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Duff v. McKay

Appeals Court of Massachusetts, Plymouth

June 14, 2016

DANIEL DUFF & another[1]
v.
JOHN McKAY & others.[2]

          Heard: January 19, 2016.

         Civil action commenced in the Superior Court Department on April 9, 2013.

         A motion to enforce settlement and to dismiss the complaint was heard by Beverly J. Cannone, J., and entry of separate and final judgment was ordered by her.

          Stephen W. Rider for the plaintiffs.

          Colin Black for the defendants.

          Present: GRAINGER, RUBIN, & MILKEY, JJ.

          MILKEY, J.

         In 2010, plaintiffs Daniel and Lisa Duff hired the defendants to perform a renovation project at their home in Hingham. A dispute ensued regarding the defendants' workmanship and their alleged failure to obtain a building permit in a timely manner. In May of 2012, the Duffs sought redress by initiating arbitration through the State program created in accordance with G. L. c. 142A.[3] The following year, on the eve of the assigned arbitrator's scheduled view of the property, the parties reached an apparent settlement of their dispute. Nonetheless, a formal settlement document was never executed because of a disagreement regarding payment terms. When the parties reached an impasse in resolving that issue, the Duffs withdrew their request for arbitration and filed a multicount action in the Superior Court asserting their underlying claims. The defendants moved to dismiss the action and to enforce the settlement. A Superior Court judge allowed that motion and entered judgment requiring the defendants to pay the agreed-to amount within ten days. On the Duffs' appeal, we affirm.

         Background.

         The parties' key communications were memorialized in electronic mail messages (e-mails), copies of which were submitted to the motion judge.[4]As a result, the essential facts pertaining to the parties' negotiations are uncontested.

         At the heart of this case is a March 21, 2013, e-mail exchange between counsel that followed extended and vigorous settlement discussions. Counsel for the Duffs wrote to "confirm what I believe our respective clients have agreed to." He then listed six terms. Key among those terms were the requirements that the defendants pay the Duffs $27, 500, and that the parties "exchange mutual general releases, subject only to the obligations in the settlement agreement."[5] The list of terms did not specify when payment of the $27, 500 was due.

         The Duffs' counsel concluded his e-mail by asking his counterpart to "confirm that I got this right by return e-mail." Six minutes later, the defendants' counsel responded, "Confirmed." Six minutes after that, the Duffs' counsel sent an e-mail to the assigned arbitrator canceling the scheduled site visit because "I am pleased to report that the parties have reached a settlement agreement." The following morning, the coordinator for the arbitration program sent an e-mail to express her happiness "that the parties have settled, " and she requested clarification whether she should "consider this your formal notice of settlement or will you mail written notice of the settlement." Counsel for the Duffs responded by stating:

"I believe the parties are planning on preparing and signing a formal settlement agreement and then will file a stipulation of dismissal, with prejudice, of the claims in the arbitration. This may take a week or so."

         Over the next two and one-half weeks, the parties sought to complete a formal settlement document. During that time, counsel for the Duffs expressed concern over delay, stating that he did not "want to give the clients too much time to rethink this." As the Duffs acknowledge, some of the delay was caused by a medical issue related to the defendants' counsel's family.

         In the end, the parties agreed on every provision of the final settlement document save one: when precisely payment of the $27, 500 was required. The Duffs insisted that payment be made when the agreement was executed, while the defendants insisted that they be given some time to complete payment. Each side asserted that its position was consistent with customary practice. In addition, each attorney asserted that his counterpart should have raised the payment issue before an apparent settlement had been reached if the issue had been important to his client. As of April 8, 2013, the state of play was as follows: the defendants were willing to pay a majority of the money ($17, 500) the following day, [6] with the remaining payment to be made three weeks later (April 30, 2013), while the Duffs continued to insist that the full amount be paid "immediately."[7]

         With the final issue at a seeming impasse, the Duffs on April 8, 2013, terminated the still-pending arbitration proceeding by withdrawing their request for arbitration.[8] The following day, they filed the current action in Superior Court. Notably, their complaint did not allege that the parties had reached a settlement agreement, with payment due immediately. Instead, without mentioning the putative settlement agreement or the abandoned arbitration proceedings, the complaint simply set forth the Duffs' underlying claims with regard to the defendants' work on the renovation project (alleging violations of G. L. c. 93A, breaches of contract, negligence, and misrepresentation).

         In response, the defendants filed what was styled as a motion to enforce the settlement agreement and to dismiss the complaint. The motion was supported by an affidavit from counsel setting forth the history of the negotiations as memorialized in the trail of e-mails. In opposing the motion, the Duffs submitted an affidavit from their own counsel that covered the same uncontested e-mail history. However, counsel also set forth his view, based on his experience, that "attorneys presume that payment of settlement proceeds will be made at the time the settlement agreements are finalized and releases exchanged" unless the paying party requests additional time before the settlement is reached. Daniel Duff himself also executed an affidavit in which he stated that in authorizing settlement, he had "understood" that payment would be due when formal settlement papers were signed and that he otherwise would not have agreed to settle the case for $27, 500.

         A Superior Court judge eventually allowed the defendants' motion and entered judgment requiring the defendants to pay the settlement amount within ten days.[9] Dissatisfied with that result, the Duffs appealed.

         Discussion.

         1. Procedural posture and standard of review.

         We begin by reviewing the procedural posture in which this case has come before us. "A settlement agreement is a contract and its enforceability is determined by applying general contract law." Sparrowv.Demonico, 461 Mass. 322, 327 (2012). In entering judgment enforcing the parties' apparent settlement agreement, the judge in effect resolved a contract claim put forward by the defendants even though that claim was presented by motion, not as a counterclaim. The case law suggests that such informality is acceptable where settlements have been reached while litigation is pending. See Fecteau Benefits Group, Inc. v.Knox, 72 Mass.App.Ct. 204, 211-212 (2008) (affirming allowance of "motion to enforce settlement agreement"). See also Fidelity & Guar. Ins. Co. v.Star Equip. Corp., 541 F.3d 1, 5 (1st Cir. 2008) ("[B]efore the original suit is dismissed, the party seeking to enforce the [settlement] agreement may file a motion with the trial court"). Whether this practice is ...


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