Shoels v. Klebold , 375 F.3d 1054 ( 2004 )


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  •                                                               F I L E D
    United States Court of Appeals
    Tenth Circuit
    PUBLISH
    JUL 21 2004
    UNITED STATES COURT OF APPEALS
    PATRICK FISHER
    Clerk
    TENTH CIRCUIT
    MICHAEL SHOELS and VONDA
    SHOELS, as parents of decedent
    ISAIAH SHOELS,
    Plaintiffs-Appellants,
    v.                                      No. 03-1295
    THOMAS KLEBOLD, SUSAN
    KLEBOLD, WAYNE HARRIS, and
    KATHERINE HARRIS,
    Defendants-Appellees,
    and
    JEFFERSON COUNTY SHERIFF
    JOHN STONE, individually and in his
    official capacity, FORMER
    JEFFERSON COUNTY SHERIFF
    RONALD BECKHAM, individually
    and in his official capacity,
    JEFFERSON COUNTY SHERIFF’S
    DEPARTMENT, NEIL GARDNER,
    individually, JOHN HICKS,
    individually, MARK M. MILLER,
    individually, T. WILLIAMS,
    individually, MIKE GUERRA,
    individually, PHILIP LEBEDA,
    individually, JOHN or JANE DOES 2
    THROUGH 10 (all deputies in the
    Jefferson County Sheriff’s
    Department), individually,
    JEFFERSON COUNTY SCHOOL
    DISTRICT R-1, FRANK
    DeANGELIS, individually and in his
    official capacity, HOWARD
    CORNELL, individually and in his
    official capacity, PETER HORVATH,
    individually, WILLIAM BUTTS,
    individually, GARRETT TALOCCO,
    individually, JUDY KELLY,
    individually, TOM TONELLI,
    individually, TOM JOHNSON,
    individually, JOHN or JANE DOES 11
    THROUGH 30, individually, JAMES
    ROYCE WASHINGTON, RONALD
    F. HARTMAN, J.D. TANNER, doing
    business as Tanner Gun Show,
    PHILLIP DURAN, MARK MANES,
    and ROBYN ANDERSON,
    Defendants.
    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF COLORADO
    (D.C. No. 00-B-1614)
    Geoffrey Nels Fieger (Victor S. Valenti with him on the briefs), Fieger, Fieger,
    Kenney & Johnson, P.C., Southfield, Michigan, for Plaintiffs-Appellants.
    C. Michael Montogomery (Steven G. Greenlee with him on the brief),
    Montgomery, Kolodny, Amatuzio & Dusbabek, L.L.P., Denver, Colorado, for
    Defendants-Appellees Wayne Harris and Katherine Harris.
    Frank D. Patterson (Gregg E. Kay and Kerri J. Atencio with him on the brief),
    Patterson, Nuss & Seymour, P.C., Englewood, Colorado, for Defendants-
    Appellees Thomas Klebold and Susan Klebold.
    Before EBEL, ANDERSON, and McCONNELL , Circuit Judges.
    -2-
    McCONNELL , Circuit Judge.
    Five years after the tragedy at Columbine High School, we are called to
    determine whether the district court rightly put to rest a lawsuit between Michael
    and Vonda Shoels, whose son Isaiah was killed at Columbine, and the parents of
    the two shooters. Over strenuous objection, the district court found that the
    Shoels, through counsel, had entered a binding agreement to settle their claims in
    April of 2001. Because the Shoels have provided us with no reason to think that
    the district court’s factual findings were clearly erroneous, we affirm the order of
    the district court.
    BACKGROUND
    In the year 2000, Michael and Vonda Shoels sued a number of defendants
    for failing to prevent or facilitating the killing of their son. Two groups of
    defendants are relevant to this appeal: first, the Harrises and Klebolds, parents of
    the shooters, and second, three associates of the shooters named Mark Manes,
    Phillip Duran, and Robyn Anderson, who were later added to the lawsuit
    (collectively referred to as the “Manes group”). The Shoels’ primary legal
    counsel was Geoffery Fieger, a Michigan attorney who retained the exclusive
    right to communicate with the Shoels and, for the most part, was the only one
    authorized to negotiate on their behalf. Mr. Fieger worked with Jack Beam &
    -3-
    Associates as local counsel, and especially with Douglas Raymond, an associate
    at that firm. In the summer of 2000, Mr. Fieger specifically authorized local
    counsel to offer to settle with the Harrises and Klebolds if they would pay the
    policy limits of their homeowner’s insurance to the Shoels and one other family.
    Reluctant to settle with the families of two victims without simultaneously
    resolving the potential claims of all the other victims and their families, the
    Klebolds suggested that they might want to involve other potential plaintiffs in
    the process. Mr. Beam urged them not to do so, and warned in a letter that their
    offer was “the only attempt which will be made by these families . . . to settle
    within your clients’ policy limits,” and that “settlement with Mr. Fieger’s clients
    will substantially reduce the Klebolds’ personal exposure by not facing a trial
    with a lawyer with Mr. Fieger’s elan.” App. 192-93.
    In the following months, a growing number of potential claimants became
    involved in trying to work out a global settlement. One of the attorneys, Stephen
    Wahlberg, emerged as the primary spokesman for these plaintiffs. While he was
    not authorized to act on behalf of any other attorneys’ clients, he was the
    intermediary who would relay communications back and forth between the
    various defendants and the various plaintiffs. In September of 2000, he
    demanded that the Klebolds, Harrises, and Mark Manes pay their policy limits in
    full (an aggregate amount of roughly $2.4 million) to a group of thirteen plaintiffs
    -4-
    in return for releasing their claims. Although formally included in this group, the
    Shoels remained tentative about actually accepting a settlement until they knew
    more definitely the amount they could expect to receive.
    In November of 2000, the Klebolds, the Harrises, and Mark Manes made a
    counteroffer. They pointed out that there were still twenty-four potential
    claimants outside of Mr. Wahlberg’s group, whose claims would not be resolved
    by the proposed settlement. Six of those claimants, represented by Jim Rouse,
    had refused to join Mr. Wahlberg’s coalition despite substantial efforts to include
    them. In their opinion, any settlement that allowed the Harrises and Klebolds to
    resolve the claims against them using only insurance proceeds – and thereby to
    escape “scot-free” with respect to their personal assets – was unacceptable. They
    wanted the Harrises and Klebolds to pay personally for the victims’ losses, at
    least to some extent, and apparently also demanded a chance to confront the
    Harrises and Klebolds face to face. The other eighteen had not been represented
    by counsel up to that point, and it was not known whether they were interested in
    pursuing their potential legal claims. The defendants acknowledged that it was
    unlikely that Mr. Rouse’s group would settle, but offered to settle with the
    remaining thirty-one claimants for $1.6 million, assuming that the Wahlberg
    group could get the other eighteen to agree.
    -5-
    To muster the required consensus, Mr. Wahlberg’s group enlisted the help
    of an organization called the Judicial Arbiter Group, an association of retired
    judges who provide alternative dispute resolution services. The group agreed to
    help contact the remaining victims and/or their families; one of its members,
    Judge Jim Carrigan, agreed to help the various plaintiffs divide the settlement
    proceeds by serving as an arbiter who would determine the relative value of each
    claim, based on the claimant’s damages and likelihood of success. Eventually,
    all but four of the eighteen families agreed to join in the Wahlberg settlement
    negotiations, and the remaining four seemed unlikely to sue at all. In March
    2001, arbitration agreements were sent out to each of the twenty-seven
    participating families. Because Mr. Raymond, the Shoels’ local counsel, had not
    received the Shoels’ copy in early April, Mr. Wahlberg sent a second copy of the
    arbitration agreement on April 13, stating that everyone else had signed and
    requesting the Shoels’ signature.
    Meanwhile, the parties continued to negotiate which plaintiffs would settle
    with each group of defendants, how much of their insurance proceeds each group
    of defendants would pay to settle the plaintiffs’ claims, and how much they would
    be allowed to set aside to defend against any other claims not covered by the
    settlement. On March 14, Mr. Wahlberg faxed to the Shoels’ counsel a letter
    from Mr. Rouse confirming that his clients would not settle with the Klebolds and
    -6-
    Harrises. Then, on April 9, Mr. Wahlberg advised the Shoels’ counsel that Mr.
    Rouse thought his clients would participate in arbitration of their claims against
    Defendants Manes and Duran. Mr. Wahlberg also speculated that some of Mr.
    Rouse’s clients might have second thoughts about the Klebolds and Harrises as
    well.
    A settlement conference was held on April 10, 2001, the results of which
    were sent by fax to the parties (including Jack Beam, local counsel for the Shoels)
    in a letter dated April 16. That letter made it clear that the Rouse plaintiffs were
    not participating in the settlement with the Klebolds and Harrises, but suggested
    that they would participate in the other settlements. In the Klebold/Harris
    negotiations, the parties ultimately agreed that instead of negotiating the amount
    to be reserved for the Rouse group and other nonparticipating claimants, they
    would let the arbiter determine it. According to the final proposal set forth in the
    letter, the Harrises and Klebolds would put 98% of their insurance policy limits
    ($1,568,000) into escrow, leaving the other 2% to cover possible zone-of-danger
    claims. Then, the arbiter would determine what share of the escrowed funds each
    potential claimant (including the nonsettling claimants) should receive. The
    amounts attributable to nonsettling plaintiffs would be held in reserve to cover
    any successful claims, and any unused portion of those funds would be distributed
    to the settling plaintiffs after the statute of limitations expired.
    -7-
    The proposed settlements with Defendants Manes, Anderson, and Duran
    had a similar structure, with one exception: those defendants refused to pay their
    insurance proceeds unless everyone,   1
    including the Rouse group, agreed to release
    their claims. Furthermore, Defendants Manes and Duran were likely judgement-
    proof, and Anderson was threatening to file for bankruptcy if a unanimous
    settlement was not reached; this made proceeding to trial considerably less
    attractive. According to the April 16 letter, Mr. Manes had agreed to deposit
    $720,000 of insurance proceeds immediately and hold the remaining $80,000 in
    reserve until the statute of limitations ran. Mr. Duran had “preliminarily” agreed
    to deposit $250,000 of his insurance money so long as everyone participated, and
    Ms. Anderson had $300,000 of insurance proceeds available for settlement,
    though her settlement proposal was not yet finalized.
    By April 18, the six families represented by Jim Rouse had definitely
    agreed to settle with the Manes group. This left only the Shoels who had not
    committed to settle with those defendants. Mr. Wahlberg called Mr. Raymond,
    explained that “everyone else was on board,” including the Rouse group, and said
    that it was time for the Shoels to make a choice. In Mr. Wahlberg’s recollection,
    it was clear that he was speaking about the negotiations with Manes, Anderson,
    1
    This apparently did not include the four potential claimants who had
    refused to participate in any settlement negotiations whatsoever.
    -8-
    and Duran. Two days after the April 18 conversation, however, Mr. Raymond
    claimed that Mr. Wahlberg falsely led him to believe that the Rouse group was
    settling with the Harrises and Klebolds as well. In any event, Mr. Raymond said
    that he would have to speak with Mr. Fieger and his clients. They were not able
    to reach Mr. Fieger that day, but the next morning (April 19) Mr. Wahlberg had
    another conversation with Mr. Raymond and someone at Mr. Fieger’s office,
    again stressing that the Shoels needed to decide what they were going to do and
    give him something in writing. Later that same morning, Mr. Fieger’s office sent
    a letter to Mr. Wahlberg, apparently signed by Mr. Fieger,   2
    which read as follows:
    This letter shall serve to confirm that Mr. and Mrs.
    Shoels have approved settlement with Defendants
    Klebold, Harris, Manes, Anderson, and Duran.
    App. 153. Mr. Wahlberg immediately faxed that letter on to counsel for the
    Klebolds and Harrises, together with a general acceptance letter on behalf of all
    the claimants.
    2
    Mr. Fieger testified at the hearing that it was actually a secretary who
    drafted, signed, and sent the letter at his instruction, and that he had never meant
    to do more than express the Shoels’ continued willingness to be part of the
    negotiations without committing to be bound by the arbitration. As far as we can
    tell from the record, he did not come forward with this story until more than a
    year after the April 19 letter was sent, even though he disputed the existence of a
    settlement agreement almost immediately. Furthermore, on cross-examination,
    Mr. Fieger expressed some uncertainty about whether he had signed the letter.
    The district court found Mr. Fieger’s claim that the letter was “misworded” to be
    unbelievable, Op. 9, and we will not second-guess its credibility determinations.
    -9-
    Within twenty-four hours, this apparently successful conclusion to the
    settlement negotiations began to unravel. When the Shoels’ attorneys realized
    that the Rouse group was not settling with the Klebolds and Harrises, they
    immediately repudiated the agreement. Mr. Raymond sent a letter saying that
    they were “shocked” that the Rouse group was not settling with the Klebolds and
    Harrises, which he considered “contrary to the representation that ‘everybody is
    on board except the Shoels.’” He redescribed Mr. Fieger’s letter as saying that the
    Shoels had “tentatively approved settlement,” and insisted that the Shoels would
    not settle until they got “the full deal in writing.” App. 202.
    That same day, Mr. Wahlberg wrote back, expressing dismay that Mr.
    Raymond was “shocked” and reviewing the terms of the settlement. App. 582.
    Mr. Raymond responded, saying, “I want to make it clear to you that we were not
    shocked that there was a settlement. We were shocked that there was a settlement
    that did not include Rouse’s group as to Klebold and Harris.” App. 180. Over
    the next several days, Mr. Fieger requested more information about the precise
    amount that the Shoels could expect to receive. Mr. Wahlberg explained the
    agreed-on process and that until the arbiter had ruled, it was impossible to put a
    precise value on the Shoels’ claim under the settlement. However, he eventually
    estimated that the Shoels’ claim might be valued at somewhere between $28,000
    and $84,000. Mr. Fieger responded that his clients would “    never settle a claim
    -10-
    with the Harris[es] and Klebolds wherein they stand to receive $28,000-84,000.”
    App. 215 (emphasis in original).   3
    At one point in the correspondence, Mr.
    Wahlberg wrote that the Shoels would not be bound by the April 19 letter because
    they had not yet signed any agreements. However, after further discussions with
    counsel for the Harrises (who were less forgiving), he wrote back, saying that he
    had been mistaken and that the Shoels, like all the other parties, were bound by
    the settlement agreement reached on April 19.
    The official claim releases were not signed until that August, after the
    arbitration was complete (but before its results were disclosed). The Shoels
    signed their final releases against Manes, Anderson, and Duran, but not against
    the Klebolds and Harrises. Although the Harrises and Klebolds maintained their
    position that the Shoels were bound by their April 19 acceptance, they did make
    further settlement overtures to the Shoels, in hopes they could persuade the
    Shoels not to contest the validity of the settlement agreement. When those
    negotiations broke down, the Shoels moved to have their case sent back to state
    court (where Mr. Fieger was confident that he could get the case to a jury), and
    the Klebolds and Harrises brought motions to enforce the settlement agreement.
    After an evidentiary hearing in March of 2003, the district court determined that
    Apparently, Mr. Fieger lost this focus on the bottom line sometime
    3
    between the Spring of 2001 and oral argument, where he insisted that the dispute
    was “not about the money.”
    -11-
    the Shoels had accepted an offer to settle on April 19, and that they were bound
    by their contract.
    DISCUSSION
    “A trial court has the power to summarily enforce a settlement agreement
    entered into by the litgants while the litigation is pending before it.”    United
    States v. Hardage , 
    982 F.2d 1491
    , 1496 (10th Cir. 1993). We review the district
    court’s decision to enforce such an agreement for an abuse of discretion.      
    Id. at 1495
    . An abuse of discretion occurs when the district court “based its decision on
    an erroneous conclusion of law or where there is no rational basis in the evidence
    for the ruling.”   Wang v. Hsu , 
    919 F.2d 130
    , 130 (10th Cir. 1990). Issues
    involving the formation and construction of a purported settlement agreement are
    resolved by applying state contract law.      United States v. McCall , 
    235 F.3d 1211
    ,
    1215 (10th Cir. 2000).
    In this appeal, Appellants present three primary arguments for overturning
    the district court’s enforcement of the settlement agreement. First, they argue that
    Mr. Fieger did not have his clients’ express authority to settle the claims, making
    his April 19 letter ultra vires and hence invalid. Second, they argue that the terms
    of the settlement were too vague to constitute a binding agreement, and were at
    most a preliminary agreement to agree. Third, they argue that their mistake about
    the Rouse group’s participation, which they claim was caused by Mr. Wahlberg’s
    -12-
    misrepresentation, gave them the option of voiding the contract, which they
    immediately did. We consider each contention in turn.
    I
    Relying on the settled Colorado rule that an attorney cannot settle a claim
    unless the client expressly authorizes him to do so, the Shoels first argue that Mr.
    Fieger had no authority to settle their claims on their behalf.    See Cross v. Dist.
    Court , 
    643 P.2d 39
    , 41 (Colo. 1982) (en banc) (“[A]s we have stated on numerous
    occasions, an attorney does not have the authority to compromise and settle the
    claim of his client without the knowledge or consent of his client.”) In response,
    Appellees point out that Mr. Fieger himself testified that he had exclusive
    authority to negotiate on behalf of the Shoels, and that in June of 2000 he
    authorized local counsel to “make a settlement” offer. Of course, that evidence is
    not dispositive; an attorney may be authorized to negotiate even if the client
    retains sole authority to sign off on the final agreement, and the fact that an
    attorney has his client’s consent to authorize an offer in one case does not prove
    that he has it to accept a very different offer several months later.
    More helpful is Appellee’s citation to       Thomas v. Colorado Trust Deed
    Funds, Inc. , 
    366 F.2d 136
    , 139 (10th Cir. 1966), where this Court held that there
    is a presumption that an attorney has express authority to settle unless there is
    evidence to the contrary in the record. When they first disputed the settlement,
    -13-
    counsel for the Shoels never claimed that their clients had not signed off on the
    acceptance or that Mr. Fieger had been acting contrary to his clients’ wishes.
    Appellants now cite evidence that, at earlier stages of negotiations, they had
    refused to settle without knowing in advance the ultimate dollar value they would
    receive. Mr. Fieger strains to read this as evidence of a limitation on his authority
    to settle, but we are not convinced. Parties often relax their supposedly non-
    negotiable demands over the course of negotiations, and the mere fact that a party
    does so through counsel does not suggest that counsel has exceeded the scope of
    his express authority. Of course, counsel for the Shoels did renew their demand
    for a precise figure after April 19, but only once they learned that the Rouse
    group was not participating. Appellants’ position seems to have been that,
    despite their demand for a fixed settlement amount, if all the other attorneys
    agreed to the arbitration procedure, they would not be “the sole laggards” or
    “obstructionists.” App. 481. Thus, even if Mr. Fieger’s long refusal to settle
    except in return for a fixed dollar amount were probative of a corresponding
    limitation on his authority, his apparent willingness to settle so long as the Rouse
    group settled – even before the arbiter had determined what the Shoels would
    receive – would be just as probative of his authority to do so.
    Evidence about the Shoels’ general negotiating position provides at best
    indirect evidence for whether the Shoels really did change course and agree to the
    -14-
    arbitration process by April 19. The most direct evidence is the text of the April
    19 letter itself: “This letter shall serve to confirm that Mr. and Mrs. Shoels   have
    approved settlement with Defendants Klebold, Harris, Manes, Anderson and
    Duran.” App. 153 (emphasis added). If one takes that sentence at face value, it
    states that the Shoels either approved the agreement themselves or authorized Mr.
    Fieger to do so. Admittedly, the record also contains a few stray remarks that
    could possibly be read to indicate a lack of authority; for instance, Mr. Fieger did
    testify that the Shoels “had already indicated they refused to sign the [arbitration]
    agreement” in the days leading up to April 19, suggesting that they were still
    refusing to participate when the acceptance letter was sent. App. 482. But that
    testimony was all in support of Mr. Fieger’s claim that his letter was
    “misworded,” and that in fact neither he nor the Shoels meant to commit to
    settlement on April 19. The district court specifically discredited that claim.
    Thus, the facts as found by the district court establish that Mr. Fieger, at least,
    intended to settle. Op. 9. In light of the language of Mr. Fieger’s letter and the
    presumption that an attorney does not act without authorization, the most natural
    conclusion is that the Shoels also intended to settle. Indeed, there was no hint of
    a division between the Shoels and their counsel in the proceedings below. Thus,
    there was a sufficient basis in the record for the district court’s finding that the
    Shoels, through counsel, accepted the Harris/Klebold offer.
    -15-
    But even if we were not convinced of this, it would be improper to reverse
    the district court on this ground, because the Shoels never properly presented their
    lack-of-authority claim to that court. When pressed at oral argument, Mr. Fieger
    stated that he did raise the claim, and cited several pages of the transcript where
    he testified that the Shoels consistently refused to settle without knowing the
    dollar amount they would receive. But even though Mr. Fieger’s testimony about
    the Shoels’ refusal to consent could conceivably have provided a factual basis for
    the legal claim he now raises, that is not enough; a party must also present the
    legal basis of the claim to the district court clearly and explicitly.       See N. Natural
    Gas Co. v. Hegler , 
    818 F.2d 730
    , 734 (10th Cir. 1987) (refusing to consider a
    legal claim suggested by the evidence but not argued below);             Lyons v. Jefferson
    Bank & Trust , 
    994 F.2d 716
    , 721 (10th Cir. 1993)         (stating that “vague, arguable
    references to [a] point in the district court proceedings do not . . . preserve the
    issue on appeal”) (quoting     Monarch Life Ins. Co. v. Elam , 
    918 F.2d 201
    , 203
    (D.C. Cir. 1990) (brackets and ellipses in original)). Nowhere in the briefing or
    argument did Mr. Fieger argue that he lacked authority or cite any cases raising
    the issue of an attorney’s authority to settle on behalf of a client. His theory was
    not that he had settled the case without the Shoels’ permission; rather, his theory
    was that neither he nor the Shoels settled or intended to settle. The general rule
    in this circuit is that “a party may not lose in the district court on one theory of
    -16-
    the case, and then prevail on appeal on a different theory.”       McDonald v. Kinder-
    Morgan, Inc. , 
    287 F.3d 992
    , 999 (10th Cir. 2002) (quoting         Lyons , 
    994 F.2d at 721
    ).
    Of course, we do have discretion to make exceptions in extraordinary
    circumstances, and as Appellants note, we are more willing to exercise that
    discretion when the newly raised issue is primarily a legal one.         See, e.g. , Petrini
    v. Howard , 
    918 F.2d 1482
    , 1483 n.4 (10th Cir. 1990) (“A federal appellate court
    is justified in reversing a judgment on the basis of issues not raised below when,
    as here, the issues involved are questions of law, the proper resolution of which
    [is] beyond reasonable doubt, and the failure to address the issues would result in
    a miscarriage of justice.”). But because the question of Mr. Fieger’s authority is
    essentially factual, it would be inappropriate to make an exception in this case.
    Had this issue been properly raised below, both sides could have presented
    evidence (including, perhaps, the crucial testimony of Mr. and Mrs. Shoels) about
    what the Shoels knew and what they authorized, rather than focusing on Mr.
    Fieger’s intent to settle (which is irrelevant if he lacked authority to settle in the
    first place). When a fact question is not squarely presented to the finder of fact
    and the adverse party, it would be unfair to allow an appellant to prevail simply
    because the evidence accidentally adduced on that question tips in the appellant’s
    favor. See Singleton v. Wulff , 
    428 U.S. 106
    , 120 (1976)       (explaining that appellate
    -17-
    courts should generally decline to reach newly argued issues so that “litigants may
    not be surprised on appeal by final decision there of issues upon which they have
    had no opportunity to introduce evidence”). That is doubly true when an
    appellant wishes to argue that the acts of an attorney are not imputable to his
    client, as they are generally presumed to be.
    II
    Next, the Shoels argue that the April 19 letter could not have created a
    binding contract because the terms of the proposed settlement were still too
    vague. They claim that at most, their agreement was a nonbinding agreement in
    principle, subject to further negotiations. In Colorado, whether negotiations are
    sufficiently definite and final to create a binding contract is to be decided by the
    finder of fact.   I.M.A., Inc. v. Rocky Mountain Airways, Inc.   , 
    713 P.2d 882
    , 887
    (Colo. 1986) (en banc). The district court determined that there was a binding
    contract, and the record supports its finding. Mr. Wahlberg’s April 16 letter, as
    well as his subsequent telephone conversations with the Shoels’ counsel, laid out
    the terms of the Klebolds’ and Harrises’ offer in detail, explaining exactly how
    much they were offering, how a portion of that amount would be held in reserve
    to cover the Rouse group’s claims, and how the remainder would be distributed
    among the settling plaintiffs. Mr. Fieger’s reply letter was no less definite,
    stating in categorical terms that the Shoels had approved settlement. It contained
    -18-
    no language suggesting that their approval was provisional or “tentative” (as Mr.
    Raymond tried to describe it the next day). The context of that letter also
    suggests that it was meant to be binding. The Shoels had been “participating”
    without committing to the arbitration process for quite some time. As the district
    court noted, the question on April 19 was whether they would finally commit so
    that the settlement, as set forth in the April 16 letter, could be finalized. And if
    the content and context of the letter were not enough to show that the parties
    meant to enter a binding agreement, we have local counsel’s own insistence, just
    one day after the April 19 letter, that the Shoels’ attorneys “were not surprised
    that there was a settlement.” App. 180.
    Despite this evidence, Appellants contend that the district court’s finding
    was clear error. They stress the fact that at the time of their alleged acceptance,
    there was no way they could know how much they would get out of the
    settlement. This, they claim, makes their case analogous to Colorado cases in
    which an agreement was held unenforceable.       See, e.g. , Griffin v. Griffin , 
    699 P.2d 407
     (Colo. 1984) (en banc);   Difrancesco v. Particle Interconnect Corp.      , 
    39 P.3d 1243
    , 1250 (Colo. Ct. App. 2001).     But these cases involved very different
    facts. In Griffin , a husband and wife had agreed as part of a divorce settlement
    that they would reach a joint agreement about where their daughter would go to
    school. When they were unable to reach such an agreement, the mother (who had
    -19-
    custody of the child and thus the legal right to choose her school) chose a school
    over the father’s objection. The Colorado Supreme Court held that because the
    parties’ separation agreement “made no provision for the resolution of
    disagreement concerning the selection of schools,” and because the court could
    not force the parents to agree on a school, it could not enforce the agreement.
    Griffin , 699 P.2d at 409. Similarly,   Difrancesco involved a license agreement
    that not only left essential terms like the royalty rate and license scope
    unspecified, but also failed to specify any method by which these terms could
    later be determined. 
    39 P.3d at 1250
    . The lack of such a method brought those
    cases within the firmly settled Colorado rule that “[i]f essentials are unsettled,
    and no method of settlement is agreed upon     , there is no contract.”   Greater Serv.
    Homebuilders’ Inv. Ass’n v. Albright    , 
    293 P. 345
    , 348 (Colo. 1930) (en banc)
    (emphasis added).
    In stark contrast to these cases, the settlement agreement set forth in the
    April 16 letter (which is what the plaintiffs accepted on April 19) provided a
    method for fixing a definite value for the Shoels’ claims: a neutral arbiter, Judge
    Carrigan, would determine their value. In such circumstances, it is irrelevant that
    the value of the claims was difficult to predict in advance; otherwise, every
    futures contract would be void in Colorado. Once Appellants knew how much
    money the Klebolds and Harrises were offering to make available, and that those
    -20-
    funds would be distributed according to the relative value of each plaintiff’s
    claims as determined by Judge Carrigan, the arrangement was sufficiently specific
    to constitute an enforceable contract.
    Appellants can also be understood to raise a closely related, but
    conceptually separable, argument. It is that even if the terms were specific
    enough to be enforceable, still Appellants’ correspondence was meant merely to
    state tentative approval, not final agreement. Under Colorado law, an acceptance
    conditioned on reaching a later, more detailed agreement is not binding.
    Difrancesco , 
    39 P.3d at 1248
    . Moreover, correspondence during the course of
    negotiations is often best construed as being conditioned in this way.     Pierce v.
    Marland Oil Co. , 
    278 P. 804
    , 806 (Colo. 1929) (in dep’t). However, though some
    evidence in the record supports this interpretation of the April 19 acceptance, it is
    insufficient to disturb the district court’s factual finding.
    First, Appellants note that the April 19 letter purported to approve
    settlement with Robyn Anderson, and since it is undisputed that she had not yet
    offered a particular amount in settlement, they argue that the April 19 “approval”
    of settlement with her could not have been meant as a binding acceptance. They
    then infer that the letter’s approval could not have been meant as a binding
    acceptance of the other defendants’ offers, either. That is one possible
    interpretation of the letter. Another possibility is that Mr. Fieger’s April 19
    -21-
    reference to Robyn Anderson was a simple mistake and was therefore irrelevant to
    the effect of the letter with respect to the valid offers. At the time, Mr. Wahlberg
    interpreted the approval letter in yet a third way: in his view, the letter did not
    operate directly as an acceptance of the various settlement offers; rather, by
    “approv[ing] settlement,” it gave Mr. Wahlberg authorization to settle on behalf
    of the Shoels. In the aftermath of Mr. Fieger’s disavowal of his April 19 letter
    with respect to the Klebolds and Harrises, Mr. Wahlberg reaffirmed his
    understanding that Mr. Fieger’s letter had given him authority to settle the Shoels’
    claims against Anderson, Duran, and Manes, and Mr. Fieger’s subsequent
    correspondence appeared to concede that point. If Mr. Wahlberg’s interpretation
    was correct, it would not matter that Anderson’s claims were not settled for
    another week or so. On that interpretation, the April 19 letter gave Mr. Wahlberg
    authority to settle the various claims; he exercised that authority immediately with
    respect to the Klebolds and Harrises but only later with respect to Anderson.
    Thus, even if we reject the district court’s simpler view that the April 19 letter
    was an acceptance, we still find ample record support for its ultimate factual
    conclusion that a binding agreement was formed that day.
    Second, Appellants rely on the fact that the Shoels never released their
    claims by signing the official arbitration agreement itself. Appellants suggest that
    signing the release form was a condition precedent to the existence of a valid
    -22-
    agreement. In part, this contention seems to be based on a conflation of
    conditions precedent to the   agreement and conditions precedent to the Klebolds’
    and Harrises’ performance . While it is true that no funds were to be disbursed
    until the releases were signed, it does not follow that no contract existed until that
    time. Appellants also rely on language from section IV(B) of the Judicial Arbiter
    Group’s arbitration agreement, which states that “[b]y signing this
    Agreement . . . the Claimant is agreeing to be bound by the distribution as
    awarded by the Arbiter.” App. 198. They claim that this language makes signing
    a necessary precondition to being bound. But while it does appear that the
    agreement contemplated acceptance by signing, the quoted language does not
    imply that signing the agreement was the    only way to accept. Its true effect is to
    set forth one of the consequences of entering the agreement (namely, becoming
    bound by the arbitration), not to limit the means by which the agreement might be
    entered.
    Finally, there is the text of the claimants’ joint acceptance letter itself.
    Some of its language does seem provisional:
    Further, the statute of limitations shall be tolled for 30
    days from April 20 for anyone participating in the
    proceedings before Judge Carrigan so that we      may
    prepare a mutually acceptable settlement agreement      .
    App. 159 (emphasis added). This language, while relevant, is not dispositive.
    While the letter clearly contemplates working out a more detailed agreement,
    -23-
    nowhere does it state that the existence of a binding contract is conditioned on
    successfully completing that process. “‘[T]he mere intention to reduce an oral or
    informal agreement to writing, or to a more formal writing, is not of itself
    sufficient to show that the parties intended that until such formal writing was
    executed the parol or informal contract should be without binding force.’”      Rocky
    Mountain Airways , 713 P.2d at 888, quoting Coulter v. Anderson , 
    357 P.2d 76
    , 80
    (Colo. 1960) (in dep’t). It may be possible to interpret Mr. Wahlberg’s language
    as saying that there was no binding agreement on April 19, and if such an
    agreement were not formulated within thirty days, the plaintiffs would remain free
    to bring suit. But it is also possible that the plaintiffs did consider themselves
    bound, but required the statute of limitations to be tolled so that they would still
    be able to bring suit in the event that the defendants breached the agreement to
    deposit their funds in escrow.    See Goltl v. Cummings , 
    380 P.2d 556
    , 558-59
    (Colo. 1963) (in dep’t) (finding that a settlement agreement existed in similar
    circumstances). Given the non-tentative beginning of Mr. Wahlberg’s letter
    (“The purpose of this letter is to accept the settlement proposal . . . .”), on balance
    it, too, supports the district court’s conclusion. And whatever ambiguities may be
    read into the text now, the district court rightly resolved those ambiguities in light
    of Mr. Raymond’s contemporaneous admission that the parties understood the
    April 19 settlement to be final. Op. 9;   see App. 180. Thus, whether Mr. Fieger’s
    -24-
    letter was itself meant as an acceptance, or whether it was meant to authorize Mr.
    Wahlberg to settle on behalf of the Shoels, the district court’s determination that
    there was a binding acceptance has ample record support.
    Appellants cite in their favor   New York Life Ins. Co. v. K N Energy, Inc.      , 
    80 F.3d 405
     (10th Cir. 1996), in which this Court applied Colorado law to hold a
    note purchase agreement unenforceable. However, the purported agreement in
    that case was marked by its use of the conditional tense to describe what “would
    be” the case if the deal were consummated, and unlike Mr. Wahlberg’s letter, it
    specifically stated that the deal would not be consummated until the parties
    reached “final agreement upon terms, conditions, covenants and other provisions
    satisfactory to Prudential.”   
    Id. at 411
    . Those facts alone suffice to distinguish      K
    N Energy . In addition, K N Energy is of limited relevance here, because it did not
    squarely decide whether a contract existed. Instead, because several conditions
    precedent to the actual note purchase had not been fulfilled, the panel held that
    the purported agreement was      either “an [unenforceable] agreement to agree        or a
    contract subject to conditions precedent which were never fulfilled.”        
    Id.
    (emphasis added). The Shoels have not shown that the Harrises and Klebolds
    have failed to perform any act on which the Shoels’ obligation to release their
    claims was conditioned. Rather, the Harrises and Klebolds have deposited their
    funds as required, and now demand that the Shoels fulfill their part of the bargain.
    -25-
    III
    Appellants’ final argument is that they should not be held to the contract
    because their acceptance was predicated on either a mistake or a
    misrepresentation. In particular, they assert that in the discussions and
    correspondence immediately prior to Mr. Fieger’s acceptance, Mr. Wahlberg told
    local counsel that “everybody is on board except the Shoels,” App. 202, 217, and
    “everyone else has signed the agreement,” App. 194, falsely leading the Shoels
    and their counsel to believe that the Rouse plaintiffs had reconsidered their
    refusal to settle with the Klebolds and Harrises. This is not a newly argued
    objection to the alleged settlement. As we have already noted, just one day after
    Mr. Fieger’s acceptance, Mr. Raymond wrote to Mr. Wahlberg: “[W]e were not
    shocked that there was a settlement. We were shocked that there was a settlement
    that did not include Rouse’s group as to Klebold and Harris.” App. 180.
    The district court found that because it had been well-established since at
    least March of 2001 that the Rouse group was refusing to settle with the Klebolds
    and Harrises, Mr. Wahlberg’s statements that “everyone else” had signed the
    agreement could not reasonably be interpreted to mean that the Rouse plaintiffs
    had changed their minds. Rather, the only reasonable interpretation was that “all
    of the claimants who previously had indicated a willingness to participate in
    arbitration had signed the agreement.” Op. 10. Thus, the Court concluded that
    -26-
    “the Shoels cannot reasonably claim that they accepted the terms of the arbitration
    agreement based on the erroneous assumption that the Rouse group was also
    participating.” Op. 10-11.
    The ultimate question here, therefore, is whether their counsel’s
    unreasonable misunderstanding of Mr. Wahlberg’s statements allows the Shoels to
    avoid their agreement. Because there is no hint in the record that the Klebolds
    and Harrises shared Appellants’ mistake, that question seems easily resolved by
    the venerable principle that a unilateral mistake of one party to an agreement is
    not ground for rescission.    Royal v. Colorado State Personnel Bd.   , 
    690 P.2d 253
    ,
    255 (Colo. Ct. App. 1984) (“What Royal may have understood or contemplated is
    not relevant. A unilateral mistake or mistake of law, if any, is not a ground for
    setting aside an agreement.”);    In re Marriage of Manzo , 
    659 P.2d 669
    , 672 (Colo.
    1983) (en banc) (“[T]raditionally a contract may not be rescinded because one
    party has made a unilateral mistake as to value unless the other party knew or had
    reason to know of the error.”);   Kuper v. Scroggins , 
    257 P.2d 412
    , 413 (Colo.
    1953) (en banc) (“In order to avoid a contract on the ground of mistake, it must
    be a mutual mistake.”).      The Shoels, however, propound three reasons why that
    principle does not dispose of the case. First, they rely on an equally hoary
    principle of the law of contracts: that there must be a meeting of the minds on all
    material points before a contract exists. Second, they argue that the rule against
    -27-
    granting rescission based on unilateral mistakes is not as absolute as it is
    sometimes expressed, and the equities favor setting aside the agreement in their
    case. Third, they note that courts have traditionally applied more lenient
    standards when one party’s mistake is the result of misrepresentation or fraud,
    and at least the former is alleged here. For the reasons explained below, however,
    none of these doctrinal wrinkles persuades us that the Colorado Supreme Court
    would excuse the Shoels’ unilateral mistake in this case.
    A
    Although one party’s mistake about the facts relevant to an agreement is
    not normally grounds for rescission, the same is not true if the “mistake” goes to a
    material term of the agreement itself. When the language of a contract contains a
    latent ambiguity and one of the parties is in fact assenting to something different
    from what the other party agrees to, the upshot of that “mistake” is that there was
    never a meeting of the minds as to a material term of the contract, and
    consequently there was never any contract at all. The textbook example of this
    principle is Raffles v. Wichelhaus 159 Eng. Rep. 375 (Ex. 1864), where the parties
    agreed to the sale of goods aboard a ship called   Peerless , but were in fact
    referring to two different ships by that name.
    That principle is inapplicable here. The Shoels’ lawyers’ mistake regarding
    whether the Rouse group was participating in the settlement at most affected their
    -28-
    assessment of the value of their claim or the desirability of entering the
    settlement. It did not create any ambiguity regarding the terms or substance of
    the settlement agreement. Under that settlement, the Shoels agreed to release
    their claims in return for the Klebolds contributing $1,568,000 into a fund that
    would be divided up in arbitration. The rights and obligations on both sides were
    the same, whether or not the Rouse group was participating. We therefore reject
    Appellants’ contention that there was no meeting of the minds because of their
    misunderstanding about the Rouse group.
    B
    Appellants argue that even if their mistake was unilateral, equity
    nevertheless favors voiding the contract because the Harrises and Klebolds did
    not rely on their acceptance before it was revoked. They cite in their favor
    Powder Horn Constructors, Inc. v. City of Florence   , 
    754 P.2d 356
     (Colo. 1988)
    (en banc). In that case, a contractor’s bid on a city construction project
    erroneously omitted certain expenses and thus was substantially lower than the
    other bids. Before the city had accepted any of the bids, the contractor noticed
    the mistake, informed the city, and submitted a corrected bid. Thereafter, the city
    accepted the original bid. Noting that “[n]o contract for construction of the
    project was ever executed by the parties, and there was no delay, no surprise, and
    no justifiable reliance by the City,” the Colorado Supreme Court held that the
    -29-
    contractor was entitled to withdraw its bid, even though such bids are generally
    irrevocable. Powder Horn , 754 P.2d at 361. Furthermore, the court refused to
    require a showing that the contractor had not been negligent, holding that material
    clerical errors (as opposed to errors in judgment) justify withdrawing a bid so
    long as the bid was made in good faith and the public authority did not rely on the
    bid to its detriment.   Id. at 363.
    However, the Powder Horn court refused to rely solely on the absence of
    detrimental reliance by the city. The court noted no fewer than five times that its
    holding extended only to cases in which the bid was withdrawn prior to formation
    of a contract. See id. at 359, 360, 361, 363, 364. It also relied on the fact that the
    city knew about the mistake prior to accepting the erroneous bid.    See id. at 363-
    64. In the Shoels’ case, by contrast, the unilateral mistake was by the party who
    accepted the contract, and so the attempted withdrawal did not occur until after a
    contract had been formed.
    This distinction is rooted in the idea that parties can make promises to each
    other that are binding well in advance of performance or detrimental reliance.
    The moment that each party has given up some consideration in return for the
    other party’s performance, each becomes entitled to the bargained-for
    performance, and if the other party declares a moment later that it will not
    perform, the measure of damages will be relative to the parties’ expectations of
    -30-
    full performance, not their reliance damages. As the Colorado Supreme Court
    noted in Powder Horn , one of the “basic policies underlying the enforcement of
    contracts” is the protection of those legitimate expectations.     Id. at 364.
    In the public bid context in which     Powder Horn was decided, bids are
    irrevocable upon opening in order to “protect the integrity of the bidding
    process,” id. at 360, not to protect bargained-for expectations. For in the typical
    case, a city has not given up anything in exchange for the lowest bidder’s
    performance when it first opens the bids. It remains free to select another
    contractor or to reject all of the bids and cancel the project. Outside of the
    bidding context, general principles of contract law preserve symmetry between the
    offeror and offeree by making the offeror just as free to withdraw the offer as the
    offeree is to reject it. Thus, it was quite reasonable for the Colorado Supreme
    Court to hold that equity favored the mistaken offeror over the city’s desire to
    reap a “windfall profit” for which it had given up nothing.      Id. at 364. This case,
    though, involves an attempt to revoke an acceptance, not an offer. That
    difference is significant because unlike the city in    Powder Horn , the Klebolds and
    Harrises lost their freedom to renegotiate the moment the Shoels made their
    “mistake” and accepted the settlement. Thus, although it is true that the Klebolds
    and Harrises had not relied on the contract before the Shoels’ counsel repudiated
    it, Mr. Fieger’s acceptance letter materially changed their position by committing
    -31-
    them to stand by their offer. Having committed to pay almost $1.6 million to
    settle all of the claims against them, including the Shoels’ claims, the Klebolds
    and Harrises were entitled to the release of those claims.
    Appellants also rely on the Second Restatement of Contracts, which does
    allow unilateral mistake to void a contract under certain circumstances. Even the
    Restatement, though, does not allow relief when doing so would frustrate the
    legitimate contract-based expectations of innocent parties.       Powder Horn , 754
    P.2d at 364 n.7.   Rather, it allows relief only if the mistakenly entered contract
    was unconscionable or the defendant knew or had reason to know of the mistake,
    thus casting doubt on the legitimacy of the defendant’s expectations.       Restatement
    (Second) of Contracts § 153; Powder Horn , 754 P.2d at 364 (noting that “equity
    will not allow a party to knowingly take advantage of a mistake of another”).
    If the Klebolds and Harrises, like the sharp-dealing city in     Powder Horn ,
    had known of Appellants’ mistake, we would have to decide how the Colorado
    Supreme Court would apply      Powder Horn ’s analysis in the context of a fully-
    formed contract. But the Klebolds and Harrises, who were not party to the
    discussions between Mr. Wahlberg and counsel for the Shoels, had no way of
    knowing about the miscommunication about the Rouse group’s participation when
    the contract was formed. Rather, they were just the kind of innocently
    contracting parties whose protection the Colorado Supreme Court considers to be
    -32-
    of fundamental importance to the law of contracts.     See Powder Horn , 754 P.2d at
    364. We therefore reject the argument that Appellants should have been
    permitted to withdraw from the settlement agreement because of their unilateral
    mistake.
    C
    Finally, Appellants argue that they accepted the settlement not merely
    because of their own confusion, but rather because Mr. Wahlberg affirmatively
    (though, they concede, innocently) misrepresented the status of the Rouse group.
    Under Colorado law, rescission based on misrepresentation is both easier and
    harder to obtain than rescission based on unilateral mistake. On the one hand,
    Colorado law allows rescission of an acceptance based on a material
    misrepresentation even after the contract is formed, and even if the other party did
    not knowingly or unconscionably take advantage of the resulting
    misapprehension.    See Wall v. Foster Petroleum Corp.    , 
    791 P.2d 1148
    , 1150
    (Colo. Ct. App. 1989); Bassford v. Cook , 
    380 P.2d 907
    , 910 (Colo. 1963) (in
    dep’t); Wheeler v. Dunn , 
    22 P. 827
    , 833 (Colo. 1889) (setting forth the
    requirements for equitable rescission based on misrepresentation);    see also
    Restatement (Second) of Contracts     § 164(2). But on the other hand, while
    Powder Horn allowed the withdrawal of a bid even based on negligent mistakes
    so long as they were made in good faith, 754 P.2d at 363, it is “well settled” that
    -33-
    plaintiffs must show that their reliance on a material misrepresentation was
    justified. M.D.C./Wood, Inc. v. Mortimer , 
    866 P.2d 1380
    , 1383 (Colo. 1994) (en
    banc). Thus, the contract is voidable on this ground only if Mr. Wahlberg’s
    statement was a material misrepresentation on which the Shoels were justified in
    relying.
    Appellants fail to establish that it was. First, it is far from clear – in light
    of the district court’s factual findings – that Mr. Wahlberg’s statement that
    “everyone is on board,” App. 202, was a misrepresentation at all. In context,
    according to the district court, this statement could only be reasonably interpreted
    to refer to those parties engaged in negotiations, which (with respect to the
    Klebolds and Harrises) did not include the Rouse group. Mr. Wahlberg was
    simply informing Appellants that they were the last claimants whose assent was
    necessary to finalize the various settlements.
    Even assuming the statement could be regarded as a misrepresentation,
    Appellants make no showing that it was material. Whether or not the Rouse
    plaintiffs participated, the arbiter would determine the Shoels’ portion of the
    insurance proceeds by calculating the ratio of their damages to the total of all
    damages (including the Rouse group’s damages). Either way, the Shoels’ likely
    share of the proceeds would have remained roughly the same, and might even
    have been larger if the Rouse group did not participate (since the agreement was
    -34-
    that funds set aside but not ultimately used to defend particular claims would
    eventually be distributed among the settling claimants).
    Nor have Appellants established that they were justified in relying on Mr.
    Wahlberg’s misrepresentation (if it can be called that). Under Colorado law,
    reliance on a misrepresentation is unjustified if the context obviously calls its
    accuracy into question or suggests that further investigation is necessary.    See,
    e.g. , Mortimer , 866 P.2d at 1381-82 (plaintiffs were not justified in relying on a
    verbal misrepresentation about the location of a proposed highway; because a
    prominently displayed map showed the correct location, plaintiffs had a duty to
    inquire further); Bassford , 380 P.2d at 909-10 (buyers were not justified in
    relying on arguably inaccurate explanations for cracks in the walls of a house
    when the seller had given them the contact information of the engineer who could
    explain the problem in more detail). Mr. Wahlberg suggested that “everyone
    else” had agreed to settle on two different occasions: both in an April 13 letter,
    and then again in the April 18 telephone conversation. App. 194, 202, 217. But
    in the interim, his April 16 letter setting forth the final contours of the settlement
    painstakingly explained that the Klebolds and Harrises would be withholding
    from the settlement proceeds the portion of funds attributable to the Rouse group
    and other nonsettling claimants. App. 606. The April 16 letter, together with the
    Rouse group’s long refusal to settle with the Harrises and Klebolds, supports the
    -35-
    district court’s finding that it was unreasonable for Appellants to rely on Mr.
    Wahlberg’s statement to conclude that the Rouse group had changed its position.
    Even were we to disagree with that finding, under Colorado law we would be
    bound to defer to the district court’s assessment on this point.   See Mortimer , 866
    P.2d at 1382. Misunderstanding, not misrepresentation, was the basis for
    Appellants’ acceptance, and so they cannot evade the normal limitations on relief
    from the consequences of their mistake.
    CONCLUSION
    For the reasons discussed above, the decision of the district court is
    AFFIRMED.
    -36-