2301 Congress Realty, LLC v. Wise Business Forms, Inc.

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2014 ME 147
Docket: Cum-13-444
Argued: September 10, 2014
Decided: December 18, 2014
Panel: SAUFLEY, C.J., and ALEXANDER, SILVER, MEAD, GORMAN, JABAR, and HJELM,
JJ.
2301 CONGRESS REALTY, LLC
v.
WISE BUSINESS FORMS, INC.
SAUFLEY, C.J.
[¶1] This appeal arises from a lease dispute between landlord 2301
Congress Realty, LLC, and tenant Wise Business Forms, Inc., and the parties’
resolution of that dispute in a settlement agreement reached through mediation.
Wise appeals from a judgment entered in the Superior Court (Cumberland County,
Warren, J.) denying its motion for summary judgment on its counterclaim for
enforcement of the settlement agreement. Because 2301 Congress has signed an
agreement reflecting all of the terms of the settlement reached through mediation,
we affirm the court’s determination that the counterclaim seeking to enforce the
settlement is moot.
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I. BACKGROUND
[¶2] From May 2002 to May 2012, Wise leased from 2301 Congress
business premises located at 2301 Congress Street in Portland pursuant to a written
lease. In July 2012, 2301 Congress filed a complaint in the Superior Court
alleging that Wise had breached maintenance and repair provisions contained in
the lease and that Wise had converted three humidifiers that were affixed to the
property. Wise filed an answer denying these allegations and asserted a
counterclaim for breach of contract, alleging that 2301 Congress had failed to
perform certain repairs and maintenance required by the lease.
[¶3] On November 1, 2012, Robert Willis (owner of 2301 Congress) and
Charles Teets (chief operating officer and general counsel for Wise) appeared with
counsel at a mediation before a private attorney. After the mediation, the mediator
drafted a summary settlement agreement, stating in whole:
2301 Congress Realty, LLC (2301) and Wise Business Forms,
Inc. (Wise) after mediation this 1st day of November, 2012 agree to
resolve all disputes between them on the following summary terms,
with final settlement documents to be prepared by counsel for Wise
and reviewed by counsel for 2301:
1. Wise will place the three humidifiers (GTS-100, GTS-200, and
GTS-400CAB) (in as is condition) on pallets for pick up by
2301.
2. Wise will pay 2301 $48,000 within 20 days of execution of
final settlement documents.
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3. The final settlement documents will include a general mutual
release of all claims of any kind or nature, whether known or
unknown. The release will include a release both by and for the
benefit of Bob Willis, and will include a release of Wise’s
insurer.
4. The pending Superior Court litigation (claims and
counterclaims) will be dismissed with prejudice and without
costs or attorneys’ fees.
Both parties signed this summary agreement at the mediation. On that same day,
both of the parties and the mediator also signed an alternative dispute resolution
conference report that stated, “As a result of the ADR Conference(s), this action is
. . . Fully Resolved.”
[¶4] After the mediation, 2301 Congress prepared and presented to Wise a
draft of a final settlement agreement. A new disagreement arose regarding the
scope of the “general mutual release of all claims” described in paragraph 3 of the
summary agreement. 2301 Congress initially contended that the agreement did not
cover claims for indemnification related to hazardous materials, and it sought to
explicitly exclude those claims from the mutual release. Wise contended that the
language in paragraph 3 of the agreement was binding and precluded any
reservation of the right to seek indemnification against Wise.
[¶5] On November 15, 2012, the court entered an order that had been
prepared by the mediator after the parties settled the case: “The entry will be:
‘Report of ADR Conference filed. Case resolved. Order/judgment is entered.’”
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On that same day, because the parties had been unable to agree on the language
regarding the mutual release, Wise moved to amend its original counterclaim to
add a second count for breach of the summary settlement agreement. The court
granted Wise’s motion to amend its counterclaim, but the court declined to make
findings on whether the summary settlement agreement was enforceable. The
order further stated that “all proceedings with respect to the claims originally
asserted in this action are stayed until that counterclaim is resolved.”
[¶6] Wise filed its answer and amended counterclaim, which included the
second counterclaim for breach of the agreement. Wise alleged that “[t]he final
settlement documents have not been executed because [2301 Congress] has refused
to sign a release that conforms to the [summary agreement].” 2301 Congress filed
an amended answer to Wise’s counterclaims.
[¶7] In April 2013, Wise moved for summary judgment on its counterclaim
for enforcement of the agreement. The next month, 2301 Congress executed and
sent to Wise a complete settlement agreement and mutual release that contained
language that comported with the language in paragraph 3 of the summary
settlement agreement. In so doing, 2301 Congress removed any reservation of a
right to seek indemnification against Wise. Wise has acknowledged that this
settlement agreement now includes language consistent with the language of the
summary agreement but has declined to sign the agreement, contending that 2301
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Congress’s counsel had stated in a separate communication to Wise that 2301
Congress still intended to reserve indemnification claims from the mutual release.
[¶8] Responding to Wise’s motion, 2301 Congress filed a cross-motion for
summary judgment, requesting that the court deny Wise’s summary judgment
motion as moot and compel Wise to execute the complete settlement agreement
that was already signed by 2301 Congress. The cross-motion further sought a
summary judgment ordering the return of the three humidifiers and payment of
$48,000 to 2301 Congress pursuant to the terms of the summary agreement.
Alternatively, 2301 Congress requested that the court declare the summary
agreement void and unenforceable because there was no meeting of the minds
regarding the scope of the mutual release.
[¶9] On August 30, 2013, the court (1) denied Wise’s motion for summary
judgment as moot, (2) granted summary judgment to 2301 Congress as to the
$48,000 payment and the return of the three humidifiers, and (3) denied the
motions in all other respects, including “with respect to the interpretation or effect
of the settlement agreement or release . . . because those issues present a
hypothetical and non-justiciable dispute at this time.” Wise appealed to us.
II. DISCUSSION
[¶10] “Settlement agreements are analyzed as contracts, and the existence of
a binding settlement is a question of fact.” In re Estate of Snow, 2014 ME 105,
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¶ 11, 99 A.3d 278 (quotation marks omitted). For a settlement agreement to be
binding, the parties must have mutually intended “to be bound by terms
sufficiently definite to enforce.” Id. (quotation marks omitted). When parties
report to the court that they have reached a settlement and have memorialized the
terms of the agreement and expressed clear consent to those terms, “that settlement
becomes an enforceable agreement and, upon acceptance by the court, is
incorporated as a judgment of the court.” Muther v. Broad Cove Shore Ass’n, 2009
ME 37, ¶ 7, 968 A.2d 539. If a release is “absolute and unequivocal” in its terms,
it “cannot be explained by parol evidence and must be construed according to the
language that the parties have seen fit to use.” Norton v. Benjamin, 220 A.2d 248,
253 (Me. 1966) (quotation marks omitted).
[¶11] Here, the agreement that the parties reached through mediation was
broad and clear: “The final settlement documents will include a general mutual
release of all claims of any kind or nature, whether known or unknown.” This
agreed upon language included no reservation of rights to bring indemnification
claims. 2301 Congress eventually executed a complete settlement agreement that
contained the required general release, but Wise refused to sign it because it feared
that 2301 Congress still considered certain types of claims to be outside the scope
of that release.
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[¶12] The primary question before the court on the cross-motions was
whether the parties had reached a sufficient meeting of the minds to create a
binding contract and judgment by executing the summary settlement agreement,
and whether the release signed by 2301 Congress satisfied the terms of that
agreement. At mediation, the parties agreed to execute a general release without
any provision for the exclusion of claims, and they are bound by that agreement.
Because 2301 Congress executed a general release, the court correctly determined
that 2301 Congress satisfied its obligation pursuant to the summary settlement
agreement. Notwithstanding Wise’s apprehension that, at some point in the future,
2301 Congress might act in contradiction to that release, the release now signed by
2301 Congress provides for no exclusions. Once 2301 Congress signed the
release, there was no controversy remaining for adjudication.
[¶13] Because, after a brief initial disagreement over the language of the
release, 2301 Congress executed a general release that complied with the summary
agreement reached through mediation, the court correctly determined that Wise’s
motion for summary judgment on its counterclaim seeking to enforce the summary
settlement agreement was moot.
The entry is:
Judgment affirmed.
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On the briefs:
Brendan P. Reilly, Esq., Jensen Baird Gardner & Henry,
Portland, for appellant Wise Business Forms, Inc.
Jennifer S. Riggle, Esq., and Robert P. Hayes, Esq., Germani
Martemucci Riggle & Hill, Portland, for appellee 2301
Congress Realty, LLC
At oral argument:
Brendan P. Reilly, Esq., for appellant Wise Business Forms,
Inc.
Jennifer S. Riggle, Esq., for appellee 2301 Congress Realty,
LLC
Cumberland County Superior Court docket number CV-2012-297
FOR CLERK REFERENCE ONLY