Opinion ID: 494700
Heading Depth: 2
Heading Rank: 2

Heading: Basis of Judgment

Text: 24 In addition to the intent of the parties to bind themselves, the formation of a settlement contract requires agreement on its material terms. The appellants contended below that the parties never had a meeting of the minds regarding the precise method for securing payment of the settlement. The existence of conflicting evidence on this issue makes summary enforcement inappropriate. 25 Specifically, the appellants acknowledged that they were willing to settle for $252,500 and that Bradley Near would sign a judgment for $387,000 to secure the payment of the settlement. However, the appellants contended that the parties failed to agree on the theory of liability upon which the judgment would be based. According to the appellants, the basis of the judgment was an important focus of the negotiations. Any mention of fraud in the judgment would jeopardize the appellants' business (syndicated real estate limited partnerships) because it is subject to rigid securities regulations. Counsel for the appellants indicated that a securities counsel for the appellants who was involved in the settlement negotiations could be called to clarify this issue. Because the appellants presented allegations which, if true, would indicate that there was no meeting of minds sufficient to effect a settlement agreement, the district court could not properly resolve this factual dispute merely by weighing the affidavits and relying on the unsworn statements of counsel. See Mid-South Towing, 733 F.2d at 391; Ozyagcilar, 701 F.2d at 308 n. ; Massachusetts Casualty Insurance Co. v. Forman, 469 F.2d 259, 260-61 (5th Cir.1972) (per curiam). 26 The failure of the district court to conduct an evidentiary hearing regarding the material terms of the purported settlement agreement cannot be justified, as suggested by the Callies, on the ground that the district court had entered a judgment which did not specify the basis of the judgment. True, this process presumably alleviated the disagreement between the parties regarding the theory of liability upon which the judgment would be based. However, alleviation of a disagreement does not erase the fact that the parties never had a meeting of the minds regarding the precise method for securing payment of the settlement. See Main Line Theatres, Inc. v. Paramount Film Distributing Corp., 298 F.2d 801, 803 (3d Cir.), cert. denied, 370 U.S. 939, 82 S.Ct. 1585, 8 L.Ed.2d 807 (1962). As mentioned earlier, the district court only has the power to enforce complete settlement agreements. Ozyagcilar, 701 F.2d at 308; see Gardiner, 747 F.2d at 1189. Accordingly, the district court erred in failing to conduct an evidentiary hearing on the disputed terms of the settlement agreement. 2 CONCLUSION 27 The judgment of the district court is VACATED and the case REMANDED for an evidentiary hearing on the existence and terms of the purported settlement agreement.