### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE
BEAMAN PONTIAC COMPAN Y v. ROY B. GILL Direct Appeal from the Circuit Court for Davidson County

No. 98C-2494, Carol Soloman, Judge

No. M1999-00666-COA-R3-CV - Decided April 28, 2000

Defendant

who entered into an agreement to settle directly appeals the trial court’s grant of Plaintiff’s motion to enforce said agreement. Specifically, Appellan t argues that the Plaintiff followedimproper procedure to enforce the settlement and that the agreement is invalid. Under the authoriti es c ited below and for the following reasons, we find, in the absence of any showing of prejudice to the defendant, no specific proce dure need be fol

lowed. We find the a

greement to be i

n the nature of a bilateral contract and fully enforceable. The trial court is affirmed in all respects, and the cause is remanded for such further proceedings as may be necessary below. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

.

C AIN , J., delivered the opinion of the court, in which C ANTRELL , P.J., M.S. AND K OCH , J., joined.
David T. Hooper, Brentwood, Tennessee, for the appellant, Roy B. Gill dba Russel lvi lle Flower Shop. Alix Coulter Cross, Nashville, Tennessee, for the appellee, Beaman Pontiac Company.

OPINION
This case concerns

a trial court’s or

der granting enf

orceme n t of a settlement agreement entered into by the parties below. The controversy

stems originally from Mr. Gill’s purchase of a vehicle from Beaman Pontiac Company (Beaman). Part of the conside ration for this

purchase took the form of a 1989 Jaguar XJS automobile.
Beaman t hen t ransferred that Jaguar to South Cumberland Motors. The vehicle traveled through several different purchasers until it wasdiscovered that the car had a “salvaged or branded title” prior to being traded from Gill to Beaman. As a result of th is discovery, each vendee went1 The letter memorializing Cresswell’s acceptance of the terms of settlement included along wi th an apology for the delay in execution of the agreement a check from Mr.Gill to Beaman for $12,769, the amount agreed upon by theparties as consideration for the Juaguar and settlement of all claims. A copy of this letter was faxed simultaneously to Cameron. The second fax followed closely on the hee

ls of the first. In t

his facsimile, Mr. Cresswell apologized for Mr. Gill’s sudden ch ange of tack and infor med Mr. Cameron tha

t a “stop payment”

order had been i

ss ued on th e settlement

check. This letter serves as kindling for the “mailbox rule” discussion infra , treating as a mere offer tha

t which from all log

ic and appeara

nce constitutes a

valid and enforc

eable contract. 

### -2- against its respective ve

ndor until the Jagua

r came to rest on B eaman’s lot. On June 2, 1998, Beaman’s counsel, James Cameron, informed Gill’s counsel, Thomas Cresswell, of the aforementioned

controversy and demanded Gi l l repurchase the

vehicle or face

suit for damage

s. Said suit was filed on September 9, 1998. On January 26, 1999, Cameron filed Beaman’s “Motion for Judgment to Enforce Settlement Agreement or in the Alternative for a Default Judgment.” The following factual allegations contained in that motion are not in dispute.
Beaman’s counsel prepared a Settlement Agreement which was fo rwarded to Defendant’s counsel who approved thedocument. The Settlement Agreement was executedby the Defendant and re turned toPlaintiff’s counsel with a check for the amount of the s ettlement proceeds. While the original Settlement Agreement and check were in the mail to Plaintiff’s counsel, Defendant’s counsel faxed Plaintiff’s counsel indicatin

g he was “revo

king” the settle

ment. 1
A copy of the alleged agreeme nt was attached as an exhibit to the motion. The court heard argument on this motion and granted enforcement of

the settlement agreement by order dated Marc h 19, 1999. Gill moved to alter or a

mend this order. Sa

id motion was denied. From the order entered March 19, Gill appeals challenging the propriety of the enf orcement proceedi ng as well as the enf orceability of the settlement. I. Validity of Settle

ment Agreem

ent Appellant takes issue prim

ar ily with the c

ourt’s recogn

ition of the agre

ement to settle as a valid and enforceab

le contract. App

ellant produces s

everal novel ar

gume nts agai nst validity and attempts among other t hings to call into question the well-settled and all-too-familiar “mailbox rule” of acceptance. Considering each of these various ar

guments in its turn,

we must affirm the

trial court.
A. Sale of Goods In addit i on to the above argument, Appellant urges that in as much as the contract entered into between Cameron and Cresswell concerned the sale of a Jaguar said contract was governed by Article II of the Uniform Commercial Code. As suc h the fa x received by Mr. Cameron from Mr. Cresswell constituted a

revocation of acceptance after a reasonable time. Compare Tenn. Code Ann. §47-2-608(2) (1996) (discussing revocation of acceptance up

on tender of nonc

onforming good

s)

.2 The “mailbox rule” rule requ ires that accep

tances be effe

ctive “upon dispa

tch” in the mails. Its modern counte

rpart appears i

n the Second Restat

ement of Contract

s thus: §63. Time When Acceptance Takes Effect Unless the offer provides otherwise, (a) an acceptence

made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutua l assent as soon as put out of the offeree’s possession, without regard to whether it ever reaches the offeror; ... Restatement (Sec

ond) Contracts §63(a)(1981). 

### -3- Appellant fails to recognize the nature of the agreement at issue. The essential purpose of the agreement at i ssue was not the “buyback” of a Jagu ar , but the settlement of a disputed clai

m. Article II of the Uniform Commercia

l Code applies to co

ntracts whose es sential purpose is the sale of tangible personal property. See Tenn. Code Ann. §47-2-102 (1996). Thus the provisions of Tenn. Code Ann. § 47-2-6

08(2) do not apply

to a settlement ag

reement.
B. Failure of Consideration Appellant also argues that since

Beaman n ever delivered the Jaguar and Mr. Gill stopped payment on the original check tendered as settlement, then the alleged contract of

compromise fails for lack of consideration. Once again Appellant misunderstands the nature of t h e agreement between the parties. The recitation in the writing and the nature of the

parties’ origin

al exchange atte

st to the bilateral natur e of th e cont ract o f sett lemen t. In essence, Beaman promised to dismiss it’s cause of action brought in good faith in exchange for Gill’s promise to repurchase the Jaguar from B eaman. The parties to a bilate

ral contract bin

d themselves by

mutual promis es to perform. Thus the exchanged

promises serve as consideration for the contract. Any refusa

l to carry th

rough on those promises does not render t he contact

void for lack of c

onsideration. I

t most likely op

erates as a breach of an exist

ing contract.
C. The “Mailbox Rule” Perhaps the most

time-honored bit o

f legal calisthe

nics known in the fi

eld of contracts is the “Mailbox Rule.” Appellant’s arg ument serves as c

lear testament to

the controversy

and confusion which still surround this legal doctrine. 2 The source of the confusion seems

to be the contradictory communication from Mr. Gill’s counsel. However, as Appellee correctly urges, consideration of the viability of the mailbox rule is immaterial to our discussion here. The record shows that the mailed “acceptance” of the settlement a greement betw

een counsel rep

resents the culmin

ation of t heir bargainingby phone and letter. Counsel for both parties state in their affidavits that, following the communication of Mr. Cameron’s final offer of settlement and prior to the mailing of the executed agreement,

Mr. Cresswell indicated t

he ac ceptability

of the contract t

erms. Under the c

ircumstances, the effectiveacceptance occurred during these prior telephonic and written conversations, not in the mailing of the settlement form executed per these communications. The Appellant’s argument for abrogation

of the mailbox rule in this case is misplaced. The agreement was in fact a valid contract for compromise

and settlement enforceable by motion in the instant action. The document signed

### -4-

by the parti

es was merely

a memorandum of th

eir oral agre

ement.
II. Procedure fo

r Enforcement of a

Settlement Ag

reement Appellant also assert s that Beama n failed to follow the proper proce dure for enfo rcing a contractfor settlement. Mr. Gill argues that a separate proceeding is required to enfor ce an agreement

to settle a lawsuit.

Yet he has failed

to provide this court

any mandatory or persua sive authority pr

escribing any

specific proce

dure for enforc

ement of a contra

ct to settle claims. Appellee for its part urges that a trial court has inher ent autho rity and equ

itable power to enforcecontracts of settlement concerning the subject matter of a suit before it. See 15A Am.Jur.2d Compromise

and S ett lement §37 (1976)(Supp. 1998). Appellee notes that the procedure followed below has been at least tacitly approved by this Court. See Mullins v. Parkey, 874 S.W.2d 12 (Tenn. Ct. App. 1992). Our review of the authorities on the subject support Appellee’s view. See Bowater North America Corp. v. Murray Machinery, Inc., 773 F.2d 71, 76 (6th Cir. 1985). See also 15A Am.Jur.2d Compromise and Set tlement §37 ( 1976). There is an admitted paucity of mandatory authority in

this state prescribing the

procedure to be

followed where a

party to litig

ation attempts to enforce a settlement agreement. On this point we find the following persuasive:
Since the law favors compromise and settlement of disputed claims and the avoidance of litig ation, ... it should not circumscribe the means of carrying such settlements into ef

fect. A compromise agreement may be enfo rced by p leading it as a defense in a subsequent

action on the clai

m which it

settled, or by a separate proceeding there on, or it may ordina

rily be enf orced by pe

tition or motion in

the original action askingfor such enforceme

nt.
15A C.J.S. Compromise and Settlement §48 (1967). Appellee also points to other jurisdictions which have recognized the inherent and discretionary

authority of trial courts over settlement agreements concer ning pending actions. See e.g. Starchman v. Bill St offle Board, Inc., 610 S.W.2d 294 (Mo. Ct. A pp. 1980); Teitelbaum Holdings, Ltd. v. Gold, 396 N.E.2d 1029 (N.Y. 1979). Appellant has failed to show this court how enforcement

on Beaman’s motion as opposed to in a separate proceeding, has prejudiced h is defense in any wa y . Mr. Gill was allowed to produce proof and argument relative to the validity of the settlement

agreement, and still may

pursue his vendor

, Crest Cadillac in a

suit for indemnification, if appropriate. Absent any sho wing that the chosen method for see king enforcem

e nt prej udiced Appellee, we areof the opinion that the trial court’s enforcement of the settlement w

as well within its inh eren t au tho rit y. III. Disposition

### -5-

For these reasons and under the authorities cited above we affirm the trial court in

all respects andremand the case for

further proceedings not inconsistent with this opinion. Costs on appeal are taxed against the

appellant.