Robert Slovak v. Wells Fargo Bank
685 F. App'x 583
9th Cir.2017Background
- At a June 3, 2014 settlement conference, Slovak and Wells Fargo reached an oral settlement on the record resolving a dispute over a promissory note secured by a deed of trust.
- The parties agreed Slovak would pay a specified amount; Wells Fargo would return the cancelled promissory note and deed of trust to Slovak; and Wells Fargo would file a deed of reconveyance.
- The district court acknowledged on the record that Wells Fargo intended to return the cancelled note and deed of trust and to file a reconveyance; both parties agreed to the terms in open court.
- Later, Wells Fargo presented a written proposed agreement that changed terms: it promised only to use its best efforts to return the note and to issue a “full reconveyance,” and it omitted returning the deed of trust.
- Slovak refused to accept the changed written agreement; the district court nevertheless enforced the proposed (different) written terms against Slovak.
- The Ninth Circuit reversed, holding the district court could not force Slovak to accept terms he had not agreed to at the oral settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nevada law allows enforcement of a later-written agreement that alters an on-the-record oral settlement | Slovak: Court cannot force him to accept changed written terms; oral agreement controls | Wells Fargo: The proposed written agreement reflects the parties’ settlement and should be enforced | Court held oral agreement controls; district court erred enforcing different written terms |
| Whether a court may alter terms of an oral settlement after acceptance in open court | Slovak: Court cannot alter terms or add/omit obligations after acceptance | Wells Fargo: Proposed writing clarified/modified the terms | Court held the district court lacked authority to alter the agreed terms under Nevada law |
| Whether the oral agreement required actual return of the cancelled note and deed of trust | Slovak: Oral terms expressly required return of both documents and reconveyance | Wells Fargo: Proposed terms reduced obligation to "best efforts" to return note and omitted returning deed | Court interpreted the plain oral agreement as requiring actual return and reconveyance; changing that was error |
| Whether district court abused its discretion by enforcing the proposed agreement | Slovak: Enforcement of different terms was an abuse of discretion | Wells Fargo: Enforcement was proper to effectuate settlement | Court held enforcement of altered terms was an abuse of discretion and reversed |
Key Cases Cited
- Wilcox v. Arpaio, 753 F.3d 872 (9th Cir.) (Nevada law governs enforceability of settlement agreements)
- Mack v. Estate of Mack, 206 P.3d 98 (Nev. 2009) (court may not force a party to accept settlement terms not consented to)
- Am. First Fed. Credit Union v. Soro, 359 P.3d 105 (Nev. 2015) (interpretation of settlement agreement terms under Nevada law)
- Musser v. Bank of Am., 964 P.2d 51 (Nev. 1998) (court may not alter terms of an oral settlement accepted in open court)
- Maynard v. City of San Jose, 37 F.3d 1396 (9th Cir.) (abuse of discretion standard for enforcing settlements)
