Court Opinion

ID: 2762451
Source: CourtListenerOpinion
Date Created: 2014-12-18 17:06:28.404523+00
Date Added: 2024-06-11T12:45:45.051030
License: Public Domain

MAINE SUPREME JUDICIAL COURT                                        Reporter of Decisions
Decision: 2014 ME 147
Docket:   Cum-13-444
Argued:   September 10, 2014
Decided:  December 18, 2014

Panel:          SAUFLEY, C.J., and ALEXANDER, SILVER, MEAD, GORMAN, JABAR, and HJELM,
                JJ.

                            2301 CONGRESS REALTY, LLC

                                            v.

                            WISE BUSINESS FORMS, INC.

SAUFLEY, C.J.

         [¶1]     This appeal arises from a lease dispute between landlord 2301

Congress Realty, LLC, and tenant Wise Business Forms, Inc., and the parties’

resolution of that dispute in a settlement agreement reached through mediation.

Wise appeals from a judgment entered in the Superior Court (Cumberland County,

Warren, J.) denying its motion for summary judgment on its counterclaim for

enforcement of the settlement agreement. Because 2301 Congress has signed an

agreement reflecting all of the terms of the settlement reached through mediation,

we affirm the court’s determination that the counterclaim seeking to enforce the

settlement is moot.
2

                                 I. BACKGROUND

         [¶2]   From May 2002 to May 2012, Wise leased from 2301 Congress

business premises located at 2301 Congress Street in Portland pursuant to a written

lease.    In July 2012, 2301 Congress filed a complaint in the Superior Court

alleging that Wise had breached maintenance and repair provisions contained in

the lease and that Wise had converted three humidifiers that were affixed to the

property.       Wise filed an answer denying these allegations and asserted a

counterclaim for breach of contract, alleging that 2301 Congress had failed to

perform certain repairs and maintenance required by the lease.

         [¶3] On November 1, 2012, Robert Willis (owner of 2301 Congress) and

Charles Teets (chief operating officer and general counsel for Wise) appeared with

counsel at a mediation before a private attorney. After the mediation, the mediator

drafted a summary settlement agreement, stating in whole:

               2301 Congress Realty, LLC (2301) and Wise Business Forms,
         Inc. (Wise) after mediation this 1st day of November, 2012 agree to
         resolve all disputes between them on the following summary terms,
         with final settlement documents to be prepared by counsel for Wise
         and reviewed by counsel for 2301:

         1.     Wise will place the three humidifiers (GTS-100, GTS-200, and
                GTS-400CAB) (in as is condition) on pallets for pick up by
                2301.

         2.     Wise will pay 2301 $48,000 within 20 days of execution of
                final settlement documents.
                                                                                  3

      3.     The final settlement documents will include a general mutual
             release of all claims of any kind or nature, whether known or
             unknown. The release will include a release both by and for the
             benefit of Bob Willis, and will include a release of Wise’s
             insurer.

      4.     The pending Superior Court litigation (claims and
             counterclaims) will be dismissed with prejudice and without
             costs or attorneys’ fees.

Both parties signed this summary agreement at the mediation. On that same day,

both of the parties and the mediator also signed an alternative dispute resolution

conference report that stated, “As a result of the ADR Conference(s), this action is

. . . Fully Resolved.”

      [¶4] After the mediation, 2301 Congress prepared and presented to Wise a

draft of a final settlement agreement. A new disagreement arose regarding the

scope of the “general mutual release of all claims” described in paragraph 3 of the

summary agreement. 2301 Congress initially contended that the agreement did not

cover claims for indemnification related to hazardous materials, and it sought to

explicitly exclude those claims from the mutual release. Wise contended that the

language in paragraph 3 of the agreement was binding and precluded any

reservation of the right to seek indemnification against Wise.

      [¶5] On November 15, 2012, the court entered an order that had been

prepared by the mediator after the parties settled the case: “The entry will be:

‘Report of ADR Conference filed. Case resolved. Order/judgment is entered.’”
4

On that same day, because the parties had been unable to agree on the language

regarding the mutual release, Wise moved to amend its original counterclaim to

add a second count for breach of the summary settlement agreement. The court

granted Wise’s motion to amend its counterclaim, but the court declined to make

findings on whether the summary settlement agreement was enforceable. The

order further stated that “all proceedings with respect to the claims originally

asserted in this action are stayed until that counterclaim is resolved.”

      [¶6] Wise filed its answer and amended counterclaim, which included the

second counterclaim for breach of the agreement. Wise alleged that “[t]he final

settlement documents have not been executed because [2301 Congress] has refused

to sign a release that conforms to the [summary agreement].” 2301 Congress filed

an amended answer to Wise’s counterclaims.

      [¶7] In April 2013, Wise moved for summary judgment on its counterclaim

for enforcement of the agreement. The next month, 2301 Congress executed and

sent to Wise a complete settlement agreement and mutual release that contained

language that comported with the language in paragraph 3 of the summary

settlement agreement. In so doing, 2301 Congress removed any reservation of a

right to seek indemnification against Wise. Wise has acknowledged that this

settlement agreement now includes language consistent with the language of the

summary agreement but has declined to sign the agreement, contending that 2301
                                                                                     5

Congress’s counsel had stated in a separate communication to Wise that 2301

Congress still intended to reserve indemnification claims from the mutual release.

      [¶8] Responding to Wise’s motion, 2301 Congress filed a cross-motion for

summary judgment, requesting that the court deny Wise’s summary judgment

motion as moot and compel Wise to execute the complete settlement agreement

that was already signed by 2301 Congress. The cross-motion further sought a

summary judgment ordering the return of the three humidifiers and payment of

$48,000 to 2301 Congress pursuant to the terms of the summary agreement.

Alternatively, 2301 Congress requested that the court declare the summary

agreement void and unenforceable because there was no meeting of the minds

regarding the scope of the mutual release.

      [¶9] On August 30, 2013, the court (1) denied Wise’s motion for summary

judgment as moot, (2) granted summary judgment to 2301 Congress as to the

$48,000 payment and the return of the three humidifiers, and (3) denied the

motions in all other respects, including “with respect to the interpretation or effect

of the settlement agreement or release . . . because those issues present a

hypothetical and non-justiciable dispute at this time.” Wise appealed to us.

                                 II. DISCUSSION

      [¶10] “Settlement agreements are analyzed as contracts, and the existence of

a binding settlement is a question of fact.” In re Estate of Snow, 2014 ME 105,
6

¶ 11, 99 A.3d 278 (quotation marks omitted). For a settlement agreement to be

binding, the parties must have mutually intended “to be bound by terms

sufficiently definite to enforce.” Id. (quotation marks omitted). When parties

report to the court that they have reached a settlement and have memorialized the

terms of the agreement and expressed clear consent to those terms, “that settlement

becomes an enforceable agreement and, upon acceptance by the court, is

incorporated as a judgment of the court.” Muther v. Broad Cove Shore Ass’n, 2009
ME 37, ¶ 7, 968 A.2d 539. If a release is “absolute and unequivocal” in its terms,

it “cannot be explained by parol evidence and must be construed according to the

language that the parties have seen fit to use.” Norton v. Benjamin, 220 A.2d 248,

253 (Me. 1966) (quotation marks omitted).

       [¶11] Here, the agreement that the parties reached through mediation was

broad and clear: “The final settlement documents will include a general mutual

release of all claims of any kind or nature, whether known or unknown.” This

agreed upon language included no reservation of rights to bring indemnification

claims. 2301 Congress eventually executed a complete settlement agreement that

contained the required general release, but Wise refused to sign it because it feared

that 2301 Congress still considered certain types of claims to be outside the scope

of that release.
                                                                                 7

      [¶12] The primary question before the court on the cross-motions was

whether the parties had reached a sufficient meeting of the minds to create a

binding contract and judgment by executing the summary settlement agreement,

and whether the release signed by 2301 Congress satisfied the terms of that

agreement. At mediation, the parties agreed to execute a general release without

any provision for the exclusion of claims, and they are bound by that agreement.

Because 2301 Congress executed a general release, the court correctly determined

that 2301 Congress satisfied its obligation pursuant to the summary settlement

agreement. Notwithstanding Wise’s apprehension that, at some point in the future,

2301 Congress might act in contradiction to that release, the release now signed by

2301 Congress provides for no exclusions.       Once 2301 Congress signed the

release, there was no controversy remaining for adjudication.

      [¶13] Because, after a brief initial disagreement over the language of the

release, 2301 Congress executed a general release that complied with the summary

agreement reached through mediation, the court correctly determined that Wise’s

motion for summary judgment on its counterclaim seeking to enforce the summary

settlement agreement was moot.

      The entry is:

                      Judgment affirmed.
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On the briefs:

        Brendan P. Reilly, Esq., Jensen Baird Gardner & Henry,
        Portland, for appellant Wise Business Forms, Inc.

        Jennifer S. Riggle, Esq., and Robert P. Hayes, Esq., Germani
        Martemucci Riggle & Hill, Portland, for appellee 2301
        Congress Realty, LLC

At oral argument:

        Brendan P. Reilly, Esq., for appellant Wise Business Forms,
        Inc.

        Jennifer S. Riggle, Esq., for appellee 2301 Congress Realty,
        LLC

Cumberland County Superior Court docket number CV-2012-297
FOR CLERK REFERENCE ONLY