Opinion ID: 1874294
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Heading: Offer to Confess Judgment.

Text: Iowa Code chapter 677 governs offers to confess judgment. Iowa Code sections 677.7 and 677.8 are the pertinent sections. Section 677.7 specifies how and when the defendant makes the offer after an action has been brought: The defendant in an action for the recovery of money only may, at any time after service of notice and before the trial, serve upon the plaintiff or the plaintiff's attorney an offer in writing to allow judgment to be taken against the defendant for a specified sum with costs. Iowa Code § 677.7 (2003). Section 677.8 specifies how and when the plaintiff may accept the offer: If the plaintiff accepts the offer, and gives notice thereof to the defendant or the defendant's attorney within five days after the offer is made, the offer, and an affidavit that the notice of acceptance was delivered in the time limited, may be filed by the plaintiff, or the defendant may file the acceptance with a copy of the offer, verified by affidavit; and in either case a minute of the offer and acceptance shall be entered upon the judge's calendar, and judgment shall be rendered by the court accordingly. Id. § 677.8. No one disputes that the procedures in both sections were followed. The dispute centers on the meaning of the offer to confess judgment, which determines whether there was an acceptance of the offer, matters we next address. Sprague contends that his offer to confess judgment is clear and unambiguous. The $5000 was the total sum offered to both plaintiffs and was not divisible. Offers to confess judgments are like offers of settlement, Hughes v. Burlington N. R.R., 545 N.W.2d 318, 320 (Iowa 1996), and [s]ettlement agreements are essentially contracts, Shirley v. Pothast, 508 N.W.2d 712, 715 (Iowa 1993). Because we look to contract principles when interpreting settlement agreements, Waechter v. Aluminum Co. of Am., 454 N.W.2d 565, 568 (Iowa 1990), we also look to contract principles when we interpret offers to confess judgment. We review the district court's interpretation of the offer at law. Ellefson v. Centech Corp., 606 N.W.2d 324, 330 (Iowa 2000) (stating contract interpretation is a legal issue unless the interpretation depends on extrinsic evidence). Contract interpretation determines the meaning of contract words. Fausel v. JRJ Enters., Inc., 603 N.W.2d 612, 618 (Iowa 1999). The primary focus of settlement agreement interpretation is ascertaining the parties' intention at the time they executed the agreement. Waechter, 454 N.W.2d at 568. Interpretation involves a two-step process. First, from the words chosen, a court must determine what meanings are reasonably possible. In so doing, the court determines whether a disputed term is ambiguous. A term is not ambiguous merely because the parties disagree about its meaning. A term is ambiguous if, after all pertinent rules of interpretation have been considered, a genuine uncertainty exists concerning which of two reasonable interpretations is proper. Walsh v. Nelson, 622 N.W.2d 499, 503 (Iowa 2001) (citations omitted). Once the court identifies an ambiguity, it then must `choos[e] among possible meanings.' Id. (alteration in original) (citation omitted). If extrinsic evidence is necessary to resolve the meaning of ambiguous language, a question of interpretation arises which is reserved for the trier of fact. Id. However, [a]ny determination of meaning or ambiguity should only be made in the light of the relevant evidence of the situation and relations of the parties, the subject matter of the transaction, preliminary negotiations and statements made therein, usages of trade, and the course of dealing between the parties. But after the transaction has been shown in all its length and breadth, the words of an integrated agreement remain the most important evidence of intention. In short, although other evidence may aid the process of interpretation, the words of the contract remain the key to determining whether the ... terms [of the offer to confess judgment] are ambiguous. Id. (citation omitted). With these principles of interpretation in mind, we are convinced the words of the confession of judgment are not, as a matter of law, ambiguous. In paragraph one of the offer to confess judgment, Sprague offers to confess judgment on plaintiffs' claim. Marlene contends the words plaintiffs' claim mean the offer of $5000 is being made to each plaintiff because Sprague used the singular of the word claim rather than the plural. We disagree. A reasonable interpretation of the phrase plaintiffs' claim is that Marlene's loss of consortium claim and Howard's personal injury claim were in Sprague's mind one claim for purposes of the offer. This becomes clear in the next paragraph when Sprague stated [t]he amount offered above is the total sum that is being offered to the plaintiffs.  (Emphasis added.) The offer did not invite a separate response on Marlene's claim and Howard's claim; Sprague lumped the two claims into one claim in his offer to confess judgment. See Dickson v. Hubbell Realty Co., 567 N.W.2d 427, 430 (Iowa 1997) (In interpreting a contract, we give effect to language of the entire contract in accordance with its commonly accepted and ordinary meaning.). To be bound, the contracting parties must manifest a mutual assent to the terms of the contract. Kristerin Dev. Co. v. Granson Inv., 394 N.W.2d 325, 331 (Iowa 1986). [T]his assent usually is given through the offer and acceptance. Id. In a contract by offer and acceptance, the acceptance must conform strictly to the offer in all its conditions, without any deviation or condition whatever. Shell Oil Co. v. Kelinson, 158 N.W.2d 724, 728 (Iowa 1968). Otherwise there is no mutual assent and therefore no contract. Id. Here Marlene attempted to accept the offer to confess judgment in a way that did not conform to the offer in all of its conditions. Instead, Marlene rejected the offer. O'Brien v. Fitzhugh, 204 Iowa 787, 790, 215 N.W. 944, 946 (1927) (Unless it may be said that the alleged acceptance by the appellee of the offer of appellant embodied the same terms as contained in his offer, there is no acceptance, but a rejection of the offer.). Consequently, there was no valid acceptance of the offer to confess judgment and therefore no mutual assent to the terms of the offer. Absent such mutual assent, there was no contract.