This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
Ridgecliffe Second Association,
Jon J. Boutelle,
Dakota County District Court
File No. C29807480
Fredrick R. Krietzman, Felhaber, Larson, Fenlon & Vogt, P.A., 601 2nd Avenue South, Suite 4200, Minneapolis, MN 55402 (for appellant)
Ellen Boutelle, Jon J. Boutelle, 1757 Karis Way, Eagan, MN 55122 (pro se respondents)
Considered and decided by Toussaint, Chief Judge, Klaphake, Judge, and Halbrooks, Judge.
Appellant association sued to foreclose on a lien on property owned by respondents for failure to pay association assessment fees. On the day that trial was to begin, the parties agreed to a settlement and put the terms of the settlement on the record. Appellant subsequently alleged that respondents breached the settlement agreement and moved the court to enforce its terms. The trial court ruled that the settlement terms, although never reduced to writing, constituted a “meeting of the minds” and were not ambiguous. Because the trial court did not err in its interpretation of the settlement agreement, we affirm.
Appellant Ridgecliffe Second Association is a Minnesota nonprofit corporation that manages a real-property development in Dakota County. The development includes 130 multifamily lots and ten single-family homes. Mathew Lukoskie owned one of the single-family homes managed and maintained by appellant. After Lukoskie died intestate, respondents Ellen and Jon Boutelle moved into and took responsibility for his home. Ellen Boutelle is Lukoskie’s daughter. It is undisputed that respondents later acquired title to the property.
In March 1995, appellant raised the monthly assessment fee charged against respondents’ property. Respondents contended that it did so in violation of appellant’s governing documents and refused to pay the fee. In March 1998, appellant placed a lien on respondents’ property for unpaid fees of $24,404.94. On January 27, 1999, the parties, both represented by counsel, reached a settlement. Counsel for appellant recited the following settlement terms for the court record:
[Respondent] agrees to pay $7,000, to be paid as follows according to the following terms: Pay $75 per month, amortized interest rate of 6 percent. There would be a balloon date which would be the earlier of either the time that they sell the property or refinance the property or 18 months from the date of settlement, which would be today. [Respondent] would agree to pay monthly assessment for—beginning February 1st of this year and continuing through June of this year at the rate of $120.75 per month.
[Appellant] has agreed to present to the membership * * * the issue of continuing with the current level of assessments.
* * * *
[Appellant] will agree to provide the same level of service to [respondents’] property which it furnishes to all other members. * * * The board would agree to cooperate in presenting * * * any good-faith proposal * * * to sever the ten single-family lots from the existing association.
The parties also agreed to continue the lien on the property in order to secure the $7,000 debt and that, in the event of default, appellant
would be entitled to recover interest and reasonable attorney’s fees and costs of collection for whatever is unpaid on the $7,000 amount with interest.
The parties were unable to subsequently reduce the settlement terms to writing.
Respondents made the agreed-upon monthly assessment payments from February through June 1999. They then ceased making payments, based on the terms of the settlement agreement. They stopped making payments to reduce the $7,000 debt at the same time in response to appellant’s attempt to continue to collect assessment fees. For its part, appellant never presented to its membership a good-faith proposal to sever the ten single-family units.
In response to appellant’s motion to enforce the settlement, the trial court held a hearing, at which respondents appeared pro se. The court ordered (1) respondents to pay appellant the balance of the negotiated monetary settlement amount plus interest; (2) that respondents’ obligation to pay assessment fees ended on June 30, 1999; and (3) that appellant must bring a good-faith proposal before its membership to sever respondents’ property from the association and release its lien on respondents’ property. Appellant now challenges the trial court’s interpretation of the parties’ settlement agreement and contends that it was reversible error for the trial court not to address the claim for attorney fees associated with appellant’s efforts to enforce the settlement agreement.
D E C I S I O N
Appellant argues that the trial court erred in interpreting the settlement agreement to permit respondents to cease paying monthly assessment fees after June 1999. Appellant maintains that the parties intended to allow respondents to pay a reduced assessment fee until June 1999 at which point they would be responsible for the standard, higher assessment fee.
A reviewing court reviews an appeal from a decision on a motion to enforce a settlement agreement under an abuse-of-discretion standard. See Johnson v. St. Paul Ins. Cos., 305 N.W.2d 571, 573 (Minn. 1981) (stating that vacating stipulation of settlement is within discretion of district court, whose action will not be reversed unless arbitrary). “Settling suits without trial is greatly favored, and such agreements will not lightly be set aside by Minnesota courts.” Beach v. Anderson, 417 N.W.2d 709, 711-12 (Minn. App. 1988) (citation omitted), review denied (Minn. Mar. 23, 1988). A settlement agreement is essentially a contract, subject to contractual rules of interpretation and enforcement. Theis v. Theis, 271 Minn. 199, 204, 135 N.W.2d 740, 744 (1965). The purpose of contract interpretation is to give effect to the intent of the parties. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979).
The only language on the record regarding the assessment fees is as follows:
[Respondents] would agree to pay monthly assessment for—beginning February 1st of this year and continuing through June of this year at the rate of $120.75 per month.
The trial court ruled that the settlement agreement was unambiguous and that the parties agreed to have respondents pay a reduced assessment fee through June 1999 and then no assessment fee at all. The court noted that forcing respondents to continue paying the assessment fees would allow appellant to further postpone the introduction of a severance proposal. Conversely, the absence of the assessment fee would induce appellant to sever respondents’ property from the association’s management.
Based on the plain language of the agreement, we hold that the district court’s interpretation is correct. In order to hold that respondents’ obligation to pay assessment fees continues beyond June 1999, we would have to insert a contract term. We decline to do so. Both parties were represented by counsel and prepared to begin trial when they agreed on the record to the terms of the settlement. As appellant correctly notes, the agreement does not state explicitly that the assessment-fee obligation terminates in June 1999. But, alternatively, had the parties wanted the assessment fee to continue, they should have stated so on the record. They did not. The agreement simply stated that respondents “would agree to pay monthly assessments * * * February * * * through June of this year.”
While appellant asserts an intent that differs from respondents’ understanding, that does not justify adding terms to the agreement. See Gethsemane Lutheran Church v. Zacho, 258 Minn. 438, 442-43, 104 N.W.2d 645, 648 (1960) (to justify rewriting a contract, the court must have clear and convincing evidence of mutual mistake or mistake induced by and taken advantage of by one of the contracting parties). Because the misunderstanding is appellant’s alone and there is no evidence of fraud or misrepresentation by respondents, we affirm the trial court’s holding that respondents’ monthly assessment obligation ended in June 1999.
Appellant argues that the district court erred in failing to award the attorney fees and costs incurred to recover the $7,000 debt from appellant. We review a district court’s decision to award attorney fees and costs under an abuse-of-discretion standard. See Andrew L. Youngquist, Inc. v. Cincinnati Ins. Co., 625 N.W.2d 178, 188(Minn. App. 2001) (applying abuse-of-discretion standard to an award of attorney fees in declaratory judgment action); Radloff v. First Am. Nat’l Bank, 470 N.W.2d 154, 156 (Minn. App. 1991) (applying abuse-of-discretion standard to award of attorney fees under Minn. Stat. § 549.21 (1988) and Minn. R. Civ. P. 11), review denied (Minn. July 24, 1991).
In its findings of fact, the district court found that the parties agreed that respondents “could recover reasonable attorney fees and costs” associated with the collection of the $7,000 plus interest. The use of the word “could” suggests the possibility rather than the certainty that attorney fees would be collected if respondents defaulted. Cf. Minn. Stat. § 645.44, subd. (15) (2000) (the word “may” is permissive). Because the trial court found that the attorney fees portion of the agreement was permissive and because on this record, that finding is not clearly erroneous, we hold that the court did not abuse its discretion by not awarding attorney fees.
Finally, appellant contends that, since respondents have not paid the $7,000 debt, delinquent assessments, or attorney fees, the lien cannot properly be lifted against the property. According to the agreement, the lien only secures the debt of $7,000 plus interest. Therefore, once respondents pay the amount remaining on the debt, the lien should be released. Because the court ordered respondents to pay the balance of the $7,000, and simultaneously ordered appellant to release the lien on the property, there was no error.