This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).




Big Fish Records, Inc., et al.,


Thomas F. Madison,



Keith Ronald Christianson,


Filed July 15, 1997


Lansing, Judge

Hennepin County District Court

File No. 959336

Robert Gust, Miaja L. Gunewitz, Jacobson Harwood Bennett & Erickson, P.A., 3800 Multifoods Tower, 33 South Sixth Street, Minneapolis, MN 55402 (for Appellant)

Jonathan C. Miesen, Doherty, Rumble & Butler Professional Association, 2800 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, MN 55101-4999 (for Respondent)

Considered and decided by Lansing, Presiding Judge, Short, Judge, and Klaphake, Judge.



In an appeal from an order dismissing an action because the parties had entered into a settlement agreement, we affirm. The record supports the district court's conclusion that the parties' oral argument bound them to the terms of the settlement.


Thomas Madison, Gene Bier, and John von Steinbergs jointly invested in Big Fish Records, Inc., a company that produced Christian music on compact discs and marketed it to church groups and related organizations. Madison invested $300,000 shortly before the corporation became insolvent. Following the insolvency, Madison, Bier and von Steinbergs sued Keith Christianson, the corporation's officer, director, and salesperson, for fraud and usurpation of corporate opportunity. The plaintiffs retained Mark Wine to represent them. Christianson was represented by Jonathon Miesen.

The parties held settlement discussions over the course of several months. At the conclusion of the discussions, Miesen notified the court that a settlement had been reached. Christianson moved the district court for an order dismissing the action based on the settlement. He also asked for attorneys' fees under Minn. Stat. § 549.21, subd. 2 (1996). The district court granted Christianson's motion to dismiss, reasoning that the undisputed evidence demonstrated that the parties had entered a binding agreement, but denied his request for attorneys' fees. Madison now appeals.


A settlement of a lawsuit is contractual in nature and requires a definite offer and acceptance that demonstrates 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). It is not essential that a settlement agreement be in writing; an oral agreement will be enforced when the facts demonstrate that the required contractual elements have been met. Id. To determine whether an offer has been accepted, Minnesota follows the objective theory of contract formation, which requires us to consider the parties' outward manifestation of assent, rather than their subjective intent. Speckel v. Perkins, 364 N.W.2d 890, 893 (Minn. App. 1985). When there is a dispute over whether a settlement was reached, "it is ordinarily for the trial court to determine what the facts are." Jallen, 264 Minn. at 373, 119 N.W. 1d at 743.

Madison challenges the district court's order as impermissibly finding facts in the context of a summary judgment and as overlooking conclusive evidence that all parties understood that a signed agreement would be required as part of the settlement. We disagree. First, by submitting the issue on affidavits to the court the parties voluntarily requested a determination on whether a settlement had been reached. But secondly, even if the right to present oral testimony and to cross-examine had not been waived, undisputed evidence provided in the affidavits supports the court's determination.

On January 25, 1996, Wine wrote Miesen to outline the terms of the settlement agreement:

This will confirm our conversations of yesterday and today concerning the tentative settlement of the above-captioned matter between the plaintiffs, whom I represent, and your client, Keith Christianson. To summarize where I believe we are in terms of settlement, my clients are willing to offer the following (subject to reaching a definitive agreement and upon verification of certain facts) as a settlement in this matter:

* * *

It is my understanding that Mr. Christianson has a contract which may prohibit his acceptance of the board position. To make sure that we are not violating an agreement in that regard, we would like to see that agreement prior to finalizing any settlement. We would appreciate it if you would furnish that agreement to us at your earliest convenience.

I am anxious to hear from you confirming the terms of the tentative settlement. I look forward to discussing these matters with you.

This letter was copied to Madison, Bier, and von Steinbergs.

On January 29, 1996, Miesen sent a letter to Wine informing him that Christianson was "interested in settling this case along the lines set forth" in the January 25th letter. From the time the January 25th letter was distributed to the parties until almost three months later, there is nothing in the record showing that Madison disagreed with the settlement terms. Madison's own attorney drafted the settlement agreement and mutual release and sent it to Miesen, whose affidavit stated that "[t]he Settlement Agreement contained all of the terms agreed upon by the parties."

In early March 1996, Madison, Bier, and von Steinbergs held a telephone conversation to discuss the settlement. Both von Steinbergs's and Bier's affidavits state that during the discussion "everyone, including Mr. Madison, was in complete agreement to settle" and that they "specifically authorized Mr. Wine to prepare a written settlement agreement incorporating the agreed-upon terms and to settle the case as soon as possible."

Following the telephone conference, Wine and Meisen confirmed that their clients had reached a binding settlement agreement, and Miesen informed the judge in writing that the parties had settled the case. Attorney Wine was copied on this letter.

On this record we conclude that the evidence supports the district court's determination that the parties entered a binding settlement agreement. The evidence demonstrates Madison's objective intent to settle: the January 29th letter, the three-way conversation in March, and Madison's failure to object to the terms of the agreement until April 1996. Even though Madison may have believed that he "would have an opportunity to review and approve any settlement agreement," Madison does not point to, and the record does not contain, any evidence that the parties intended that the agreement would become operable only when signed.

Finally, we affirm the district court's denial of Christianson's request for legal fees under Minn. Stat. § 549.21, subd. 2 (1996). It was within the district court's discretion to conclude that Madison's refusal to acknowledge the settlement did not demonstrate bad faith and that any fees incurred in defending Madison's new lawsuit alleging the same claims should be addressed in that lawsuit.