Maria F. Olson v. James Scott Kent Peoples National Bank of Mora ( 2016 )

This opinion will be unpublished and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
A16-0221
Maria F. Olson, et al.,
Appellants,
vs.
James Scott Kent, et al.
Defendants,
Peoples National Bank of Mora,
Respondent.
Filed December 19, 2016
Affirmed in part and reversed in part
Rodenberg, Judge
Isanti County District Court
File No. 30-CV-13-716
Frederic W. Knaak, Craig J. Beuning, Wayne B. Holstad, Holstad & Knaak, PLC, St. Paul,
Minnesota (for appellants Maria F. Olson, Shannon Olson, and SSO, LLC)
Vincent D. Louwagie, Steven C. Kerbaugh, Daniel R. Hall, Peter J. McElligott, Anthony
Ostlund Baer & Louwagie P.A., Minneapolis, Minnesota (for respondent Peoples National
Bank of Mora)
Considered and decided by Halbrooks, Presiding Judge; Rodenberg, Judge; and
Hooten, Judge.
UNPUBLISHED OPINION
RODENBERG, Judge
Appellants Maria F. Olson, Shannon Olson, and SSO, LLC, appeal from a judgment
in favor of respondent Neighborhood National Bank f/k/a People’s National Bank of Mora
for $150,000 plus attorney fees for claimed breach of the parties’ earlier settlement
agreement.1 Appellants also challenge the district court’s order denying appellant Maria
Olson’s motion to vacate a settlement agreement that contained a conditional confession
of judgment for that amount. We affirm in part and reverse in part.
FACTS
In 2010, appellants conveyed two properties to MNSilverCare, Inc.
(MNSilverCare), and James Scott Kent. The purchases were financed, in part, through
loans provided by respondent. The sale of one of the properties included seller financing,
and a promissory note for $164,500 was executed by MNSilverCare and James Scott Kent.
At closing, the parties to the promissory note signed a Standby Creditor’s Agreement,
acknowledging MNSilverCare’s $164,500 debt to appellants and that the agreement was
entered into “[t]o induce [respondent] to make loans” to MNSilverCare. The agreement
included terms requiring that appellants take no action to enforce MNSilverCare’s
obligation to pay appellants without respondent’s approval, and that all future loans made
by appellants to MNSilverCare would be subject to the terms of the Standby Creditor’s
Agreement.
1
The settlement agreement was not signed by the parties, but it was placed into the record
and accepted by the parties in open court, as discussed below.
2
In 2013, appellants sued Kent and MNSilverCare for breach of contract and unjust
enrichment. Kent and MNSilverCare asserted an affirmative defense that the claims were
barred by the Standby Creditor’s Agreement.
In February 2014, appellants amended their complaint to include a claim against
respondent for tortious interference with contract and for a declaratory judgment that the
Standby Creditor’s Agreement and the $164,500 promissory note were void. Appellants
claimed that they did not loan MNSilverCare and Kent the $164,500 evidenced in the
promissory note, but rather, Kent and MNSilverCare executed a promissory note for
$458,000. Respondent asserted counterclaims for breach of contract, unjust enrichment,
and fraud concerning appellants’ claim that they did not provide the loan described in the
Standby Creditor’s Agreement. Respondent asserted that, because of the fraudulent
execution of the Standby Creditor’s Agreement and the undisclosed promissory note for
$458,000, respondent had loaned funds for substantially more than the property was worth,
which caused MNSilverCare to default and eventually lose the property in foreclosure.
Respondent’s fraud claim was dismissed.
Appellants settled their claims against Kent and MNSilverCare, and those claims
were dismissed with prejudice. Appellants’ claims against respondent were dismissed by
summary judgment. Respondent’s claims against appellants for breach of contract and
unjust enrichment then remained before the district court as the only unresolved claims.
In March 2015, respondent and appellants reached a settlement agreement. The
parties submitted an electronic copy of the agreement to the district court and confirmed
the fact of settlement and the accuracy of the written agreement in open court. In response
3
to questioning by the district court, the parties agreed that no promises were made other
than those laid out in the written agreement and that the agreement was to be a “full and
final settlement” of the matter.
The agreement provided, in pertinent part:
4. Maria Olson, Shannon Olson, Shannon’s Exteriors and
SSO, LLC, on behalf of themselves and on behalf of any entity
which they, or any of them, control, make a full release of all
claims, known or unknown, through date of agreement against
[respondent], its agents, employees, attorneys, or others acting
on its behalf except that Maria Olson and Shannon Olson do
not release any claim they may have against the law firm of
Hinshaw & Culbertson LLP for acting with an alleged conflict
of interest. This is intended to be the broadest release allowed
by law.
The agreement included a covenant that appellants not sue any of the entities released
“based on any facts or events that arose on or before date of agreement.” The agreement
also stated:
6. Maria Olson, Shannon Olson, Shannon’s exteriors and
SSO, LLC confess judgment against Neighborhood National
Bank in the amount of $150,000. Judgment may be entered . . .
if Maria Olson, Shannon Olson, Shannon’s Exteriors and/or
SSO, LLC, or any entity which they, or any of them, control,
commence any complaint or claim against the bank . . . based
on any facts or events that arose on or before date of this
agreement, including but not limited to any claim released or
any claim covered by the covenant not to sue above.
(Emphasis added.)
The parties later discussed adding an exception to the agreement concerning
possible claims by appellants against the law firm of Lindberg & McKinnis. Respondent
refused to make this additional exception to the settlement agreement and release.
4
Appellant Maria Olson claims to have become aware of an admonition from the
Minnesota Office of Lawyers Professional Responsibility “for [Dwight McKinnis’s]
professional misconduct in the SBA ARC loan matter,” which she claims resulted in
damage to her.2 In April 2015, she sued Dwight McKinnis, an attorney who had worked
for respondent in 2011, claiming that McKinnis had represented her in a financial matter
while simultaneously representing respondent to collect on appellants’ SBA ARC loan.
Upon learning of Maria Olson’s lawsuit against McKinnis, respondent moved the
district court to enforce the settlement agreement and to have judgment against appellants
for $150,000 under paragraph six of the settlement agreement. Maria Olson, pro se,
opposed the motion to enforce the settlement agreement, claiming that she did not breach
its terms because McKinnis was not referenced specifically in the agreement and because
she was suing him strictly in his capacity as her attorney, and not in his capacity as
respondent’s attorney. In a memorandum of law opposing respondent’s motion to enforce
the settlement agreement and enter judgment, Maria Olson also argued:
The Settlement Agreement does not provide the remedy the
bank is asking for. If [the district court] interprets the
Settlement Agreement to blanket every attorney the bank has
used, and that Maria Olson cannot bring action against
Mr. McKinnis in his capacity as her attorney, this would still
not provide the bank a right to obtain judgment of $150,000
against the Olsons. Paragraph 6 of the [settlement agreement]
states specifically a judgment for $150,000 may be entered IF
the Olsons commence any complaint or claim against the
Bank. The Olsons have not brought a claim against the Bank.
2
Whether there was such an admonition, and of what it consisted if there was one, is not
before us in this appeal.
5
In August 2015, the district court granted respondent’s motion to enforce the
settlement agreement and entered judgment against appellants in the amount of $150,000.
The district court found that the claim against McKinnis arose out of events that occurred
while he was acting on respondent’s behalf and before the date of the settlement agreement.
The district court determined that Maria Olson’s claims against McKinnis fall “within the
very broad language” of paragraph four of the settlement agreement, and the agreement
contained a covenant that appellants not sue persons or entities released by the settlement
agreement. Stating that “[t]he remedy for breach of the settlement agreement is entry of
judgment in the amount of $150,000.00,” the district court concluded that “the Bank is
entitled to that remedy.”
In October 2015, Maria Olson moved the district court to vacate the settlement
agreement and grant relief from the August 20, 2015 judgment under Minn. R. Civ. P.
60.02, alleging fraud and newly discovered evidence. She claimed that respondent
committed fraud on the court and appellants by failing to disclose documents during
discovery and by making false statements in a related case that was settled as part of the
settlement agreement. The related case was commenced in 2013 and concerned the
existence of easements over Lot 2, a property that had not been included in the original
conveyances. No discovery was undertaken in the related case.
In her motion to vacate the settlement agreement, Maria Olson argued that
appellants were induced to enter into the settlement agreement by respondent’s fraud in
“failing to disclose material information and claiming false damages.” She argued that
respondent failed to disclose e-mails in response to discovery requests in this case and that
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the e-mails showed that, at the time of the settlement agreement, respondent was aware that
title to Lot 2 and the easements over it were not included in the conveyances. She argued
that, had appellants known of respondent’s awareness, they would not have settled.
In an order filed on December 7, 2015, the district court denied the motion to vacate
the settlement agreement. The district court found that Maria Olson had not exercised due
diligence in finding the evidence now claimed to be newly discovered, and that she did not
demonstrate fraud because she did not rely on the alleged misrepresentations made by
respondent in the related case.
In a separate order filed on December 7, 2015, and on respondent’s motion, the
district court awarded respondent $4,528 in attorney fees incurred in enforcing the
settlement agreement and obtaining the judgment against appellants for $150,000 based on
the claims made against McKinnis in violation of the covenant not to sue.
This appeal followed.3
DECISION
I. Denial of Motion to Vacate Settlement Agreement
Appellants challenge the district court’s order denying Maria Olson’s motion to
vacate the settlement agreement under Minn. R. Civ. P. 60.02. They argue that the district
3
In a special-term order, we construed the appeal as taken from the judgments entered on
August 20, 2015 and December 7, 2015, and the December 7, 2015 order denying Maria
Olson’s motion to vacate the settlement agreement.
7
court abused its discretion in refusing to vacate the settlement agreement based on newly
discovered evidence and fraudulent concealment of documents.4
“Settlement of disputes without litigation is highly favored, and such settlements
will not be lightly set aside by the courts.” Johnson v. St. Paul Ins. Cos., 305 N.W.2d 571,
573 (Minn. 1981) (citation omitted). “[V]acating a stipulation of settlement rests largely
within the discretion of the trial court, and the court’s action in that regard will not be
reversed unless it be shown that the court acted in such an arbitrary manner as to frustrate
justice.” Id. (quotation omitted). A court abuses its discretion under rule 60.02 when its
decision is “against logic and facts on the record,” is “arbitrary or capricious,” or is based
on “an erroneous view of the law.” Posey v. Fossen, 707 N.W.2d 712, 714 (Minn. App.
2006) (quotation omitted).
The Minnesota Rules of Civil Procedure provide as follows:
On motion and upon such terms as are just, the court may
relieve a party or the party’s legal representatives from a final
judgment . . . order, or proceeding . . . for the following reasons:
...
4
Respondent requests that we disregard portions of appellants’ brief that fail to adequately
cite the record. Each statement of a material fact in a brief “shall be accompanied by a
reference to the record.” Minn. R. Civ. App. P. 128.02, subd. 1(c); Minn. R. Civ. App. P.
128.03. Failure to comply with the rules requiring citations to the record “can diminish a
brief’s persuasiveness, lead to non-consideration of an issue, or dismissal of an appeal.”
Cole v. Star Tribune, 581 N.W.2d 364, 371-72 (Minn. App. 1998) (citations omitted). We
may decline to strike portions of a brief if the critical facts are supported by documents in
the record. Hecker v. Hecker, 543 N.W.2d. 678, 681 n.2 (Minn. App. 1996), aff’d, 568
N.W.2d 705 (Minn. 1997). Although appellants did not use consistent or accurate citations
in accordance with the applicable appellate rules, the material facts necessary for our
decision are supported by documents in the record. We therefore deny respondent’s
request.
8
(b) Newly discovered evidence which by due diligence could
not have been discovered in time to move for a new trial
pursuant to Rule 59.03;
(c) Fraud (whether heretofore denominated intrinsic or
extrinsic), misrepresentation, or other misconduct of an
adverse party . . . .
Minn. R. Civ. P. 60.02. The party seeking to vacate a settlement has the burden of showing
sufficient grounds for relief. Johnson, 305 N.W.2d at 573. See City of Barnum v. Sabri,
657 N.W.2d 201, 205 (Minn. App. 2003) (“The burden of proof in a proceeding under Rule
60.02 is on the party seeking relief.”).
A. Newly discovered evidence
Appellants argue that newly discovered e-mails demonstrate that respondent knew
that Lot 2 was not included in the conveyance of the other properties at the time it sued for
a declaratory judgment that easements existed over Lot 2. Appellants claim they settled
this and the related case because they were unaware that respondent possessed evidence
that would have defeated respondent’s claims.
Rule 60.02(b) allows relief for newly discovered evidence that “by the exercise of
reasonable diligence,” could not have been discovered before. Frazier v. Burlington N.
Santa Fe Corp., 811 N.W.2d 618, 631 (Minn. 2012), as modified (Apr. 19, 2012)
(quotations omitted). In order to establish the exercise of reasonable diligence, a party
must show that he employed “reasonable investigation efforts to find and produce the
evidence.” Turner v. Suggs, 653 N.W.2d 458, 467 (Minn. App. 2002) (quotation omitted).
Reasonable diligence “requires the use of available discovery tools as well as reasonable
investigation efforts.” Regents of Univ. of Minn. v. Med. Inc., 405 N.W.2d 474, 479 (Minn.
9
App. 1987), review denied (Minn. July 15, 2897). The newly discovered evidence must be
relevant and admissible, and likely to have an effect on the result; the evidence must not
be merely collateral, impeaching, or cumulative. Turner, 653 N.W.2d at 467. If a party
fails to prove any of the required factors for newly discovered evidence, then rule 60.02
relief is inappropriate. Frazier, 811 N.W.2d at 631.
The district court found that appellants did not conduct any discovery in the related
case involving Lot 2 and easements, and that relief under rule 60.02(b) was therefore
unavailable. Appellants did not seek discovery in the related case involving the allegations
that the conveyances included easements over Lot 2. Nor is it clear that the discovery
requests in this case would have resulted in the discovery of the e-mails because the
discovery requests sought information about the “claims and defenses in this lawsuit.” This
case was about the execution of the $164,500 promissory note and the Standby Creditor’s
Agreement. The record does not include respondent’s discovery responses, nor does it
appear that appellants moved to compel additional discovery before entering into the
settlement agreement.
Appellants have not demonstrated that the district court abused its discretion in
denying relief under rule 60.02(b). They have failed to demonstrate that they could not
have discovered the information they now claim to be newly discovered before they entered
into the settlement agreement by the exercise of reasonable diligence, or that they exercised
“reasonable investigation efforts to find and produce the evidence.” Turner, 653 N.W.2d
at 467; see also Frazier, 811 N.W.2d at 631. The burden of showing sufficient grounds to
vacate the settlement agreement is on appellants, and failure to show sufficient grounds
10
bars relief under Minn. R. Civ. P. 60.02(b). Frazier, 811 N.W.2d at 631; Johnson, 305
N.W.2d at 573. On this record, the district court did not base its decision on an erroneous
view of the facts or the law in finding that appellants did not exercise due diligence in
discovering the e-mails in question through use of available discovery tools before entering
into the settlement agreement. It therefore acted within its discretion in declining to vacate
the settlement agreement.
B. Fraud by an adverse party
Appellants argue that, because respondent fraudulently concealed material facts
subject to the discovery requests in the current case, appellants were not aware that
respondent’s claims regarding Lot 2 and the easements were baseless in the other case, and
they were therefore fraudulently induced to settle because of the pending lawsuit.
The district court may vacate an order or judgment that is attributable to an adverse
party’s fraud, misrepresentation, or misconduct. Minn. R. Civ. P. 60.02(c). Fraud by an
adverse party may justify relief, if the party alleging fraud establishes by clear and
convincing evidence that the “adverse party engaged in fraud or other misconduct which
prevented it from fully and fairly presenting its case.” Regents of Univ. of Minn., 405
N.W.2d at 480. The district court finds facts, weighs evidence, and assesses credibility to
decide whether fraud occurred. J.L.B. v. T.E.B., 474 N.W.2d 599, 603 (Minn. App. 1991),
review denied (Minn. Oct. 11, 1991). If fraud occurred, the district court should vacate the
judgment only if the fraud affected the central issue rather than a collateral issue. Turner,
653 N.W.2d at 466.
11
The district court examined the elements of fraud in relation to Maria Olson’s
argument that respondent concealed evidence that it knew Lot 2 was not included in the
conveyances and that respondent’s claims in the related case were therefore false. The
district court found that respondent’s claims in the related case were not false
representations, but were instead claims made in litigation. It also found that Maria Olson
did not rely on the “representations” in any event, and that she specifically denied
respondent’s claims. The district court also found that appellants had not conducted any
discovery to investigate respondent’s claims before settling the case. The burden to
demonstrate fraud is on the party seeking relief. Sabri, 657 N.W.2d at 205. We see no
error in the district court’s determination that appellants did not produce clear and
convincing evidence of fraud inducing them to settle. Regents of Univ. of Minn., 405
N.W.2d at 480. The record supports the district court’s findings and the district court acted
within its discretion in denying relief under Minn. R. Civ. P. 60.02(c).
C. Public Policy
Appellants argue that the settlement agreement violates public policy because it
released an attorney, an officer of the court, from liability. Generally, a reviewing court
will only consider issues that the record shows were presented to and considered by the
district court. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). Appellants did not make
this argument before the district court, and we therefore decline to address it.
12
II. Order Granting Motion to Enforce Settlement Agreement and Enter
Judgment
Appellants also argue that Maria Olson did not breach the terms of the settlement
agreement and that the settlement agreement was ambiguous. Respondent argues that
appellants forfeited their arguments that the settlement agreement is ambiguous because
they did not raise this argument to the district court. For the reasons set forth below, we
conclude that the settlement agreement is unambiguous, but that the district court erred in
granting respondent judgment under the plain language of paragraph six.
“Settlement of claims is encouraged as a matter of public policy.” Voicestream
Minneapolis, Inc. v. RPC Props., Inc., 743 N.W.2d 267, 271 (Minn. 2008). A settlement
agreement is a contract. Dykes v. Sukup Mfg. Co., 781 N.W.2d 578, 581-82 (Minn. 2010).
If the language is clear and unambiguous, the district court may enforce the settlement
agreement as a matter of law, giving the language its plain and ordinary meaning. Id. at
582. But if the agreement is ambiguous and the parties dispute material facts, the district
court must conduct an evidentiary hearing. Voicestream, 743 N.W.2d at 272.
In Voicestream, the supreme court stated that a district court shall treat a motion to
enforce a settlement agreement “as it would a motion for summary judgment.” Id. at 273.
A contract may be summarily enforced if it is clear and unambiguous, id., but “[s]ummary
judgment is inappropriate where terms of a contract are at issue and those terms are
ambiguous or uncertain,” Bank Midwest, Minn., Iowa, N.A. v. Lipetzky, 674 N.W.2d 176,
179 (Minn. 2004). On appeal from a grant of summary judgment, we review de novo
whether there are any genuine issues of material fact and whether the district court erred in
13
its application of the law. Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC, 790
N.W.2d 167, 170 (Minn. 2010). Construction of an unambiguous contract is a question of
law, which we review de novo. Horodenski v. Lyndale Green Townhome Ass’n, 804
N.W.2d 366, 371 (Minn. App. 2011).
Appellants argue that the lawsuit commenced by Maria Olson against the attorney
McKinnis was “not part of the agreement” and that the lawsuit therefore “cannot support
[respondent’s] motion for enforcement or the sanctions imposed by the district court.”
A. Breach of the Settlement Agreement
The district court found that Maria Olson’s lawsuit against McKinnis was “within
the very broad language” of paragraph four of the settlement agreement and therefore
violated paragraph five. Paragraph five provided that appellants, on behalf of themselves,
agreed not to sue “any of the entities released hereby, based on any facts or events that
arose on or before date of agreement, including but not limited to any claims released.”
“Generally, a release must manifest the intent to release, discharge, or relinquish a
right, claim, or privilege by a person in whom the claim exists to a person who seeks to be
released.” Curtis v. Altria Grp., Inc., 813 N.W.2d 891, 902 (Minn. 2012). “A general
release of all claims, known and unknown, will be enforced by the court if the intent is
clearly expressed.” Id. We agree with the district court that the parties agreed to the
“broadest release allowed by law” which included a release of all known and unknown
claims against respondent’s “agents, employees, attorneys, or others acting on its behalf.”
The parties agreed that no additional promises were made and that the agreement was to
be a “full and final settlement.” The district court correctly identified the objective intent
14
of the parties under paragraphs four and five to release one another and respondent’s
“agents, employees, [and] attorneys,” from all claims arising out of the events that occurred
before the date of the settlement agreement.
Appellants contend that respondent “must establish that the appellants intended to
include attorney McKinnis’s conflict of interest ethical violation as a term of the
settlement.” The settlement agreement unambiguously includes the release of all known
and unknown claims against lawyers who had performed work on behalf of respondent
before the date of the settlement agreement. The release includes attorney McKinnis,
despite that appellants may not have known of their potential claims for malpractice at the
time the agreement was consummated, because the release unambiguously includes “all
claims, known or unknown.” To the extent that Maria Olson was somehow mistaken as to
whether McKinnis was included within the release, “[u]nilateral mistake as to the scope of
a release will not avoid its plain language; appellants must come forward with evidence
that there was a mutual mistake regarding the intended scope of the releases or that
respondents induced the mistake in some way.” Goldberger v. Kaplan, Strangis & Kaplan,
P.A., 534 N.W.2d 734, 737 (Minn. App. 1995), review denied (Minn. Sept. 28, 1995).
Appellants have failed to show that there was a mutual mistake as to the scope of the
release.
Further, to the extent that any ambiguity could have existed as to which attorneys
were released by the settlement agreement, the well-recognized rule of expressio unius est
exclusio alterius applies here. The maxim provides that “the expression of specific things
in a contract implies the exclusion of all not expressed.” Maher v. All Nation Ins. Co., 340
15
N.W.2d 675, 680 (Minn. App. 1983) (citing Anderson v. Twin City Rapid Transit Co., 250
Minn. 167, 175, 84 N.W.2d 593, 599 (1957)), review denied (Minn. Apr. 25, 1984). The
inclusion of the law firm of Hinshaw & Culbertson LLP within paragraph four as an
exception to the general release of respondent’s “attorneys” indicates the parties’ intent to
exclude that firm, but no others, from the release of claims.
B. The $150,000 judgment against appellants
Although the settlement agreement unambiguously releases appellants’ claims
against McKinnis arising from his work for respondent, the agreement does not entitle
respondent to judgment against appellants in the amount of $150,000 under paragraph six.
The district court appears to have reasoned that the settlement agreement called for the
entry against appellants for any breach of paragraphs four and five of the agreement. That
is not what paragraph six provides. It provides that respondent is entitled to judgment if
the appellants, in either their individual capacities or collectively, “commence any
complaint or claim against the bank . . . based on any facts or events that arose on or before
date of the agreement, including but not limited to any claim released or any claim covered
by the covenant not to sue.” (Emphasis added.) Giving the words within paragraph six
their plain and ordinary meaning, the settlement agreement entitles respondent to a
$150,000 judgment if appellants “commence any complaint or claim against the bank.”
(Emphasis added.) Maria Olson did not sue “the bank.” She sued McKinnis.
While Maria Olson’s suit against McKinnis was barred by the release language of
paragraphs four and five of the settlement agreement, the district court erred in its
conclusion that the remedy for the “breach of the settlement agreement is entry of judgment
16
in the amount of $150,000.” Because paragraphs four, five, and six of the settlement
agreement are unambiguous and do not call for the entry of judgment against appellants
for any breach of the covenant not to sue, but are limited to breach of the covenant not to
sue “the bank,” we do not consider appellants’ additional arguments regarding their intent
and interpretation of the release at the time of entering the settlement agreement. The plain
language of paragraph six does not entitle respondent to the judgment awarded by the
district court. We therefore reverse that judgment.
C. The award of attorney fees
Having determined that the district court erred in entering judgment in the amount
of $150,000, we next consider whether the judgment for attorney fees was also in error.
“Attorney fees are recoverable if specifically authorized by contract or statute.”
Horodenski, 804 N.W.2d at 371 (quotation omitted). We review a district court’s award
or denial of attorney fees for abuse of discretion. Northfield Care Ctr., Inc. v. Anderson,
707 N.W.2d 731, 735 (Minn. App. 2006). Construction of an unambiguous contract is a
question of law, which we review de novo. Horodenski, 804 N.W.2d at 371.
Paragraph 22 of the settlement agreement states, “If the [sic] either party breaches
any provision of this agreement, they shall pay the . . . other party its attorneys’ fees for
enforcing this agreement, in addition to any damages.” The district court’s order granting
respondent’s motion to enforce the settlement agreement provided that the district court
would also grant reasonable attorney fees incurred in bringing the motion. Respondent
moved the court for an award of $4,528 in attorney fees for the “work that [respondent’s
counsel] performed for the benefit of [respondent] in preparing and bringing the motion”
17
and costs associated with the motion. The district court granted the request for attorney
fees on December 7, 2015, and entered judgment.
Respondent was awarded attorney fees on the basis that it expended money in
bringing the motion to enforce the agreement and to have judgment entered against
appellants for Maria Olson’s breach of the settlement agreement. However, and as
discussed above concerning the plain language of the settlement agreement, respondent
was not entitled to the $150,000 judgment on the basis of Maria Olson’s suit against
McKinnis. Therefore an award of attorney fees was unwarranted under paragraph 22. The
plain language of the settlement agreement leads us to conclude that the award of attorney
fees was in error. We therefore reverse the judgment against appellants for attorney fees.
III. Conclusion
In sum, the district court acted within its discretion in denying appellants’ motion
to vacate the settlement agreement. That agreement unambiguously released all claims
against respondent’s agents, employees, and attorneys for actions taken on respondent’s
behalf before the parties entered into the settlement agreement. The covenant not to sue,
likewise, is unambiguous and was breached by Maria Olson’s lawsuit against McKinnis.
Her claims against McKinnis were unambiguously settled and released. However, the
district court erred in concluding that the remedy for that breach was effectuating the
confession of judgment under paragraph six. Paragraph six, giving the words their plain
and ordinary meaning, provides that judgment of $150,000 would be entered if appellants,
either individually or collectively, bring a claim or complaint against respondent, “the
bank.” Because the McKinnis suit was not a claim against the bank, entry of judgment was
18
improper. Likewise, the award of attorney fees for fees expended in entering judgment
was in error, respondent having had no right to the relief it sought.
Affirmed in part and reversed in part.
19