367893
Mich. Ct. App.Sep 25, 2024Background
- Plaintiff, Safa Dabish, sued Zak Essak and Panorama Property’s LLC for repayment of a $372,000 loan used for property renovations.
- After initial litigation steps, the parties reached a settlement in open court whereby Essak/Defendants would pay $250,000 over several years, secured by a mortgage and a “pocket consent judgment.”
- The parties agreed to later draft written documents (a settlement agreement, mortgage, and pocket judgment) but failed to explicitly include a release of claims in the terms stated in court.
- Dispute arose when defendants insisted on including a mutual release term in the written agreement; plaintiff objected, arguing no such term was in the oral settlement on the record.
- The trial court ruled a release was required and ordered the parties to sign an agreement containing it; Plaintiff appealed that requirement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a release term must be included in the written settlement if not stated in open court | Written agreement should match oral record; no release term agreed to | A release was always intended and assumed; a settlement requires a release | No release term required; only the open-court terms are binding |
| Whether plaintiff waived objection by agreeing to court as arbiter of disputes on written terms | Court’s arbiter role limited to pocket judgment/mortgage disputes | Plaintiff agreed to submit all disputes (including the release) to court | Waiver does not apply; original agreement governs |
| Whether the oral settlement lacked essential terms or consideration without a release | All essential terms and valid consideration present (payment for dismissal) | No complete contract formed without release and mutual assent | All essential terms and consideration present; contract is valid |
| Whether the lack of a release was a mutual mistake permitting court modification | No mutual mistake; terms were clear and mutually agreed on | Both sides assumed a release was included; omission was a mutual mistake | No mutual mistake shown; parties are bound by open-court agreement |
Key Cases Cited
- Mikonczyk v. Detroit Newspapers, Inc, 238 Mich App 347 (settlement terms stated in open court are binding; later writing must conform)
- Kloian v. Domino’s Pizza, LLC, 273 Mich App 449 (mutual assent and essential terms required for settlement contract)
- Burkhardt v. Bailey, 260 Mich App 636 (meeting of the minds assessed objectively)
- Mich Mut Ins Co v Indiana Ins Co, 247 Mich App 480 (MCR 2.507(G) requires settlement agreements to be made in open court or in writing to be binding)
- Innovation Ventures v Liquid Mfg, 499 Mich 491 (consideration is essential for contract formation)