Case Title: Doe v. Lozano

Citation: 

Docket Number: 2022 ME 33

State: maine

Court: Maine Supreme Court

Date: 2022-06-16T00:00:00Z

Document:
MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
 2022 ME 33 
Docket: 
Yor-21-150 
Argued: 
 January 11, 2022 
 
Decided: 
 June 16, 2022 
 
Panel: 
 STANFILL, C.J., and MEAD, JABAR, HORTON, and CONNORS, JJ.*  
 
 
PAT DOE1 
 
v. 
 
RUDY A. LOZANO 
 
 
STANFILL, C.J. 
 
[¶1]  Rudy A. Lozano appeals from a judgment of the District Court 
(Biddeford, Mulhern, J.) determining that a settlement agreement that the 
parties signed constitutes a binding contract and granting Pat Doe’s motion to 
enforce the agreement.  We clarify the standards courts should use in enforcing 
a settlement agreement, vacate the judgment, and remand for further 
proceedings. 
 
*  Although Justices Gorman and Humphrey participated in the appeal, they retired before this opinion 
was certified. 
1  Pursuant to federal law, we do not identify the plaintiff in this appeal referencing a protection from 
abuse action and limit our description of events and locations to avoid revealing “the identity or 
location of the party protected under [a protection] order.” 18 U.S.C.S. § 2265(d)(3) (LEXIS through 
Pub. L. No. 117-130). 
 
2 
I.  BACKGROUND 
[¶2]  In September 2018, Doe filed a complaint against Lozano for unjust 
enrichment and partition of real estate, alleging that she and Lozano had lived 
together for over seven years and that she was entitled to reimbursement or 
payment for multiple benefits she conferred upon Lozano during that time.  In 
November 2018, Doe filed with the court a settlement agreement, signed by 
both parties, which stated that the parties were previously in a personal and 
business relationship and sought to “resolve all issues of real and personal 
property, and any other legal rights” arising from that relationship.   
[¶3]  The settlement agreement included a section regarding property 
described as “marital real estate” that provided that Lozano “shall purchase 
[Doe’s] interest in the property” and listed payments that Lozano was to make, 
with the first payment due no later than November 1, 2018.  The settlement 
agreement also provided that Lozano “shall be entitled to a walk-through of the 
premises to ensure that the property is in a condition similar to that which 
existed on his last date of occupancy” and that the “agreement is conditioned 
upon the real estate and buildings thereon being in a satisfactory condition as 
mutually agreed” by the parties.  The settlement agreement stated that the 
parties agreed the civil action “shall be settled and agreed upon by submission 
 
3 
of this executed document to the court” and that Lozano agreed to “a default 
judgment in the full amount remaining that is due and owed” if he failed to 
“fulfill any of the commitments agreed upon” in the agreement.2  Doe filed the 
settlement agreement with the court on November 6, 2018.  The agreement was 
never incorporated into a judgment.   
[¶4]  Several months passed, and on April 22, 2019, Lozano filed an 
answer to Doe’s complaint.  Doe filed a proposed judgment two days later, 
contending that the settlement agreement resolved the issues between the 
parties.  On August 12, 2019, the court (Moskowitz, J.) entered a pretrial order 
stating that the court had the settlement agreement in its file; that Lozano 
disagreed with Doe that the settlement agreement was a binding, enforceable, 
contract; and that Doe could move for summary judgment on that issue.  Doe 
moved for summary judgment, and Lozano filed an opposition.  Doe then 
moved for permission to withdraw her summary judgment motion and to 
amend her complaint to add a claim for breach of contract, which the court 
(Foster, A.R.J.) granted.   
 
2  Doe had also filed a complaint for protection from abuse in September 2018.  The District Court 
(Biddeford, Sutton, J.) issued a temporary protection order on behalf of Doe and her two children and 
later issued a second temporary protection order.  The settlement agreement stated that the 
protection from abuse action “shall be dismissed with prejudice,” and the court (Moskowitz, J.) 
granted Doe’s motion to dismiss the protection from abuse complaint in November 2018. 
 
4 
[¶5]  Doe did not amend her complaint in the District Court but filed a 
complaint against Lozano in the Superior Court (York County) for breach of 
contract and promissory estoppel.  The Superior Court (Douglas, J.) stayed that 
case pending further action of the District Court.   
[¶6]  On August 17, 2020, Doe moved to “enforce” the settlement 
agreement in the District Court, arguing that Lozano had failed to make any 
payments due to Doe under the agreement.  Unlike the withdrawn motion for 
summary judgment, Doe did not support her motion to enforce with any 
affidavits or other material of evidentiary quality.  Lozano opposed the motion, 
raising the following defenses: that he entered into the agreement under duress 
due to the pending protection from abuse action; that he was mentally 
incapacitated when he signed the agreement; that Doe fraudulently induced 
him to enter into the agreement by concealing the results of an appraisal of the 
real property, which concluded that the property was worth considerably less 
than Lozano believed; that the agreement was not enforceable because both 
parties knew that the description “marital real estate” was a mistake; that he 
was not given a chance for a “walk-through of the premises” and the property 
was not in a condition similar to the condition it was in on the last date that he 
occupied it; and that a condition of the agreement—that the property be in a 
 
5 
satisfactory condition—is ambiguous and was not met.  Lozano argued that an 
evidentiary hearing on the motion to enforce was required as a matter of due 
process and that discovery was necessary before a hearing could be held.3 
[¶7]  Despite Lozano’s request for an evidentiary hearing, the court 
(Mulhern, J.) held a nontestimonial hearing on November 24, 2020.  Based on 
the parties’ arguments and the settlement agreement, on March 24, 2021, the 
court entered a judgment granting in part Doe’s motion to enforce.  The court 
determined that the settlement agreement is an enforceable contract with 
sufficiently definite terms and that the agreement’s material terms “are not in 
dispute, so no evidentiary hearing needs to be conducted.”  The court rejected 
Lozano’s argument regarding mutual mistake, stating that it had “not been 
presented any facts that indicate that at the time of the signing . . . the parties 
were under the mistaken belief that they were married” and that the language 
“marital real estate” was “a simple clerical error.”  The court found that the 
settlement agreement contained “detailed terms and multiple affirmations of 
intent”; that the parties used attorneys to negotiate the agreement, affirmed 
“their intent to a notary,” and had the agreement notarized; and that the 
 
3  The court (Mulhern, J.) stayed all discovery in the matter, stating that the granting of the motion to 
enforce “would conclude the case without the need for further discovery.”   
 
6 
notarized agreement was submitted to the court.  The court determined that, 
as a result, the parties intended to be bound by the agreement.   
[¶8]  Finally, the court concluded that there were no grounds to void the 
settlement agreement.  The court determined that Doe had “performed 
significant partial performance” under the agreement, that Lozano accepted 
that performance and “stayed silent and did not indicate to [Doe] that he would 
challenge” the agreement, and that therefore Lozano could not claim the 
settlement agreement was void.  The court rejected Lozano’s arguments with 
respect to the unsatisfactory condition of the property, duress, incompetence, 
and fraud because it determined that Lozano waived “any objection to the 
condition of the property” when he moved back into the property and accepted 
and recorded the quitclaim deed to the property and that he “ratified the 
agreement by his subsequent conduct.”  The court thus approved the 
settlement agreement, determined that Doe was entitled to enforce the 
agreement with respect to the amount Lozano owed for the real property, and 
entered a judgment of $80,002 for Doe.4   
 
4  The court denied Doe’s request for enforcement of the agreement regarding the value of personal 
property because the claim was “not for a definite amount.”  The court also denied all outstanding 
motions, including Lozano’s motion for relief and sanctions pursuant to M.R. Civ. P. 37, motion for a 
protective order regarding discovery, motion in limine, and motion to test the sufficiency of Doe’s 
answers to Lozano’s requests for admissions.   
 
7 
[¶9]  Lozano moved for further findings of fact, which the court denied.  
Lozano timely appealed.5   
II.  DISCUSSION 
[¶10]  Lozano argues that the court improperly reached conclusions on 
questions of fact “without allowing exhibits, taking evidence or otherwise 
weighing fact” and that it violated his “due process rights to test the evidence.”6  
Doe contends that the court did not need to hold an evidentiary hearing on her 
motion to enforce because “there was no genuinely disputed question of 
material fact regarding the existence or unambiguous terms” of the settlement 
agreement.7   
 
5  On March 11, 2022, Lozano filed a motion requesting that we decide his appeal without referring 
to the protection from abuse matter, a motion which Doe opposed.  We accepted the motion and 
opposition as additional briefing in considering the merits of Lozano’s appeal.   
6  We reject Lozano’s argument that Doe is collaterally estopped from pursuing the motion to enforce 
because she did not amend her complaint to assert a claim for breach of contract.  Lozano has waived 
this argument because he did not develop it or offer case law in support of it.  See Mehlhorn v. Derby, 
2006 ME 110, ¶¶ 9, 11, 905 A.2d 290; Alexander, Maine Appellate Practice § 404 at 316 (5th ed. 
2018).  Regardless, his argument fails because there was no final judgment with respect to these 
issues.  See Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 9, 940 A.2d 1097. 
7  We reject Doe’s argument that Lozano failed to properly raise and develop any issues relating to 
his due process argument.  Lozano argued, in his opposition to Doe’s motion to enforce, that failing 
to hold an evidentiary hearing would violate his due process rights and, during the nontestimonial 
hearing, Lozano also raised the court’s need to take evidence.  The court specifically contemplated 
whether Lozano’s due process rights would be preserved without an evidentiary hearing.  There was 
thus “a sufficient basis in the record to alert the court” and Doe of this issue.  Warren Constr. Grp., LLC 
v. Reis, 2016 ME 11, ¶ 9, 130 A.3d 969 (quotation marks omitted); Alexander, Maine Appellate 
Practice § 402(a) at 310 (5th ed. 2018). 
 
8 
[¶11]  We review “de novo whether an individual was afforded 
procedural due process.”  Mitchell v. Krieckhaus, 2017 ME 70, ¶ 16, 158 A.3d 
951 (quotation marks omitted).  “The fundamental requirement of due process 
is the opportunity to be heard at a meaningful time and in a meaningful 
manner.”  Id. ¶¶ 16, 20 (quotation marks omitted).  Furthermore, “[w]hen 
significant rights are at stake, due process requires: notice of the issues, an 
opportunity to be heard, the right to introduce evidence and present witnesses, 
the right to respond to claims and evidence, and an impartial fact-finder.”  
Jusseaume v. Ducatt, 2011 ME 43, ¶ 12, 15 A.3d 714 (quoting GENUJO LOK 
Beteiligungs GmbH v. Zorn, 2008 ME 50, ¶ 18, 943 A.2d 573). 
[¶12]  We have previously “implicitly endorsed motions to enforce as 
appropriate vehicles by which parties may bring an alleged settlement 
agreement before a trial court,” and we have broadly stated that whether a 
court must hold an evidentiary hearing on a motion to enforce is ordinarily 
within the court’s discretion.  Est. of Snow, 2014 ME 105, ¶ 18, 99 A.3d 278; 
see M.R. Civ. P. 7(b)(7).  We have not, however, always clearly articulated 
standards to determine when an evidentiary hearing may be necessary, nor 
have we clearly articulated the court’s power to enforce a settlement 
agreement upon such a motion.  We do so now. 
 
9 
A. 
Contract Formation 
[¶13]  A settlement agreement is analyzed as a contract and the existence 
of a binding settlement agreement is a question of fact reviewed for clear error.  
2301 Cong. Realty, LLC v. Wise Bus. Forms, Inc., 2014 ME 147, ¶ 10, 106 A.3d 
1131; Est. of Snow, 2014 ME 105, ¶ 11, 99 A.3d 278.  For a binding agreement 
to exist, “the parties must have mutually intended to be bound by terms 
sufficiently definite to enforce.”  2301 Cong. Realty, LLC, 2014 ME 147, ¶ 10, 106 
A.3d 1131 (quotation marks omitted). 
[¶14]  “[W]here parties read a settlement agreement that contains all the 
necessary elements of an agreement into the court record, no further 
fact-finding is required.”  Est. of Snow, 2014 ME 105, ¶ 19, 99 A.3d 278 
(summarizing cases); see, e.g., Muther v. Broad Cove Shore Ass’n, 2009 ME 37, 
¶¶ 2, 8, 968 A.2d 539 (explaining that the transcript of the judicially assisted 
settlement conference “conclusively establishes the existence of a binding 
settlement agreement . . . and subsequent disputes that arose while attempting 
to reduce the settlement to a stipulated judgment did not affect” the court’s 
authority to enforce the agreement).  Further, in Estate of Snow, we affirmed a 
court’s determination that no evidentiary hearing was necessary where the 
parties read the details of a settlement agreement into the record at a 
 
10 
deposition.  2014 ME 105, ¶¶ 5-7, 21-22, 99 A.3d 278.  Although the parties 
later failed to agree on written language reflecting the agreement, they did not 
dispute the accuracy or authenticity of the deposition transcript submitted to 
the court, which the court properly found reflected an unambiguous binding 
settlement agreement.  Id. ¶¶ 7, 21; see also 2301 Cong. Realty, LLC, 2014 ME 
147, ¶ 10, 106 A.3d 1131. 
[¶15]  If, however, the parties dispute the existence of an enforceable 
settlement reached outside the court’s presence, “findings of fact regarding the 
terms of the agreement and the parties’ intent may be required.”  Muther, 2009 
ME 37, ¶ 6, 968 A.2d 539.  For example, in Marie v. Renner we held that an 
evidentiary hearing was necessary to determine whether the parties reached a 
binding settlement agreement.  2008 ME 73, ¶ 10, 946 A.2d 418.  The plaintiff 
had sued in that case alleging that the renovation work to the defendant’s 
building had caused her to have an allergic reaction and incur medical bills.  Id. 
¶ 2.  Prior to trial, the court was notified that the parties had settled the case, 
and the plaintiff filed a motion to enforce, arguing that a binding contract 
existed, “namely, in exchange for a release of all claims, [defendant] would 
prepare and tender a check,” and that a hearing was unnecessary because the 
filings with the court disclosed this agreement.  Id. ¶¶ 3, 6.   
 
11 
[¶16]  The defendant contended that his agreement to settle was 
conditioned on the proceeds “being used to pay [plaintiff’s] outstanding 
medical bills” and, because the medical provider had written off those bills, the 
settlement agreement’s terms were not met.  Id. ¶ 3.  We determined that the 
parties’ filings, including documents signed by only one party and 
correspondence between counsel, did not reflect a binding settlement 
agreement but instead revealed an ambiguity that went “to the substance of the 
agreement” regarding whether “there was a condition precedent to the 
agreement as to the use of the proceeds of the check.”  Id. ¶¶ 8-9.  We therefore 
vacated the court’s judgment and remanded the matter for an evidentiary 
hearing.  Id. ¶ 10; see also White v. Fleet Bank of Me., 2005 ME 72, ¶¶ 3 & n.2, 5, 
12-13, 875 A.2d 680 (affirming the enforcement of a settlement agreement 
reached during mediation, where the mediation was not recorded due to a tape 
recorder malfunction and the court held an evidentiary hearing). 
[¶17]  While the above cases are instructive, here the parties’ dispute 
regarding the settlement agreement is not limited to whether an agreement 
was reached outside of the court and what the material terms of that agreement 
are.  The parties both signed the settlement agreement and Doe filed it with the 
court.  The agreement on its face appears fully integrated.  Under principles of 
 
12 
contract law and the parol evidence rule, extrinsic evidence is not admissible to 
explain or alter an unambiguous integrated contract.  See Handy Boat Serv., 
Inc. v. Pro. Servs., Inc., 1998 ME 134, ¶ 11, 711 A.2d 1306. 
[¶18]  In this case, however, Lozano contended and argues on appeal that 
the agreement is invalid because of the circumstances leading up to the 
agreement’s signing.  Specifically, he claims that he was under duress due to 
Doe’s pending action for protection from abuse and was mentally incapacitated 
at the time of signing,8 and that Doe fraudulently induced him to enter the 
agreement.  These arguments go to the validity of the agreement’s formation, 
not to the terms of the agreement. 
[¶19]  A party asserting the defense of fraudulent inducement may use 
parol evidence to show that the other party engaged in fraudulent 
representations to induce the party to enter a settlement agreement.  See Ferrell 
v. Cox, 617 A.2d 1003, 1006 (Me. 1992); Harriman v. Maddocks, 518 A.2d 1027, 
1029 (Me. 1986).  Such evidence may show that the signed settlement 
agreement does not reflect the intent of the parties, Ferrell, 617 A.2d at 1006, 
and may vitiate the contract, Harriman, 518 A.2d at 1029. 
 
8  Lozano notes that Doe herself asserted in her complaint for protection from abuse that Lozano was 
mentally ill and delusional.   
 
13 
[¶20]  In addition, a contract is voidable if a contracting party does not 
have the requisite mental capacity to contract.  See Est. of Marquis, 2003 ME 71, 
¶ 14, 822 A.2d 1153.  The determination of a party’s contractual capacity is 
necessarily a question of fact.  See id. ¶ 16.  Similarly, duress founded upon 
wrongful conduct of the other party is a factual question that may also 
invalidate a contract.  See City of Portland v. Gemini Concerts, Inc., 481 A.2d 180, 
182-83 (Me. 1984).   
[¶21]  As we have previously explained, see Est. of Snow, 2014 ME 105, 
¶ 20, 99 A.3d 278, the First Circuit has determined that courts “may not 
summarily enforce a purported settlement agreement if there is a genuinely 
disputed question of material fact regarding the existence or terms of that 
agreement” and must instead “take evidence to resolve the contested issues of 
fact,” Malave v. Carney Hosp., 170 F.3d 217, 220, 222 (1st Cir. 1999) (“Summary 
enforcement of arm’s-length settlements is a useful device to hold litigants to 
their word, but the procedure ought to be reserved for situations in which a 
struck bargain is admitted or proved, and the basis for nonperformance is 
insubstantial.”).  In Malave, the First Circuit held that an evidentiary hearing 
was necessary when a party disputed whether its attorney had authorization 
to settle the case.  Id. at 219, 221-22; see also Lane v. Maine Cent. R.R., 572 A.2d 
 
14 
1084, 1084-85 (Me. 1990).  An evidentiary hearing can similarly be necessary 
to determine whether a party had the mental capacity to enter into an 
agreement.  See Marston v. United States, No. 10-10437-GAO, 2012 U.S. Dist. 
LEXIS 29140, at *10-12 (D. Mass. Mar. 6, 2012).  The same is true as to improper 
coercion.  See Bandera v. City of Quincy, 344 F.3d 47, 52 (1st Cir. 2003) (stating 
that it was unlikely that the matter could be resolved absent an evidentiary 
hearing where there were issues of fact, including whether the plaintiff was 
“improperly coerced into signing the [settlement] agreement”). 
[¶22]  We now make clear that if a party raises a factual issue that goes 
to the validity of a settlement agreement’s formation, an evidentiary hearing 
will ordinarily be necessary on a motion to enforce the settlement, even if the 
written agreement otherwise appears to be a fully integrated contract.9  
Because issues of fact regarding the formation of the settlement agreement 
exist here and no such hearing was held, we must vacate the judgment. 
 
9  We do not suggest that these factual issues, as with any factual issues, cannot be resolved upon a 
properly supported motion for summary judgment.  Such a motion was filed in this case but then 
withdrawn.  Summary judgment remains available when there are no genuine issues of material fact. 
M.R. Civ. P. 56(c).  Similarly, as the First Circuit has noted, “[p]arties are perfectly free to submit issues 
for resolution on whatever limited evidence they choose to present.”  F.A.C., Inc. v. Cooperativa de 
Seguros de Vida de P.R., 449 F.3d 185, 188, 194 (1st Cir. 2006) (determining that the lack of an 
evidentiary hearing was not problematic where a party did not properly raise that a hearing was 
requested and did not argue “that the failure to hold an evidentiary hearing was error,” and where 
the court was familiar with the issues because it had participated in the settlement negotiations). 
 
15 
B. 
Enforcement Remedy 
[¶23]  In her motion to enforce, Doe sought not only a declaration that 
the settlement agreement was valid and entry of judgment thereon, but she also 
sought remedies for breach of the substance of the agreement.  In response, in 
addition to claiming that the contract was void or voidable, Lozano raised other 
issues that may be defenses, in whole or in part, to an action for breach of 
contract.  In this regard, the court again erred by determining factual issues 
regarding performance, breach, and remedies without receiving any evidence.   
[¶24]  On a motion to enforce a settlement agreement, the court may 
determine that an agreement is enforceable as a full and final agreement.  A 
court will ordinarily enforce a settlement agreement by entering a judgment in 
accordance with the agreement, whether by dismissing the action or 
incorporating the agreement’s terms into a judgment.  See, e.g., Muther, 2009 
ME 37, ¶ 7, 968 A.2d 539 (stating that a valid settlement agreement is 
enforceable “and, upon acceptance by the court, is incorporated as a judgment 
of the court”); Toffling v. Toffling, 2008 ME 90, ¶¶ 8-9, 953 A.2d 375 (“[A]n oral 
stipulation entered on the record at trial is adequate to support the entry of a 
judgment finally disposing of the litigation.” (quotation marks omitted)); White, 
2005 ME 72, ¶ 8, 875 A.2d 680 (explaining that once the court determined that 
 
16 
the parties had a binding settlement, the court issued an order adopting and 
enforcing the settlement’s terms); Page v. Page, 671 A.2d 956, 958 (Me. 1996) 
(stating that a “settlement agreement can be summarily enforced by the entry 
of a judgment”); Transamerica Com. Fin. Corp. v. Birt, 599 A.2d 65, 65 (Me. 
1991). 
[¶25]  The determination that a settlement agreement was validly 
formed with sufficiently definite terms and is entitled to enforcement as a 
judgment, however, is separate from a determination of whether a party is in 
breach of the settlement agreement and the remedies therefor.  In this case, the 
court’s judgment was not limited to entry of a judgment based on the 
settlement agreement.  After determining there was a valid agreement, the 
court went on to determine that Doe had “performed significant partial 
performance” of the agreement; that Doe had “upheld her obligations under the 
contract”; that Lozano had remained silent and did not indicate he would 
challenge the agreement; that Lozano had “defaulted” under the agreement; 
that Lozano had waived his defenses; that Doe was entitled to a judgment of 
 
17 
$80,002; and that Doe was entitled to request attorney’s fees—all without 
relying on any competent evidence or other factual record.10   
[¶26]  As stated above, Doe originally moved for summary judgment 
regarding the settlement but then withdrew her motion.  She was given 
permission to amend her complaint to add a claim for breach of contract but 
never did so.  She filed a separate Superior Court complaint against Lozano for 
breach of contract and promissory estoppel, but that case was stayed pending 
further proceedings in the District Court.  Any of those procedural mechanisms 
would be acceptable ways to resolve her allegations of breach of the settlement 
agreement.  What could not be done, however, was entry of a judgment against 
Lozano on a motion to enforce without any hearing or other factual record.  
The entry is: 
 
Judgment vacated.  Remanded for further 
proceedings consistent with this opinion. 
 
 
 
 
 
 
 
 
 
10  To be clear, Doe’s motion to enforce was not under oath and did not include or rely on any affidavits 
or other filings that might arguably provide a factual basis for the court’s findings.   
 
18 
Daniel D. Feldman, Esq. (orally), Law Office of Daniel Feldman, Yarmouth, for 
appellant Rudy A. Lozano 
 
Fred W. Bopp III, Esq. (orally), Bopp & Guecia, Yarmouth, for appellee Pat Doe 
 
 
Biddeford District Court docket number CV-2018-290 
FOR CLERK REFERENCE ONLY