Sylvester v. Merchants Credit Corporation

• Court: District Court, W.D. Washington
• Decided: August 2, 2019
• Docket: 2:17-cv-00168
• Status: Unknown

Opinion

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3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE 7 KENNETH S. SYLVESTER, et al. 8 Plaintiffs, 9 v. C17-168 TSZ 10 MERCHANTS CREDIT MINUTE ORDER CORPORATION, 11 Defendant. 12

13 The following Minute Order is made by direction of the Court, the Honorable Thomas S. Zilly, United States District Judge: 14 (1) Plaintiffs Kenneth and Lisa Sylvester (“plaintiffs”) seek an order enforcing a settlement agreement in this matter. See Motion to Enforce Settlement Agreement, 15 docket no. 36. The motion is not opposed. Having considered plaintiffs’ brief filed in support of the motion, the Court DENIES the motion to enforce settlement agreement, 16 docket no. 36.

17 Trial courts may “summarily enforce . . . a settlement agreement entered into by the litigants” while the litigation is pending. In re City Equities Anaheim, 18 Ltd., 22 F.3d 954, 957 (9th Cir. 1994). “Settlement agreements are interpreted according to the principles of contract law.” Tucker v. Tucker, 203 F.3d 832, 832 19 (9th Cir. 1999); see also Jeff D. v. Andrus, 899 F.2d 753, 760 (9th Cir. 1989) (“The construction and enforcement of settlement agreements are governed by 20 principles of local law which apply to interpretation of contracts generally.”).

21 To form a valid and enforceable contract in Washington, the parties must objectively manifest their mutual assent to the essential terms. Yakima Cnty. Fire 22 1 Prot. Dist. No. 12 v. City of Yakima, 122 Wn.2d 371, 388, 858 P.2d 245 (1993). Under Washington law, a contract may be established by agreement of counsel 2 even though the parties contemplated signing a more formal writing in the future. Loewi v. Long, 76 Wn. 480, 484, 136 P. 673 (1913); Morris v. Maks, 69 Wn. App. 3 865, 850 P.2d 1357 (1993). The party asserting the existence of the contract must show the terms of the contract are stated, agreed upon, and that “the parties 4 intended a binding agreement prior to the time of the signing and delivery of a formal contract.” Plumbing Shop v. Pitts, 67 Wn.2d 514, 520, 408 P.2d 382 5 (1965) (quoting Loewi, 76 Wn. at 484); see also Keystone Land & Dev. Co. v. Xerox Corp., 353 F.3d 1070, 1073 (9th Cir. 2003). “Equally certain is that if the 6 parties intended their legal obligations to be deferred until the execution of the formal writing, the preliminary writings and negotiations cannot constitute a 7 contract.” Keystone, 353 F.3d at 1073 (citing Plumbing Shop, 67 Wn.2d at 520- 21); see also KVI, Inc. v. Doernbecher, 24 Wn.2d 943, 967, 167 P.2d 1002 (1946). 8 The parties’ intent to enter into a subsequent agreement “is strong evidence to show that they do not intend the previous negotiations to amount to any proposal 9 or acceptance.” Pac. Cascade Corp. v. Nimmer, 25 Wn. App. 552, 556, 608 P.2d 266 (1980) (quoting Coleman v. St. Paul & Tacoma Lumber Co., 110 Wash. 259, 10 272, 188 P. 532 (1920)).

11 When a party moves to enforce the terms of a settlement agreement, that party bears the burden of “proving that there is no genuine dispute over the 12 existence and material terms of the agreement.” Bringerhoff v. Campbell, 99 Wn. App. 692, 696-97, 994 P.2d 911 (2000). The court must view the facts in 13 the light most favorable to the non-moving party to “determine whether reasonable minds could reach but one conclusion.” Id. at 697. Here, defendant’s counsel 14 confirmed “[w]e have a deal” after conferring with his client in response to plaintiffs’ offer. See Declaration of Ryan L. McBride, Ex. B, docket no. 36-4 15 (“Email Correspondence”), at 7. However, that email and subsequent correspondence reflects an intent to enter into a subsequent agreement and that the 16 parties would need to review and approve that subsequent agreement. For example, defendant’s counsel—in the same email in which he stated “[w]e have a 17 deal”—stated that he “had a question on how [plaintiff] wanted to handle the payments.” Id. Plaintiffs’ counsel later emailed a draft settlement agreement and 18 asked “if [defendants’ counsel had] any redlines.” Id. at 12. Plaintiffs’ counsel subsequently emailed defendants’ counsel, stating that “you indicated you did not 19 have any edits to the settlement agreement I proposed to you and were going to run the agreement by your decision maker and get back to me soon . . . .” Id. at 20 17. Although in some instances the parties may enter an enforceable settlement agreement even though they contemplate executing a future, more formal 21 agreement, see, e.g., McKelvey v. Am. Seafoods, No. C99-2108L, 2000 WL 33179292, at *1 (W.D. Wash. Apr. 7, 2000), this is not such a case. Taking the 22 facts in the light most favorable to the non-moving party, the email 1 correspondence indicates that although the parties agreed to certain terms of the settlement, defendants’ counsel expressly indicated that he would need to obtain 2 client approval for the final agreement. The Court finds plaintiffs have failed to show that the parties “intended a binding agreement prior to the time of the 3 signing and delivery of a formal contract.” Plumbing Shop, 67 Wn.2d at 520. Moreover, Washington law requires “a stipulation in open court on the record, or a 4 writing acknowledged by the party to be bound” in order to bind a party to a settlement agreement negotiated by the party’s attorney. Bryant v. Palmer Coking 5 Coal Co., 67 Wn. App. 176, 178 (1992) (citing CR 2A and RCW 2.44.010). The purpose of this rule is to avoid situations where one party seeks to enforce a 6 settlement agreement against another party that has not agreed to the settlement terms. Id. at 179. 7 (2) The parties are ORDERED to file a Joint Status Report on or before 8 August 30, 2019, addressing potential trial dates in October 2019.

9 (3) The Clerk is directed to send a copy of this Minute Order to all counsel of record. 10 Dated this 2nd day of August, 2019. 11 William M. McCool 12 Clerk 13 s/Karen Dews Deputy Clerk 14 15 16 17 18 19 20 21 22