514 P.3d 148
Utah Ct. App.2022Background
- Park Property Management sued G6 Hospitality (and individuals) over a terminated franchise agreement; G6 filed counterclaims.
- At mediation (Nov. 20, 2019) G6 offered a “walk-away” settlement: mutual release of all claims and each party pays its own fees; Park Property’s counsel orally accepted and confirmed by email.
- G6’s draft written settlement included provisions preserving indemnification, insurance, post-termination, and confidentiality terms from the franchise agreement; Park Property objected to paragraph preserving those franchise provisions.
- Counsel exchanged emails; on Dec. 9 Park Property’s counsel agreed to sign if the indemnification provision remained and certain nonparty names were removed; G6 nevertheless sent a Jan. 26 draft that still included the contested franchise provisions; Park Property refused to sign.
- G6 moved to enforce the November 20 agreement; the district court found a binding settlement (no later than Dec. 9), ordered the parties to sign the Jan. 26 document, and awarded G6 attorney fees for enforcement.
- Park Property appealed; the Court of Appeals affirmed enforcement, upheld the order to sign the Jan. 26 document based on the record at the time, and remanded for appellate attorney fees to G6.
Issues
| Issue | Park Property's Argument | G6 Hospitality's Argument | Held |
|---|---|---|---|
| Whether the Nov. 20 communications created a binding settlement (meeting of minds) | The parties intended to defer legal obligations until a formal written agreement; no meeting of minds on material terms | The parties unambiguously agreed to a mutual "walk-away" release and each paying their own fees on Nov. 20 (confirmed by email); later negotiations did not undo that agreement | Held: Binding oral settlement existed as to the essential "walk-away" terms (Nov. 20); meeting of minds existed no later than Dec. 9 |
| Whether the Jan. 26 written draft conflicted with the parties' agreement and thus could not be enforced/signed | The Jan. 26 draft contained provisions (post-termination, confidentiality, others) that contradicted counsel's negotiations and prior agreements; court should not force signature | The Jan. 26 document reflected the parties’ agreed terms; the court may order signature to memorialize the settlement | Held: District court did not err ordering parties to sign the Jan. 26 document given the evidence before the court at the time; Park Property failed to timely preserve the contention that specific provisions conflicted |
| Award of attorney fees for enforcing the settlement (including on appeal) | Fees were not reasonably necessary; some fees related to execution not enforcement; contested provisions caused additional work | The settlement (and written agreement) authorizes recovery of fees for enforcing the agreement; prevailing party entitled to reasonable fees, including on appeal | Held: Award of fees below stands; Court remanded to district court to calculate fees reasonably incurred on appeal |
Key Cases Cited
- Lebrecht v. Deep Blue Pools & Spas Inc., 374 P.3d 1064 (Utah Ct. App. 2016) (distinguishes situations where parties intended to defer obligations until a future written agreement)
- Sackler v. Savin, 897 P.2d 1217 (Utah 1995) (parties’ communications showing intent to proceed later to a formal agreement can preclude an enforceable oral contract)
- Lawrence Constr. Co. v. Holmquist, 642 P.2d 382 (Utah 1982) (an oral contract can be binding despite later failure to execute a memorializing written instrument)
- ACC Cap. Corp. v. Ace West Foam Inc., 420 P.3d 44 (Utah Ct. App. 2018) (settlement enforceable where integral features are definite even if some terms remain to be drafted)
- Patterson v. Knight, 391 P.3d 1075 (Utah Ct. App. 2017) (meeting of the minds and definiteness required for enforceable settlement; unresolved nonessential terms do not necessarily preclude enforcement)
- Mardesich v. Sun Hill Homes LC, 392 P.3d 950 (Utah Ct. App. 2017) (prevailing party awarded appellate attorney fees when fees were awarded below)