STATE OF MINNESOTA
IN COURT OF APPEALS
Bill Arvan, et al.,
Filed February 2, 1999
Stearns County District Court
File No. C0941390
Thomas P. Melloy, Hall & Beyers, P.A., 1010 West St. Germain, Suite 600, St. Cloud, MN 56301 (for respondent Tabor)
Stephen O. Plunkett, Rider, Bennett, Egan & Arundel, LLP, 2000 Metropolitan Centre, 333 South Seventh Street, Minneapolis, MN 55402 (for respondents Arvan, et al.)
Considered and decided by Toussaint, Chief Judge, Peterson, Judge, and Foley, Judge.*
On appeal from a judgment, appellants challenge the district court's order enforcing a settlement agreement and dismissing with prejudice their lawsuit against respondents. We affirm.
In the church, following a funeral service, Judith Harms discussed with Tabor a problem her son was having at school. Judith Harms did not like Tabor's response to her concerns. She alleges that when she attempted to end the conversation, Tabor grabbed her from behind, spun her around, made physical contact with her head and the upper part of her body, shook her forcefully, and prevented her from leaving. Judith Harms also alleges that as she ducked away from Tabor and left the church, he made a couple of rude remarks to her.
The Harmses reported Tabor's actions to church leadership. The Harmses allege that church leadership forbade them from telling anyone what Tabor had done and threatened to malign Judith Harms's character if she reported Tabor's actions to police. But in a statement to police, Judith Harms indicated that the Harmses initially were willing to resolve the matter within the church but later decided to report Tabor's actions to police because they were dissatisfied with the church's response to their complaint. The Harmses allege that church leadership attempted to coerce the Harmses into dismissing the criminal complaint and retaliated against them for refusing to do so.
In March 1994, the Harmses began this action against respondents. In January 1995, the district court granted summary judgment in favor of respondents on the Harmses' claims for defamation, negligent and intentional infliction of emotional distress, tortious interference with a contract, and promissory estoppel. After the summary judgment, the Harmses' claims for assault and battery against Tabor and negligent retention and supervision against the church and Arvan remained. In August 1997, three days before the scheduled trial date on the remaining claims, the Harmses' counsel withdrew. The district court denied the Harmses' motions for a continuance and to remove the assigned judge.
The case, however, did not proceed to trial. On October 3, 1997, the parties entered into a settlement agreement. The parties stated the settlement agreement on the record on October 6, 1997. A dispute later arose between the parties regarding the settlement terms. The district court granted respondents' motion to enforce the settlement and ordered this action dismissed with prejudice. This appeal followed.
The Harmses contend that all of the documents were filed in the district court. The Harmses provided citations to the record for three of the documents, and we have verified that those documents were part of the district court record. We, therefore, deny the motion to strike the following documents and references to them: the excerpt from Tabor's deposition; the April 17, 1995, letter; and the attorney-client agreement. The Harmses did not provide citations to the record for any other documents included in the motion to strike, and, in our independent review of the record, we did not discover any of those other documents. We, therefore, grant the motion to strike as to all other documents included in the motion and all references to them.
2. The Harmses contend that the settlement agreement was invalid because the issuing judge was biased against them and should have been removed. The party seeking to remove a judge must make an affirmative showing of prejudice. Minn. R. Civ. P. 63.03. Absent an abuse of discretion, this court will affirm the district court's ruling on a motion to remove. Uselman v. Uselman, 464 N.W.2d 130, 139 (Minn. 1990).
The Harmses moved to remove the assigned district court judge, alleging that the assigned judge committed numerous acts of misconduct and improperly interfered with their right to a trial. The assigned judge denied the motion. The Harmses sought review by a second district court judge, who also denied the motion.
The district court's denial of the motion to remove indicates that the court determined that the Harmses' allegations of misconduct lacked credibility. This court must defer to the district court's assessment of witness credibility. Minn. R. Civ. P. 52.01. Viewed in its entirety, the record does not demonstrate that the assigned judge was prejudiced against the Harmses. The district court did not abuse its discretion in denying the motion to remove.
3. The Harmses contend that the settlement was invalid because it failed to meet the requirements for an enforceable contract.
The settlement of a lawsuit is contractual in nature, requiring offer and acceptance for its formation, and it is subject to all of the other rules of [contract] interpretation and enforcement. 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). The district court has discretion to decide whether to enforce a settlement, and its decision will not be reversed unless "the court acted in such an arbitrary manner as to frustrate justice." Myers v. Fecker Co., 312 Minn. 469, 474, 252 N.W.2d 595, 599 (Minn. 1977).
On October 3, 1997, the Harmses' attorney sent the following letter to respondents' attorney:
I am writing to inform you that the [Harmses] will accept $30,000, plus a waiver of the sanctions awarded to [respondents], to settle and dismiss their case against all [respondents]. THIS OFFER IS VALID UNTIL 5 pm TONIGHT. Its acceptance must be confirmed in writing by 5 pm TONIGHT.
At 4:32 p.m. on October 3, 1997, respondents' attorney faxed a letter to the Harmses' attorney accepting the settlement offer. At respondents' request, the settlement agreement was stated on the record on October 6, 1997. The record shows a valid offer and acceptance of the settlement agreement.
The Harmses also argue that the settlement ordered by the district court is invalid because it fails to provide that respondents waive the $700 in sanctions. But the settlement set forth on the record expressly states that respondents waive the $700, and respondents do not dispute that waiver. The Harmses further contend that the settlement is invalid because the district court ordered respondents to pay $6,451.93 of the $30,000 settlement to their former attorney. The Harmses, however do not cite to evidence indicating that they do not owe the attorney that amount. They allege that they paid that attorney $6,000 but do not cite to evidence supporting that allegation. Moreover, the record does not support their claim that the attorney agreed to accept $6,000 as payment in full.
4. In enforcing the settlement agreement, the district court ordered the Harmses to execute the following release:
For and in consideration of the sum of Thirty Thousand and no/100ths ($30,000) Dollars, receipt of which is acknowledged, we release and forever discharge [respondents], their principals, agents and represents, from any and all rights, claims, demands and damages of any kind, known or unknown, existing or arising in the future, resulting from or related to an incident which occurred between plaintiff Judith Harms and Charles Tabor on December 9, 1992, and those matters which are the subject of pending litigation in [this case].
The Harmses argue that the release is invalid on several grounds. First, the Harmses argue that the release is unsupported by consideration. But the Harmses agreed to dismiss their claims against respondents in exchange for $30,000. The $30,000, thus, was consideration for the release.
Second, the Harmses argue that the release is invalid because they did not have the opportunity to change its language. The argument is not persuasive. A party's opportunity to change language is merely one factor to consider in determining the validity of a release. Somora v. Marriott Corp., 812 F. Supp. 917, 921 (D. Minn. 1993) (citing Schmidt v. Smith, 299 Minn. 103, 111, 216 N.W.2d 669, 673-74 (1974)).
In addition, the presence of counsel during negotiations is a strong indication of a party's intent to release. Moreover, a release is not to be set aside merely because a party fails to appreciate the legal effects of such release, as long as the party is aware of its terms and alleges no fraud.
Id. (citing Sorenson v. Coast-to-Coast Stores, 353 N.W.2d 666, 669 (Minn. App. 1984); Dolgner v. Dayton Co., 182 Minn. 588, 592, 235 N.W. 275, 277 (1931)).
Third, the Harmses contend that the release is invalid because it requires them to waive unknown and future claims. The Harmses were present and represented by counsel at the hearing to place the settlement agreement on the record. Respondents attorney stated that respondents agreed to pay the Harmses $30,000 and waive the $700 in sanctions
in exchange for a full and final release of all claims against all [respondents] arising out of the December 9, 1992 incident, including all claims that existed and those that have also been dismissed by the Court.
The literal meaning of "all claims" includes unknown and future claims. The Harmses did not make any objection or ask for clarification. See Skalbeck v. Agristor Leasing, 384 N.W.2d 209, 213-14 (Minn. App. 1986) (party impliedly agreed to settlement by failing to object to it); Schumann v. Northtown Ins. Agency, Inc., 452 N.W.2d 482, 485 (Minn. App. 1990) (same). The Harmses allege that respondents understood that the Harmses were not willing to release potential claims. But the letters that the Harmses cite in support of that allegation state that respondents demand a release or settlement of "all claims" and do not contain any limiting language.
Fourth, the Harmses argue that the release is invalid because it requires them to discharge respondents "from any and all further liability to us or any other party for claims of damages, contribution or indemnity, whether made directly or indirectly." The Harmses argue that this language could be construed to require them to indemnify respondents if a third party brings an action against respondents arising out of the December 9, 1992, incident. We construe the language as prohibiting the Harmses from assigning a claim to a third party or from joining a third party's claim. We do not construe the language as applying to third-party claims that are entirely independent of the Harmses and their claim.
5. Finally, the Harmses argue that the district court failed to comply with procedural requirements in enforcing the settlement agreement. The Harmses argue that the district court's order enforcing the settlement should be reversed because the hearing on the motion to enforce the settlement was held less than 28 days after the Harmses received notice of the motion. See Minn. R. Gen. Pract. 115.03 (no dispositive motion shall be heard until at least 28 days after service of motion papers on nonmoving party). The district court properly found that respondents' motion, which requested clarification and enforcement of the settlement agreement previously stated in the record, was nondispositive. The outcome of this case was determined by the parties entering into the settlement agreement.
The Harmses also contend that the district court erred by failing to make findings of fact and conclusions of law. Under Minn. R. Civ. P. 52.01 and the rules cited therein, the court is required to make findings of fact and conclusions of law when deciding a case on the merits. The district court's order enforcing the settlement did not decide the Harmses' case on the merits. Moreover, the Harmses do not specify how the district court's order enforcing the settlement was deficient, i.e., what fact and legal issues the district court should have addressed but did not. The order enforcing the settlement shows that the district court found the settlement was a valid contract and enforced it accordingly.
In light of our conclusion that the district court did not err in enforcing the settlement, we do not reach the remaining issues raised by the parties on appeal.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.