Opinion ID: 2585588
Heading Depth: 1
Heading Rank: 9

Heading: Failure to Enforce a Settlement Agreement

Text: The legal effect of a written instrument is a question of law for the court to decide. On appeal, a written instrument or contract may be construed and its legal effect determined by the appellate court regardless of the construction made by the trial court. First Financial Ins. Co. v. Bugg, 265 Kan. 690, 694, 962 P.2d 515 (1998). On December 15, 1997, the district court conducted a hearing to outline the terms of a proposed settlement agreement. Counsel for the District stated: [T]he plaintiff and the defendant [have agreed] that we would settle this litigation.... [T]he settlement that we've entered into would also include either a flowage or pondage easement of some kind applicable to the land at high water, which would be an easement for water that would run onto the land. The District is also agreeing that it would not alter the topography of the drain bases in such a way so as to increase the volume of water moving out of the southerly end of the drain, but the District can maintain the drain to historic design standards and will be allowed to do that. Plaintiff would agree to maintain the ditches and levees which are on his property in such a fashion so as not to allow flowing water to be dumped onto adjacent landowners, and the District would pay a total of $50,000 to plaintiff, and/or his wife, as they designate, and that would be characterized for allocation between the easement and the damages in a fashion that would be described by plaintiff's experts, tax experts. Counsel then stated that the parties may have to refine that a little bit as we go along. Counsel for Dougan stated, I believe counsel has described the [breadth] of our agreement, and we would concur with his recitation. When asked by the trial court when a stipulation of dismissal might be filed, counsel for the District stated that the District had to find funding for the settlement and resolve the capital gains implications. He stated, [T]he timing could be at some point in the future, a month or two, or something. I don't know. It depends on the changes in the capital gains rules, among other things, and the District's ability to finance the settlement. Following the hearing, Dougan refused to agree to an easement. The District moved the court to enforce the agreement. In a memorandum decision, the district court found that the parties reached an informal agreement. The court based this finding on the credibility of the witnesses and the course of conduct and circumstances. The court found further that it had been clearly expressed during the negotiations that the only way there would be a settlement was if there was an easement or some other mechanism for ensuring that there would not be future litigation. The court found that this term was clear and was not negotiable. The court noted that Dougan clearly understood that settlement had been reached and concluded that Dougan did authorize the settlement, but then refused to undertake good faith negotiations of the terms of the document which would finalize the agreement. In concluding that the parties' informal agreement was not an enforceable settlement, the district judge observed that the underlying principles to enforce such an agreement included a meeting of the minds as to all essential terms of the agreement, Weil & Associates v. Urban Renewal Agency, 206 Kan. 405, 414, 479 P.2d 875 (1971), and the parties' intent to be bound, King v. Wenger, 219 Kan. 668, 671-72, 549 P.2d 986 (1976). The district judge found that Dougan and the District contemplated continued negotiation of essential terms and conditions of the contract but lacked a meeting of the minds regarding an essential term of the contract. The court noted that agreements pertaining to an interest in land must be reduced to writing to avoid the statute of frauds. In order for parties to form a binding contract, there must be a meeting of the minds as to all essential terms thereof. Moreover, with certain exceptions, an agreement to make a contract in the future is not binding unless all the terms and conditions are agreed upon and nothing is left to future negotiation. Weil, 206 Kan. at 414. In addition, no interests in lands shall at any time be assigned or granted unless it be by deed or note, in writing, signed by the party or his or her agent assigning or granting the interest. K.S.A. 33-105. No action shall be brought on any contract for the sale of lands or any interest in lands unless the agreement upon which the action is brought is in writing and signed by the party to be charged. K.S.A. 33-106. It is well settled that an easement is within the statute of frauds and must be in writing. Smyre v. Kiowa County, 89 Kan. 664, 668, 132 Pac. 209 (1913). The essential terms of the contract were not sufficiently defined to evidence a meeting of the minds. Furthermore, the interest in lands was an easement, which is enforceable only after it has been reduced to writing. Affirmed. ABBOTT, J., not participating. DAVID S. KNUDSON, J., assigned. [1]