Settling a business dispute is supposed to end it.
But a settlement is only as good as a party’s willingness to honor it.
When one side refuses to perform under the settlement agreement, then the other party must go back to court to force compliance. An ugly fight between the owners of a real-estate company confirms two things always worth remembering: (1) courts will enforce the settlement you signed and (2) and they retain the power to do so. The case is Zanayed v. Mufarreh, 2026 IL App (1st) 240744-U (May 14, 2026).
A Chicago-area property company was controlled by several owners. One of them was also a member of a construction company, which he engaged to make repairs to the property company’s holdings. The plaintiff alleged that the construction company overcharged for those repairs and that the owner facilitated the property company’s payments to his own construction firm. Or as we all call it, self-dealing.
After the self-dealing owner was removed as an officer, the plaintiff alleged, he began “looting” the company’s bank accounts and locked the other officers out of the company’s management software. The claims included violations of the Illinois Business Corporation Act, conversion, breach of fiduciary duty, and unjust enrichment.
The parties eventually resolved the case with a settlement agreement. Under the settlement agreement the departing owner was to transfer certain real property so the proceeds could fund payments owed to him. He did not transfer the property. All of this is adding up to a defendant who every Judge presumably considered a real piece of work and his attorneys presumably considered a real pain in the butt…Not a good way to for a case and a attorney-client relationship to start. This is particularly true when the client effectively asked his client to pull a rabbit out of a hat.
The plaintiff moved to enforce the settlement; the trial court granted the motion and ordered the transfer; and the appellate court affirmed.
The decision rests on principles any first year law student understands. A settlement agreement is an enforceable contract. A court that approves or incorporates a settlement generally retains jurisdiction to enforce its terms. A party who signs a settlement and then refuses to perform cannot escape by arguing the court has lost the power to make him comply. The court that resolved the case keeps the keys to its own judgment.
Here, the mechanism mattered. The settlement required transferring real property so its sale proceeds could satisfy the obligations the parties had negotiated. When the owner failed to convey the property, the trial court had authority to order the conveyance and the appellate court agreed. Moreover, the settlement agreement had a clause that required the losing party in a dispute over the agreement to pay the attorney’s fees incurred by the prevailing party.
So What?
A settlement is binding—you will need to perform. Signing a settlement agreement and then refusing to carry out its terms is not a strategy; it is a second breach. Courts retain jurisdiction to enforce settlements, and the party who forces enforcement often recovers its fees. If you agree to transfer property, pay money, or take some action by a date, do it….unless you have strategic reason for not performing that you have discussed with your attorney. Your attorney might share the idea is an awful one. But business-savvy attorneys may also share ideas into reasons why non-compliance could make sense.
Build enforcement mechanics into the agreement. Settlements that depend on future performance—transferring real estate, making installment payments, delivering documents—should spell out exactly what happens on default: consequences, timelines, self-executing remedies, and an express retention of jurisdiction.
Related-party deals invite fiduciary scrutiny. The underlying dispute began with an owner steering the company’s repair work to his own construction firm at allegedly inflated prices. Transactions between a company and an entity its insider controls are magnets for breach-of-fiduciary-duty and self-dealing claims.
Disclose them, get disinterested approval, document arm’s-length terms, or expect a fight.
Being a jerk rarely works. Cutting other officers off from bank accounts and management systems or otherwise acting like a jerk are bad business and legal decisions.
Prevailing-party fees are a big deal. If you expect trouble, then you should demand them. If you expect to be the trouble, then fight against them.
David Seidman is the principal and founder of Seidman Law Group, LLC. He serves as outside general counsel for companies, which requires him to consider a diverse range of corporate, dispute resolution and avoidance, contract drafting and negotiation, real estate, and other issues. He can be reached at david@seidmanlawgroup.com or 312-399-7390. This blog post is not legal advice.
Please consult an experienced attorney to assist with your legal issues.
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