Muilenburg, Inc. v. Cherokee Rose Design

• Decision Date: 05 May 2008
• Docket Number: No. 28505.,28505.
• Citation: 250 S.W.3d 848
• Parties: MUILENBURG, INC., Plaintiff-Appellant, v. CHEROKEE ROSE DESIGN AND BUILD, L.L.C., Defendant-Respondent.
• Court: Missouri Court of Appeals

250 S.W.3d 848

MUILENBURG, INC., Plaintiff-Appellant, v. CHEROKEE ROSE DESIGN AND BUILD, L.L.C., Defendant-Respondent.

No. 28505.

Missouri Court of Appeals, Southern District, Division II.

May 5, 2008.

Stuart H. King, Springfield, MO, for plaintiff-appellant.

Deborah K. Dodge, Steven J. Blair, Springfield, MO, for defendant-respondent.

Don E. Burrell, Judge.

Facts

Muilenburg, Inc. ("Muilenburg") appeals from the trial court's granting of Cherokee Rose Design and Build, L.L.C.'s ("Cherokee Rose") motion to enforce a settlement agreement.

Cherokee Rose acted as a general contractor and developer of the Lantern Hill subdivision in Christian County, Missouri ("Lantern Hill"). Muilenburg is a utility contractor and was hired by Cherokee Rose to install certain underground utilities within the subdivision. After the work had been performed, Muilenburg filed a petition (based on theories of breach of contract, quantum meruit, and action on an account) alleging that Cherokee Rose had failed to properly compensate Muilenburg for the services provided. Cherokee Rose brought several counterclaims against Muilenburg. Those counterclaims alleged that the services had been performed in a negligent, unworkmanlike manner and that Muilenburg had misrepresented the amount of rock it had hauled away from the subdivision.

On August 25, 2006, after the parties had filed their respective claims against each other, Steven Blair ("Blair"), counsel for Cherokee Rose, sent a letter to Muilenburg's counsel proposing a settlement of all claims ("August 25 Letter"). In the August 25 Letter, Cherokee Rose proposed that:

a. [Cherokee Rose] will sell to [Muilenburg] Lots 7, 8, & 9 of Phase II of Lantern Hill, along with the adjoining five acres accessible through Lot 7 or 10th Ave., for the below market price of $75,000.00. These 5 acres have the potential, with minimal infrastructure cost, to be subdivided into several lots and developed at a substantial profit to [Muilenburg].

b. In consideration of the performance of subpart(a), [Muilenburg] will execute a Full and General Release in favor of [Cherokee Rose] and vice versa;

c. In further consideration of the performance of subpart(a), [Muilenburg] will execute a Voluntary Dismissal with Prejudice in Case No. CV102-1025CC pending in the Circuit Court of Christian County; and vice versa; and

d. All parties will bear their own costs.

Muilenburg's counsel responded on behalf of Muilenburg in a letter dated October 28, 2006 ("October 28 Letter"). The October 28 Letter stated:

My client has authorized me to convey its acceptance of the settlement offer outlined in your correspondence of August 26, 2006. Your client will need to convey marketable title by way of a warranty deed and my client would like [Cherokee Rose] to provide us with a current commitment for title insurance in order that we can review the current status of the title.

Unless I hear from you otherwise, I will assume that you are going to prepare the agreement and dismissal documents.

After receiving the October 28 Letter, Blair drafted a full and general release agreement to effectuate the settlement agreement proposed by the August 25 Letter. Blair then sent the settlement release documents to Muilenburg. David Randall Muilenburg ("Mr. Muilenburg") is the "owner" of Muilenburg. Mr. Muilenburg testified that when he received the settlement release documents he realized for the first time that Muilenburg would have to pay $75,000 to Cherokee Rose in order to receive the lots referenced in the August 25 Letter. Muilenburg then refused to execute the final settlement documents and Cherokee Rose brought its motion to enforce the settlement agreement.

After a hearing on the matter, the trial court sustained Cherokee Rose's motion to enforce the settlement agreement and ordered the parties to perform their respective duties under that agreement.

Muilenburg appeals raising three points: 1) that the August 25 Letter was ambiguous and, therefore, no meeting of the minds occurred between the parties; 2) that the August 25 Letter did not contain the essential terms of a settlement agreement; and 3) that the October 28 Letter did not constitute an unconditional acceptance of the offer made in the August 25 Letter. For ease of analysis, we address Muilenburg's points in reverse order.

Standard of Review

The general rule is that in reviewing a court-tried case, we will affirm the judgment unless it is against the weight of the evidence, there is no substantial evidence to support it, or the trial court has erroneously applied or declared the law. Eaton v. Mallinckrodt, Inc., 224 S.W.3d 596, 598 (Mo. banc 2007); Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). However, matters of contract interpretation — including whether or not a contract is ambiguous — are questions of law to be reviewed de novo on appeal. Monsanto Co. v. Syngenta Seeds, Inc., 226 S.W.3d 227, 230 (Mo.App. E.D.2007).

Analysis

No specific process exists in Missouri for enforcing a settlement agreement. Eaton, 224 S.W.3d 596, 599. One possible method of enforcement is to raise the issue in a motion to enforce the settlement agreement. Id. The party seeking to enforce the agreement must prove its existence by clear, convincing and satisfactory evidence. Id. Settlement agreements are governed by principles of contract law. Neiswonger v. Margulis, 203 S.W.3d 754, 760 (Mo.App. E.D.2006). So long as the essential terms are present in a contract and are sufficiently definite to enable a court to give them exact meaning, the contract will be found to be valid and enforceable even if some terms are missing or left to be agreed upon at a later time. Vulgamott v. Perry, 154 S.W.3d 382, 390-91 (Mo.App.W.D.2004).

October 28 Letter as an Acceptance

We address first Muilenburg's claim that the October 28 Letter did not constitute an unconditional acceptance of the offer made in the August 25 Letter. To establish a valid contract, there must be both an offer and an unequivocal acceptance of that offer. Crestwood Shops, L.L.C. v. Hilkene, 197 S.W.3d 641, 649 (Mo.App. W.D.2006). The acceptance must be a "mirror image" of the offer; any purported acceptance that contains additional or different terms is a rejection of the original offer and is simply a non-binding counter-offer. Id. "A determination of whether an offer has been accepted depends upon what is actually said and done; it does not depend on the understanding or supposition of one of the parties." Id. Finally, although a request for a change in the terms of a proposed contract would constitute a rejection of the original offer, a mere inquiry as to whether the offeror will modify the terms of the contract does not result in a rejection of the offer. Beck v. Shrum, 18 S.W.3d 8, 10 (Mo.App. E.D.2000).

Muilenburg argues that the October 28 Letter contained new or different terms than those proposed in the August 25 Letter and was, therefore, a rejection of the August 25 Letter and a mere counter-offer. Specifically, Muilenburg points to three reasons why the October 28 Letter did not constitute an unconditional acceptance: 1) it requires Cherokee Rose to convey marketable title via warranty deed; 2) it requires Cherokee Rose to provide Muilenburg with a current commitment for title insurance; and 3) it contemplates the preparation and negotiation of additional contractual documents.

Initially, we note that although Muilenburg states the October 28 Letter "required" Cherokee Rose to provide a current commitment for title insurance, the actual language of the October 28 Letter stated that Muilenburg "would like [Cherokee Rose] to provide us with a current commitment for title insurance." (emphasis added). As such, Muilenburg merely stated a preference for a title insurance commitment. Such an expressed preference did not constitute a rejection of Cherokee Rose's offer. Id.

Regarding the first stated reason, we find the case of Haase v. Richmond, 570 S.W.2d 341 (Mo.App.1978) to be instructive. In Haase, a lessee brought a suit against the lessor to enforce a provision within the lease which gave the lessee an option to purchase the property. Id. at 343. The lease stated that the lessee "may purchase at any time [the leased property] (during the) next five years for the purchase price of $22,000." Id. The lessee's attorney had sent the lessor a letter indicating that the lessee intended to exercise the option to purchase. Id. The letter read, in pertinent part, that the lessee "is exercising this option to purchase immediately, for the total purchase price of $22,000.00, in return for which we expect and are entitled to a full Warranty Deed and merchantable title of record to this land, free and clear of all incumbrances." Id.

On appeal, the lessor argued that the reference to the "entitle[ment] to a full Warranty Deed" in the letter sent by the lessee's attorney made the acceptance of the option to purchase conditional because it contained terms not included in the original offer. Id. at 344. The Haase court rejected the lessor's contention, noting that

[a]n agreement to sell and convey land is in legal effect an agreement to sell a title to the land, and in the absence of any provision in the contract indicating the character of the title provided for, the law implies an undertaking on the part of the vendor to make and convey a good or marketable title to the purchaser. A contract to sell and convey real estate ordinarily requires a conveyance of the fee simple free and clear of all liens and encumbrances. Also, the obligation of the vendor in a contract for the sale of land, in the absence of any provision or stipulation to the contrary, is to convey a good or marketable title, and this obligation cannot be satisfied by an offer to convey an estate subject to outstanding encumbrances; in the absence of anything in the contract itself indicating that the vendee is to take title subject to...