Veith v. Xterra Wetsuits, LLC

144 Wash. App. 362

• Court: Court of Appeals of Washington
• Decided: May 1, 2008
• Docket: No. 25912-9-III
• Status: Published

Opinions

Thompson, J.

*

¶1 This appeal arises from a superior court decision denying a motion to enforce a settlement agreement. Parties enter into an enforceable settlement agreement when their intentions are plain and they agree upon the contract’s terms even if one or both of the parties contemplated later execution of a written agreement. Moreover, valid contracts require acceptance. Here, some material terms had not yet been resolved and the defendant had not approved a final settlement. The parties therefore did not have an enforceable settlement agreement. We affirm the trial court.

FACTS

¶2 Michael Veith died of hyperthermia during the swimming leg of a triathlon. At the time of his death, he was wearing a wetsuit manufactured by Xterra Wetsuits, LLC, and distributed by UnclePDog, LLC, and King Distribution, LLC. His widow, Cristi Veith, sued Xterra, UnclePDog, and King. She alleged that the wetsuit was defective and that the defendants failed to warn of the possibility that the wetsuit could cause a person to become hyperthermic.

¶3 UnclePDog was uninsured when Ms. Veith sued. UnclePDog had a distribution agreement with King wherein King would name UnclePDog as an additional insured under its liability insurance policy. King procured liability insurance in the amount of $1,000,000 through Montgomery Insurance Company. It intended to name UnclePDog. But UnclePDog was not listed as an additional insured under King’s policy. Montgomery refused UnclePDog’s tender of defense of this suit as a result.

¶4 UnclePDog and Ms. Veith then entered into settlement negotiations. The parties conferred and exchanged correspondence and draft agreements. UnclePDog agreed to assign its potential claims against Montgomery to Ms. Veith. It also promised to stipulate to a $1,000,000 judgment against it. Ms. Veith agreed to release all her claims against UnclePDog in exchange. She also agreed not to execute on the stipulated judgment.

¶5 Ms. Veith, UnclePDog, King, and Montgomery participated in a mediation meeting. Ms. Veith and her attorney believed that they had reached a final agreement with UnclePDog before the meeting began because of UnclePDog’s counsel’s statement that they had a deal.

¶6 Montgomery agreed, during the course of the mediation meeting, to insure UnclePDog. UnclePDog’s counsel then told Ms. Veith’s attorney that UnclePDog was no longer interested in negotiating a settlement.

¶7 Ms. Veith moved to enforce what she viewed to be a final settlement agreement. After the parties presented evidence and testimony at a hearing, the court concluded that “[t]he attempted compromise did not pass from a stage of negotiation to one of finality.” Clerk’s Papers (CP) at 69. It found that Ms. Veith and UnclePDog had “a basic agreement as to the outlines of an agreement.” Id. It also found that “the matter wasn’t completely resolved [because] various items raised by UnclePDog . . . had not been resolved and were clearly material.” Id. Finally, the court found that “Mr. Simmons, the owner of UnclePDog, LLC had not given final approval to the settlement because it was not in the final form and was not presented to him as such.” Id.

DISCUSSION

¶8 Motions to enforce judgment are reviewed de novo where the evidence consists of only declarations and affidavits. Lavigne v. Green, 106 Wn. App. 12, 16, 23 P.3d 515 (2001). But cf. Morris v. Maks, 69 Wn. App. 865, 868, 850 P.2d 1357 (1993) (applying abuse of discretion standard of review). But where the trial court decides a motion to enforce after taking evidence and testimony at a hearing, as the court did here, we review the trial court’s factual findings for substantial evidence. Fred Hutchinson Cancer Research Ctr. v. Holman, 107 Wn.2d 693, 712, 732 P.2d 974 (1987).

¶9 The trial court here issued a memorandum opinion. It did not enter formal findings of fact and conclusions of law. Memorandum opinions that adequately cover the court’s determination of facts shown by the evidence are sufficient to fulfill the requirement for findings of fact. Bice v. Bice, 138 Wash. 598, 601, 244 P. 1000 (1926); see State v. Clark, 46 Wn. App. 856, 859, 732 P.2d 1029 (1987). We conclude that the memorandum opinion here sufficiently covers the court’s factual findings, satisfying the requirement for findings of fact.

¶10 Ms. Veith does not assign error to any of the trial court’s findings. Unchallenged findings are verities for purposes of appeal. Zunino v. Rajewski, 140 Wn. App. 215, 220, 165 P.3d 57 (2007). This court then must determine whether those findings from the memorandum opinion support the court’s conclusions of law. Id. Conclusions of law are reviewed de novo. Id.

¶11 The issue before the trial court was whether Ms. Veith and UnclePDog had entered into an agreement to settle the litigation between them. The court concluded that “[t]he attempted compromise [between Ms. Veith and UnclePDog] did not pass from a stage of negotiation to one of finality.” CP at 69. In other words, the court determined that Ms. Veith and UnclePDog did not enter into a settlement agreement.

¶12 Ms. Veith contends that she and UnclePDog had an enforceable settlement agreement even though the parties did not sign the final agreement. She argues that the agreement contained all the material terms and that UnclePDog did not genuinely dispute those terms. Ms. Veith contends that UnclePDog’s attorney orally accepted the final terms of the agreement.

¶13 The validity and enforceability of a settlement agreement are determined by reference to the substantive law of contracts. Stottlemyre v. Reed, 35 Wn. App. 169, 171, 665 P.2d 1383 (1983). A contract exists when the intention of the parties is plain and the terms of a contract are agreed upon, even if one or both of the parties contemplated later execution of a writing. Id. A contract requires offer, acceptance, and consideration. Christiano v. Spokane County Health Dist., 93 Wn. App. 90, 95, 969 P.2d 1078 (1998). “There is no valid contract until an offer is accepted.” Hansen v. Transworld Wireless TV-Spokane, Inc., 111 Wn. App. 361, 370, 44 P.3d 929 (2002). Acceptance is an expression (communicated by word, sign, or writing to the person making the offer) of the intention to be bound by the offer’s terms. Plouse v. Bud Clary of Yakima, Inc., 128 Wn. App. 644, 648, 116 P.3d 1039 (2005).

¶14 The court’s unchallenged findings show that the parties had not yet resolved their disagreements over some of the settlement’s material terms. The findings also show that UnclePDog had not approved the final settlement. In other words, the agreement lacked valid acceptance, and the parties had not yet agreed upon all of its material terms. These findings support the conclusion that a contract did not exist between Ms. Veith and UnclePDog.

¶15 Regardless of which standard we apply, the abuse of discretion as here or de novo (as the dissent suggests), our result would be the same. Ms. Veith had a duty at the trial court level to produce evidence that established the existence of a contract. She failed to satisfy that duty.

¶16 Affirmed.

Kulik, A.C.J., concurs.

Judge Philip J. Thompson is serving as judge pro tempore of the Court of Appeals pursuant to ROW 2.06.150.