## Facts

- Vincent Virzi brought a diversity personal-injury action against Grand Trunk Warehouse and Cold Storage Co. and Beatrice Foods Co.
- The court referred the case to mediation under a local rule; plaintiff’s counsel filed a mediation statement on June 2, 1983.
- Virzi died unexpectedly on June 5, 1983, from causes unrelated to the lawsuit.
- A mediation hearing occurred on June 14, 1983, resulting in a $35,000 evaluation; plaintiff’s counsel was then unaware of the death.
- After mediation, plaintiff’s counsel learned of the death; a probate court appointed a personal representative on June 24, 1983.
- No suggestion of death was filed in the district court, and no substitution of the personal representative occurred.
- At a July 5, 1983 pretrial conference, counsel negotiated and placed on the record a $35,000 settlement without plaintiff’s counsel disclosing that Virzi had died.
- Plaintiff’s counsel informed defense counsel of the death only after the settlement was concluded and entered on the record.

## Issues

1. Whether an attorney who learns of a client’s death before concluding a settlement must disclose the death to opposing counsel and the court.
2. Whether a settlement placed on the record should be set aside when plaintiff’s counsel failed to disclose the client’s death before finalizing the agreement.

## Decision

- The court held plaintiff’s counsel had an absolute ethical obligation to disclose the client’s death to the court and opposing counsel before concluding settlement.
- The court found the nondisclosure materially affected the settlement process and the integrity of the proceedings.
- The court set aside the settlement reached and placed on the record at the pretrial conference.

## Legal Principles

- An attorney must disclose a known, material fact to the court and opposing counsel when silence would render the proceeding misleading, including facts bearing on settlement authority and case status.
- A client’s death materially affects counsel’s authority to act and triggers procedural requirements for suggestion of death and substitution of the proper party.
- A settlement may be vacated when it was procured or recorded while counsel withheld a material fact in violation of duties of candor to the tribunal and fair dealing with opposing counsel.

## Conclusion

The court vacated a settlement because plaintiff’s counsel, after learning the client had died, failed to disclose the death before finalizing and recording the agreement, breaching an absolute duty of disclosure and compromising the fairness and integrity of the settlement process.


Virzi v. Grand Trunk Warehouse & Cold Storage Co., 571 F. Supp. 507 (E.D. Mich. 1983)