Opinion ID: 2345248
Heading Depth: 2
Heading Rank: 2

Heading: When Accepted, the May 28th E-mail Became an Enforceable Contract

Text: Mr. King's estate and Mr. Dyer disagree about whether their agreement to settle was an enforceable contract or merely an unenforceable agreement to agree. Before setting out to interpret the terms of a settlement agreement, we must first ask whether the parties entered into an enforceable contract. See Sutton v. Banner Life Insurance Co., 686 A.2d 1045, 1048 (D.C.1996). For a contract to be enforceable, the parties must (1) express an intent to be bound, (2) agree to all material terms, and (3) assume mutual obligations. EastBanc, 940 A.2d at 1002. A contract's material terms (such as subject matter, price, payment terms, and duration) must be sufficiently definite so that each party can be reasonably certain about what it is promising to do or how it is to perform. Rosenthal v. National Produce Co., 573 A.2d 365, 370 (D.C.1990) (citing J.D. Calamari & J.M. Perillo, THE LAW OF CONTRACTS, § 2-13, at 43-44 & n. 17 (2d ed.1977)). Generally, parties need to express their intentions so that a court can understand them, determine whether a breach has occurred, and identify the obligations it should enforce. Rosenthal, 573 A.2d at 370. However, because all agreements have some degree of indefiniteness and some degree of uncertainty, the terms need not be fixed with complete and perfect certainty for a contract to [be enforceable]. EastBanc, 940 A.2d at 1002 (citations omitted).
[R]egardless of the parties' actual, subjective intentions, the ultimate issue is whether, by their choice of language. . ., they objectively manifested a mutual intent to be bound contractually. 1836 S Street Tenants Ass'n, Inc. v. Estate of B. Battle, 965 A.2d 832, 837 (D.C.2009). When Mr. Fisher wrote the e-mail, he stated that his purpose was to settle Mr. Dyer out of the Bilaal case completely. The e-mail then proposed several terms for settlement. At the end of the e-mail, Mr. Fisher requested a prompt reply, because Mr. Dyer wishe[d] to reach an agreement in principle today if at all possible. In addition to the language of the offer, its timing (the day before trial), its swift acceptance, [4] and the in-court announcement that the parties had reached an agreement also demonstrate the parties' intent to be bound by the terms set forth in the May 28, 2007, e-mail.
Mutuality exists when each party agrees to do something it otherwise is under no legal obligation to do, or to refrain from doing something it has a legal right to do. See Order of AHEPA v. Travel Consultants, Inc., 367 A.2d 119, 125 (D.C.1976). An exchange of promises provides sufficient consideration, evidencing mutual obligation. EastBanc, 940 A.2d at 1003 (citation omitted). This requirement was satisfied. In the May 28, 2007, e-mail, Mr. Dyer undertook to pay off the mortgage on the King house and to convey title to the King estate. The plaintiffs agreed to drop Mr. Dyer from the lawsuit, allowing him to avoid trial and the prospect of greater liability. [5]
The terms in the May 28, 2007, e-mail are definite enough to be enforceable because each party could be reasonably certain how it was to perform. See EastBanc, 940 A.2d at 1003 (The enforceability of the agreement comes from the definitive character of the obligation to perform, not a precise description of the ways in which the obligation might be fulfilled.) (internal citation omitted). Although the e-mail did not assign an exact cost to Mr. Dyer's obligation to pay off the King mortgage in full, it did not have to do so. Id. (citing Cobble Hill Nursing Home, Inc. v. Henry & Warren Corp., 74 N.Y.2d 475, 548 N.Y.S.2d 920, 548 N.E.2d 203, 206 (1989) (noting that a price term is not necessarily indefinite because the agreement. . . leaves fixing the amount for the future)) (internal citations omitted). The mortgage was accruing interest, so the total amount due was in flux. [6] The trial court also noted that there were penalties, apparently occasioned by Defendant Dyer's decision not to continue the mortgage payments after Willie King and/or his heirs had failed to make some of the monthly protective order payments as directed by this court. Whether or not Mr. Dyer was justified in withholding those payments, he certainly knew (or should have known) about the resulting penalties. [7] Furthermore, when reading in full against the background of the underlying dispute and in the context of Mr. Dyer's e-mail, which stated he would return title to the King estate, we agree with the trial court that this mortgage cannot be released, and title cannot pass, until all of its terms, including any penalties, are satisfied. Although it is in theory possible to pass less than full title by a quitclaim deed, Mr. Dyer pledged to return title and pay off the mortgage in full, and we think the trial court sensibly construed the offer, as a whole, to mean that the King estate would receive title free and clear of any encumbrances. [8] Mr. Dyer also argues that there is no contract because the agreement omits the material term of a confidentiality clause. However, provisions that are not necessary for the parties to understand how they are expected to perform the contract itself are not material and do not undermine the binding nature of the agreement. Tauber v. Quan, 938 A.2d 724, 730 (D.C.2007) (internal quotation marks and citation omitted). A case clearly may be settled without a confidentiality clause. Such a provision certainly could have been deemed material, but neither party referred to confidentiality in the e-mail, in the acceptance, or in open court. If confidentiality were, indeed, an indispensable part of the settlement, it is curious that Mr. Dyer's counsel stood by silently while the material terms of the agreement were stated by his opponent on the record, in open court. Mr. Dyer nevertheless claims that a confidentiality clause was implied when he stated he wished to settle out of the case completely. This certainly is not a natural implication of the word completely. Moreover, this argument ignores the fact that all overt references to such a provision took place after the May 29, 2007, hearing and after Mr. Dyer avoided trial. Under Mr. Dyer's theory, he could always avoid his legal obligations by later claiming he meant to include a term that he previously failed to mention. [9] Finally, we are unpersuaded by Mr. Dyer's argument that the agreement is void because restricting his ability to engage in the sale/leaseback/option-to-repurchase business places undue restraints on the disposition of property and is contrary to public policy. It was Mr. Dyer who affirmatively offered not to conduct in the future any pre-foreclosure transactions that involve a sale and lease-back with an option to repurchase in his May 28, 2007, e-mail, touting it as a pledge that addresses the public interest concerns of all plaintiffs. Although we have, on occasion, refused to enforce a contract on public policy grounds, this is not such a case. [10]