997 N.W.2d 463
Mich. Ct. App.2022Background
- Plaintiff Maher Dabish and his company MDI became a member of LV Petro, LLC with three relatives but later sued defendants for minority-member oppression, receiver appointment, and dissolution.
- Defendants offered to buy Dabish’s membership interest for $150,000 (two staggered payments) and to keep LV Petro bound to a lease with MDI; attorneys drafted a Settlement Agreement and Release and a Membership Interest Purchase Agreement (MIPA).
- Dabish (through counsel) suggested minor changes and never signed the final settlement documents; attorneys exchanged emails but no document was subscribed by Dabish or an attorney of record.
- Defendants moved to enforce the alleged settlement; the trial court ruled on August 11, 2021 that a settlement existed and later ordered Dabish to sign, threatening contempt sanctions when he refused.
- On appeal, the Court of Appeals reversed, holding there was no enforceable settlement because MCR 2.507(G) was not satisfied and there was no unambiguous acceptance or meeting of the minds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability under MCR 2.507(G) | Dabish: no enforceable settlement because it was neither made in open court nor in writing "subscribed" by him or his attorney | Defendants: settlement was reached via counsel negotiations and emails | Held: No. MCR 2.507(G) requires a signed (subscribed) writing or an on-the-record agreement; documents were unsigned, so unenforceable |
| Mutual assent / acceptance | Dabish: no unambiguous acceptance or meeting of minds; no attorney response to final offer email | Defendants: asserted that counsel’s negotiations and communications effectuated acceptance | Held: No evidence of unambiguous acceptance; offer was not accepted in strict conformity, so no contract formed |
| Court’s authority to force signing / contempt | Dabish: court lacked authority to compel him to sign a settlement | Defendants: court could enforce settlement and order compliance | Held: Court erred to compel signature; a court cannot force parties to settle or sign documents when no enforceable agreement exists |
| Enforce MIPA separately from Settlement Agreement | Dabish: agreements are interdependent; cannot enforce one unsigned document to resolve litigation | Defendants: sought enforcement of the MIPA even if Settlement Agreement unenforceable | Held: Rejected; enforcing MIPA alone would not effectuate a complete settlement of the pending litigation |
Key Cases Cited
- Reicher v. SET Enterprises, Inc., 283 Mich. App. 657 (Mich. Ct. App. 2009) (settlement agreement is a binding contract)
- Kloian v. Domino’s Pizza, LLC, 273 Mich. App. 449 (Mich. Ct. App. 2006) (acceptance must be unambiguous and in strict conformity; MCR 2.507(G) signature requirement explained)
- Mich Mut Ins Co v. Indiana Ins Co, 247 Mich. App. 480 (Mich. Ct. App. 2001) (agreement to settle pending litigation must comply with court rule to be enforceable)
- Henry v. Prusak, 229 Mich. App. 162 (Mich. Ct. App. 1998) (court cannot force settlements upon parties)