Opinion ID: 1135241
Heading Depth: 2
Heading Rank: 2

Heading: Whether There was a Meeting of the Minds so as to Constitute a Valid Settlement Between the Parties

Text: To determine whether the parties actually reached an agreement we apply ordinary principles of contract formation. ``The requisite elements of [a valid contract] include: an offer and an acceptance, consideration, and mutual assent to terms essential to the formation of a contract.'' Hunter v. Wilshire Credit Corp., 927 So.2d 810, 813 (Ala.2005) (quoting Avis Rent A Car Sys., Inc. v. Heilman, 876 So.2d 1111, 1118 (Ala.2003), quoting in turn other authorities). The probate court found that each of those elements were met, and we can reverse that court's judgment only upon determining that its findings were plainly and palpably wrong. Mrs. Shewmake argues that no valid settlement agreement was reached. She first argues that the parties had merely engaged in ongoing discussions without reaching a settlement agreement, citing as supporting evidence only (1) her own affidavit, (2) a letter she personally wrote to Parnell upon receiving the probate court's July 9 order entered on the settlement agreement, which disavowed having agreed to a settlement, and (3) her own testimony at the October 28 hearing. In contradiction of that contention, however, other witnesses to the June 4 discussions unanimously testified or otherwise asserted that those discussions resulted in a settlement agreement. Mrs. Shewmake additionally seeks to demonstrate that no settlement agreement was reached by pointing to a July 12, 2004, letter written by Parnell to Matthews and Thorington (the Parnell letter), which does not recite the terms of any settlement agreement but refers to the issues that I wrote down at the settlement conference. She argues that the inference necessarily arising from Parnell's use of that terminology is that the parties left unresolved some or all of the terms of their proposed agreement. We also note that the Parnell letter occasionally uses the subjunctive mood, describing what would occur or mentioning a term to which the parties would agree or perhaps to which they will agree. Yet the letter elsewhere also states repeatedly that the parties in fact agreed to various terms. In short, the Parnell letter could be construed to support either the proposition that no agreement was formed or the proposition that one was formed. The probate court heard evidence on each of these points, weighed that evidence, and determined that Mrs. Shewmake's testimony was less compelling than that of the other witnesses and that the parties had actually reached a settlement agreement. The court expressly found in its November 18, 2004, order that the testimony of Parnell, Coleman, and Martin established without doubt that Mrs. Shewmake agreed to the terms and conditions of the settlement and that Mrs. Shewmake's testimony to the contrary was not convincing. Mrs. Shewmake has pointed to nothing specific to suggest that the probate court's findings in that regard were plainly and palpably wrong. Mrs. Shewmake additionally argues that no agreement could have been reached because the probate court's order entered on the settlement agreement failed to mention several terms that, according to the Parnell letter, were central to the agreement. Specifically, Mrs. Shewmake notes that the Parnell letter recited the following terms: (1) that Mr. Shewmake's children would release Mrs. Shewmake from any claim they had against her, (2) that all interested parties would release Mrs. Shewmake from any claim against her regarding Mr. Shewmake's missing firearms, (3) that Mr. Shewmake's cash assets would be paid into Mr. Shewmake's trust, and (4) that if Mr. Shewmake predeceased Mrs. Shewmake and his children, after a portion of his estate was distributed to Mrs. Shewmake, the remainder of his estate would be distributed according to his will. According to Mrs. Shewmake, none of those terms was expressed in the order entered on the settlement agreement or in Mr. Shewmake's trust created in accordance with that agreement. Additionally, she contends, the order is void for vagueness because it fails to mention specifically which of Mr. Shewmake's personal effects would be sold and which would be retained. At the October 28 hearing, Mrs. Shewmake's counsel stated to the court in his opening remarks that in the Parnell letter, there were a number of other items listed . . . regarding a proposed agreement that are not in the order on [settlement] agreement of the court. For instance, in [the Parnell] letter [to Matthews and Thorington], it states that there was something about a release to be executed by the children of Mr. Shewmake, and that's not in the order on settlement agreement. And there are two or three other matters in there that I'll get to in the testimony. Indeed, the subject of the release to be executed by Mr. Shewmake's children was raised at the October 28 hearing. Specifically, Matthews explained to the court that because Mr. Shewmake's children were not parties to the settlement agreement, the parties to the agreement had mutually determined that in the end it was unnecessary to include that specific term in the settlement agreement. The probate court agreed, stating in its November 18 order that the release was not included because the children were not parties to the settlement agreement. Moreover, the court noted, the children had in fact already executed and delivered to Mrs. Shewmake the release contemplated in the Parnell letter. The remaining three items allegedly missing from the order entered on the settlement agreement, however, as well as the void-for-vagueness argument, were never discussed in the probate court. We infer from the above-quoted opening remarks by Mrs. Shewmake's counsel that he intended to address those issues at some later point during the hearing, but, for whatever reason, he did not do so.' This Court cannot consider arguments advanced for the purpose of reversing the judgment of a trial court when those arguments were never presented to the trial court for consideration or were raised for the first time on appeal.' Halford v. Alamo Rent-A-Car, LLC, 921 So.2d 409, 416 (Ala.2005) (quoting State Farm Mut. Auto. Ins. Co. v. Motley, 909 So.2d 806, 821 (Ala.2005), quoting in turn Crutcher v. Wendy's of North Alabama, Inc., 857 So.2d 82, 97 (Ala.2003)). Thus, the probate court adequately addressed the one discrepancy Mrs. Shewmake has preserved for review, and we cannot say that its finding as to the abandonment of the release feature from the settlement agreement was plainly or palpably wrong. Mrs. Shewmake also notes that in its July 1, 2004, order setting a status conference, the probate court referenced a proposed settlement agreement that had allegedly been reached by the parties. The trial court, however, explained in its order of November 18 that those two words were inadvertently used, and that its use of them did not negate the fact that a settlement had been reached by the parties. Obviously, because after it issued the July 1 order the probate court explained its word choice in the July 1 order, we cannot consider the phrasing to indicate that the court believed there had been no meeting of the minds. Having failed to demonstrate the failure to form a contract, Mrs. Shewmake next argues that any contract that was formed could not be enforced. In support of this argument, she points to the Parnell letter and another letter Parnell wrote on July 12, as well as Parnell's testimony, which she contends prove that the settlement agreement was contingent upon approval of a transfer of funds from a trust created for Mrs. Shewmake's benefit (Mrs. Shewmake's trust) to Mr. Shewmake's trust. Specifically, according to Mrs. Shewmake, such a transfer was to cover any shortfall between the sum of $300,000 and the proceeds from the auction of Mr. Shewmake's personal effects and the sale of his firearms. Because SouthTrust Bank (SouthTrust), as trustee of Mrs. Shewmake's trust, notified Parnell that it would not be willing to make such a transfer in order to make up any shortfall, she argues that any settlement agreement is unenforceable for failure to satisfy a necessary condition precedent. In their more conversational sentences, the letters drafted by Parnell indeed suggest that the transfer from Mrs. Shewmake's trust to Mr. Shewmake's trust was perhaps a term of the settlement agreement. But in discussing the specific terms of that agreement, the Parnell letter suggests another possibility: After the sale of the glass, furniture, antiques and personalty, the trust would have to have a minimum balance of $300,000. If the auction sale, cash and other assets did not generate at least $300,000, then [Mrs. Shewmake] would agree to take whatever steps she could to transfer funds to [Mr.] Shewmake's trust so that it would have at least that amount. ( At the settlement conference, we all were contemplating that SouthTrust, as trustee, would agree to simply transfer that amount, if necessary, from her current trust assets, but . . . they will not agree to do that now.) (Emphasis added.) As the first emphasized portion indicates, the ultimate responsibility to cover any shortfall in funding Mr. Shewmake's trust fell to Mrs. Shewmake; the parties had merely contemplated that this responsibility would be fulfilled, as the second emphasized portion suggests, by SouthTrust's transferring funds from Mrs. Shewmake's trust to Mr. Shewmake's trust. However, the funding of Mr. Shewmake's trust was not dependent on a transfer by SouthTrust of funds from Mrs. Shewmake's trust. The probate court found just such an arrangement: Compliance with the July 9, 2004 Order (and with the Settlement) was not and is not contingent on the agreement of [SouthTrust] to contribute to the funding of [Mr. Shewmake's trust]. Rather, it was understood by the parties that Mrs. Shewmake may ask [SouthTrust] to contribute some funding, if need be, after the sale of Mr. Shewmake's items of personal property, but only if there were a deficiency in the $300,000 sum agreed to fund [Mr. Shewmake's trust], as set out in the July 9, 2004 Order. If such request for funding of the deficiency amount is required after the sale of Mr. Shewmake's personal property, and if [SouthTrust] does not agree to fund the deficiency, Mrs. Shewmake agreed to fund the deficiency in some other way. If [Mr. Shewmake's trust] is not fully funded with $300,000 within fifteen (15) days after the deposit provided for in [the order entered on the settlement agreement], the parties are ordered to report that fact to the Court. Again, because the probate court made these factual findings after an ore tenus hearing and because Mrs. Shewmake has not demonstrated that these findings are plainly and palpably wrong, we cannot conclude that the judgment entered on these findings is in error. We therefore conclude that the trial court was correct in determining that there had been a meeting of the minds and the parties had reached a binding settlement agreement.