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Robert Slovak v. Wells Fargo Bank
685 F. App'x 583
9th Cir.
2017
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Background

  • 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)
Read the full case

Case Details

Case Name: Robert Slovak v. Wells Fargo Bank
Court Name: Court of Appeals for the Ninth Circuit
Date Published: Mar 28, 2017
Citation: 685 F. App'x 583
Docket Number: 15-15881
Court Abbreviation: 9th Cir.