This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. ß 480A.08, subd. 3 (1998).


Jolene Schulte,


Randy LeClaire,

Filed January 11, 2000
Anderson, Judge

McLeod County District Court
File No. C6-97-694

Steven C. Wang, Schneider Law Firm, 706 First Street South, P.O. Box 776, Willmar, MN 56201 (for appellant)

Stephen O. Plunkett, Deborah C. Eckland, Rider, Bennett, Egan & Arundel, LLP, 2000 Lincoln Centre, 333 South Seventh Street, Minneapolis, MN 55402 (for respondent)

Considered and decided by Anderson, Presiding Judge, Short, Judge, and Willis, Judge.

U N P U B L I S H E D   O P I N I O N


Appellant challenges the district courtís conclusion that a full and final settlement agreement had been reached by the parties, as opposed to a tentative settlement under Schmidt v. Clothier, 338 N.W.2d 256 (Minn. 1983). Because the evidence supports the district courtís conclusion that the parties reached a complete agreement beyond the scope of Schmidt, we affirm.


Respondent Randy LeClaire injured appellant Jolene Schulte in an auto accident in December 1996. In September 1998, prior to trial, attorneys for the parties reached an oral settlement by telephone for $15,000. In November 1998, appellantís attorney denied that a full and final settlement had been reached, and refused to comply with the terms of the agreement when appellantís underinsured motorist carrier attempted to substitute its check for the purpose of retaining subrogation rights.

Respondent brought a motion to enforce the terms of the settlement. The district court held a contested hearing on the issue of whether the settlement agreement was tentative, or full and final. After hearing testimony from both attorneys, the court ordered enforcement of the settlement agreement. In its order and memorandum, the district court found that (1) the partiesí attorneys had negotiated a $15,000 settlement over the telephone; (2) at no point during the negotiations was there a discussion that the agreement was tentative; and (3) appellantís counsel failed to respond to, and deny confirmation of, the full and final settlement confirmed by respondentís counsel in a post-negotiation letter to both the court and opposing counsel. Based on the weight and credibility of the testimony of respondentís attorney, the court concluded that the parties had reached a full and final settlement, and granted respondentís motion enforcing the settlement agreement.


Although this case arises from a district court order, not judgment, rule 103.03(e) of the Minnesota Rules of Civil Appellate Procedure authorizes an appeal "from an order which, in effect, determines the action and prevents a judgment from which an appeal might be taken." Because the district courtís order enforcing the settlement prevents a trial that would result in a judgment, the order is appealable. See Speckel by Speckel v. Perkins, 364 N.W.2d 890, 893 (Minn. App. 1985) (accepting appeal under Rule 103.03(e) from district court order enforcing settlement agreement).

The underlying merits of this personal injury claim are not at issue on appeal. Appellant challenges only the district courtís enforcement of the settlement agreement. As a policy matter, "[t]he settling of lawsuits without trial is greatly favored and such settlements will not be set aside lightly by the courts." Schumann v. Northtown Ins. Agency, Inc., 452 N.W.2d 482, 483 (Minn. App. 1990).

At issue is the district courtís conclusion that an agreement for a full and final settlement existed between the parties, which relies on the finding that the parties had not reached just a "tentative" agreement. The district court acts as a fact-finder in disputes concerning pretrial settlements. Wildman v. K-Mart Corp., 556 N.W.2d 10, 13 (Minn. App. 1996), review denied (Minn. Jan. 29, 1997). "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous * * *." Minn. R. Civ. P. 52.01; see Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) ("On appeal, a trial courtís findings of fact are given great deference, and shall not be set aside unless clearly erroneous.").

We affirm the district courtís findings supporting the conclusion that the parties reached a final agreement. "To constitute a full and enforceable settlement, there must be such a definite offer and acceptance that it can be said that there has been a meeting of the minds on the essential terms of the agreement." Jallen v. Agre, 264 Minn. 369, 373, 119 N.W.2d 739, 743 (1963)) (quotation omitted). "It is for the trial court to determine the weight and credit to be given to the testimony of the witnesses when testimony is in conflict." Gand v. Jay Bros., Inc., 367 N.W.2d 645, 647 (Minn. App. 1985); see Minn. R. Civ. P. 52.01 ("due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses").

The parties reached agreement over the telephone, after both an offer and acceptance on a $15,000 settlement. A written agreement is not a prerequisite to enforcement of a settlement. Schumann, 452 N.W.2d at 483. The Jallen court recommended that if the terms of a settlement are not in writing, generally, the terms of the settlement should "be stated to the court and taken down by [a court] reporter or otherwise reduced to writing so as to prevent a dispute." 264 Minn. at 373, 119 N.W.2d 743. Respondent supplied a writing to both the district court and appellant, which appellant failed to dispute until respondent attempted to enforce the agreement.

On appeal, appellant does not directly contest the district courtís findings, but raises a policy challenge to the effect of the agreement. "The construction and effect of a contract are questions of law for the court." Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979). Because the findings support the conclusion that the parties reached a final agreement, we must determine whether the agreement constitutes an enforceable contract in light of appellantís challenge. "A compromise settlement of a lawsuit is contractual in nature." Speckel, 364 N.W.2d at 893 (citing Jallen, 264 Minn. at 373, 119 N.W.2d 743).

Appellant challenges the contract ruling, arguing that such negotiations, as a matter of policy, are generally tentative. Appellantís argument refers to the supreme courtís holding in Schmidt v. Clothier, 338 N.W.2d 256 (Minn. 1983). In Schmidt, the court required that a claimant who settles with a tortfeasor must provide notice of the "tentative" settlement agreement to the insurance company to guarantee future underinsurance benefits. Id. at 262-63. The notice allows the insurance company to substitute payment to protect its rights of subrogation against the tortfeasor, before the tortfeasor is released from liability as a result of the settlement. Id.; see also Gusk v. Farm Bureau Mut. Ins. Co., 559 N.W.2d 421, 423 (Minn. 1997).

But, nothing in the case law mandates that parties are unable to contract outside the scope of Schmidt. Appellantís argument would have this court rule as a matter of law that future negotiating parties could never reach a full and final settlement because of Schmidt. While the Schmidt court did not discuss the issue of notice that must be supplied to the tortfeasor during such negotiations, no language in that or later opinions suggests that the basic principles of contract law are now subservient to a "tentative" settlement as a result of the Schmidt holding.

While appellant may have provided notice to his carrier, this fact does not overcome the evidence that the parties had reached a final agreement. In determining the existence of a contract, a partyís "outward manifestation of assent is determinative, rather than a partyís subjective intention." Speckel, 364 N.W.2d at 893; see also Cederstrand v. Lutheran Bhd., 263 Minn. 520, 532, 117 N.W.2d 213, 221 (1962) ("Expressions of mutual assent, by words or conduct, must be judged objectively, not subjectively."). Appellant (1) admits reaching an agreement, (2) never asserted at district court that the settlement was tentative or subservient to Schmidt during negotiations, and (3) did not dispute respondentís correspondence detailing a final agreement.

There is no evidence in the record to indicate that the agreement between the parties is anything but a noncontingent, full, final, and complete settlement. Appellant seeks a declaration that, as a matter of law, all personal injury settlements to which Schmidt might conceivably apply are "tentative" even if the parties have not so agreed. This we decline to do. It is sufficient for the disposition of this case to affirm the district courtís order enforcing the full and final settlement between the parties.