In re De-Annexation of Real Property

• Court: Oklahoma Supreme Court
• Writing for the Court: Colbert
• Citation: In re De-Annexation of Real Property, 204 P.3d 87, 2009 OK 18 (Okla. 2009)
• Decision Date: 10 March 2009
• Docket Number: No. 104,212.,104,212.
• Parties: In re DE-ANNEXATION OF CERTAIN REAL PROPERTY FROM the CITY OF SEMINOLE, a municipal corporation, Bedford T. Brewer and Larry Brewer, Appellants, v. The City of Seminole, Appellee.

204 P.3d 87

2009 OK 18

In re DE-ANNEXATION OF CERTAIN REAL PROPERTY FROM the CITY OF SEMINOLE, a municipal corporation Bedford T. Brewer and Larry Brewer, Appellants, v. The City of Seminole, Appellee.

No. 104,212.

Supreme Court of Oklahoma.

March 10, 2009.

CERTIORARI TO THE COURT OF CIVIL APPEALS, Division 4

¶ 0 The City of Seminole and plaintiff landowners began settlement negotiations after the Court of Civil Appeals remanded this matter to the trial court. The City sought to enforce an oral settlement agreement which it alleged it had reached with the landowners. The trial court, Honorable Lee Stilwell, held that a binding settlement agreement had been reached by the parties, stated the terms of the agreement, and ordered its enforcement. The Court of Civil Appeals affirmed.

CERTIORARI PREVIOUSLY GRANTED; OPINION OF COURT OF CIVIL APPEALS VACATED; TRIAL COURT REVERSED; CAUSE REMANDED.

Jerry L. Colclazier, Colclazier & Associates, Seminole, OK, for Plaintiffs/Appellants.

David W. Kirk, Lytle, Soule & Curlee, P.C., Oklahoma City, OK, for Defendant/Appellee.

COLBERT, J.

¶ 1 The issue presented is whether the trial court erred in determining that a binding settlement agreement had been reached in this matter based upon the parties' discussions and correspondence. This Court holds that the evidence of the parties' negotiations does not demonstrate mutual assent to the terms of a settlement.

PROCEDURAL HISTORY

¶ 2 This is the second appeal in this matter. The decision in the first appeal reversed summary judgment for the City of Seminole (City). In re De-annexation of Certain Real Property, 2006 OK CIV APP 103, 143 P.3d 228.

¶ 3 In 1976, City annexed the Sinclair Industrial Addition and other land by ordinance. Plaintiffs (the landowners) owned lots in the addition. The streets shown in the plat of the addition were never constructed. "Sometime between April 14, 2004, and August 25, 2004, City filed a municipal criminal charge against Bedford Brewer, [one of the landowners] alleging that he had placed two steel I-beams across the platted road easement in the Sinclair Industrial Addition adjacent to [his] property and he had thereby created a public nuisance in violation of . . . City's ordinances." Id. ¶ 12, 143 P.3d at 231. Brewer challenged his conviction in district court by challenging the validity of the annexation ordinance. He also filed this action seeking de-annexation of his property.

¶ 4 As part of a proposed resolution of the criminal matter, Brewer entered a nolo contendere plea to the criminal charge. The court accepted the plea and entered a judgment and sentence. In this civil matter, City moved for summary judgment arguing that the no contest plea established that the land on which the violation occurred was within the city limits. Id. ¶ 16, 143 P.3d at 232. The trial court apparently accepted that argument and granted summary judgment in favor of City.

¶ 5 The Court of Civil Appeals reversed the summary judgment. It held that "[t]he no contest plea [was] no more than a stipulation that City would be able to prove the property upon which the crime was committed was within the city limits of Seminole. It [was] not a stipulation that the property was in fact within those limits." Id. ¶ 19, 143 P.3d at 232. The matter was remanded to the trial court.

¶ 6 On August 30, 2006, counsel for City in this matter placed a telephone call to the landowners' counsel to request that the landowners submit a settlement demand. This appeal addresses only whether the subsequent negotiations of the parties ripened into a binding settlement agreement.

STANDARD OF REVIEW

¶ 7 "A motion to enforce a settlement agreement is treated as a motion for summary judgment." Russell v. Bd. of Co. Comm'nrs, 2000 OK CIV APP 21, ¶ 7, 1 P.3d at 445. "Whether a settlement has been reached so as to conclude the action may be a question for a jury." Id. ¶ 7 n. 8, 1 P.3d at 445 n. 8. However, when, as in this matter, the dispute concerns the legal effect of the relevant facts, the question is whether the party seeking enforcement is entitled to judgment as a matter of law. Rules for Dist. Cts., Okla. Stat. tit. 12, ch. 2, app., Rule 13(e) (Supp.2008). Legal issues are reviewed de novo. Kluver v. Weatherford Hosp. Auth., 1993 OK 85, ¶ 14, 859 P.2d 1081, 1084.

APPLICABLE LAW

¶ 8 A settlement agreement is an oral or written contract between the parties. Russell, 2000 OK CIV APP 21, ¶ 3, 1 P.3d at 443. As such, it is subject to the rules of offer and acceptance and of mutual assent which control any issue of contract formation.

¶ 9 "The consent of the parties to a contract must be: 1. Free, 2. Mutual, and 3. Communicated by each to the other." Okla. Stat. tit. 15, § 51 (2001). "Consent is not mutual unless the parties all agree upon the same thing in the same sense. . . ." Okla. Stat. tit. 15, § 66 (2001). Therefore, "an acceptance will not bind the offeror unless it is unconditional, identical to the offer, and does not modify, delete or introduce any new terms into the offer." Ollie v. Rainbolt, 1983 OK 79, ¶ 19, 669 P.2d 275, 280. An acceptance that modifies the terms of an offer is a counter offer and constitutes a rejection of the initial offer. Young v. Roller, 1948 OK 29, ¶ 6, 201 P.2d 793, 796; Okla. Stat. tit. 15, § 71 ("A qualified acceptance is a new proposal.").¹

FACTS AND ANALYSIS

¶ 10 The landowners made a written offer of settlement on August 31, 2006, which proposed three terms.²

The City would (1) confess the de-annexation issue, (2) direct the Industrial Authority to execute a deed, and (3) reimburse the landowners' counsel $7,500.00 of his attorney fee. The City's September 7, 2006, written response³ began by stating: "I believe there is a very real opportunity to resolve this dispute." The response gave assent to the "deed" term and stated counsel's belief "that we will be able to make an agreement regarding the reimbursement of fees along the lines you propose." It did not, however, recite acceptance of the "confess the de-annexation" term. Instead, City's counsel sought clarification of what was meant by the proposed term. Therefore, the response was not an unqualified acceptance of the terms of the offer. It was an invitation to negotiate further.

¶ 11 Further negotiations occurred in a face-to-face meeting of opposing counsel on September 8, 2006, and City contends that mutual assent was reached as to all three terms proposed in the August 31st offer and a binding agreement was formed. There are two documents which City attached to its motion as evidence of mutual assent, an affidavit of counsel for City and a letter from City's counsel to the landowners' counsel dated September 12th "confirming" the substance of the September 8th negotiations.

¶ 12 The affidavit demonstrates that a new condition on the "confess the de-annexation issue" term was injected into the negotiations by City's insistence that the settlement be "global." City's September 12th letter⁴ confirming the conversation defined "global" to mean that "any pending disputes, charges, citations, claims, etc., which have arisen since the commencement of the litigation are also to be abandoned or released as part of the conclusion of this litigation." The letter described an "agreement in principal [sic]" as to the "confess the de-annexation" term and mentioned the need to "confer with [the] Seminole City Attorney . . . regarding the precise manner in which the City will acknowledge that your clients' tracts are no longer annexed." In the letter, counsel for City stated that he would "prepare a formal release of all claims and Stipulation of Dismissal with Prejudice" within "the next few days or weeks."

¶ 13 The addition of the new "global" requirement negates any assertion that there was an unqualified acceptance of the terms of the landowners' August 31, 2006, written offer of settlement. No mutual assent was demonstrated by either the affidavit or the September 12th confirmation letter. Rather, that evidence demonstrates a counteroffer was made with a new and additional proposed term. That counteroffer was a rejection of the offer to settle and functioned as a new offer. The original offer to settle expired by its own terms for lack of acceptance by the September 8, 2006, deadline. No settlement contract was formed.

¶ 14 The parties exchanged correspondence on September 15, 2006, apparently following a telephone conversation on that date. In anticipation of a response to its September 12, 2006, letter, City⁵ stated: "We both agreed that the parties have reached a settlement in princip[le] although several tasks need to be completed to achieve that." The landowners' September 15th response⁶ to the City's September 12th letter stated: "For the most part, I believe we have an agreement, with a couple of clarifications." The landowners' letter goes on to introduce new, but not necessarily inconsistent terms into the negotiations while at the same time accepting parts of the City's September 12th proposal. Although the landowners gave their assent to the "global" aspect of City's proposed settlement and the "attorney fee" term, provided that the settlement would be concluded in a timely manner, the landowners introduced two new terms by which City would (1) see that an abstract provided by "the Foundation" be supplied to the landowners, and (2) take whatever actions were necessary to "expunge Mr. Brewer's criminal record" in connection with the litigation. The landowners set a deadline of September 22, 2006, for "clos[ing] this matter."

¶ 15 The new additional terms proposed in the landowners' September 15th letter constitute a rejection of City's September 12th proposal. A new offer was created with terms that did not mirror the original offer of August 31, 2006.

¶ 16 City objected to the introduction of new terms in a letter dated September 25, 2006.⁷ City reminded the landowners that their original offer of August 31st...