Court Opinion

ID: 4677304
Source: CourtListenerOpinion
Date Created: 2021-04-14 19:00:16.747918+00
Date Added: 2024-06-11T08:03:37.669717
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 20-1112

                    THE COMMONWEALTH SCHOOL, INC.,

                         Plaintiff, Appellee,

                                  v.

 COMMONWEALTH ACADEMY HOLDINGS LLC, a/k/a Commonwealth Academy,
                             ET AL.,

                       Defendants, Appellants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
               FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Indira Talwani, U.S. District Judge]

                                Before

                     Kayatta, Selya, and Barron,
                           Circuit Judges.

     John H. Ray, III, with whom Ray & Counsel, P.C. was on brief,
for appellants.
     M. Lawrence Oliverio, with whom Polsinelli P.C. was on brief,
for appellee.

                            April 14, 2021
              SELYA, Circuit Judge.          This multifaceted appeal requires

us to resolve, as threshold matters, a pair of jurisdictional

issues.        The    first     is    an    issue       concerning       our   appellate

jurisdiction, and the second is an issue concerning the district

court's jurisdiction.            After concluding that neither of these

jurisdictional booby traps derails the appeal, we reach the merits

and   reverse       the    district   court's       order   of    dismissal,      direct

enforcement of the contested agreement, and remand for further

proceedings consistent with this opinion.

I. BACKGROUND

              The    dispute    between      the    parties      dates    back   several

years, and we think it helpful to sketch the relevant facts.                         The

Commonwealth School, Inc. (the School) has operated a Boston-based

private school since 1958.            It was the plaintiff below and is the

appellee in this court.               The School's antagonist, defendant-

appellant Commonwealth Academy Holdings LLC,1 operates a relatively

new       private     school     (founded          in    2011)     in      Springfield,

Massachusetts.            The distance between Boston and Springfield is

slightly over ninety miles.

      1The School's suit also named other defendants allegedly
associated with Commonwealth Academy Holdings LLC, and the latter
— in its pleadings — suggested that an unnamed entity, Project 13,
Inc., may be the real party in interest. For present purposes,
nothing turns on the interrelationships among these players, and
we refer to them, collectively, as "the Academy."

                                           - 2 -
              The pot began to boil in April of 2016.           At that time,

the School brought suit under the Lanham Act, see 15 U.S.C.

§§ 1114(a), 1125(a), against the Academy.            The School alleged that

it had trademarked the name "Commonwealth School" and that the

Academy's name ("Commonwealth Academy") infringed that trademark.

The School's complaint also contained supplemental claims arising

under Massachusetts law, based on essentially the same conduct.

The School subsequently filed an amended complaint covering much

the same ground, see Fed. R. Civ. P. 15(a)(1)(B), and the Academy

filed an answer in which it denied liability, raised affirmative

defenses, and asserted four counterclaims.

              In August of 2016, the two parties seemingly achieved a

settlement through court-attached mediation.              The settlement was

based on an oral agreement reached at a mediation session held on

August   3,    2016.     The   material     terms    of   the   agreement   are

straightforward:       the School agreed to pay $25,000 to the Academy

in exchange for the Academy changing its name to "Springfield

Commonwealth Academy."2        The mediator reported the oral agreement

to the district court the next day.                 Based on the mediator's

report, the district court conditionally dismissed the case on

August 8, cautioning that the conditional order of dismissal

     2 The agreement also authorized the Academy to use the acronym
"SCA."   Because this provision sheds no light on the current
dispute, we omit any further reference to it.

                                    - 3 -
allowed either party to reopen the case within sixty days if the

settlement      "is   not   consummated."        Both     the    School's    amended

complaint and the Academy's counterclaims were to be dismissed.

            The     parties   failed    to    memorialize       the     agreement    in

writing.     Within the sixty-day grace period, the School moved to

reopen the case.       In response, the Academy moved for enforcement

of what it deemed to be a valid settlement agreement.                    At a hearing

before    the    district     court    on    October     13,    2016,    both   sides

acknowledged that they had agreed to the material terms of the

settlement.       Shortly thereafter, the district court entered an

order in which it found that a settlement had been reached at the

August 3 mediation session and that, accordingly, the Academy must

change its name and the School must pay it $25,000.

            For nearly three years, the district court maintained

this     posture.       Early    in    the     process     of    supervising        the

implementation of the settlement agreement, the court directed the

School to escrow the agreed $25,000 payment.               The School complied,

and the Academy took steps to change its name in a variety of

publications, social media outlets, and promotional materials.                       It

also changed its website.             Nevertheless, the prescribed $25,000

payment was not released from escrow.                    The School said that,

despite the Academy's palliative actions, no payment was due

because the Academy was allowing students to use basketball jerseys

                                       - 4 -
that prominently featured the words "Commonwealth Academy" but

relegated the word "Springfield" to a smaller font.

                After   a   hearing   aimed   at   resolving    the    "basketball

jersey" contretemps, the district court reversed course:                        it

concluded, in an electronic order entered on September 5, 2019,

that the parties had not reached an agreement three years earlier

because there had not been a "meeting of the minds."                  Accordingly,

the court refused to enforce the settlement even though the Academy

had fulfilled virtually all of its commitments under the agreement

and,       in   addition,    had   represented     that   it   would    alter   its

basketball jerseys in such a way as the court deemed necessary to

satisfy the School's objection.               Despite indicating that it was

vacating the settlement and the order of dismissal, the district

court stated in the same order that either side could reopen the

case by filing a notice to that effect within thirty days.                      The

court did not explain why, having vacated the order of dismissal,

the case had to be "reopened."3

                The court's invitation went unrequited.          With matters at

a standstill and the School displaying no inclination to prosecute

       The district court described its September 5 order as an
       3

order vacating the "Settlement Order of Dismissal" that was entered
on August 8, 2016. This characterization is confusing because the
court also spoke of the parties' need to take affirmative action
in order to "reopen[]" the case. For ease in exposition, we refer
throughout to the September 5 order as an order refusing to enforce
the settlement.

                                       - 5 -
its claims, the court issued another order on January 7, 2020.

The January 7 order notified the parties that the case would be

dismissed unless one of them showed cause for reopening within two

weeks.   When neither party responded to the show cause order, the

court dismissed the case with prejudice on January 23, 2020.

           This    timely    appeal    followed.      In    it,    the    Academy

principally asks us to reverse the district court's refusal to

enforce the settlement agreement.

II. ANALYSIS

           Before we can reach the essence of the parties' dispute

— the question of contract formation — two jurisdictional obstacles

must be removed.     First, we must determine whether this court has

appellate jurisdiction.        Second, we must determine whether the

district   court    had      jurisdiction      to   enforce       the    putative

settlement.    Only when those jurisdictional obstacles have been

cleared away can we turn to the merits of the appeal.                   We proceed

accordingly.

                      A.    Appellate Jurisdiction.

           Courts    of     appeals    must    confirm     the    existence      of

appellate jurisdiction in every case, see Calvary Chapel of Bangor

v. Mills, 984 F.3d 21, 26 (1st Cir. 2020), taking care to "monitor

their    jurisdictional      boundaries       vigilantly,"       Am.     Fiber    &

Finishing, Inc. v. Tyco Healthcare Grp., 362 F.3d 136, 139 (1st

Cir. 2004).    The threshold question in this appeal is whether we

                                      - 6 -
have jurisdiction to review the district court's September 5 order

refusing to enforce the parties' settlement.          Although this order

was interlocutory in nature, the Academy             submits   that it is

reviewable because it merged with the judgment (that is, with the

eventual dismissal with prejudice of the action).

           For the most part, our appellate jurisdiction extends

only to "final decisions of the district courts."               28 U.S.C.

§ 1291.   Interlocutory orders, virtually by definition, are not

"final decisions," and they ordinarily cannot be appealed at the

time they are entered.     See Awuah v. Coverall N. Am., Inc., 585
F.3d 479, 480 (1st Cir. 2009).        Once a district court enters final

judgment, though, antecedent interlocutory orders typically merge

into the judgment and become subject to appellate review.              See

John's Insulation, Inc. v. L. Addison and Assocs., 156 F.3d 101,

105 (1st Cir. 1998).

           Of course, this general rule, familiarly known as the

"merger doctrine," admits of exceptions.           Particularly pertinent

for   present   purposes   is   the    exception    which   provides   that

interlocutory orders do not merge with a final judgment when that

judgment is premised upon the failure to prosecute a case.              See
id. at 105-07.      No fewer than seven circuits (including this

circuit) have adopted this exception to the merger doctrine.           See

id. at 105 (collecting cases).          The question, then, reduces to

whether the interlocutory order that the Academy seeks to challenge

                                  - 7 -
and the final judgment in this case combine to trigger this

exception.4

           Literally, the exception would seem to apply:             the order

that the Academy seeks to challenge is plainly interlocutory, and

the final judgment in this case is based on a failure to prosecute.

But as we explain below, we believe that the peculiar circumstances

of this case give rise to an exception to the exception and, thus,

bring    the   appeal    within    the    encincture    of    our    appellate

jurisdiction.

           The   cases   carving    out     the   exception   to    the   merger

doctrine for dismissals for want of prosecution all involved

plaintiffs who sought to appeal interlocutory orders following

such dismissals.    See, e.g., id. at 104; DuBose v. Minnesota, 893

F.2d 169, 170-71 (8th Cir. 1990); Sere v. Bd. of Trs. of Univ. of

Ill., 852 F.2d 285, 286-87 (7th Cir. 1988); Marshall v. Sielaff,

492 F.2d 917, 919 (3d Cir. 1974).           The case at hand deviates from

this pattern.     The School, as the plaintiff, was the party that

would naturally be expected to prosecute the action.                Yet, it is

     4 Where the merger doctrine applies, an appellant need not
specifically list the challenged interlocutory order (in addition
to the final judgment) in its notice of appeal.        See John's
Insulation, 156 F.3d at 105; see also Fed. R. App. P. 3(c). Here,
however, the Academy took a belt and suspenders approach, listing
both the interlocutory order and the final judgment in its notice
of appeal.

                                    - 8 -
the Academy that seeks to appeal the interlocutory order.5                           And

this       deviation    from      the   usual     pattern    makes    a    dispositive

difference:        given       this     altered    posture,    the    Academy     would

effectively have no avenue at all for appellate review of the

challenged order if that order did not merge with the final

judgment.

               In explicating our reasoning, we start with our decision

in John's Insulation.             There, we catalogued several reasons for

the    exception       to   the   merger    doctrine.        The   main    reason,   we

indicated, is to preserve the integrity of the final judgment rule

by preventing any potential reward for "dilatory and bad faith

tactics."       John's Insulation, 156 F.3d at 105 (quoting Sere, 852

F.2d at 288).       We explained that "[i]f a litigant could refuse to

proceed whenever a trial judge ruled against him, wait for the

court to enter a dismissal for failure to prosecute, and then

obtain review of the judge's interlocutory decision, the policy

against       piecemeal      litigation      and    review    would       be   severely

weakened."       Id. at 105-06 (quoting Marshall, 492 F.2d at 919).

       To be sure, the Academy asserted counterclaims in its
       5

original pleading, and it may technically be regarded as a
plaintiff with respect to those counterclaims.        Even so, the
Academy has not pursued its counterclaims beyond its initial
pleading, and the terms of the settlement agreement relate directly
to the Academy's trademark infringement claim. Consequently, the
existence of the counterclaims does not affect our analysis of the
merger doctrine.

                                           - 9 -
            This     rationale,     however,       is    uniquely   applicable    to

plaintiffs.      The risk of a defendant playing fast and loose with

the final judgment rule in this manner is nonexistent.

            This case illustrates the point. Once the district court

refused to enforce the settlement, there was no way for the Academy

to engineer a final judgment as a means of obtaining review of an

interlocutory order.        The School, as the plaintiff, held the reins

as to whether to prosecute the case that it had brought:                  only the

School could elect to pursue its claims.

            We      add,   moreover,        that   the    specter   of   piecemeal

litigation, which we mentioned in John's Insulation, see id., is

absent here.       Reversal of the interlocutory order would reinstate

the settlement and provide a roadmap to end the litigation, not

extend it.       Cf. Bethel v. McAllister Bros., 81 F.3d 376, 381 (3d

Cir. 1996) (observing "that it is well established that otherwise

non-appealable orders may become appealable where circumstances

foreclose     the     possibility      of     piecemeal     litigation").        The

exception to the merger doctrine finds a more welcoming home where

reversal of an interlocutory order would simply pave the way for

further litigation rather than moving towards an end to legal

proceedings.      That is not the situation here.

            There is yet another reason for the exception:                       the

concern that a plaintiff may drag his heels and substantially delay

the progress of the litigation in order to secure a dismissal for

                                       - 10 -
want of prosecution that he then can use as a lever for obtaining

review of an adverse interlocutory ruling.          See John's Insulation,

156 F.3d at 107.    This concern is heightened because a plaintiff

who   wishes   immediately   to   appeal   an    interlocutory   order   has

recourse to a more efficient process:           he can request a voluntary

dismissal, see Fed. R. Civ. P. 41(a), making it possible to appeal

the earlier order right away.      But no such process is available to

a defendant.    Here, for instance, the Academy had no opportunity

to voluntarily dismiss the School's             claims   in order to seek

immediate appellate review of the interlocutory order.

           Attempting to dull the force of this reasoning, the

School suggests that the Academy had ample opportunity to keep the

case alive in the district court.          In this regard, it points to

the district court's September 5 order providing that either party

could "reopen[]" the case by a notice filed within thirty days.

The Academy's failure to file such a notice, the School says,

evinces a deliberate abandonment of any challenge to that order.

This suggestion mixes plums with pomegranates:             the question is

not whether the Academy could have kept the case alive by filing

a notice to reopen but, rather, whether the Academy had any control

over the School's decision qua plaintiff not to prosecute the

action that it had brought.

                                  - 11 -
           That ends this aspect of the matter.              We hold that the

exception to the merger doctrine does not apply and, thus, we have

jurisdiction to hear and determine this appeal.

                    B.    District Court Jurisdiction.

           The second jurisdictional hurdle is easier to vault.                 It

is   axiomatic    that     federal     courts       are   courts     of   limited

jurisdiction.    See Kokkonen v. Guardian Life Ins. Co. of Am., 511

U.S. 375, 377 (1994); Klimowicz v. Deutsche Bank Nat'l Tr. Co.,

907 F.3d 61, 64 (1st Cir. 2018).          In many instances, a motion to

enforce a settlement, filed after the underlying action has been

dismissed,   will    require    some   independent        showing    of   federal

jurisdiction.    See Kokkonen, 511 U.S. at 381-82.               But everything

depends on context, and the district court may retain jurisdiction

to enforce a settlement in a dismissed case as long as the order

of   dismissal   either    incorporates       the   settlement      agreement    or

explicitly reserves jurisdiction to enforce the settlement.                     See

id.; Metro-Goldwyn Mayer, Inc. v. 007 Safety Products, Inc., 183

F.3d 10, 14 (1st Cir. 1999).

           In the course of this appeal, neither party questioned

the district court's jurisdiction to enter orders regarding the

enforcement vel non of the putative settlement.             At oral argument,

however, the court itself voiced concern over whether a Kokkonen

issue might be lurking in the penumbra of the case.                  Having come

to the court's attention, the issue must be addressed.                After all,

                                     - 12 -
the court of appeals has an independent obligation to inquire sua

sponte into potential defects in the district court's subject-

matter jurisdiction.    See Caribbean Mgmt. Grp. v. Erikon LLC, 966

F.3d 35, 40 (1st Cir. 2020).

          Upon close examination of the record, we are satisfied

that the court below had jurisdiction to enter the challenged order

(that is, the September 5 order in which it concluded that there

had been no "meeting of the minds" and, thus, refused to enforce

the settlement agreement).   Importantly, the court had — on August

8, 2016 — entered a conditional order of dismissal that, in effect,

reserved its jurisdiction over the case for a period of sixty days.

This grace period provided a window within which the parties could

reduce their oral settlement agreement to a written agreement or,

if unsuccessful, seek some further order from the district court.

Such a conditional dismissal is precisely the type of "retaining

jurisdiction" provision contemplated by the Kokkonen Court.      511

U.S. at 381.

          Thereafter, the district court's jurisdiction was fully

restored: both the School and the Academy moved, within the sixty-

day window, to reopen the case.     The Academy's motion also asked

for enforcement of the settlement agreement.      Enforcement of the

settlement     was,   therefore,   within   the   district   court's

jurisdictional orbit.    See id.; Malave v. Carney Hosp., 170 F.3d

217, 220 (1st Cir. 1999).

                               - 13 -
                         C.    The Merits.

          This brings us to the merits:        the district court's

refusal to enforce the settlement agreement.    In a case like this

one, arising under federal law and brought in federal court,

federal common law supplies the substantive rules of decision.

See Malave, 170 F.3d at 220.   Even so, federal courts are normally

"free to borrow from state law," absent any conflict between

federal interests and the borrowed state law.    McCarthy v. Azure,

22 F.3d 351, 356 (1st Cir. 1994).

          Issues of contract formation, which often involve mixed

questions of law and fact, are reviewed on a "sliding scale."

Quint v. A.E. Staley Mfg. Co., 246 F.3d 11, 14 (1st Cir. 2001).

The district court's handling of legal questions is reviewed de

novo and its factual determinations are reviewed for clear error.

See id. Here, the key question — contract formation — is a question

of law informed by essentially undisputed facts.6   It follows that

the district court's order refusing to enforce the settlement

     6 To be sure, the parties' joint October 3, 2018 status report
to the district court indicates that the School may seek to claim
that the Academy's entitlement to the entire $25,000 payment is
conditioned upon the Academy's production of receipts evidencing
expenditures   incurred   in   complying   with   its   name-change
obligations. While any such claim seems implausible in light of
the district court's description of the settlement agreement, we
need not resolve it here. After all, such a claim goes to contract
performance, not contract formation, and can be resolved on remand
by the district court.

                               - 14 -
engenders de novo review.       See, e.g., Coffin v. Bowater Inc., 501

F.3d 80, 97 (1st Cir. 2007).

          On    appeal,   the   School    argues,    in   effect,    that   the

Academy's use of basketball jerseys that did not comply with the

terms of the settlement agreement proves that the parties, years

before, never achieved the requisite meeting of the minds.                  This

revisionist history does not withstand scrutiny.

          Federal common law on contract formation requires mutual

assent as to all material terms in order for a valid contract to

be formed.     See Quint, 246 F.3d at 14-15; Casa del Caffe Vergnano

S.P.A. v. ItalFlavors, LLC, 816 F.3d 1208, 1212 (9th Cir. 2016).

In determining whether there was mutual assent, the parties' post-

negotiation    conduct    may   provide   persuasive      evidence   that    an

agreement was reached at an earlier time.            Cf. TLT Constr. Corp.

v. RI, Inc., 484 F.3d 130, 136 (1st Cir. 2007) ("[T]here is no

surer way to find out what parties meant, than to see what they

have done." (internal citation omitted)).

          At the August 3 mediation session, both parties agreed

to the material terms of the settlement:            the School was to pay a

fixed sum of $25,000 in exchange for the Academy changing its name

to "Springfield Commonwealth Academy."        The record makes manifest

that, from and after the August 3 session, both the School and the

Academy behaved as if the settlement agreement was in full flower.

A prime example of this behavior took place on October 13, 2016,

                                  - 15 -
when the district court confirmed the existence of the settlement

agreement at a hearing related to settlement compliance.               Both

parties acknowledged that an agreement had been reached during

mediation and made pellucid that they were asking the court to

"enforce [the] settlement agreement."          The School's counsel added

that "[t]here's no dispute as to what [the mediator] read into the

record . . . that the defendant agreed to change its name to

Springfield Commonwealth Academy . . . and [the School] agreed to

pay the defendant a certain sum of money . . . ."            In light of

this representation and the Academy's acquiescence in it, the

district court supportably found that the parties had reached an

accord.

           The   court's   finding    cannot    be   discounted   as   idle

chatter.    The court gave that finding bite on November 3, 2016,

ordering the Academy to refrain from using the "Commonwealth

Academy" nomenclature in its publications, promotional materials,

athletic jerseys, and other public-facing outlets. It also ordered

the School to place the $25,000 payment in escrow.           The parties

complied without objection — a circumstance indicating that they,

like the court, believed that a meeting of the minds had taken

place.     The parties' conduct following the negotiation of an

agreement can itself constitute evidence that they considered the

agreement valid and binding.         See Román-Oliveras v. P.R. Elec.

Power Auth. (PREPA), 797 F.3d 83, 87 (1st Cir. 2015) (finding

                                - 16 -
settlement enforceable where neither party had objected to earlier

district court order recognizing parties' agreement); see also

Sound Check, Inc. v. Am. Fed'n of Telev. and Radio Artists, 204

F.3d 801, 804 (8th Cir. 2000) ("Performance is evidence that a

party intended to enter into a contract.").    The parties' conduct

speaks volumes here.

           There is more.   In an October 3, 2018 status report to

the district court, the School raised only issues regarding the

allegedly nonconforming basketball jerseys; it did not claim, say,

that the terms of the settlement agreement were incomplete or

unclear.    Equally as telling, the School's evident purpose in

raising the "basketball jersey" issue was to seek performance of

the settlement agreement.    Taken in context, we think that this

amounts to the School's reaffirmation of the material terms of the

settlement agreement that it had entered into more than two years

earlier.   See Salem Laundry Co. v. New Eng. Teamsters and Trucking

Indus. Pension Fund, 829 F.2d 278, 281 (1st Cir. 1987) (concluding

that parties' post-negotiation conduct confirmed material terms of

settlement agreement).   What is more, the School acknowledged — at

a hearing held to resolve the "basketball jersey" dispute — that

the Academy "complied with the Court's order to change [its] name,"

which reinforces the conclusion that the material terms of the

settlement agreement were in place.     See Román-Oliveras, 797 F.3d

at 87.

                               - 17 -
           We recognize that — for reasons not apparent from the

record — the parties never got around to reducing their agreement

to writing.     That failure, though, is not a fatal flaw.              As a

general matter, oral settlement agreements are enforceable as long

as the parties have mutually assented to all of their material

terms.   See Quint, 246 F.3d at 15.        So it is here.

           Agreeing upon the material terms of a contract, whether

oral or in writing, is not a guarantee that interstitial questions

will not arise.    Such questions, however, generally do not furnish

grounds for rescission of a fully formed agreement.            See Colfax

Envelope Corp. v. Local No. 458-3M, Chicago Graphic Communications

International Union, 20 F.3d 750, 752 (7th Cir. 1994) (Posner, J.)

(explaining    that   "[m]ost   contract   disputes   arise   because    the

parties did not foresee and provide for some contingency that has

now materialized" but such disputes are treated as matters of

interpretation, "not as grounds for rescinding the contract").

Here,    the   "basketball   jersey"   question    clearly    relates     to

performance, not to contract formation.

           We add, moreover, that federal common law incorporates

the "common-sense canons of contract interpretation."          Bellino v.

Schlumberger Techs., Inc., 944 F.2d 26, 29 (1st Cir. 1991) (quoting

Burnham v. Guardian Life Ins. Co. of Am., 873 F.2d 486, 489 (1st

Cir. 1989)).    Those canons validate this approach.        One such canon

is that parties have formed a binding agreement once they have

                                  - 18 -
assented to all of the material terms.         See Bourque v. FDIC, 42

F.3d 704, 708 (1st Cir. 1994).       Another canon teaches that when a

party's conduct indicates its interest in enforcing an agreement,

it cannot then evade its own obligations under the agreement.         See

AccuSoft Corp. v. Palo, 237 F.3d 31, 55-56 (1st Cir. 2001).           That

canon was triggered when the School sought to have the district

court prohibit the Academy's use of its allegedly noncompliant

basketball jerseys.

           In light of these canons, we think it plain that the

failure   to   imagine   every    possible    permutation   related    to

performance does not necessarily negate the formation of a valid

settlement agreement.    See generally TLT Constr., 484 F.3d at 135

(explaining that the presence of an ambiguity "will not necessarily

preclude the formation of a binding contract" so long as "the

parties . . . have progressed beyond the stage of imperfect

negotiation" (internal citation omitted)).       The case at hand is a

poster child for this proposition.

           The parties' differences about what the Academy was

required to do with respect to its basketball team's jerseys relate

to performance under the settlement agreement's change-of-name

provision, not contract formation.           In fact, the "basketball

jersey"   dispute   assumes   that   a   change-of-name   agreement   had

previously been reached.      Coupling the nature of this dispute with

the parties' conduct at and after the August 3 mediation session,

                                 - 19 -
the dispute cannot be said to undermine the existence of the

settlement agreement.7       See Román-Oliveras, 797 F.3d at 87; Salem

Laundry Co., 829 F.2d at 281.        Where, as here, a dispute surfaces

as to performance under a contractual term, the existence of that

dispute does not allow one of the contracting parties to treat a

settlement agreement as if it had been written in disappearing

ink.       See AccuSoft Corp, 237 F.3d at 55.

              On this record, we conclude that both parties assented

to all the material terms of a fully formed agreement:          the School

was to pay the fixed sum of $25,000 in exchange for the Academy's

compliance      with   the   agreed-upon    name-change   provision.   It

follows, as night follows day, that the settlement agreement was

valid and enforceable. We hold, therefore, that the district court

erred both in refusing to enforce the settlement agreement and in

dismissing the case after effectively declaring the settlement

agreement null and void.

III. CONCLUSION

              We need go no further. For the reasons elucidated above,

we reverse the district court's order of dismissal and remand the

       It also bears mentioning that even the dispute about the
       7

basketball jerseys proved to be a non-issue.     When the School
complained to the district court, the Academy represented that it
was currently using a jersey that complied with the School's
demands and that it was willing to seek the district court's
permission for continued use of that design.      This concession
appears to have marked a resolution of the dispute over
performance, not a repudiation of the settlement agreement.

                                   - 20 -
case for enforcement of the settlement agreement and for further

proceedings consistent with this opinion.   Should gap-filling be

required, we remind the district court that it possesses a modicum

of authority to put meat on the bare bones of the parties'

agreement.   See Restatement (Second) of Contracts, § 204 (1981);

see also Cofman v. Acton Corp., 958 F.2d 494, 497 (1st Cir. 1992).

Costs shall be taxed in favor of the Academy.

Reversed and remanded.

                              - 21 -