Opinion ID: 2628021
Heading Depth: 1
Heading Rank: 2

Heading: Existence of a Presuit Settlement Agreement

Text: Our decision on the previous issue does not moot EMCASCO's appellate argument that Judge Clark erred in granting partial summary judgment in favor of Nungesser on the existence of a presuit settlement agreement. Although Judge Clark's decision on this issue came long after Judge Ballinger's September 2003 ruling on EMCASCO's first motion to dismiss, it was controlled by unchangeable and uncontroverted facts that predated not only the motion to dismiss but also the entire case. In addition, we note that the issue of whether a binding settlement was effected presuit is one on which EMCASCO's and Bryant's interests are aligned. We therefore review the purely legal conclusion to be drawn from the undisputed facts, having had the benefit of full participation of all parties in the briefing and argument of this issue on appeal. Judge Clark ruled: As a matter of law, the communications between [Nungesser's attorney], on behalf of Plaintiff, and Bruce Fischer, on behalf of defendant Josh Bryant and/or EMCASCO, did not form a settlement contract. He set out several reasons for his conclusion, most significantly, that Bryant could not establish a mutual agreement or a meeting of the minds. Ample Kansas case law supports the hornbook proposition that an unconditional and positive acceptance is required to form a contract; a conditional acceptance of a settlement offer is but a counteroffer, which does not create a contract. Steele v. Harrison, 220 Kan. 422, 428, 552 P.2d 957 (1976) (It is fundamental that a communicated offer creates a power to accept the offer that is made, and only that offer. Any expression of assent that changes the terms of the offer in any material respect may be operative as a counter-offer, but it is not an acceptance and constitutes no contract. Unless the original offeror subsequently expresses unconditional assent to the counter-offer there will never be a contract.); Seymour v. Armstrong, 62 Kan. 720, Syl. ¶ 2, 64 Pac. 612 (1901) (If the acceptor affixes conditions to his acceptance not comprehended in the proposal, there can be no agreement without the assent of the proposer to such conditions); Restatement (Second) of Contracts § 59 (1979); 1 Corbin on Contracts § 3.28, pp. 457-63 Rev. ed. 1993 & 2006 Supp. In Judge Clark's view, Nungesser never unconditionally accepted EMCASCO's offer, and EMCASCO rejected Nungesser's counteroffer. This court's standard of review on this issue is a familiar one: `Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. The trial court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. On appeal, we apply the same rules and where we find reasonable minds could differ as to the conclusions drawn from the evidence, summary judgment must be denied.' [Citation omitted.] State ex rel. Stovall v. Reliance Ins. Co., 278 Kan. 777, 788, 107 P.3d 1219 (2005). When the evidence pertaining to the existence of a contract or the content of its terms is conflicting or permits more than one inference, a question of fact is presented. However, whether undisputed facts establish the existence and terms of a contract raises a question of law for the court's determination. See Hays v. Underwood, 196 Kan. 265, 267, 411 P.2d 717 (1966). There is no factual dispute among the parties on the events leading up to the filing of Nungesser's automobile negligence action against Bryant. Thus our appellate review of the district court's ruling on summary judgment is unlimited. See Roy v. Young, 278 Kan. 244, 247, 93 P.3d 712 (2004). EMCASCO suggests that generally, a settlement agreement requires only an agreement concerning the amount to be paid to resolve the claim; that an enforceable contract may exist despite the parties' agreement to resolve nonessential terms at a later time; and that immaterial or minor differences or variances between an offer and acceptance will not prevent the formation of a contract, citing Giblin v. Giblin, 253 Kan. 240, 854 P.2d 816 (1993); Phillips & Easton Supply Co., Inc. v. Eleanor International, Inc., 212 Kan. 730, 737, 512 P.2d 379 (1973); Connor v. Hammer, 201 Kan. 22, 439 P.2d 116 (1968); Lewis v. Gilbert, 14 Kan.App.2d 201, 785 P.2d 1367 (1990). EMCASCO also notes that no formal exchanges of offer and acceptance are needed to create a legally binding settlement contract. An offer that does not specify any particular means of acceptance may be accepted in any reasonable manner. EMCASCO combines these correct statements of law with the argument that the October 9, 2003, note accompanying Carolyn Nungesser's $180 check to Wesleywhich demanded the lien be released so that we can conclude our settlementreferred to an existing agreement, not a pending offer than might be accepted if future conditions are met. Although it might be difficult to pinpoint the exact moment when a binding settlement agreement was reached, EMCASCO argues, the October 9 note made it clear that there was an agreement to settle by that time. In the alternative, it claims that Carolyn Nungesser's note itself constituted an acceptance of EMCASCO's offer to settle for the policy limit. Both of these arguments were presented to and rejected by Judge Clark. Although the cases EMCASCO cites do stand for the general propositions of contract law they accompany, the cases do not support the assumption required to reach the outcome EMCASCO desires. Each case involves a situation in which unconditional acceptance of all essential terms was clearly communicated. Giblin, 253 Kan. 240, 854 P.2d 816; Phillips & Easton Supply Co., Inc., 212 Kan. 730, 512 P.2d 379; Connor, 201 Kan. 22, 439 P.2d 116; Lewis, 14 Kan.App.2d 201, 785 P.2d 1367. None holds that the point on which the parties continued to disagree here, i.e., the proper identity of the payee of the settlement proceeds, is a nonessential or immaterial term. In fact, disagreement between an offer and acceptance on that term is not a minor variance. On the contrary, such disagreement can be fatal to formation of a contract. EMCASCO cites no precedent to the contrary, and we are aware of none. Furthermore, as the district court noted, it is well established that, in order to create a contract, an acceptance must be unconditional and unequivocal. See Steele, 220 Kan. at 428, 552 P.2d 957; Seymour, 62 Kan. 720, Syl. ¶ 2, 64 P. 612; Restatement (Second) of Contracts § 59; 1 Corbin on Contracts § 3.28, pp. 457-62. The uncontroverted facts in this case demonstrate that Nungesser never accepted the exact terms of EMCASCO's offer, and EMCASCO refused before suit was filed to modify its offer to accommodate the conditions Nungesser required. Regardless of any language in Carolyn Nungesser's October 9 note, there was never a binding settlement agreement before or after that date. Moreover, she did not have authority to bind her husband, and delivery of her note to Wesley could not constitute a communication of acceptance to EMCASCO, the offeror. Given the discussion above, we affirm Judge Clark's ruling in favor of Nungesser on the settlement agreement issue. No binding settlement was arrived at before Nungesser's suit against Bryant was filed. Affirmed in part, reversed in part, and remanded to the district court for further proceedings consistent with this opinion. NUSS, J., not participating. MARQUARDT, J., assigned. [1]