Summary
finding settlement agreement negotiated through emails to be an enforceable meeting of the minds
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Court of Appeals Case No. 20A-PL-1461
03-10-2021
JETZ SERVICE COMPANY, INC., Appellant-Plaintiff, v. Ellis VENTURES d/b/a Cherry Street Apartments, Michael Ellis, and Highland Quarters, LLC, Appellees-Defendants.
STATEMENT OF THE CASE
[1] Appellant-Plaintiff, Jetz Service Co. Inc. (Jetz), appeals the trial court's order enforcing a settlement agreement that it entered into with the Appellees-Defendants, Ellis Ventures d/b/a Cherry Street Apartments, Michael Ellis (Michael), (collectively, Ellis) and Highland Quarters LLC (Highland).
[2] We affirm.
ISSUE
[3] Jetz raises two issues on appeal, one of which we find dispositive and restate as: Whether the trial court erred when it granted an order enforcing a settlement agreement entered into between Jetz and Ellis.
FACTS AND PROCEDURAL HISTORY
[4] On September 21, 2015, Jetz entered a seven-year lease with Ellis Ventures wherein Ellis Ventures granted Jetz the right to install three pay-to-use washers and dryers in Cherry Street Apartments in Terre Haute, Indiana.
[5] In February 2016, Michael, as an authorized agent of Ellis Ventures, emailed Jetz's representative, Brad Applegate (Applegate) and stated Ellis Ventures was considering eliminating the Cherry Street Apartments and that Ellis Ventures would be terminating the lease. Applegate on behalf of Jetz wrote back and informed Ellis Ventures that there were approximately 81 months remaining on the 84-month contract and it was entitled to about $9,720.00 from Ellis Ventures in light of the breach. On March 17, 2016, Applegate wrote another email indicating that Jetz was willing to settle for "$8,000.00 no more no less." (Appellant's App. Vol. II, p. 144). That same day, Michael, on behalf of Ellis Ventures, accepted Jetz's offer and responded as follows: "I will reluctantly agree. Please forward a termination agreement effective 6/25/16. Remove the machines between the 25th & 30th of June." (Appellant's App. Vol. II, p. 144). The following day on March 18, 2016, Applegate emailed Michael and stated, "[Jetz] have prepared an agreement of understanding to put this matter to rest. Please see attached." (Appellant's App. Vol. III, p. 167). The attached document was titled "Mutual Release and Settlement Agreement" and it provided, in part, that
1. Within five (5) business days after execution of this Agreement [Ellis] shall pay to [Jetz] the sum of Eight Thousand Dollars ($8,000.00) by a certified check or other bank check without set off or deduction.
2. Between the dates of June 25th, 2016 and June 30th, 2016, [Ellis] shall remove all of its equipment from the leased premises and vacate the leased property.
3. Effective at the close of business on the date the laundry equipment is removed from the leased premises by [Ellis], the Lease agreement shall be terminated and neither party shall make any further claim against the other party based on the Lease Agreement.
(Appellant's App. Vol. II, p. 185). Following that email, Applegate did not hear from Michael until April 5, 2016 through another email in which he wrote,
I'm back in Terre Haute and can address this issue now. I'm not ready to etch in stone that we are terminating the Agreement. I want the ability to terminate with 30 days’ notice on these terms.
Payment will be paid within 30 days of notice to terminate.
Equipment pick up will be within 30 days of Notice to Terminate.
I will draft that agreement[,] or your people can.
Please advise.
(Appellant's App. Vol. II, p. 166). That same day, Applegate, on behalf of Jetz, contacted Michael and informed him to go ahead and "red line through with any changes" that Michael wanted to make for Ellis Ventures in the proposed settlement agreement. (Appellant's App. Vol. II, p. 166). Michael wrote back and indicated that he was not that "sophisticated" and that Jetz should instead send him the modified version or he could prepare a modified settlement agreement himself. (Appellant's App. Vol. II, p. 166). Following that email exchange in early April 2016, Jetz did not hear from Ellis for more than two months. As such, Jetz assumed that Ellis Ventures had decided it no longer wanted to cancel the lease. Finally, on June 30, 2016, Michael, on behalf of Ellis Ventures called Jetz representative, Applegate, and stated that Cherry Street Apartments had been sold. Michael also followed up with an email to Applegate stating that:
It subsequently turned out that neither Michael or Ellis Ventures, who held themselves out as the owners of Cherry Street Apartments, were in fact the owners. The actual owners on record at the time Ellis executed the lease with Jetz were Michael Ellis's brother Kaleel Ellis (Kaleel) and the Michael Ellis Trust (the Trust). In June 2016, Kaleel and the Trust sold Cherry Street Apartments to Highland Quarters LLC (Highland) via a general warranty deed. Highland claimed that it neither knew about nor was obligated to perform under the lease.
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I realize we have a contract that needs to be resolved. However, in our earlier negotiations, JETZ was not being reasonable. Now that I've had time to look at the numbers, JETZ is only getting $120.00 per month pursuant to the contract plus 5% of anything over $120.00 per month of revenue. According to what JETZ has been paying me for my 95% portion of the excess over $120.00, JET[Z] has only been receiving another $10.00 or so on a good month.
Therefore, I hereby rescind all previous offers. The units are in storage. If they would like to resolve this, I'm all for it. If not, I'll send them $120.00 per month and keep the units in storage until the termination of the lease agreement.
Please let me know how you wish to proceed.
(Appellees’ App. Vol. II, p. 85). Further discussions took place regarding the possibility of another settlement agreement, but those discussions did not lead to an agreement.
[6] On April 13, 2018, Jetz filed a Complaint for breach of contract against Ellis, and the subsequent owner of Cherry Street Apartments, Highland. On June 5, 2018, claiming that it neither knew about nor was obligated to perform under the lease, Highland filed a crossclaim against Michael for indemnification and third-party claims against the Trust and Kaleel for breach of warranty covenants and indemnification/contribution. After the matter had been litigated for approximately two years, in 2020, Ellis filed motions for leave to amend its answer to Jetz's Complaint, and to enforce the settlement agreement. Ellis primarily sought to enforce the settlement agreement it entered into with Jetz on March 17, 2016 in which Michael, on behalf of Ellis Ventures, "reluctantly agreed" to pay Jetz $8,000. On May 27, 2020, Jetz filed a notice that it intended to file its responses to Ellis's motions. On June 3, 2020, Jetz filed a motion for enlargement of time to file its responses. On June 15, 2020, Jetz filed its response to Ellis's motion for leave to amend answer but did not file a separate response to Ellis's motion to enforce settlement agreement. On July 20, 2020, the trial court issued an Order of Judgment against Ellis Ventures, Kaleel, and the Trust, in favor of Jetz. The order stated, in part, that:
On March 17, 2016, Jetz demanded a settlement amount of $8,000.00, plus getting their washer/dryers out of the building upon reasonable notice. On the same date, [Ellis], through its Agent, [ ] agreed "I will reluctantly agree. Please forward a termination agreement effective 6/25/16. Remove the machines between the 25th and 30th of June".
Contrary to Jetz’ position, there is a meeting of the minds. There was never a mutual rescission of the contract. Ellis
tried to amend the agreement but never was then a mutual agreement.
Jetz should have and could have sued for the $8,000.00 but now Jetz wants more and Ellis wants to pay less. That is all well, however, both are forgetting that both agreed on March 17, 2016 to settle. A contract was formed. They can sue on that and no more.
(Appellant's App. Vol. II, p. 27).
[7] Jetz now appeals. Additional information will be provided as necessary.
DISCUSSION AND DECISION
[8] Jetz argues that the trial court erred in finding that a valid settlement agreement existed between Jetz and Ellis on March 17, 2016. We first note that neither party requested special findings of fact and the trial court did not sua sponte enter such findings. Thus, we review the decision of the trial court under the general judgment standard. Shelby Engineering Co., Inc. v. Action Steel Supply, Inc. , 707 N.E.2d 1026, 1027 (Ind. App. Ct. 1999). "A general judgment will be affirmed if it can be sustained upon any legal theory consistent with the evidence." Id. at 1027. We neither reweigh the evidence or witness credibility, but we consider only the evidence most favorable to the judgment along with all reasonable inferences that can be drawn therefrom. Id.
[9] Jetz contends that the trial court erred in concluding that the parties entered into an enforceable settlement agreement on March 17, 2016 because the facts do not support a meeting of the minds. A settlement is an agreement to terminate or forestall all or part of a lawsuit. Harding v. State , 603 N.E.2d 176, 179 (Ind. Ct. App. 1992), trans. denied ; see also Vance v. Lozano , 981 N.E.2d 554, 558 (Ind. Ct. App. 2012) ("A ‘compromise’ or ‘settlement’ is a contract between two or more people to amicably settle or adjust their differences on such terms as they can agree.") (citing 15B Am. Jur. 2d Compromise & Settlement § 1 (2011) ). "Indiana strongly favors settlement agreements and if a party agrees to settle a pending action, but then refuses to consummate his settlement agreement, the opposing party may obtain a judgment enforcing the agreement." MH Equity Managing Member, LLC v. Sands , 938 N.E.2d 750, 757 (Ind. Ct. App. 2010) (citing Georgos v. Jackson , 790 N.E.2d 448, 453 (Ind. 2003) ), trans. denied. Settlement agreements are governed by the same general principles of contract law as other agreements. Id. Generally, a settlement agreement is not required to be in writing. Id. (citing Estate of Skalka v. Skalka , 751 N.E.2d 769, 771 (Ind. Ct. App. 2001) ). The breach of a settlement agreement by one of the parties is actionable, and a trial court has the power to order specific performance. Harding , 603 N.E.2d at 179.
[10] Construction of the terms of a written contract—here, the emails between the parties are the writings we are asked to interpret—is a pure question of law to which we apply a de novo standard of review. McGraw v. Marchioli , 812 N.E.2d 1154, 1157 (Ind. Ct. App. 2004). The basic requirements of a contract are "offer, acceptance, consideration, and ‘a meeting of the minds of the contracting parties.’ " Harding , 603 N.E.2d at 179. (quoting Batchelor v. Batchelor , 853 N.E.2d 162, 165 (Ind. Ct. App. 2006) ). The intention of the parties to a contract is a factual matter that must be determined from all the circumstances. Zimmerman v. McColley , 826 N.E.2d 71, 76 (Ind. Ct. App. 2005). To be valid and enforceable, a contract must be reasonably certain and definite. Zukerman v. Montgomery , 945 N.E.2d 813, 819 (Ind. Ct. App. 2011). "All that is required to render a contract enforceable is reasonable certainty in the terms and conditions of the promises made, including by whom and to whom; absolute certainty in all terms is not required." Id. Only essential terms are necessary for a contract to be enforceable. Id.
[11] Contrary to his claim that there was no meeting of the minds, the undisputed evidence shows that there were a series of emails between Ellis and an agent of Jetz on settling the lease dispute. On March 17, 2016, after multiple back and forth emails which had offers and counteroffers, Jetz offered to release Ellis from the lease if he paid $8,000. That same day, on behalf of Ellis Ventures, Michael responded, "I will reluctantly agree. Please forward a termination agreement effective 6/25/16. Remove the machines between the 25th & 30th of June." (Appellant's App. Vol. II, p. 144).
[12] To render a contract enforceable, an absolute certainty in all terms is not required, rather, all that is required to render the contract enforceable is reasonable certainty in the terms and conditions of the promises made, including by whom and to whom. See Zukerman , 945 N.E.2d at 819. Here, as the trial court found, on March 16, 2016, there was an offer, acceptance, and consideration. The parties agreed that Ellis would pay Jetz $8,000, that their lease would be terminated, and that Jetz would remove its equipment from Cherry Street Apartments. The essential terms of the settlement agreement were reached on that day without any qualification. Their exchange of emails created a contract, and the execution of a more elaborate written agreement to memorialize the contract was not required. See, e.g., Ind. Bureau of Motor Vehicles v. Ash, Inc. , 895 N.E.2d 359, 365-66 (Ind. Ct. App 2008) (exchange of faxes showing an offer, acceptance, and consideration was a contract where a lease amendment document was prepared but never signed). As there is evidence in the record to support the trial court's judgment that there was a meeting of the minds on March 16, 2016, we conclude that the trial court did not err in granting Ellis's motion to enforce the settlement agreement.
CONCLUSION
[13] Based on the foregoing, we hold that the trial court did not err in granting Ellis's motion to enforce the settlement agreement.
[14] Affirmed.
Najam, J. concurs
Crone, J. dissents with separate opinion
Crone, Judge, dissenting.
[15] I agree with the majority's determination that the parties reached agreement on most of the essential terms of a settlement on March 17, 2016. But the majority has disregarded the critical second step of the analysis: determining whether the parties "intended that they would be bound only after executing a subsequent written document." Wolvos v. Meyer , 668 N.E.2d 671, 675 (Ind. 1996). Based on the parties’ conduct and correspondence, I believe that the answer is yes. On March 17, Ellis's Michael asked Jetz to forward him a termination agreement with an effective date of June 25; the agreement drafted by Jetz made Ellis's payment contingent on the execution of the agreement, which never occurred. Several weeks later, Michael expressed his desire to revise the terms of the agreement; Jetz's Applegate told Michael that he could do so, but Michael never did. After Ellis sold the apartments, as the majority notes, "[f]urther discussions took place regarding the possibility of another settlement agreement, but those discussions did not lead to an agreement." Slip op. at 5. Because the parties intended that they would be bound only after executing a subsequent written document that was never executed, I would reverse the trial court's order granting Ellis's enforcement motion. See Foster v. United Home Improvement Co. , 428 N.E.2d 1351, 1355 (Ind. Ct. App. 1981) ("where the parties agree they shall not be bound until a contract is reduced to writing, execution of a written contract is necessary").