Opinion ID: 2639745
Heading Depth: 2
Heading Rank: 1

Heading: the settlement agreement unambiguously releases only the claims between the parties named in the agreement

Text: ¶ 18 Bodell argues that the district court erred in ruling that the settlement agreement unambiguously settled Bodell's claims against nonparties to the agreement. More specifically, Bodell argues that the settlement agreement plainly released only those claims that Bodell and Jenson had against one another. In the alternative, Bodell argues that the settlement agreement was ambiguous and extrinsic evidence demonstrates that the parties intended to limit the settlement agreement to claims between Bodell and Jenson. We agree with Bodell's first argument, that the settlement agreement unambiguously released only those claims between Bodell and Jenson. Accordingly, we decline to consider any extrinsic evidence. ¶ 19 Settlement agreements are governed by the rules applied to general contract actions. [5] When we interpret a contract, or in this case a settlement agreement, we determine the intent of the contracting parties by first look[ing] to the writing alone. [6] If the writing is unambiguous, we determine the intent of the parties exclusively from the `plain meaning of the contractual language.' [7] Only where there is ambiguity in the terms of the contract may we ascertain the parties' intent from extrinsic evidence. [8] `A contractual term or provision is ambiguous if it is capable of more than one reasonable interpretation because of uncertain meanings of terms, missing terms, or other facial deficiencies.' [9] ¶ 20 The settlement agreement between Bodell and Jenson is unambiguous because it is capable of only one reasonable interpretation. The language of the settlement agreement unambiguously demonstrates that Bodell and Jenson intended only to settle those claims that they had against one another. First, the agreement identifies the parties to the agreement: THIS SETTLEMENT AGREEMENT (this Agreement) is entered into ... by and among BODELL CONSTRUCTION COMPANY, a Utah corporation (BCC), MICHAEL BODELL, an individual (Bodell), MARC S. JENSON, an individual (Jenson), and MSF PROPERTIES, L.L.C., a Utah limited liability company (MSF). As we use the terms in this opinion, Bodell and Jenson are the only parties named by the settlement agreement. [10] Then the settlement agreement plainly limits its terms to those named parties. It states, WHEREAS, the parties now desire to achieve a full settlement of all obligations, disputes and other matters outstanding between them. ... 4.... MSF, Jenson, Bodell and BCC have definitely settled all matters between them.... 5. Each of the parties hereto understand and agree that this is a mutual release of claims and that following execution of this document, no Bodell Party shall have any claim against an MSF Party and no MSF Party shall have any claim against a Bodell Party.... (Emphases added.) ¶ 21 In addition to limiting its terms to the named parties, the settlement agreement also specifically names which parties are released from which claims. The agreement states, 2. Each of Bodell and BCC, for himself, itself, their affiliates and for all persons or entities claiming by, through or under him, it or them, hereby (a) releases, acquits, waives and forever discharges MSF, its affiliates and their respective members, managers, officers, employees and agents (each, including without limitation Jenson, an MSF Party) from any and all claims, ... arising out of all past affiliations and transactions among Bodell, BCC and any MSF Party, ... acknowledges and agrees that the obligations of the MSF Parties in connection with the Loans, including all principal and interest that may have been deemed to have accrued thereon, are hereby deemed fully satisfied and repaid in full. ... (Emphases added.) There is no language to indicate that the parties intended to satisfy all of Bodell's potential tort and contract claims against persons not a party to the agreement. ¶ 22 Bank One and Robbins argue that because the settlement agreement includes the word satisfied, we should construe the agreement to be an accord and satisfaction, or, in other words, to satisfy any and all related claims that the named parties may have against nonparties to the agreement. We disagree. ¶ 23 Accord and satisfaction is a common law concept. [11] It denotes the intention of the contracting parties to agree that a different performance, to be made in substitution of the performance originally agreed upon, will discharge the obligation created under the original agreement. [12] An accord and satisfaction may discharge an obligation arising out of a contract, quasi-contract, [or] tort. [13] When a claim is discharged through an accord and satisfaction, the claim is considered fully satisfied. The claimant no longer has the legal right to seek recovery from anyone on that claim. [14] Before we determine that an agreement constitutes an accord and satisfaction, we must find the following three elements in the contract: (1) an unliquidated claim or a bona fide dispute over the amount due; (2) a payment offered as full settlement of the entire dispute; and (3) an acceptance of the payment as full settlement of the dispute. [15] ¶ 24 From a plain reading of the settlement agreement, we determine that the last two elements of an accord and satisfaction are not met. Although the agreement incorporated the offer of a payment by Jenson and the acceptance by Bodell in satisfaction of an obligation, the language of the agreement does not indicate that the payment was offered and accepted with the intent to satisfy the entire underlying dispute. Rather, the payment was offered and accepted as a full settlement of all obligations, disputes and other matters outstanding between them, including, but not limited to the Loans. (Emphasis added.) Thus, the plain language limits the effect of the payment to the settlement of the claims between Bodell and Jenson; claims as to third parties are not contemplated. ¶ 25 Robbins and Bank One contend that by including the term satisfied in the settlement agreement, Bodell necessarily released any claims he may have against Bank One and Robbins, even though Bank One and Robbins were not parties to the agreement. We disagree. The parties' use of satisfied in the settlement agreement does not alter our reading of the agreement. Indeed, we decline to adopt a rule that overlooks the contracting parties' clear intent and imputes a different meaning to a contract simply because the parties incorporated an otherwise ordinary term into their agreement. Satisfied appears only once in the agreement and is limited by surrounding language. The agreement states that Bodell acknowledges and agrees that the obligations of [Jenson] in connection with the Loans ... are hereby deemed fully satisfied and repaid in full. Thus the word satisfied does not depict a full satisfaction of all underlying claims, as is characteristic of an accord and satisfaction; rather its impact is limited to the obligations of [Jenson] in connection with the Loans. Thus, the settlement agreement satisfied only Jenson's loan obligation to Bodell. It did not satisfy any claims that Bodell may potentially have against Robbins or Bank One for full satisfaction of the debt owed. [16] ¶ 26 Because we determine that the plain language of the settlement agreement limited the agreement to claims between Bodell and Jenson, we reverse the district court's grant of summary judgment. [17] We now turn to the court's decision to strike the report of Bodell's damages expert.