Opinion ID: 2345248
Heading Depth: 1
Heading Rank: 4

Heading: The Dyer-King Settlement Agreement

Text: On May 28, 2007, one day prior to trial, Mr. Dyer's attorney, Mr. Fisher, sent a settlement offer to Mr. Pariser, the attorney for the King estate, for the purpose of settl[ing] Mr. Dyer out of the Bilaal case completely. Mr. Dyer offered the following terms: 1. The Estate of Willie King will receive title to the King house. 2. The mortgage on the King house will be paid off in full. 3. The approximately $16,000 expended to take the King house out of foreclosure will be forgiven. 4. The King estate will receive $50,000 in cash. 5. Any outstanding payments due for the King house arising out of any court orders will be forgiven. Mr. Dyer also offered not to conduct in the future any pre-foreclosure transactions that involve a sale and lease-back with an option to repurchase. . . . Dyer's attorney characterized this proposal as a substantial new settlement offer that makes the King estate whole (by returning the King house) and considerably more (by paying off the mortgage and making a substantial cash payment), and addresses the public interest concerns of all plaintiffs with a pledge that Mr. Dyer will not engage in pre-foreclosure/lease-back/buy-back transactions in the future. Mr. Pariser accepted the offer by phone the same day. On May 29, 2007, Mr. Pariser announced in open court that the King estate had reached a settlement with Mr. Dyer, and they had agreed that he would read into the record . . . the material terms. Mr. Pariser did so without correction from Mr. Fisher. Subsequently, the parties attempted to draft a more comprehensive written agreement but disputed whether to include a confidentiality clause and what it meant to pay off the mortgage in full. Mr. Dyer argues that when he used the term in full, he meant that he would pay the principal outstanding balance. The King estate asserts that in full includes not only the principal but also any penalties and arrearages. After negotiations broke down, plaintiffs filed a motion to enforce the settlement agreement. On August 3, 2007, the trial court granted the motion, holding (1) that the parties had reached an enforceable settlement agreement that did not include a confidentiality clause, and (2) that the term [t]he mortgage will be paid off in full was unambiguous and required Mr. Dyer to pay all outstanding principal plus interest plus taxes plus insurance plus arrearages and late fees. In addition to appealing that judgment, Mr. Dyer also appeals the denial of his Motion for Possession, to Strike Plea of Title, and to Enter Judgment, filed on July 25, 2007, which the trial court rejected in light of its decision to enforce the settlement agreement.
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]
Mr. Dyer also asserts that the trial court should have held an evidentiary hearing to determine what each party understood the terms in full and completely to mean and whether he was acting under duress when he offered the settlement terms. Mr. Dyer cites four cases to support his first request, but his reliance is misplaced because in each of those cases, the alleged contract was based on oral statements made out of court. [11] By contrast, here the terms of the offer were set forth in writing and Mr. Pariser also announced them in court on the record. There is no dispute about what was said between the parties. As demonstrated above, we can interpret the agreement without resort to extrinsic evidence. Indeed, the objective law of contracts requires us to avoid considering extrinsic evidence in the absence of ambiguity. 1010 Potomac Assocs. v. Grocery Manufacturers of America, Inc., 485 A.2d 199, 205 (D.C.1984) (Extrinsic evidence of the parties' subjective intent may be resorted to only if the document is ambiguous.). It was likewise unnecessary to hold a hearing to determine whether Mr. Dyer settled under duress due to his fear of losing at trial. He may now regret having settled, but the excuses he offers simply do not meet the legal test for duress. [D]uress is `any wrongful threat of one person by words or other conduct that induces another to enter a transaction under the influence of such fear as precludes him from exercising free will and judgment.. . .' Sind v. Pollin, 356 A.2d 653, 656 (D.C.1976) (quoting RESTATEMENT OF CONTRACTS § 492 (1932)). We are not prepared to say that Mr. Dyer's assessment of the courtroom prowess of plaintiffs' counsel, his mounting weariness, frustration, and confusion over this 2-year litigation, or his dismay precluded him from exercising free will and judgment. [A]ll defendants considering settlement do so based upon consideration of the adverse consequences that might result if the action proceeds and they do not prevail on the merits. American Security Vanlines, Inc. v. Gallagher, 251 U.S.App. D.C. 198, 203, 782 F.2d 1056, 1061 (1986) (quotation from attached opinion of the district court). Because the factors Mr. Dyer points to could not legally amount to duress, there was no need to hold an evidentiary hearing on that issue. See Sind v. Pollin, 356 A.2d at 657 (upholding grant of summary judgment; appellant's factual allegations and theory of economic coercion do not constitute duress as a matter of law); cf. United States v. Jenrette, 240 U.S.App. D.C. 193, 197, 744 F.2d 817, 821 (1984) (Where [] the evidence is insufficient as a matter of law to support a finding of duress, the district court's refusal to instruct the jury on duress is not erroneous.) [12] In sum, we find no legal error in the trial court's decision to enforce the settlement agreement. Furthermore, because the case had been settled, and Mr. Dyer had agreed to return title to the King estate, the court properly denied his Motion for Possession, to Strike Plea of Title, and to Enter Judgment.