Title: IN RE DE-ANNEXATION OF CERTAIN REAL PROPERTY

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

IN RE DE-ANNEXATION OF CERTAIN REAL PROPERTY  IN RE DE-ANNEXATION OF CERTAIN REAL PROPERTY 2009 OK 18 204 P.3d 87 Case Number: 104212 Decided: 03/10/2009 THE SUPREME COURT OF THE STATE OF OKLAHOMA In re De-Annexation of Certain Real Property from the City of Seminole, a municipal corporation, Bedford T. Brewer and Larry Brewer, Appellants, v. The City of Seminole, Appellee. CERTIORARI TO THE COURT OF CIVIL APPEALS Division IV ¶0 The City of Seminole and plaintiff landowners began settlement negotiations after the Court of Civil Appeals remanded this matter to the trial court. The City sought to enforce an oral settlement agreement which it alleged it had reached with the landowners. The trial court, Honorable Lee Stilwell, held that a binding settlement agreement had been reached by the parties, stated the terms of the agreement, and ordered its enforcement. The Court of Civil Appeals affirmed. CERTIORARI PREVIOUSLY GRANTED; OPINION OF COURT OF CIVIL APPEALS VACATED; TRIAL COURT REVERSED; CAUSE REMANDED. Jerry L. Colclazier, COLCLAZIER & ASSOCIATES, Seminole, Oklahoma, for Plaintiffs/Appellants. David W. Kirk, LYTLE, SOULE & CURLEE, P.C., Oklahoma City, Oklahoma, for Defendant/Appellee. COLBERT, J. ¶1 The issue presented is whether the trial court erred in determining that a binding settlement agreement had been reached in this matter based upon the parties' discussions and correspondence. This Court holds that the evidence of the parties' negotiations does not demonstrate mutual assent to the terms of a settlement. PROCEDURAL HISTORY ¶2 This is the second appeal in this matter. The decision in the first appeal reversed summary judgment for the City of Seminole (City). In re De-annexation of Certain Real Property, ¶3 In 1976, City annexed the Sinclair Industrial Addition and other land by ordinance. Plaintiffs (the landowners) owned lots in the addition. The streets shown in the plat of the addition were never constructed. "Sometime between April 14, 2004, and August 25, 2004, City filed a municipal criminal charge against Bedford Brewer, [one of the landowners] alleging that he had placed two steel I-beams across the platted road easement in the Sinclair Industrial Addition adjacent to [his] property and he had thereby created a public nuisance in violation of . . . City's ordinances." Id. ¶ 12, 143 P.3d at 231. Brewer challenged his conviction in district court by challenging the validity of the annexation ordinance. He also filed this action seeking de-annexation of his property. ¶4 As part of a proposed resolution of the criminal matter, Brewer entered a nolo contendere plea to the criminal charge. The court accepted the plea and entered a judgment and sentence. In this civil matter, City moved for summary judgment arguing that the no contest plea established that the land on which the violation occurred was within the city limits. Id. ¶ 16, 143 P.3d at 232. The trial court apparently accepted that argument and granted summary judgment in favor of City. ¶5 The Court of Civil Appeals reversed the summary judgment. It held that "[t]he no contest plea [was] no more than a stipulation that City would be able to prove the property upon which the crime was committed was within the city limits of Seminole. It [was] not a stipulation that the property was in fact within those limits." Id. ¶ 19, 143 P.3d at 232. The matter was remanded to the trial court. ¶6 On August 30, 2006, counsel for City in this matter placed a telephone call to the landowners' counsel to request that the landowners submit a settlement demand. This appeal addresses only whether the subsequent negotiations of the parties ripened into a binding settlement agreement. STANDARD OF REVIEW ¶7 "A motion to enforce a settlement agreement is treated as a motion for summary judgment." Russell v. Bd. of Co. Comm'nrs, APPLICABLE LAW ¶8 A settlement agreement is an oral or written contract between the parties. Russell, ¶9 "The consent of the parties to a contract must be: 1. Free, 2. Mutual, and 3. Communicated by each to the other." Okla. Stat. tit. 15, § 51 (2001). "Consent is not mutual unless the parties all agree upon the same thing in the same sense...." Okla. Stat. tit. 15, § 66 (2001). Therefore, "an acceptance will not bind the offeror unless it is unconditional, identical to the offer, and does not modify, delete or introduce any new terms into the offer." Ollie v. Rainbolt, FACTS AND ANALYSIS ¶10 The landowners made a written offer of settlement on August 31, 2006, which proposed three terms. The City would (1) confess the de-annexation issue, (2) direct the Industrial Authority to execute a deed, and (3) reimburse the landowners' counsel $7,500.00 of his attorney fee. The City's September 7, 2006, written response ¶11 Further negotiations occurred in a face-to-face meeting of opposing counsel on September 8, 2006, and City contends that mutual assent was reached as to all three terms proposed in the August 31st offer and a binding agreement was formed. There are two documents which City attached to its motion as evidence of mutual assent, an affidavit of counsel for City and a letter from City's counsel to the landowners' counsel dated September 12th "confirming" the substance of the September 8th negotiations. ¶12 The affidavit demonstrates that a new condition on the "confess the de-annexation issue" term was injected into the negotiations by City's insistence that the settlement be "global." City's September 12th letter ¶13 The addition of the new "global" requirement negates any assertion that there was an unqualified acceptance of the terms of the landowners' August 31, 2006, written offer of settlement. No mutual assent was demonstrated by either the affidavit or the September 12th confirmation letter. Rather, that evidence demonstrates a counteroffer was made with a new and additional proposed term. That counteroffer was a rejection of the offer to settle and functioned as a new offer. The original offer to settle expired by its own terms for lack of acceptance by the September 8, 2006, deadline. No settlement contract was formed. ¶14 The parties exchanged correspondence on September 15, 2006, apparently following a telephone conversation on that date. In anticipation of a response to its September 12, 2006, letter, City ¶15 The new additional terms proposed in the landowners' September 15th letter constitute a rejection of City's September 12th proposal. A new offer was created with terms that did not mirror the original offer of August 31, 2006. ¶16 City objected to the introduction of new terms in a letter dated September 25, 2006. ¶17 City's rejection of the landowners' additional terms constituted a rejection of the landowners' September 15th offer and offered a new proposal for dealing with the additional proposed terms. No mutual assent was given and no contract was formed. ¶18 On September 25, 2006, a letter ¶19 City attached an affidavit from its counsel and the correspondence between counsel to support its motion to enforce the settlement agreement which it claimed was reached at the face-to-face meeting of counsel on September 8, 2006. The landowners responded challenging the legal conclusions City drew from the affidavit of its counsel and the correspondence. ¶20 In its December 18, 2008 court minute, the trial court reasoned that the landowners' offer of August 31, 2006, was accepted by City's letter of September 7, 2006, and that the need for "clarification" of the terms did not negate that acceptance. In the Journal Entry of Judgment, the trial court stated the following terms: [T]he Court finds that pursuant to the agreement 1) the plaintiff's property shall be de-annexed by the defendant and the defendant agrees not to attempt to annex plaintiff's property in the future, 2) the defendant shall convey by deed the disputed property, 3) defendant shall pay $7,500.00 in Attorney's fees to plaintiff's counsel, 4) the municipal conviction of the plaintiff shall be expunged, and 5) the agreement shall be universal and resolve all pending disputes between the parties. Some of these terms, supplied in the Journal Entry, were not part of the negotiations until after September 7th, the date the trial court reasoned that acceptance had been given. The "global" or "universal" aspect of the negotiations was not discussed until the face-to-face meeting on September 8th and the expungement issue did not arise until it was presented in the landowners' September 15th letter. Yet, these terms were incorporated into an agreement which was formed, according to the trial court, on September 7th. ¶21 The trial court impermissibly composed a settlement agreement for the parties by supplying terms on which there had been no final agreement. It thus converted ongoing, yet deteriorating, negotiations into a contract. That piecemeal approach to contract formation ignores the requirements of offer and acceptance and the requirement of mutual assent to the terms of a contract. The trial court's judgment is therefore reversed and this matter is remanded to the trial court. CERTIORARI PREVIOUSLY GRANTED; OPINION OF COURT OF CIVIL APPEALS VACATED; TRIAL COURT REVERSED; CAUSE REMANDED. Concur: Edmondson, C.J., Taylor, V.C.J., Opala, Kauger, Winchester, Colbert, JJ. Dissent: Watt, J. Not Participating: Reif, J. Disqualified: Hargrave, J. FOOT