Court Opinion

ID: 4388176
Source: CourtListenerOpinion
Date Created: 2019-04-17 17:40:13.393245+00
Date Added: 2024-06-11T14:50:40.058189
License: Public Domain

J-A02040-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    SWEPI, LP                                  :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    HARVEY AND BOBBI JO WOOD                   :
                                               :
                       Appellants              :   No. 508 MDA 2018

                 Appeal from the Order Entered March 2, 2018
     In the Court of Common Pleas of Tioga County Civil Division at No(s):
                                 59 Civil 2011

BEFORE: LAZARUS, J., DUBOW, J., and NICHOLS, J.

MEMORANDUM BY NICHOLS, J.:                               FILED APRIL 17, 2019

       Appellants Harvey and Bobbi Jo Wood appeal from the order granting

Appellee SWEPI, LP’s motion to enforce settlement agreement. Appellants

argue that the parties did not agree on several material terms of the

settlement agreement, and they did not intend for the oral agreement to be

operative in the absence of an executed written agreement. We affirm.

       The relevant facts and procedural history of this appeal are as follows.

       This case began in 2011 when [Appellee] filed suit against
       [Appellants] in a dispute involving a . . . gas lease and access to
       [Appellants’] property. Through previous litigation, the case has
       been appealed to the Superior Court on two prior occasions. In
       the last appeal, the Superior Court overturned the court’s grant of
       [Appellants’] Motion for Summary Judgment.[1] Upon remand, the
       court scheduled the matter for trial. Jury selection was scheduled
       to commence Tuesday, February 14, 2017. On Monday, [February

____________________________________________

1 See SWEPI LP v. Wood, 1945 MDA 2015 (Pa. Super. filed Sep. 7, 2016)
(unpublished mem.).
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        13th,] the court was informed the parties had reached a
        settlement agreement and held a telephone conference on the
        record with the parties’ respective counsel, Attorney Jeremy
        Mercer for [Appellee] and Attorney Cassandra Blaney for
        [Appellants]. During the telephone conference, counsel informed
        the court the parties came to a settlement of not only this case
        but also two other cases between the parties that were then
        pending in the Tioga County Court of Common Pleas. The court
        then canceled the trial set to begin the next day.

        After the court canceled the scheduled trial, Attorney Mercer sent
        Attorney Blaney a written agreement for [Appellants] to sign.
        [Appellants], however, refused to execute the written settlement
        agreement and retained new counsel. [Appellee] thereafter filed
        a Motion to Enforce Settlement Agreement. The court held a
        hearing on the motion over three days and took testimony from
        [Appellant, Ms.] Bobbi Jo Wood, [Appellant, Mr.] Harvey Wood,
        and Attorney . . . Blaney.

Trial Ct. Op., 5/25/18, at 1-2.

        At the hearing on August 16, 2017, both parties submitted the relevant

emails documenting the negotiations between Attorneys Blaney and Mercer.

An email Attorney Mercer sent at 3:11 p.m. on Sunday, February 12, 2017,

indicated that the parties had reached a settlement pursuant to the following

terms:

        ●     The parties will execute a Confidential Settlement
              Agreement and Release that contains standard terms and
              conditions, including confidentiality and a global release of
              claims (but which release will exclude any claims
              [Appellants] may have related to sick cows), and detail the
              payment of xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (to be
              paid within 45 days of execution of the settlement
              agreement).[2] The scope of the release and the terms of
              this document will be those found within the Confidential
              Settlement Agreement and Release sent to you earlier this
              year in connection with another matter, with the case-
____________________________________________

2   The parties redacted the amount of the payment.

                                           -2-
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          specific references changed . . . to the matters being
          resolved here.

     ●    The parties will enter into a new Oil and Gas Lease for the
          acreage covered by the November 21, 2000, Allegheny
          Energy Development Corporation lease. That lease will be
          the standard lease that [Appellee] is offering in the Tioga
          County area, a copy of which was sent to you in January of
          this year in connection with another matter. The “bonus”
          payment will be $1200 per net acre and the royalty
          percentage will be 12.5%.

     ●    The parties will agree on terms for an addendum to be part
          of the aforementioned new Oil and Gas Lease.               You
          explained that the terms your clients wants [sic] to have
          included in the addendum are the same as those you
          provided in January of this year in connection with another
          matter. I explained that the land department would have
          to review but those terms, save the two noted in the next
          sentence, appear to [be] acceptable; final determination on
          that, though, must come from the land department. The
          Pugh Clause and the Shut-In Clause of that prior addendum
          are not acceptable. The Pugh Clause will be removed
          entirely. The Shut-In Clause will have terms added to it to
          ensure that it [is] understood to operate prospectively only,
          e.g., the five-year clock does not begin to run until the date
          of the Oil and Gas Lease.

     ●    The parties will execute a Ratification and Amendment for
          which (i) ratifies the November 21, 2000 Allegheny Energy
          Development Corporation lease and then (ii) amends that
          lease by replacing it in whole with the terms of the
          aforementioned Oil and Gas Lease, with Addendum as of the
          date of the new Oil and Gas Lease.

     ●    The parties will execute a Memorandum of Lease that can
          be recorded evidencing the new Oil and Gas Lease should
          [Appellee] desire to record that instead of the new Oil and
          Gas Lease, with Addendum.

     ●    Without limiting the breadth of the aforementioned global
          release, the parties will dismiss with prejudice the following
          cases pending in Tioga County, Pennsylvania, within 5
          business days of the date of the execution of the

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              Confidential Settlement Agreement and Release: SWEPI LP
              v. Harvey R. Wood and Bobbi Jo Wood, 59 CV 2011; Harvey
              R. Wood and Bobbi Jo Wood v. SWEPI LP, 654 CV 2011; and
              SWEPI LP v. Harvey R. Wood and Bobbi Jo Wood, 993 CV
              2013.

      ●       The parties will use good faith efforts to attempt to resolve
              the issue of [Appellants’] alleged inability to access a portion
              of their property in the Wood 626 Unit that is south of the
              existing well pad.

Appellants’ Ex. 1 at 2-3; Appellee’s Ex. 5 at 2-3.

      Attorney Blaney testified that she informed Mr. Wood about all aspects

of the proposed settlement on February 12th, immediately after receiving the

email from Attorney Mercer. After the conversation between Attorney Blaney

and Mr. Wood, Appellants authorized Attorney Blaney to accept the

settlement.

      Attorney Blaney responded to Attorney Mercer’s email at 5:09 p.m. on

February 12th, providing additional language to the final paragraph

concerning the land access issue. Otherwise, all other terms were acceptable

to Appellants. See Appellants’ Ex. 1 at 2-3; Appellee’s Ex. 5 at 2-3.

      Attorney Blaney also testified that Appellants changed course during a

meeting at her office in March 2017. At that time, Attorney Blaney expected

both Appellants to attend and sign the written settlement agreement.

However, Mr. Wood attended the meeting alone and expressed that he was

“very unhappy” with the terms of the agreement. N.T. Hr’g., 8/16/17, at 122.

Mr. Wood “did not complain about any of the specific terms being not what he

agreed to.” Id. Rather, he claimed that Attorney Blaney “threw him under

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the bus,” and the agreement “was not what he was owed by [Appellee].” Id.

at 122-23.

      During a subsequent telephone call, Attorney Blaney informed Mr. Wood

that Appellee would likely file a motion to enforce settlement agreement if

Appellants withheld their signatures. Mr. Wood responded that “he expected

that” Appellee would attempt to enforce the settlement agreement, but

Appellants “weren’t going to sign it and . . . they would take their chances” in

court. Id. at 124.

      On March 2, 2018, the trial court entered an order granting Appellee’s

motion to enforce settlement agreement. Appellants timely filed a notice of

appeal and a court-ordered Pa.R.A.P. 1925(b) concise statement of errors

complained of on appeal. The court filed a responsive Rule 1925(a) opinion,

explaining that Attorney Blaney had authority to enter into the settlement

agreement, and the communications between Attorneys Blaney and Mercer

demonstrated the formation of a valid and enforceable settlement agreement.

      Appellants now raise six issues for our review:

      1. Whether the [trial] court erred by granting [Appellee’s] Motion
      to Enforce Settlement given the facts and evidentiary testimony
      presented to the [c]ourt[.]

      2. Whether the [trial] court erred by finding that the parties
      entered into an oral settlement agreement as there was no
      meeting of the minds regarding the leasehold acreage and
      consideration to be paid for the new oil and gas lease at the heart
      of the asserted settlement[.]

      3. Whether the [trial] court erred in enforcing the asserted oral
      settlement agreement when [Appellants] had not seen or

                                     -5-
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     reviewed the newly proposed Oil and Gas Lease prior to entering
     into the asserted oral settlement[.]

     4. Whether the [trial] court erred in enforcing the asserted oral
     settlement agreement when [Appellants] had not seen or
     reviewed the newly proposed Addendum to the Oil and Gas Lease
     prior to entering into the asserted oral settlement[.]

     [5]. Whether the [trial] court erred by finding that the parties
     entered into an oral settlement agreement as there was no
     meeting of the minds regarding numerous material terms of the
     asserted oral settlement agreement, including no meeting of the
     minds regarding the following material terms:

        a. confidentiality requirements and potential punitive
        remedies in the event of a breach of confidentiality;

        b. a global release of other outstanding claims against
        [Appellee]; and

        c. an agreement to settle [Appellants’] land access issues to
        provide [Appellants] access to their property in the area of
        [Appellee’s] well pad.

     6. Whether the [trial] court erred in upholding the asserted oral
     settlement agreement when there was no intent for the oral
     agreement to be operative in the absence of an executed written
     agreement.

Appellants’ Brief at 4-5.   Although Appellants’ brief lists six issues, they

actually present two distinct arguments in opposition to the order granting

Appellee’s motion to enforce settlement agreement.

     First, Appellants contend that the parties to a settlement agreement

must come to a meeting of the minds on all terms in order for the agreement

to be enforceable. Id. at 25. Appellants insist that there was no meeting of

the minds on several material terms of its agreement with Appellee, including

(1) the amount of acreage Appellee would lease; (2) the amount of

                                    -6-
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compensation Appellee would pay; (3) the use of Appellee’s standard lease

form; (4) the addendum terms; (5) the confidentiality provision; (6) the global

release of Appellants remaining claims against Appellee; and (7) the resolution

of the land access issue. Id. at 26, 36, 40, 41, 45, 47. Because the parties

did not come to a meeting of the minds regarding these terms, Appellants

maintain that this Court must reverse the order granting enforcement. Id. at

47.

      “The enforceability of settlement agreements is determined according

to principles of contract law. Because contract interpretation is a question of

law, this Court is not bound by the trial court’s interpretation.” Step Plan

Servs., Inc. v. Koresko, 12 A.3d 401, 408 (Pa. Super. 2010) (citation

omitted).

      Our standard of review over questions of law is de novo and to
      the extent necessary, the scope of our review is plenary as [the
      appellate] court may review the entire record in making its
      decision. With respect to factual conclusions, we may reverse the
      trial court only if its findings of fact are predicated on an error of
      law or are unsupported by competent evidence in the record.

Id. (citations and quotation marks omitted).

      “There is a strong judicial policy in favor of voluntarily settling lawsuits.”

Felix v. Giuseppe Kitchens & Baths, Inc., 848 A.2d 943, 946 (Pa. Super.

2004) (citation omitted). “The primary reason that settlement is favored is

that it expedites the transfer of money into the hands of a complainant.

Further, settlement reduces the burden on and expense of maintaining

courts.” Id. (citations omitted).

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      In a settlement agreement, “[t]here is an offer (the settlement figure),

acceptance, and consideration (in exchange for the plaintiff terminating his

lawsuit, the defendant will pay the plaintiff the agreed upon sum).” Step Plan

Servs., 12 A.3d at 409 (citation omitted). “As with any contract, it is essential

to the enforceability of a settlement agreement that the minds of the parties

should meet upon all the terms, as well as the subject-matter, of the

agreement.” Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999) (internal

quotation marks, citation, and brackets omitted).

      “If parties agree upon essential terms and intend them to be binding, a

contract is formed even though they intend to adopt a formal document with

additional terms at a later date. The intent of the parties is a question of fact

which must be determined by the factfinder.” Compu Forms Control, Inc.

v. Altus Grp., Inc., 574 A.2d 618, 622 (Pa. Super. 1990) (internal quotation

marks and citations omitted). “A reviewing court must defer to the findings

of the trier of the facts if they are supported by the evidence.” Id. (citation

omitted).

      Instantly, Attorney Blaney testified that she informed Mr. Wood about

all aspects of the proposed settlement on February 12, 2017:

      We went down step-by-step what the agreement would entail. I
      told [Mr. Wood] there would be a settlement agreement that was
      four to five pages that outlined this, but here are the . . . basic
      terms. That he was waiving all claims against [Appellee] except
      for the sick cows in exchange for a . . . payment. That . . . meant
      that all three lawsuits would be dismissed. That all of the back
      royalties would be paid . . . within forty-five days of executing the
      agreement, [Appellee] was holding [a] significant amount of

                                      -8-
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       royalties[.] [T]hat there would be either in the agreement or in
       the addendum a clause that while . . . neither side was admitting
       fault, that we would ratify the old lease again so that there was a
       lease that covered all the way through.

       We talked about the need for the agreement to be confidential.
       What that meant[:] that he couldn’t go to the newspaper, I
       couldn’t respond to the calls that I had been getting from the
       newspaper, he couldn’t talk about it in a coffee shop with friends,
       but that he could discuss the financial terms with both an
       accountant and an attorney as necessary. We discussed that
       [Appellee] would resolve his ability to access this lower field south
       of the pad. [Appellants’] preferred access was through a roadway
       that crossed over the neighbor’s property and went to the pad.
       He wanted to be able to cross that roadway and get to the lower
       field. I told him that [Appellee] could not promise that that would
       be the access without sending somebody out to see it; that we’d
       make note that was their preferred access, but one way or another
       we would figure out how he was going to access his field.

       And that they would get a new lease; twelve hundred dollars per
       acre, twelve-and-a-half percent royalty, payment on the lease
       within forty-five calendar days not business operating days,
       addendum, same as I had―I had discussed again that we’d
       already used―I had already used these addendums and
       negotiated them with [Attorney Mercer] very recently. And [we]
       went through what addendums were there. Told them that there
       would be no Pugh Clause[3] . . . . And I told [Mr. Wood] we could
       go through the exact language of those addendums in detail on
       Monday.

N.T. Hr’g, 8/16/17, at 101-02.             Following this conversation, Appellants

authorized Attorney Blaney to accept the settlement. Id. at 104.

       Our review of the record confirms that throughout the evidentiary

hearings, Attorney Blaney provided testimony demonstrating Appellants’

____________________________________________

3 A Pugh clause provides that “production from a unit including a portion of a
leased tract will maintain the lease in force as to all the lands covered by the
lease.” Fremaux v. Buie, 212 So. 2d 148, 149 n.1 (La. Ct. App. 1968)
(citations omitted).

                                           -9-
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awareness of the material terms of the settlement agreement. Appellee also

submitted exhibits, including Attorney Blaney’s phone records and the notes

she took contemporaneously during her telephone conversations with

Appellants, which supported Attorney Blaney’s testimony. See Appellee’s Ex.

3, 4.

        To the extent Appellants rely on their own testimony that conflicted with

that of Attorney Blaney, the trial court specifically found Attorney Blaney

credible. See Trial Ct. Op. at 8. The record supports the court’s findings, and

we defer to those findings. See Compu Forms Control, 574 A.2d at 622.

Therefore, the court properly determined that the parties came to a meeting

of the minds for all material terms, and the settlement agreement was

enforceable. See Mazzella, 739 A.2d at 536.

        In their second argument, Appellants contend that they “did not intend

to be bound by the terms of the oral settlement without the subsequent

memorialization      and    execution     of   the   final   settlement   documents.”

Appellants’ Brief at 49. Appellants rely on Wilson v. Pennsy Coal Co., 112
A. 135, 136 (Pa. 1920), for the proposition that oral agreements are

enforceable only where it is “shown, by the acts or declarations of the parties,

that they intended the agreement to be operative before execution, and

without regard to the writing.”4 Id. at 48. “Without some affirmative action

demonstrating [Appellants’] intent to be bound by the asserted oral
____________________________________________

4Wilson involved an oral agreement to convey real estate, “where the lease
proposed would not have been valid without writing.” Wilson, 112 A. at 136.

                                          - 10 -
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agreement, the asserted agreement should be viewed only as an offer of

settlement and should not be enforced.” Id. at 50.

      “Where a settlement agreement contains all of the requisites for a valid

contract, a court must enforce the terms of the agreement.”         Step Plan

Servs., 12 A.3d at 409 (citation omitted). “This is true even if the terms of

the agreement are not yet formalized in writing.       Pursuant to well-settled

Pennsylvania law, oral agreements to settle are enforceable without a writing.”

Id. (citation omitted); see also Shovel Transfer & Storage, Inc. v. Pa.

Liquor Control Bd., 739 A.2d 133, 138 (Pa. 1999) (reiterating that, “Where

the parties have agreed orally to all the terms of their contract, and a part of

the mutual understanding is that a written contract embodying these terms

shall be drawn and executed by the respective parties, such oral contract may

be enforced, though one of the parties thereafter refuses to execute the

written contract” (citation omitted)).

      Instantly, the settlement agreement contained the requisites for a valid

contract, including an offer, acceptance, and consideration. See Step Plan

Servs., 12 A.3d at 409. More specifically, Appellee agreed to make a payment

to Appellants.   In exchange, Appellants agreed to, among other things, a

global release of multiple claims against Appellee. The parties also agreed to

execute a new lease whereby Appellee would pay Appellants for the right to

extract natural resources from Appellants’ property.

      Despite the fact that the parties did not immediately memorialize the

oral agreement in writing, their subsequent behavior demonstrated their

                                     - 11 -
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intent to be bound by the oral agreement.          Attorneys Mercer and Blaney

participated in a conference with the court on February 13, 2017, confirming

that the parties had reached a settlement. See N.T. Settlement Conference,

2/13/17, at 2. Attorney Mercer indicated that he would be “providing a copy

of the settlement agreement . . . and release to Attorney Blaney” within the

next two days, and “all of the terms of the agreement will be fulfilled by the

end of this week.”5 Id. Further, counsel did not express any concern when

the court announced that it would cancel jury selection, which it had scheduled

for the next day. Id. at 4.

       Based upon the foregoing, the oral settlement agreement was

enforceable in the absence of a formally executed writing.        See Shovel

Transfer & Storage, 739 A.2d at 138; Step Plan Servs., 12 A.3d at 409.

Accordingly, we affirm the order granting Appellee’s motion to enforce

settlement agreement.

       Order affirmed.

____________________________________________

5The trial court observed that, “Given the timing of the settlement agreement,
with trial to start in less than two days, it would have been difficult for the
parties to execute a written settlement agreement before trial.” Trial Ct. Op.
at 9.

                                          - 12 -
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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 04/17/2019

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