Greenwald v. Kersh, A05A1176 (GA 6/22/2005)

• Decision Date: 22 June 2005
• Docket Number: A05A1176.
• Court: Georgia Supreme Court
• Parties: GREENWALD et al. v. KERSH et al.

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GREENWALD et al. v.KERSH et al.

A05A1176.

Court of Appeals of Georgia.

Decided: June 22, 2005

JOHNSON, Presiding Judge.

Gary Greenwald and Denise Greenwald appeal the trial court's order enforcing a settlement agreement between the Greenwalds and Martin E. Kersh, Jill G. Kersh, 1st Magnolia Homes, Inc., and Henry Burns, Sr.(collectively, the "defendants").We affirm for the reasons set forth below.

The Greenwalds sued their neighbors, the Kershes, and the builders of the Kershes' new house, 1st Magnolia and Burns, for trespass and nuisance, claiming that the "grading of and deposit of dirt onto the Kershes' property had altered the flow of surface water from the Kershes' land and caused the Greenwalds' property to flood."¹

Following our reversal of the trial court's grant of summary judgment to the Kershes in Greenwald v. Kersh,² the Greenwalds and the defendants entered into mediation, resulting in the execution of a settlement agreement by all parties.Under the terms of the settlement agreement, the defendants agreed to pay the Greenwalds $50,000, and to construct a "brick retaining wall adjacent to the driveway on [the Kershes' property] in the location shown on the attached plan."

The Greenwalds filed a motion to enforce the settlement agreement claiming, among other things, that the defendants had failed to construct the retaining wall.The Kershes filed a cross-motion to enforce the settlement agreement, contending that the retaining wall was being constructed in accordance with the terms of the settlement agreement.After a hearing, the trial court found that a retaining wall had been constructed on the Kershes' property, and that the defendants had restored the slope outward from the wall so that "the embankment and swale conform to the topography at the time the settlement was reached."The trial court directed the parties to sign the dismissal documents and exchange funds as provided in the settlement agreement.

On appeal, the Greenwalds contend the trial court erred in enforcing the settlement agreement because the defendants had failed to restore the Kershes' property to grade as required by the settlement agreement or, alternatively, that there was no meeting of the minds between the parties.We disagree.

The trial court's construction of the settlement agreement is a matter of law subject to de novo review.³"[A] settlement agreement must meet the same requirements of formation and enforceability as other contracts.Only when a meeting of the minds exists will an agreement be formed.But the law also favors compromise, and when parties have entered into a definite, certain, and unambiguous agreement to settle, it should be enforced."⁴

At issue is the trial court's construction of the settlement agreement's provision that "all dirt and swale⁵ adjacent to the wall on [the Kershes' property] be restored to grade."The Greenwalds claim the intent of the parties was that the defendants return the grade in front of the retaining wall to the topography that existed before construction of the Kershes' residence.The trial court found that the defendants' restoration of the topography at the time of settlement agreement was sufficient to demonstrate their compliance.While the term "restore to grade" is not defined in the settlement agreement, the property to be restored to grade is "that dirt and swale adjacent to the wall."The "wall" is the retaining wall to be constructed by the defendants under the terms of the settlement agreement, and that construction would necessarily disturb the adjacent "dirt and swale."Thus, a reasonable construction of the settlement agreement requires the grade of this adjacent material to be restored to that grade in existence at the time of the settlement agreement and before the construction of the wall.In order to interpret the settlement agreement as contended by the Greenwalds, "restore to grade" must refer to the grade in existence before the Kershes began to construct their home, but there is no reference in the settlement agreement to this pre-existing topography.While the Greenwalds argue the proper grading is shown in the plans attached to the settlement agreement, the settlement agreement does not require the property to be re-graded in accordance with the plans, but only that the wall be built "in the location" specified by the plans.Accordingly, we conclude that the settlement agreement is unambiguous, and the trial court correctly enforced the agreement in accordance with its terms.⁶

The Greenwalds further contend the trial court erred in enforcing the settlement agreement because there was no meeting of the minds between the parties.⁷The trial court found the Greenwalds had intended "the pre-litigation topography to be restored."However, the trial court further held there was nothing presented showing that the defendants knew of the Greenwalds' intent or that the defendants' intent was to do anything other than what they did.

[C]ourts apply an objective theory of intent whereby one party's intention is deemed to be that meaning a reasonable man in the position of the other contracting party would ascribe to the first party's manifestations of assent, or that meaning which the other contracting party knew the first party ascribed to his...