935 N.W.2d 308
Wis. Ct. App.2019Background
- Plaintiff Paul R. Ponfil Trust and defendant Charmoli Holdings, LLC jointly owned quarry property; Trust sued Charmoli in November 2016.
- During mediation the parties signed a one-page handwritten "Mediation Settlement Agreement" reciting the case was "Settled In Full," specifying mutual conveyances of two 40‑acre parcels and a $500,000 payment by Charmoli within 30 days.
- Paragraph 5 of the agreement stated the parties "agree[d] to sign a separate substantive agreement covering such things as liability & indemnity in usual form."
- The parties exchanged multiple drafts dealing with detailed indemnity/environmental terms but never reached agreement on the separate substantive indemnity/release provisions.
- The Trust moved to enforce the mediation agreement under Wis. Stat. § 807.05; the circuit court found a binding settlement and ordered enforcement. Charmoli appealed.
- The Court of Appeals reversed, holding the written agreement was unenforceable because Paragraph 5 left material terms (liability/indemnity) indefinite and unresolved; case remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the signed mediation settlement (which defers "liability & indemnity" to a separate future agreement) is an enforceable contract under Wis. Stat. § 807.05 | The Trust: the one‑page writing says the case is "Settled In Full"; Paragraph 5 can be addressed later or enforced if disputes arise; court should enforce now | Charmoli: no meeting of the minds on material terms; agreement to agree on indemnity is indefinite and unenforceable | Reversed: no enforceable settlement — Paragraph 5 left material terms unresolved and therefore the agreement lacks the definiteness required for enforcement |
| Whether a court may supply or reform missing material terms (e.g., write the "usual form" indemnity) | Trust: court could adopt a reasonable construction or enforce despite future details; "usual form" supplies guidance | Charmoli: court cannot rewrite or supply material terms; lack of objective standard precludes enforcement | Held: court may not rewrite or supply Paragraph 5; there is no objective basis to determine the contested indemnity/liability terms, so enforcement is improper |
Key Cases Cited
- Waite v. Easton-White Creek Lions, Inc., 289 Wis. 2d 100 (2006) (settlement agreements governed by Wis. Stat. § 807.05; enforceability reviewed under contract principles)
- Kocinski v. Home Ins. Co., 154 Wis. 2d 56 (1990) (§ 807.05 does not alter basic contract law; writing requirement is an exception to oral-contract rule)
- Management Comput. Servs., Inc. v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158 (1996) (contracts must be definite as to material terms; courts should not void contracts for mere disagreement over intent unless terms are truly indefinite)
- American Nat’l Prop. & Cas. Co. v. Nersesian, 277 Wis. 2d 430 (2004) (no binding settlement where parties anticipated a formal contract containing additional material provisions)
- Ehlinger v. Hauser, 325 Wis. 2d 287 (2010) (a contract must be definite and certain as to material obligations to be enforceable)
- Dunlop v. Laitsch, 16 Wis. 2d 36 (1962) (agreements to agree on material terms are unenforceable)
- United States v. Orr Constr. Co., 560 F.2d 765 (7th Cir. 1977) (an agreement is unenforceable when material terms cannot be determined from the contract or by usage/custom)