Court Opinion

ID: 4020577
Source: CourtListenerOpinion
Date Created: 2016-08-01 21:08:13.635889+00
Date Added: 2024-06-11T14:30:20.537839
License: Public Domain

This opinion will be unpublished and
                           may not be cited except as provided by
                           Minn. Stat. § 480A.08, subd. 3 (2014).

                                 STATE OF MINNESOTA
                                 IN COURT OF APPEALS
                                       A16-0103

                                       Anita W. Sluck,
                                         Appellant,

                                             vs.

                                     Terence E. Rapacz,
                                        Respondent.

                                    Filed August 1, 2016
                                          Affirmed
                                       Stauber, Judge

                               Hennepin County District Court
                                 File No. 27-CV-12-14348

Richard S. Eskola, Columbia Heights, Minnesota (for appellant)

Mary M.L. O’Brien, Kathleen M. Ghreichi, Meagher & Geer, P.L.L.P., Minneapolis,
Minnesota (for respondent)

         Considered and decided by Stauber, Presiding Judge; Ross, Judge; and Johnson,

Judge.

                          UNPUBLISHED OPINION

STAUBER, Judge

         Appellant challenges the district court’s order enforcing a settlement agreement,

arguing that the parties did not have a meeting of the minds and that her attorney did not

have authority to accept the settlement on her behalf. We affirm.
                                           FACTS

       Respondent Terrence Rapacz, a veterinarian, treated appellant Anita Sluck’s dogs.

In October 2009, Rapacz asked appellant’s late husband, John Sluck (Sluck), for a

$60,000 loan to cover delinquent real-estate taxes. Sluck loaned him $60,000, as well as

another $190,000 in March 2010. Despite the fact that Sluck was an attorney, the terms

of the loan were vague; Rapacz agreed to an interest rate of five percent per annum, but

there were no scheduled payments or a due date, and the loans were not documented in

writing. Rapacz asserted that he told Sluck he would make interest payments when he

was able to do so. Rapacz made three monthly interest payments of $1,041.75, and one

double payment of $2,083.50, in 2010, but made no other payments on the loans. Sluck

died in January 2011.

       Appellant has been incapacitated since April 2008. In 2009 or 2010, Daniel

Koehler, a former neighbor of the Slucks, was given a power of attorney to act on behalf

of both Sluck and appellant. Koehler began this breach-of-contract and unjust-

enrichment action to collect the loan balance from Rapacz.

       After a June 2013 court trial on the contract and unjust-enrichment claims, the

district court held that appellant failed to present sufficient evidence of a binding

contract. But the district court also concluded that appellant “met her burden of proof in

establishing a claim for unjust enrichment,” and ordered judgment against Rapacz in the

amount of $250,000 at five percent interest. Rapacz’s motion for amended findings or

new trial was denied. Rapacz appealed to this court, which reversed the district court’s

decision and remanded with the direction to determine if Rapacz had the current ability to

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repay the loans. Sluck v. Rapacz, No. A13-2268, 2014 WL 4056071, at *2 (Minn. App.

Aug. 18, 2014). This court also concluded that Rapacz had not been unjustly enriched by

failure to pay interest because there was no contract. Id.

       On remand, the parties conducted more discovery. Appellant alleged that Rapacz

had the ability to pay because he was living extravagantly. Rapacz filed documents

showing that Koehler sought to have his wife and himself made beneficiaries of one of

the Sluck trusts.

       A few days before the hearing on remand, Rapacz’s attorney, Kathleen Ghreichi,

sent a final settlement offer to appellant’s attorney, Richard Eskola. The terms of the

offer were set forth in an email:

                    *$1300 per month at 2.5% interest. If the practice is
              sold during Dr. Rapacz’s lifetime, those monthly payments
              would stop. At that juncture, [appellant] would instead receive
              25% of the first down payment on the sale of the business, and
              10% of any remaining payments until interest/principal are
              met.

              *All repayment obligations end upon Dr. Rapacz’s death.

Eskola replied that he had forwarded the settlement offer to Koehler. Three days later,

Eskola said he had “not yet heard back from my client on your last proposal and will try

to contact him this afternoon.” Later that day, Eskola called Ghreichi and said that

Koehler accepted the offer on appellant’s behalf. The same day, Eskola called the district

court and sent an email to the district court’s clerk indicating that “this case has settled

and Ms. Ghreichi is going to draft the settlement documents.” Ghreichi drafted

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settlement documents and forwarded them to Eskola. The settlement documents

conformed to the settlement proposal.

       On July 17, 2015, Eskola emailed Ghreichi, saying “[W]e have a

misunderstanding, my client will only agree to continue the $1,300.00/month payments

even if your client sells the business . . . (instead of the 10 percent). Until his death or

until the princip[al] amount is paid in full. If this is a problem, please contact me.”

       Rapacz moved for enforcement of the settlement agreement. Koehler submitted

an affidavit stating that he “misunderstood the terms of the proposed settlement as

explained to [him] by [his] counsel.” Koehler averred that he thought the payments

would continue even if Rapacz sold his practice.

       After a hearing on September 22, 2015, the district court granted Rapacz’s motion

to enforce the settlement agreement. The district court determined that the emailed offer

was unambiguous, the email had been forwarded to Koehler, who was acting on

appellant’s behalf, and appellant’s attorney informed the court that the matter had been

settled. The court reasoned, “Simply because [appellant] has changed her mind and no

longer likes the terms of the settlement, are not reasons to vacate a settlement.” This

appeal followed.

                                       DECISION

       A settlement agreement is a contract. Dykes v. Sukup Mfg. Co., 781 N.W.2d 578,

581-82 (Minn. 2010). When contract terms are unambiguous, interpretation of a contract

is a question of law. Roemhildt v. Kristall Dev., Inc., 798 N.W.2d 371, 373 (Minn. App.

2011), review denied (Minn. July 19, 2011). An unambiguous contract will be enforced

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according to the language of the contract. Dykes, 781 N.W.2d at 582. “[District] courts

have the inherent power to summarily enforce a settlement agreement as a matter of law

when the terms of the agreement are clear and unambiguous.” Voicestream Minneapolis,

Inc. v. RPC Props., Inc., 743 N.W.2d 267, 272 (Minn. 2008) (quotation omitted).

       Appellant argues that there was no meeting of the minds necessary to the

formation of a contract because he was mistaken as to its terms. As with any contract,

“there must be a definite offer and acceptance with a meeting of the minds on the

essential terms of the agreement.” TNT Props., Ltd. v. Tri-Star Developers LLC, 677
N.W.2d 94, 100-01 (Minn. App. 2004). But “[a] binding contract can exist despite the

parties’ failure to agree on a term if the term is not essential or can be supplied.” Id. at

101. An agreement may be affirmed “despite some incompleteness and imperfection of

expression,” if the parties’ intent can be discerned. Id. (quotation omitted).

       The district court wrote, “The written offer is unambiguous and clearly lays out

the loan outcome in the event the business is sold.” The email setting forth the settlement

terms included the amount and frequency of payments and the interest rate, and stated, “If

the practice is sold during Dr. Rapacz’s lifetime, those monthly payments would stop.”

The agreement also sets forth the terms of what happens after the practice is sold and in

the event of Rapacz’s death. These terms are definite enough to create a binding

contract.

       Appellant argues that her attorney lacked authority to enter into a binding

settlement agreement. “An attorney may bind a client, at any stage of an action or

proceeding, by agreement . . . made in writing and signed by such attorney.” Minn. Stat.

                                               5
§ 481.08 (2014). In order to do so, however, the attorney must have the client’s express

authority to enter into a settlement. Schumann v. Northtown Ins. Agency, Inc., 452
N.W.2d 482, 483-84 (Minn. App. 1990). But a written expression of authority is not

required; a client’s grant of authority to settle can be expressed through conduct.

Rosenberg v. Townsend, Rosenberg & Young, Inc., 376 N.W.2d 434, 437 (Minn. App.

1985). For example, in Rosenberg, this court concluded that the following record

evidence established the attorney’s authority to settle his client’s claim: (1) a letter from

the opposing party confirming a settlement agreement reached during a telephone

conversation; (2) the opposing party’s oral representation to the court that the client’s

attorney had authority to settle; (3) a previous settlement agreement in the same amount;

and (4) no immediate action by the client to repudiate the settlement. Id. And in

Schumann, (1) the client’s attorney sent the opposing party a letter accepting the

settlement offer; (2) a copy of the letter was sent to the client; and (3) the letter indicated

that the client’s attorney had contacted the client and the client had authorized the

settlement. 452 N.W.2d at 484.

       Here, in an email exchange, Eskola stated that he “forwarded” Ghreichi’s email

containing the offer to Koehler. Three days later, Eskola said that he would contact

Koehler because he had not heard from him. Eskola called Ghreichi on July 7 to say that

Koehler had accepted the offer and subsequently called the district court to say that the

case was settled. Ten days later, and three days after receiving the formal settlement

documents, Eskola reported that Koehler said that he misunderstood the terms of the

settlement. Although in his affidavit Koehler said, “I misunderstood the terms of the

                                               6
proposed settlement as explained to me by my counsel,” he does not deny receiving the

forwarded email, or initially authorizing the settlement.

       “Settlement of disputes without litigation is highly favored, and such settlements

will not be lightly set aside by the courts. The party seeking to avoid a settlement has the

burden of showing sufficient grounds for its vacation.” Johnson v. St. Paul Ins. Co., 305
N.W.2d 571, 573 (Minn. 1981) (citation omitted). The district court’s decision on

whether to vacate a settlement agreement will not be reversed absent an abuse of

discretion. Id. Later dissatisfaction with the terms of a settlement agreement is not a

sufficient basis for voiding the agreement. See Schumann, 452 N.W.2d at 485 (“A party

who voluntarily enters into a settlement agreement cannot avoid the agreement upon

determining . . . that the agreement has ultimately become disadvantageous or the

settlement amount paltry.”). The district court’s decision to enforce the settlement

agreement was not an abuse of discretion.

       Affirmed.

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