Hastings Pork v. Johanneson

• Decision Date: 30 June 1983
• Docket Number: No. 10402,10402
• Parties: HASTINGS PORK, a Nebraska partnership, Plaintiff and Appellee, v. Kent JOHANNESON and Richard D. Olson, Defendants and Appellants. Civ.
• Court: North Dakota Supreme Court

Page 802

335 N.W.2d 802

HASTINGS PORK, a Nebraska partnership, Plaintiff and Appellee, v. Kent JOHANNESON and Richard D. Olson, Defendants and Appellants.

Civ. No. 10402.

Supreme Court of North Dakota.

June 30, 1983.

Wheeler, Wolf, Peterson, Schmitz, McDonald & Johnson, Bismarck, for plaintiff and appellee; argued by Steven L. Latham, Bismarck.

Kelsch, Kelsch, Bennett, Ruff & Austin, Bismarck, for defendants and appellants; argued by Thomas F. Kelsch, Bismarck.

PEDERSON, Justice.

This is an appeal from a summary judgment enforcing a settlement agreement. We affirm the judgment.

Hastings Pork commenced an action against Johanneson and Olson seeking to recover $157,812.50 plus interest. The basis for the claim was not discussed. Before the case could come to trial, the parties entered into a settlement agreement ¹ which provided for procedures whereby Johanneson and Olson were to convey mineral interests having an aggregate fair market value of $200,000 to Hastings and, in return, Hastings agreed to dismiss the lawsuit. The settlement agreement further provided that if Johanneson and Olson failed to comply with the terms of the agreement, Hastings would be entitled to a judgment for the full amount of damages prayed for in the complaint and Hastings would execute a quit claim deed to any interest it had in capital stock of Classic Mining Corp. of Salt Lake City, Utah. A stipulation was subsequently signed by the attorneys for the parties and filed with the court in which it was agreed to postpone the trial to give the parties time to comply with the provisions of the agreement. The stipulation also provided that if Johanneson and Olson failed to comply with the provisions of the settlement agreement, judgment would be entered against them for the amount sought by Hastings in its complaint.

In accordance with the provisions of the settlement agreement, an appraiser was selected. Johanneson and Olson submitted a list of mineral interests to the appraiser who determined the maximum value of these interests to be $23,865. Pursuant to paragraph number 6 of the settlement agreement, because the appraised value of the minerals was less than $200,000, Johanneson and Olson provided an additional listing of mineral interests within 15 days. The appraiser determined the maximum value of the additional mineral interests to be $20,000.

Hastings subsequently moved for entry of judgment alleging that Johanneson and Olson had failed to comply with the terms and conditions of the settlement agreement. Further attempts by Johanneson and Olson to tender additional mineral interests were rejected by Hastings. Following a hearing on the motion for entry of judgment, the district court issued a memorandum opinion. The court determined that Johanneson and Olson had breached the settlement agreement by failing to provide Hastings with a listing of additional mineral interests of sufficient value within 15 days after receiving notification that the appraised value of the interests initially offered was less than $200,000. Treating Hastings' motion for entry of judgment both as a motion for entry of judgment and as a motion for summary judgment, ² the court concluded that no genuine issues of material fact existed and granted judgment in favor of Hastings, according to the terms of the settlement agreement, for the full amount of damages prayed for in the complaint. Judgment was entered accordingly ³ and from that judgment Johanneson and Olson appeal.

The only issue on appeal is whether or not the district court erred in granting judgment for Hastings.

Summary judgment will be entered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to judgment as a matter of law. Keller v. Hummel, 334 N.W.2d 200 (N.D.1983); Rule 56(c), NDRCivP. On appeal from a summary judgment, this court must view the evidence in a light most favorable to the party against whom the summary judgment was granted and we may only determine if a genuine issue of fact exists and if the law was applied correctly. Benson Cty. Co-op., Etc. v. Central Livestock, 300 N.W.2d 236 (N.D.1980). Summary judgment is not appropriate if it appears from the record that there is an unresolved issue of material fact. Nor is summary judgment appropriate if the moving party is not entitled to judgment as a matter of law, or if reasonable differences of opinion exist as to the inference to be drawn from undisputed facts. Keller v. Hummel, supra.

Johanneson and Olson argue that summary judgment was inappropriate in the instant case. They claim that the court erred when it interpreted paragraph number 6 of the settlement agreement ⁴ and erred in concluding that Johanneson and Olson had breached the agreement by failing to provide Hastings with a listing of mineral interests totaling $200,000 in value within 15 days following notification that the market value of the mineral interests initially offered was less than $200,000. Johanneson and Olson contend that paragraph number 6 does not specify what is to happen in the event the second listing does not bring the aggregate fair market value of the mineral interests up to $200,000. They argue that a reasonable inference can be drawn which would permit them to submit additional mineral interests to Hastings, provided that such interests are submitted in good faith and within a reasonable time after the second mineral interest listing. We do not agree.

The settlement agreement signed by the parties was, in essence, a contract entered into in an attempt to settle the lawsuit which Hastings had commenced against Johanneson and Olson. Parties may contract to settle a controversy between them. Swan v. Great Northern Ry. Co., 40 N.D. 258, 266, 168 N.W. 657, 658 (1918). This court has expressed approval of compromise and settlement agreements fairly entered into between parties. Thomas C. Roel Associates, Inc. v. Henrikson, 295 N.W.2d 136, 137 (N.D.1980); Bohlman v. Big River Oil Company, 124 N.W.2d 835, 837 (N.D.1963). Because litigation is considered injurious to society, McGlynn v. Scott, 4 N.D. 18, 21, 58 N.W. 460, 461 (1894), compromises which diminish litigation and promote a peaceful society are favored. Swan, supra, 40 N.D. at 270, 168 N.W. at 660.

When a settlement agreement is fairly entered into, it disposes of all disputed matters. Roel Associates, supra, 295 N.W.2d at 137; Bohlman, supra, 124 N.W.2d at 837. In the absence of fraud, duress, or another equitable defense, a settlement agreement operates as a merger, barring recovery on the original claim. Production Credit Association of Minot v. Geving, 218 N.W.2d 185, 194 (N.D.1974); Bohlman, supra, 124 N.W.2d at 837; Swan, supra, 40 N.D. at 266, 168 N.W. at 658. A settlement agreement is a final determination upon the merits which should be upheld regardless of the merits of the original controversy. Bohlman, supra, 124 N.W.2d at 839.

A settlement agreement is a contract which either party may enforce; the rights and responsibilities of the parties are limited by the terms of the agreement. Production Credit, supra, 218 N.W.2d at 194-95. Both parties agreed to the terms of the settlement in the instant case.

The construction of a written contract to determine its legal effect is a question of law for the court to decide. The determination of whether or not a contract is ambiguous is also a question of law for the court to decide. Sorlie v. Ness, 323 N.W.2d 841 (N.D.1982). When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone if possible. Section 9-07-04, NDCC. If the parties' intentions can be ascertained from the writing alone, without reference to extrinsic evidence, then the interpretation of the contract is entirely a question of law, and this court will independently examine and construe the contract to determine whether or not the district court erred in its interpretation of it. Sorlie v. Ness, supra.

We conclude that the district court did not err in either its interpretation of the agreement or in its conclusion that Johanneson and Olson breached the agreement. When Johanneson and Olson failed to...