2020 COA 178
Colo. Ct. App.2021Background:
- Tuscany (plaintiff) contracted to build/sell a home to Westover defendants, who would sell it to the Platenaks; dispute led to litigation and a mediation on March 25, 2019.
- The mediator, after technical problems prevented signing at the session, emailed counsel a summary of settlement terms and asked for review/assent; follow-up emails and a Draft Agreement circulated.
- Tuscany and the Platenaks signed the Draft Agreement; the Westover defendants refused and instead submitted a nearly identical Westover Draft that added Paragraph 19 (reserving certain future claims).
- Tuscany and the Platenaks moved to enforce an oral settlement allegedly formed at the mediation and relied on the mediator’s email, the Draft Agreement, and mediator testimony; the district court admitted that evidence and enforced the settlement, awarding fees to the Platenaks.
- On appeal, the Colorado Court of Appeals held the mediator’s email and the Draft Agreement were "mediation communications" protected by the Dispute Resolution Act and therefore inadmissible; without that evidence, plaintiffs failed to prove an enforceable settlement. The enforcement order and fee award were reversed and remanded.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of mediator’s email | Email memorialized terms of an agreement and is not protected | Email was a mediator’s memorandum prepared pursuant to mediation and is protected | Email is a mediation communication (protected) and inadmissible |
| Admissibility of Draft Agreement | Draft simply memorialized terms agreed at mediation and is admissible | Draft was prepared at mediator’s behest or records communications made during mediation and is protected | Draft was a mediation communication or disclosed mediation communications and was inadmissible |
| Sufficiency of remaining evidence to prove enforceable settlement | Testimony and correspondence plus parties’ signatures (some) suffice to show meeting of minds | Without the mediator email and Draft, plaintiffs lack admissible evidence of terms | Without the excluded materials plaintiffs did not meet their burden to prove an enforceable agreement; enforcement reversed |
| Attorney-fee award | Plaintiffs were prevailing party and entitled to fees under contract clause | Fees depend on enforcement ruling; if enforcement reversed no prevailing party | Fee award reversed because order enforcing settlement was reversed |
Key Cases Cited
- Yaekle v. Andrews, 195 P.3d 1101 (Colo. 2008) (interprets Dispute Resolution Act; mediation communications limited to those made in mediator’s presence or at mediator’s behest; fully executed written agreements excepted)
- Western Distribution Co. v. Diodosio, 841 P.2d 1053 (Colo. 1992) (party seeking to enforce contract bears burden to prove its existence)
- Sumerel v. Goodyear Tire & Rubber Co., 232 P.3d 128 (Colo. App. 2009) (discusses elements of settlement contract and meeting of the minds)
- H.B. Zachry Co. v. O’Brien, 378 F.2d 423 (10th Cir. 1967) (definition of memorandum as a writing outlining terms of a transaction)
- Atkinson v. Estate of Hook, 374 P.3d 215 (Wash. Ct. App. 2016) (discusses execution of a written agreement and meaning of "execute")