
misrepresentations, nor mistake of fact.” Johnson v. St. Paul Ins. Co. , 305 N.W.2d 571,
574 (Minn. 1981) (quotation omitted). The district court’s decision whether to vacate a

1 Cobb sought an advisory opinion from the Lawyers Professional Responsibility Board.
The Board demurred because the inquiry only concerned Cobb’s past conduct, and the
question of “whether the assignment of a client’s claim to an attorney” violates M inn. R.
Prof. Conduct 1.8(i) is not settled law in Minnesota.

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settlement agreement is discretionary and will not be reversed “unless it be shown that the
court acted in such an arbitrary manner as to frustrate justice.” Id. at 573.
A settlement agreement is enforceable if there is a definite offer, acceptance, and a
meeting of the minds on the agreement’s essential terms. Ryan v. Ryan, 193 N.W.2d 295,
297 (Minn. 1971). A mediated settlement agreement is binding if:
(1) it contains a provision stating that it is binding and a
provision stating substantially that the parties were advised in
writing that (a) the mediator has no duty to protect their
interests or provide them with information about their legal
rights; (b) signing a mediated settlement agreement may
adversely affect their legal r ights; and (c) they should consult
an attorney before signing a mediated settlement agreement if
they are uncertain of their rights; or
(2) the parties were otherwise advised of the conditions
in clause (1).

Minn. Stat. § 572.35, subd. 1 (2018).
The agreement contains the statutorily required terms, and Cobb does not argue that
it lacks the elements of a binding contract or fails to comply with Minn. Stat. § 572.35,
subd. 1. Rather, he contends the agreement is void because it may cause him to violate an
ethics rule. This argument is unavailing.
First, as the party challenging the agreement, Cobb bears “the burden of showing
sufficient grounds for its vacation.” Johnson, 305 N.W.2d at 573 (stating that the party
challenging a settlement agreement “has the burden of showing sufficient grounds for its
vacation”). His contention that accepting an assignment of Patti’s FCRA claim “may”
violate Minn. R. Prof. Conduct 1.8(i) does not satisfy this burden. The Schultzes hotly

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disputed whether they ever had an attorney-client relationship with Cobb. And even if they
did, they are clearly former clients, to whom rule 1.8(i) does not apply. 2
Second, the fact that Cobb may not have considered the impact of the agreement on
his ethical responsibilities is not a basis for voiding the agreement. A settlement agreement
is a compromise of rights, even rights about which one party to the settlement is unaware
or mistaken. See id. at 574; Schumann v. Northtown Ins. Agency, Inc. , 452 N.W.2d 482,
485 (Minn. App. 1990) (“A party who voluntarily enters into a settlement agreement cannot
avoid the agreement upon determining . . . that the agreement has ultimately become
disadvantageous . . . .”). Because Cobb is an a ttorney, he is fairly charged with a
heightened knowledge of the law and should have acted with due diligence in researching
his rights before entering into the agreement. See Jerry’s Enters., Inc. v. Larkin, Hoffman,
Daly & Lind gren, Ltd., 711 N.W.2d 811, 817 (Minn. 2006) (“Attorneys have a duty to
exercise that degree of care and skill that is reasonable under the circumstances,
considering the nature of the undertaking.” (quotation omitted)).

2 Cobb acknowledges that rule 1.8(i) was enacted to prevent champerty, defined as “an
agreement between a stranger to a lawsuit and a litigant by which the stranger pursues the
litigant’s claims as consideration for receiving part of any judgment proceeds,” Maslowski
v. Prospect Funding Partners LLC , 890 N.W.2d 756, 763 (Minn. App. 2017) (quotation
omitted), review denied (Minn. May 16, 2017), and maintenance, defined as “assistance in
prosecuting or defending a lawsuit given to a litigant by someone who has no bona fide
interest in the case; meddling in someone else’s litigation,” Johnson v. Wright, 682 N.W.2d
671, 675 (Minn. App. 2004), review granted (Minn. Oct. 19, 2004) and appeal dismissed
(Minn. Jan. 10, 2005). Cobb further acknowledges the agreement likely does not implicate
those concerns, and that he made no such argument in the district court. The district court
noted that the agreement does not violate the American Bar Association’s m odel rules on
professional conduct, which permit an attorney to purchase a client’s accounts receivable
that is the subject matter of the litigation if the attorney purchases the entire account. ABA
Comm’n on Ethics & Prof’l Responsibility, Formal Op. 00-416 (2000).

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Third, the agreement does not, by i ts terms, require Cobb to violate the law or his
professional obligations. The only thing the agreement requires Cobb to do is dismiss his
claim against the Schultzes with prejudice and prepare the assignment document. It does
not condition any aspect of the settlement upon Cobb actually taking an assignment of and
asserting Patti’s FCRA claim. If Cobb decides for whatever reason not to pursue the FCRA
claim, he has nevertheless received the benefit of his bargain. See Baker v. Best Buy Stores,
LP, 812 N.W.2d 177, 182 (Minn. App. 2012) (upholding unfavorable retail service contract
provision that terminated the contract upon replacement of a purchased good, because the
purchasers agreed to the contract term and “received the benefit of the bargain” with the
retailer), review denied (Minn. Apr. 25, 2012).
In sum, the district court did not abuse its discretion by enforcing the agreement and
dismissing Cobb’s action against the Schultzes.
Affirmed.