Opinion
No. 11–P–1423.
2012-06-21
Jacqueline ROMAIN v. Miriam DEVER.
The defendant appeals from the entry of the separate and final judgment pursuant to rule 54(b), arguing that the parties never reached a binding and enforceable agreement.
By the Court (TRAINOR, SMITH & SULLIVAN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendant appeals from a separate and final judgment entered pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974), following the allowance of the plaintiff's motion for summary judgment on her complaint for breach of a settlement agreement. We reverse and remand.
The plaintiff filed a verified complaint for breach of contract alleging that the defendant, her former financial adviser, agreed to settle claims of alleged financial mismanagement for $100,000, but failed to do so. The defendant answered, denying wrongdoing and denying the existence of a binding settlement agreement. The defendant also counterclaimed for fraud and deceit, abuse of process, and defamation.
Thereafter, the parties filed cross motions for summary judgment on the breach of contract claim. The plaintiff opposed the defendant's motion, claiming that an enforceable settlement agreement was formed during a March 28, 2007, telephone conversation between the parties, in which the defendant offered to pay the plaintiff $100,000 in exchange for the plaintiff's release of the defendant from all demands and claims. The defendant asserted that the terms of the proposed release were never agreed upon, and that multiple terms remained outstanding. The judge denied the defendant's motion and allowed the plaintiff's motion, stating:
“It is clear from the Verified Complaint and attachments thereto that the defendant agreed to pay plaintiff $100,000 and plaintiff would execute a release. A settlement agreement becomes a binding contract and will be enforced by the Court.”
The defendant appeals from the entry of the separate and final judgment pursuant to rule 54(b), arguing that the parties never reached a binding and enforceable agreement.
“Faced with allowance of a motion for summary judgment, we review the record de novo. See Miller v. Cotter, 448 Mass. 671, 676 (2007). In doing so, we look to see ‘whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.’ “ Dennis v. Kaskel, 79 Mass.App.Ct. 736, 740 (2011) (citation omitted).
A valid settlement agreement is treated as an enforceable contract. See Vasconcellos v. Arbella Mut. Ins. Co., 67 Mass.App.Ct. 277, 282 (2006). A settlement agreement not yet memorialized in a signed writing is enforceable only if there is agreement of the parties on all material terms, as well as a mutual intent to be bound. See McCarthy v. Tobin, 429 Mass. 84, 87 (1999); Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 878 (2000) ( Malouf ). “While it is true that the parties' intention to execute a final written agreement ‘justifies a strong inference that the parties do not intend to be bound’ until the agreement is executed, it is also true that if ‘all the material terms ... have been agreed upon, it may be inferred that the writing to be drafted and delivered is a mere memorial of the contract.’ “ Malouf, supra at 879–880 (citation omitted). Any questions whether material terms remain to be negotiated should generally be reserved for the jury. See Bresky v. Rosenberg, 256 Mass. 66, 75 (1926); Malouf, supra at 879. Here, the record contains documents and sworn testimony showing that factual disputes exist as to whether the parties had an enforceable agreement pending a signed written document, and whether there was agreement on the material terms of the settlement.
There are material facts in dispute as to whether the parties conditioned a final agreement on a written document. For example, the evidence in the summary judgment record includes a letter which states that “mutual agreement” awaited an “appropriate signed agreement.” This language permits an inference that the parties did not intend to be bound until the written agreement was finalized. See Dennis v. Kaskel, 79 Mass.App.Ct. at 742, citing Goren v. Royal Invs. Inc., 25 Mass.App.Ct. 137, 140 (1987). The inference creates a dispute of material fact as to whether there was a binding oral agreement. See Wang Labs., Inc. v. Applied Computer Sciences, Inc., 958 F.2d 355, 359 (Fed.Cir.1992).
We are sensitive to the concerns of a trial judge who may be wary of litigants who have “settled” and then attempt to extract additional concessions or who simply wish to back out. However, as the Wang Labs. case demonstrates, parties sophisticated and unsophisticated may encounter difficulties in the settlement process. Here, no representations of settlement terms were made to a mediator or the court. Compare Correia v. DeSimone, 34 Mass.App.Ct. 601, 602–603 (1993) (settlement reported to court and jury discharged; terms not indefinite); Targus Group Intl., Inc. v. Sherman, 76 Mass.App.Ct. 421, 428–434 (2010) (granting summary judgment based on a written “agreement in principle” entered into in mediation). The contemporaneous record in this case states that the parties must agree on a written document, and since the disputes as to terms arose quickly, the factual record precludes summary judgment.
The record also includes numerous subsequent written communications between the parties raising issues that remained unresolved as late as August 13, 2007. Among the terms that remained outstanding were the terms of the release. In addition, the defendant sought liquidated damages and confidentiality clauses. There is extensive correspondence regarding the tax treatment of the defendant's payment. Whether the parties entered into a binding oral agreement that consisted of an agreement to pay money in exchange for a simple release and whether the subsequent efforts to modify the terms of the release constituted a breach, or whether material terms legitimately remained to be negotiated, is a question of fact.
Where, as here, the evidence is disputed, the contract's existence is “a question for resolution by a fact finder, not for resolution on summary judgment.” Dennis v. Kaskel, supra at 744. See LeMaitre v. Massachusetts Turnpike Authy., 70 Mass.App.Ct. 634, 637–638 (2007), S. C., 452 Mass. 753 (2008), and cases cited. This record, viewed in the light most favorable to the defendant, shows that there is a genuine issue of material fact as to whether the parties entered into a valid and binding agreement.
The judgment is reversed, and the case is remanded to the Superior Court for further proceedings. The motion for attorney's fees is denied.
So ordered.