This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
STATE OF MINNESOTA
COURT OF APPEALS
Center for Diagnostic Imaging, Inc.,
Filed December 31, 2007
Affirmed in part, reversed in part, and remanded
Ramsey County District Court
File No. C6-03-4083
Owen L. Sorenson, Stringer & Rohleder, Ltd., 55 East Fifth Street, Suite 1200, St. Paul, MN 55101-1788 (for appellant)
Jeremy J. Sundheim, Robert M. Mahoney, Geraghty, O’Loughlin & Kenney, P.A., Suite 1100 Alliance Bank Center, 55 East Fifth Street, St. Paul, MN 55101-1812 (for respondent)
Considered and decided by Peterson, Presiding Judge; Willis, Judge; and Wright, Judge.
In 1980, appellant Keith Soderbeck was struck in his right eye by a piece of steel. A doctor operated on his eye, but was unable to remove the piece of steel. A month or two after the surgery, Soderbeck’s retina detached, and since then, he has been completely blind in his right eye. Although Soderbeck had no sight in his right eye, the eye appeared normal and had normal movement.
In March 2001, Soderbeck injured his right shoulder while he was at work. As part of the effort to treat the injured shoulder, Soderbeck went to respondent Center for Diagnostic Imaging, Inc. (CDI) for a magnetic resonance imaging (MRI) scan. One of the intake forms that Soderbeck completed before undergoing the MRI scan indicates that he had a metal fragment in his right eye. CDI performed the MRI scan, and during the scan, Soderbeck felt a burning sensation in his eye. When the MRI scan was completed, Soderbeck felt pain in his eye, and he was very nauseous. In May 2001, Soderbeck’s right eye was surgically removed. Soderbeck still felt pain in the eye socket and would hear “gushing” sounds behind his eye socket, see bright lights, become nauseous, and pass out.
In April 2003, Soderbeck sued CDI for personal injury. On December 9, 2003, Soderbeck and CDI attended mediation. Soderbeck attended the mediation with his attorney Steven Rutzick and his friend Judy Berke. In the late afternoon, the parties agreed on a settlement amount of $150,000. The next day, Soderbeck told Rutzick that he was not accepting the settlement agreement. Soderbeck discharged Rutzick shortly after the mediation and began looking for another attorney.
In March 2004, after Soderbeck refused to sign the necessary releases and stipulations for dismissal, CDI brought a motion to enforce the mediated settlement agreement. In May 2004, the district court held an evidentiary hearing on CDI’s motion. Because Soderbeck had dismissed his attorney and was unable to find another attorney, he represented himself at the hearing. During the hearing, Rutzick testified that although he pressured Soderbeck into settling because he believed that Soderbeck’s case would not do well at trial, he never told Soderbeck that he had to sign the settlement agreement or he would get nothing. Rutzick denied threatening Soderbeck or using physical force against him in any way. While cross-examining Rutzick, Soderbeck asserted that when he was participating in the settlement negotiations, he was under the influence of 4,800 milligrams of Neurontin.
The mediator, Philip Pfaffly, also testified about the mediation. Pfaffly testified that during the mediation, he did not witness Rutzick say or do anything that indicated that Soderbeck was forced to sign the agreement. Pfaffly testified that he did not see Rutzick threaten Soderbeck with any physical force or unlawful threats.
Soderbeck called Berke to testify at the hearing. Berke testified that Rutzick told Soderbeck that his case was weak and that if he did not settle during the mediation, he would not recover anything. During her direct examination, Berke testified that Soderbeck had taken 4,800 milligrams of Neurontin before the mediation and that he was also taking that amount at the time of the hearing on the motion to enforce the settlement agreement.
Soderbeck produced a letter from Dr. F. Michael Cutrer that describes Neurontin as “a very effective non-addictive, non-narcotic pain suppressant medication.” Cutrer’s letter also states that Neurontin has “suppressant effects, which could include cognitive clouding and slowing of thinking,” and that for a patient taking more than 4,000 milligrams per day, “the possibility of sedation, slowing of thinking, and other effects that might have some bearing on his decision making continue to be present.” Cutrer stated in the letter that because of his extremely limited knowledge of the details about the dosages that Soderbeck was taking when he entered into any agreements, he was “unable and unwilling to speculate in regard to the extent of his impairment at that time.”
During the hearing, Soderbeck argued that because he was under the influence of Neurontin during the mediation, he was mentally incapable of making a decision. While making this argument, Soderbeck said to the court, “I’m not very good at the judgment when I’m intoxicated. As I am right now, Your Honor.” The court then stopped the hearing before Soderbeck could testify and continued the hearing so that Soderbeck’s doctors could send the court more information about his condition. The district court denied CDI’s motion to enforce the settlement agreement and reserved a ruling on all of the parties’ issues until Soderbeck could confirm that “he was medically cleared to proceed.”
In June 2006, CDI again brought a motion to enforce the mediated settlement agreement, and in July 2006, the district court held a hearing on the motion. Soderbeck was represented by counsel at this hearing. At the hearing, Soderbeck argued, among other things, that the settlement agreement was improvident and that he was intoxicated at the time of the agreement. The district court offered to hold another evidentiary hearing regarding the question of Soderbeck’s intoxication, but both parties waived the evidentiary hearing.
In October 2006, the district court granted CDI’s motion. The district court concluded that Soderbeck failed to meet his burden of showing that the settlement agreement was improvident. The district court also found that Soderbeck failed to demonstrate that he was incompetent due to intoxication at the time of the mediation and settlement. This appeal followed.
of disputes without litigation is highly favored, and such settlements will not
be lightly set aside by the courts.” Johnson v. St. Paul Ins. Cos., 305
N.W.2d 571, 573 (Minn. 1981) (citation omitted). “The party seeking to avoid a settlement has
the burden of showing sufficient grounds for its vacation.” Id. Vacating a settlement agreement “rests
largely within the discretion of the [district] court, and the court’s action
in that regard will not be reversed unless it . . . acted
in such an arbitrary manner as to frustrate justice.” Id.
(quotation omitted). “The [district]
court acts as a finder of fact in disputes concerning pretrial settlements.” Wildman
v. K-Mart Corp., 556 N.W.2d 10, 13 (
Soderbeck argues that the settlement should be set aside because he was intoxicated at the time of the agreement. “In Minnesota, there is a presumption of competence.” Fisher v. Schefers, 656 N.W.2d 592, 595 (Minn. App. 2003). “Mental competence is measured at the time the person executes the document.” Id. “Mere mental weakness does not incapacitate a person from contracting.” Id. (quotation omitted). It is sufficient if the person has enough mental capacity to understand, to a reasonable extent, the nature and effect of what the person is doing. Id. at 595-96.
The district court found that Soderbeck failed to establish that he was incompetent due to his use of prescription medication. The district court relied on the testimony of Rutzick and Pfaffly that Soderbeck did not appear intoxicated. Soderbeck’s own witness, Berke, only testified about how much medication he had taken and did not testify that he was intoxicated at the time of settlement. Although Berke testified that, since his MRI scan, Soderbeck’s “thinking isn’t very clear a lot of times,” she did not testify that his thinking was impaired at the time of the settlement.
Soderbeck also alleged that the level of his impairment at the mediated settlement conference was the same as the level of his impairment during the May 2004 evidentiary hearing. But at the evidentiary hearing, Soderbeck questioned witnesses, followed the judge’s instructions, and made coherent arguments. Soderbeck appears to disagree with the district court’s credibility determinations, arguing that the court “did not consider all the medical evidence regarding [Soderbeck’s] intoxication.” But Cutrer’s letter stated that Cutrer could not speculate about the effect that the Neurontin had on Soderbeck during the mediation. And Soderbeck declined the district court’s offer to hold an evidentiary hearing where Soderbeck would have had an additional opportunity to present medical evidence of incapacity. Because there is evidence in the record that shows that at the time of settlement, Soderbeck had sufficient mental capacity to understand, to a reasonable extent, the nature and effect of what he was doing, the district court’s finding that Soderbeck failed to establish that he was incompetent at the time of settlement is not clearly erroneous, and we affirm that finding.
Soderbeck also argues that the settlement should be set aside because it was improvident. A settlement agreement “may be set aside or avoided: (1) [f]or fraud or collusion (2) for mistake; or (3) where the stipulation was improvidently made.” Keller v. Wolf, 239 Minn. 397, 399, 58 N.W.2d 891, 894 (1953).  “Improvidence in the making of a personal injury settlement imports an absence of calculation or a thoughtless exercise of discretion whereby a result is brought about which in equity and good conscience ought not to be allowed to stand.” Id. at 402, 58 N.W.2d at 895. Factors to be considered when determining whether a settlement was improvidently made include (1) the seriousness of the plaintiff’s injury, (2) the extent of the plaintiff’s damages, and (3) the plaintiff’s likelihood of being able to establish a right of recovery against the defendant. Schoenfeld v. Buker, 262 Minn. 122, 128, 114 N.W.2d 560, 564 (1962); Keller, 239 Minn. at 402-03, 58 N.W.2d at 896.
In determining whether the mediated settlement agreement was improvidently made, the district court analyzed the eight factors discussed in Karnes v. Quality Pork Processors, 532 N.W.2d 560, 562 (Minn. 1995). The Karnes court stated:
“Among factors to be considered in determining the validity and extent of a release are the following: (a) The length of period between the injury and the settlement; (b) the amount of time elapsed between the settlement and the attempt to avoid the settlement; (c) the presence or absence of independent medical advice of plaintiff’s own choice before and at the time of the settlement; (d) the presence or absence of legal counsel of plaintiff’s own choice before and at the time of the settlement; (e) the language of the release itself; (f) the adequacy of consideration; (g) the competence of the releasor; and (h) whether the injury complained of by the releasor was an unknown injury at the time of the signing of the release or merely a consequence flowing from a known injury.”
Karnes, 532 N.W.2d at 562 (quoting Schmidt v. Smith, 299 Minn. 103, 109-10, 216 N.W.2d 669, 673 (1974)). But, as the quoted language indicates, these eight factors apply when determining the validity and extent of a settlement, not whether the settlement was improvidently made. In Karnes, the supreme court stated,
The question before us, however, is not whether the settlement award may be vacated to allow an “adjustment of the award in relation to facts subsequently appearing” but rather, whether the release in Karnes’ workers’ compensation settlement from civil liability arising from a common law cause of action is valid and enforceable in her civil action.
Id. The district court’s analysis of the factors in Karnes supports a conclusion that the settlement is valid, but it does not address the separate question whether the settlement was improvidently made. Therefore, we reverse the district court’s determination that Soderbeck “failed to meet his burden of showing that the settlement was improvident” and remand to permit the district court to determine whether the settlement, even though valid, was improvidently made and in equity and good conscience should not be allowed to stand. We express no opinion about the merits of Soderbeck’s claim that the settlement should be set aside because it was improvident.
Affirmed in part, reversed in part, and remanded.
 Rutzick’s son and partner, Adam Rutzick, also worked on Soderbeck’s case and attended the mediation during the morning.
 The Keller court cites several opinions of the Minnesota Supreme Court as authority for the principle that a settlement may be set aside when the stipulation was improvidently made. 239 Minn. at 399, 58 N.W.2d at 894. Each of the cited opinions involves a stipulation made by a party’s attorney, and the rule stated is that a party may be relieved from a stipulation made by the party’s attorney if the stipulation was improvidently made. See, e.g., Nat’l Council of Knights & Ladies of Sec. v. Scheiber, 141 Minn. 41, 44, 169 N.W. 272, 273 (1918) (stating “the court in its discretion may relieve a party from a stipulation made by his attorney if the stipulation was improvidently made and in equity and good conscience ought not to stand”). It appears that the stipulation in Keller was entered into by the party, rather than her attorney, because the attorney stated in his affidavit “that it was only after both plaintiff and her father had indicated that they were satisfied with such a settlement figure that the stipulation was entered into.” 239 Minn. at 400, 58 N.W.2d at 895. The court did not find that because the party had entered into the stipulation, the rule permitting relief from a stipulation that was improvidently made did not apply.
 In the district court, Soderbeck explained in his memorandum opposing respondent’s motion to confirm the mediated settlement that a settlement can be set aside when it is improvidently made and then moved directly into a discussion of the Karnes factors without drawing any distinction between determining whether a settlement is valid and determining whether a settlement was improvidently made. The district court’s application of the Karnes factors is consistent with Soderbeck’s argument in the district court.