Opinion
3:17-cv-00920-YY
06-26-2023
LOJY AIR COMPANY, an Egyptian Corporation Plaintiff, v. GLOBAL FINANCIAL & LEASING, INC., an Oregon Corporation, and RICHARD KEITH WARD, individually, Defendants.
FINDINGS AND RECOMMENDATIONS
YOULEE YIM YOU, UNITED STATES MAGISTRATE JUDGE
FINDINGS
Currently pending is defendants' Motion for Partial Summary Judgment. ECF 68. Because plaintiff cannot show that the parties entered into a valid and enforceable agreement to settle their dispute in 2014 on the terms alleged in plaintiff's complaint, defendants' motion should be granted.
I. Background
This current suit is part of a long-running dispute between plaintiff Lojy Air Company (“Lojy Air”), an aviation company based in Egypt, and defendant Global Financial & Leasing, Inc. (“Global”), an Oregon-based aviation finance company. Galal Barakat is chairman of the board of directors of Lojy Air. In 2010, Global sued Lojy Air in Multnomah County Circuit Court after an apparent agreement between the parties (whereby Global would lease an Airbus A320-200 aircraft to Lojy Air) fell apart. Lojy Air removed the case to this court based on diversity jurisdiction. See Notice of Removal; Plaintiff's Trial Memo., Global Financial & Leasing v. Lojy Air Company, Case No. 3-10-cv-1369-PK (“Lojy I”), ECF 1, 74. On June 10, 2014, the parties informed the court that the case had settled, and the court dismissed Lojy I with prejudice but “with leave, upon good cause shown within sixty (60) days, to have this order of dismissal set aside and the action reinstated if the settlement is not consummated.” Lojy I, Order of Dismissal, ECF 79; see LR 41-1(c). This purported 2014 settlement agreement forms the basis of plaintiff's claims here.
Button Decl. Ex. 35 (“Barakat Dep.”) at 12:8, ECF 68-4.
On June 13, 2017, Lojy Air commenced the present action (“Lojy II”) against Global and its president and CEO Richard Keith Ward (collectively “defendants”), alleging that defendants breached the parties' 2014 settlement agreement pertaining to Lojy I. Compl. ¶¶ 11-30, ECF 1. Specifically, plaintiff alleges that defendants breached the terms of the 2014 settlement agreement as follows:
This court has diversity jurisdiction over the present action pursuant to 28 U.S.C. § 1332(a)(1), because Lojy Air is a citizen of Egypt, both defendants are citizens of Oregon, and the amount in controversy exceeds $75,000. Compl. ¶¶ 1-5, ECF 1.
9.) Pursuant to the terms of the settlement agreement reached in the matter, WARD and GLOBAL represented that and agreed, individually and collectively, to undertake the following duties and obligations:
a.) Payment of $30,000 by GLOBAL and WARD to LOJY;
b.) GLOBAL and WARD were to locate a Cessna Caravan aircraft or similar single engine turbo prop aircraft in commuter configuration for purposes of lease/purchase by LOJY and prepare a lease purchase agreement (“LPA”) for the aircraft;
c.) GLOBAL and WARD were to assist in obtaining financing for the aircraft; and d.) GLOBAL and WARD were to assist in the financing of the aircraft by paying a balloon payment of $120,000 at the conclusion of the lease purchase agreement.
10.) WARD and GLOBAL have failed to preform [sic] any of the duties and obligations described in Paragraph 9 above.
Compl. ¶¶ 9-10, ECF 1. The parties then attempted to settle Lojy II, and the resulting purported 2019 settlement agreement was the subject of defendants' Motion to Enforce Settlement Agreement. ECF 26 (filed June 17, 2019). After several rounds of additional briefing, numerous telephone conferences with the parties, and logistical difficulties driven by the disruption of court operations during the COVID-19 pandemic and other factors, the court held evidentiary hearings on defendants' Motion to Enforce in September and December of 2021. See ECF 34-52. The motion was denied because the parties “did not having a meeting of the minds with respect to all of the material terms” of the 2019 settlement agreement. Order (March 22, 2022) 3, ECF 58.
The parties then completed fact discovery regarding the purported 2014 settlement agreement for Lojy I. And now, defendants have moved for partial summary judgment on the enforceability of the 2014 settlement agreement for Lojy I. Mot. Partial Summ. J. 1, ECF 68. Defendants assert that the parties “failed to reach mutual assert on all material terms to form a settlement contract in 2014,” or in the alternative, that the 2014 settlement agreement was “to indefinite on materials issues” to be enforceable. Id. at 5.
Because all of plaintiff's current claims rely on the existence of the 2014 settlement agreement and the terms of that agreement as alleged in plaintiff's complaint, granting defendants' motion here would require that plaintiff's claims be dismissed, leaving only defendants' counterclaim for quantum meruit for trial. See Reply 5, ECF 72; Answer with Counterclaims, ECF 4.
II. Summary Judgment Standard
Under Federal Rule of Civil Procedure 56(a), “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The party moving for summary judgment bears the initial responsibility of informing the court of the basis for the motion and identifying portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party does so, the nonmoving party must “go beyond the pleadings” and “designate ‘specific facts showing that there is a genuine issue for trial.' ” Id. at 324 (citing Fed.R.Civ.P. 56(e)).
The court “does not weigh the evidence or determine the truth of the matter, but only determines whether there is a genuine issue for trial.” Balint v. Carson City, Nev., 180 F.3d 1047, 1054 (9th Cir. 1999). “Reasonable doubts as to the existence of material factual issue are resolved against the moving parties and inferences are drawn in the light most favorable to the non-moving party.” Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000).
III. Judicial Estoppel
In opposing defendants' motion for partial summary judgment, plaintiff primarily argues that defendants should be judicially estopped from challenging the formation or enforceability of the 2014 settlement agreement because defendants previously sought to enforce the later 2019 settlement agreement. Resp. 1-7, ECF 71. “[I]f the terms of the first settlement agreement were not binding and enforceable,” plaintiff asks rhetorically, “then why did defendants offer in January 2019 to settle the claims in the complaint[?]” Id. at 2. Plaintiff asserts that “it made no sense for a defendant to spend six figures in legal fees to enforce a bogus settlement agreement worth only $10,000-UNLESS those defendants actually believed they were on the hook for a more much bigger judgment if the bogus settlement agreement was not enforced.” Resp. 4-5, ECF 71 (emphasis in original).
Federal law governs the application of judicial estoppel in federal courts. Rissetto v. Plumbers and Steamfitters Local, 94 F.3d 597, 603 (9th Cir. 1996). Judicial estoppel is “an equitable doctrine invoked by a court at its discretion” to “protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment.” New Hampshire v. Maine, 532 U.S. 742, 749-50 (2001) (simplified). “The doctrine applies to positions taken in the same action or in different actions,” whether that position “is an expression of intention, a statement of fact, or a legal assertion.” Samson v. NAMA Holdings, LLC, 637 F.3d 915, 935 (9th Cir. 2011) (citation and quotation marks omitted).
Because it is an equitable doctrine, “the circumstances under which judicial estoppel may appropriately be invoked are probably not reducible to any general formulation of principle.” New Hampshire, 532 U.S. at 750-51. Three factors, though, typically inform whether to apply the doctrine in a particular case: the later position is clearly inconsistent with the earlier one; whether the party succeeded in persuading a court to accept the first position; and whether the change in position would provide an unfair advantage or impose an unfair detriment on the opposing party. Id. This is not, however, an exhaustive formula and other factors may be relevant depending on the facts of the case. Id. at 751.
Judicial estoppel does not apply here. For one, there is nothing inconsistent in defendants' positions. Defendants have always maintained that “there was no meeting of the minds to give rise to an enforceable contract” in 2014. Answer With Counterclaims 2, ECF 4. The 2019 settlement agreement obviously did not arise until after plaintiff had filed this lawsuit in 2017, and thus the facts relevant to whether the parties came to an agreement in 2014-which are substantially expanded below-are completely different than the facts relevant to whether the parties came to an agreement in 2019. Compare Mot. Enforce 2-3, ECF 26 (discussing email correspondence between the parties from January to March of 2019) with Memo. ISO Mot. Partial Summ. J. (“Memo.”) 1-5, ECF 68-1 (discussing email correspondence between the parties from May of 2014 to March of 2015).
It is not inconsistent for defendants to simultaneously assert that 1) the parties had reached a settlement of the underlying dispute for substantially less ($10,000) than plaintiff's alleged damages ($750,000), and 2) the contract that formed the basis of the underlying dispute is unenforceable. See Recommended Findings of Fact and Conclusions of Law ¶¶ 5-6 (Jan. 10, 2022), ECF 54. Defendants' attempt to enforce a 2019 settlement agreement did not necessarily depend on, and certainly did not establish that, the 2014 settlement was enforceable. Had defendants addressed the merits of plaintiff's allegations regarding 2014 settlement agreement without attempting to enforce the purported 2019 settlement agreement, defendants would have waived the ability to argue the 2019 settlement was grounds for dismissing plaintiff's claims. Defendants' litigation strategy may have “made no sense” to plaintiff, Resp. 4-5, ECF 71, but it did not result in the type of “inconsistent positions” that judicial estoppel is designed to root out. See Whatley v. Nike, Inc., No. 3:98-cv-00963-AS, 2000 WL 33201902, at *2 (D. Or. Oct. 20, 2000) (“[J]udicial estoppel doctrine should be limited to those instances in which statements made to different courts or in different proceedings are truly inconsistent and mutually exclusive.”) (simplified).
Finally, defendants lost the motion to enforce to enforce the 2019 settlement agreement, and thus judicial estoppel does not prevent defendants from now asserting that the 2014 settlement agreement is not enforceable. See Baughman v. Walt Disney World Co., 685 F.3d 1131, 1133 (9th Cir. 2012) (explaining that judicial estoppel is appropriate where a party “assumes a certain position in a legal proceeding, and succeeds in maintaining that position”) (quoting New Hampshire, 532 U.S. at 749); Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 783 (9th Cir. 2001) (“[The Ninth Circuit] has restricted the application of judicial estoppel to cases where the court relied on, or accepted, the party's previous inconsistent position.”) (internal quotation marks omitted).
IV. 2014 Settlement Agreement
Defendants' motion for partial summary judgment presents essentially a single issue: whether the 2014 settlement agreement upon which plaintiff's complaint exclusively relies is valid and enforceable. Memo. 5, ECF 68-1. The party seeking to enforce a contract bears the burden to prove the contract exists and that the parties agreed to all its material terms. Glob. Exec. Mgmt. Sols., Inc. v. Int'l Bus. Machines Corp., 260 F.Supp.3d 1345, 1367 (D. Or. 2017); Povey v. Clow, 146 Or.App. 760, 764 (1997) (“Plaintiffs had the burden to establish that the . . . contract was definite in all material respects, with nothing left for future negotiation.”). When the facts are not disputed, determining whether a contract exists is a question of law. Glob. Exec., 260 F.Supp.3d at 1367 (citations omitted).
When a federal court adjudicates a diversity action, it applies state law to resolve substantive issues. Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). Thus, this court applies Oregon contract law in deciding whether a settlement agreement exists.
To determine whether a contract exists and what its terms are, courts “examine the parties' objective manifestations of intent” as shown by their communications and acts. Ken Hood Const. Co. v. Pac. Coast Const., Inc., 201 Or.App. 568, 578 (2005). For a contract to be enforceable, the parties must have agreed to all its essential or material terms. Glob. Exec., 260 F.Supp.3d at 1368; see also Pacificorp v. Lakeview Power Co., 131 Or.App. 301, 307 (1994) (explaining that a “meeting of the parties' minds on the essential terms . . ., rather than all terms, is all that is required” to establish an enforceable contract under Oregon law). “A term is ‘material' to an enforceable agreement when it goes to the substance of the contract and, if breached, defeats the object of the parties in entering into the agreement.” Glob. Exec., 260 F.Supp.3d at 1368; see also Johnstone v. Zimmer, 191 Or.App. 26, 34 (2003).
Generally, a contract may be oral or written. Ponderosa Properties, LLC v. Emp. Dep't, 262 Or.App. 419, 435 (2014). But even if the parties mutually assented to an unwritten agreement, the terms of that agreement must be sufficiently defined or certain to allow a court to determine what the parties intended. Benedict v. Held, No. 3:19-cv-01295-HZ, 2021 WL 2720443, at *3 (D. Or. Feb. 7, 2021) (“If the parties' communications and actions manifest assent to be bound by promises, they will form a contract unless the promises are so indefinite that a court cannot determine what the parties intended.”) (simplified) (citing Wieck v. Hostetter, 274 Or.App. 457, 472 (2015)); Brazil v. FedEx Ground Pkg. Sys., Inc., No. 3:03-cv-06287-TC, 2004 WL 2457776, at *3 (D. Or. Nov. 1, 2004) (“Finally, even assuming, arguendo, that an oral agreement [existed], the terms of any agreement between the parties were insufficiently certain for the agreement to be enforceable.”).
Here, it is undisputed that the terms of the 2014 settlement agreement were never reduced to writing. Thus, the evidence of the agreement and its terms largely consists of email negotiations between the parties' attorneys. See BenefitElect, Inc. v. Strategic Benefit Sols. Corp., 614 F.Supp.3d 838, 842 (D. Or. 2022) (“When the dispute concerns an unwritten agreement, the conclusion that the parties manifested mutual assent must be constructed from evidence of their negotiations or other past conduct.”) (quoting Kabil Devs. Corp. v. Mignot, 279 Or. 151 (1977)).
On May 15, 2014, plaintiff's counsel wrote defendants' counsel, in part:
To improve readability, all email communications are presented here as they were originally written and without inline edits to correct minor typographical errors, unless otherwise indicated by brackets. As for citations to the record, all of the relevant exhibits were attached to the Button Declaration, and thus all references to “Ex.” in the citations that follow refer to those exhibits attached to the Button Declaration exhibits filed at ECF 68-3, unless otherwise noted.
We reviewed the numbers that you sent In regard to settlement. Captain Barakat feels that the offer is insufficient in terms of value. He proposes another approach to increase the value of the offer. As such, Mr. Ward would pay $30,000 at the time of settlement. His next payment would be $120,000 due in the form of a ballon payment at the conclusion to the LPA (I am presuming that your settlement proposal contemplates Global locating an aircraft for Lojy, such as the Cessna Caravan presently being proposed). This ballon payment would be three to 5 years out depending upon the terms of the underlying LPA.
This proposal contemplates that Mr. Ward will receive some sort of commission from the seller of the subject aircraft and that income will go toward the settlement. Moreover, it gives Global 3 to 5 years to earn the ballon payment (either through the Caravan deal or the additional Caravan aircraft that Lojy has expressed an interest in purchasing. Additonally, other business revenue that Global will earn over the next 3 to 5 years can be used to fund the ballon payment.
Ex. 1 at 1.
Two weeks later, defendants' counsel responded:
In terms of responding to your offer, we have only one change. Instead of $30,000 now, we want to pay $20,000 over the next 45 days. This is of course a change from our original offer of $20,000 over a year. The remainder of your email is generally acceptable.
Ex. 3.
Plaintiff's counsel was traveling in California, and the attorneys attempted to schedule a phone call to discuss settlement. Plaintiff's counsel wrote on June 2, 2014:
Ex. 7 at 1-2.
Can you email me details of the settlement proposal that I can go ahead and look at before hand?
Id. at 1.
Defendants' counsel responded:
The only difference from what you outlined is the amount up front, and that is a short term cash flow problem for my client. Everything else-balloon payment with aircraft in 3-5 years, is fine.
Id.
And a few minutes later, defendants' counsel wrote again with more specific proposed terms:
Keith Ward has authorized me to extend you the following offer:
• Ward pays 20K within 45 days.
• Ward locates an appropriate aircraft for LOJY, and both parties act in good faith towards that selection
• Ward pays another 120K in the form of a balloon payment at the conclusion of the LPA for the aircraft. This balloon payment would be 3-5 years out, depending on the LPA. This 120K may come from Ward's commission on the sale of the aircraft.
Ex. 8.
Plaintiff's counsel responded the next day:
I spoke with Galal this morning, I think we are close but need to address two issues:
1) Galal wants to get $30K upfront payment instead of the $20K. I think you indicated that this was feasible but that Mr. Ward would need additional time to pay that amount;
2) In regard to $120,000 ballon, Galal raised the point with me this morning that he wanted to have this ballon paid by the aircraft seller, rather than Ward, because Galal felt the ballon payment had greater security if it was paid by the aircraft seller than Mr. Ward.
Frankly, I do not think this is feasible due to the unlikely acceptance of the seller of this obligation (even if Ward agreed to
fund the seller directly). My alternative thought to give Galal the security he wants is to have Mr. Ward enter into a stipulated judgment at the time of settlement for the $120,000. The settlement agreement would have language in it allowing the stipulated Judgment to be executed upon, provided that Mr. Ward falls to make a timely ballon payment.
Thoughts?
Ex. 9.
Defendants' counsel responded:
I will talk to Keith about the 30K. Would Galal allow 30K over 45 days? I don't think Keith has 30K right now. Obviously, I don't know that, but I highly suspect this to be true.
In terms of the 120K, what if there is never a successful LPA? Obviously, all sides want there to be. I can assure you we do because Keith wants the money and/or to be done.
Id.
The next day, June 4, 2014, plaintiff counsel emailed:
I just want to make sure we are on the same page. I shot you an email yesterday regarding getting $30k to Galal over a longer period of time ($20 at signing of settlement, with another $10K paid 90 days afterwards) with the request that you present that to Mr. Ward. Once I hear back from you on that issue, I will seek to confirm the settlement terms with Galal so that we can advise the court that the parties have settled.
Ex. 10.
On June 6, 2014, plaintiff's counsel emailed again:
I am following up on my email yesterday. If this case has settled we want to move forward rapidly to its conclusion due to emerging business opportunities for Lojy in Egypt.
Ex. 11.
Defendant's counsel responded:
Yes, we have a deal.
Id.
The following Monday, June 9, 2014, defendants' counsel reported to Judge Papak that “the parties settled this matter,” and the case was dismissed the next day “with leave upon good cause shown within sixty (60) days, to have [the dismissal] set aside and the action reinstated if the settlement is not consummated.”
Exs. 13 & 14.
But when comparing this evidence to plaintiff's allegations in the complaint, it is clear that the parties either never reached an agreement as to all the material terms, or that the terms were not specific enough to be enforceable. First, plaintiff alleges that defendants agreed to pay $30,000 to plaintiff. Compl. ¶ 9, ECF 1. But in the days and weeks leading up to reporting the case as “settled,” the parties heartily negotiated over several different ways that payment might be made. The specific amounts and deadlines for the initial and subsequent payments was crucial to the deal; defendants were experiencing “a short term cash flow problem,” and the attorneys exchanged several email communications specifically addressing the timing of the initial payment to plaintiff. See Johnstone, 191 Or.App. at 34 (explaining that a term is material if it “goes to the substance of the contract” and that materiality is usually reserved for the fact-finder unless the “uncontested evidence leads to only one legal conclusion”). The last and most specific payment proposal that plaintiff offered to defendant was by email on June 4, 2014, that the $30,000 payment would be structured as “$20[k] at signing of settlement, with another $10K paid 90 days afterwards.” Defense counsel responded two days later that “we have a deal” and then reported the settlement to the court. See Bridge City Fam. Med. Clinic, P.C. v. Kent & Johnson, LLP, 270 Or.App. 115, 121 (2015) (“Even when it has not been reduced to a formal writing, a valid contract can be created by an offer and its unqualified acceptance.”) (simplified).
Ex. 7 at 1.
Ex. 10 at 1 (emphasis added).
Exs. 11 & 13.
The June 4 payment terms are critically different from the terms plaintiff alleges in the complaint because the June 4 payment terms were expressly conditioned on the signing of a settlement agreement, which never occurred. After reporting to the court on June 6, 2014, that the case had settled, defendant's counsel sent a “draft lease agreement” for plaintiff's review on June 18, 2014; however, no copy of the “Aircraft Lease Agreement Commercial” document that was attached to counsel's email and no other evidence of the draft agreement's terms appears to be in the record. On June 21, 2014, Barakat told his attorney, “we need to have a lease purchase agreement,” not a straight lease, and proposed several other terms, including the type of aircraft to be acquired, which financial terms would be included in the “final agreement,” “technical” and “delivery and redelivery” conditions that plaintiff would provide, and more. Barakat also asked if there would be “[two] separate agreement[s], one for the settlement and another as [a lease purchase agreement]?” Plaintiff's counsel apparently did not respond with a draft of any formal written settlement agreement, and neither party has produced a written agreement.
Ex. 15 at 4-5.
Ex. 15 at 1-3. As explained more fully below, this email from plaintiff is representative of many communications between the parties after the case “settled” on June 6, 2014, that show the parties' negotiations were fluid and ongoing, and that the parties never reached a true meeting of the minds as to several material terms.
Id. at 1.
Barakat testified that he believed defendants were supposed to make the initial $30,000 payment “within 45 days of the signing” of the settlement agreement, or perhaps within 45 days of the June 6 email that the parties “had a deal.” But that does not change the analysis that the parties failed to reach an agreement on the critical terms regarding the initial $30,000 payment. It is the parties' outward communications and acts, and not their “undisclosed intents and ideas,” that establish the contract's terms. Kabil Devs. Corp. v. Mignot, 279 Or. 151, 157 (1977) (quoting Kitzke v. Turnidge, 209 Or. 563, 572-73 (1957)). Thus, the June 4 email providing that the $20,000 was due “at signing of settlement” and an additional $10,000 was due 90 days after signing controls here, and not Barakat's subjective belief about the terms of the deal. To the extent Barakat's testimony could properly be considered probative of his “behavior and the perceptions of the parties to the negotiation,” other evidence in the record shows the parties believed that the terms of the payment obligation were not agreed upon or had not yet been triggered. See id. (explaining that it was not error for trial court to allow a party to “testify to his own sense of the state of negotiations, as long as the jury was not misled into treating this testimony, in its context, as something more than evidence bearing on the behavior and the perceptions of the parties to the negotiation.”). As mentioned above, in the immediate aftermath of the June 6 “settlement,” Barakat inquired of his attorney whether there would be “[two] separate agreement[s], one for the settlement and another as LPA?” The parties exchanged numerous emails in the weeks and months following the June 6 “settlement,” and not once did Barakat or his attorney mention that the initial payment obligation was due or expected from defendants-not after July 21, 2014, which was 45 days after the June 6 “settlement” date, or any time after that.
Ex. 35 (Barakat Dep.) at 15:20-16:11, ECF 68-4.
Ex. 15.
See Ex. 22 at 1; Ex. 23 at 2; Ex. 26 at 2.
Barakat's testimony, in other words, cuts against plaintiff in several ways. Either Barakat's testimony is credited, and it shows the parties failed to reach a true meeting of the minds as to the terms of the initial $30,000 payment, or Barakat's subjective belief about the terms is ignored, in which case the June 4 terms control. In the latter case, plaintiff cannot establish that defendants breached the payment term because neither their initial obligation to pay $20,000 “at signing of settlement” or to pay $10,000 within 90 days after signing, was ever triggered by the necessary condition precedent that an agreement was actually signed. Hill v. Oland, 61 Or.App. 85, 90 (1982) (“Performance of a duty subject to a condition cannot become due unless the condition occurs or its non-occurrence is excused.”).
There are other problems, too, in trying to pinpoint whether the parties truly had an agreement and if so on what terms. Plaintiff asserts that defendants agreed to “locate a Cessna Caravan aircraft or similar single engine turbo prop aircraft in commuter configuration for purposes of lease/purchase by LOJY and prepare a lease purchase agreement (‘LPA') for the aircraft.” Compl. ¶ 9(b), ECF 1. But those specific terms are nowhere in the parties' email communications leading up the “settlement” of the case in June of 2014. Plaintiff's counsel wrote on May 15, 2014, that the settlement proposal at that point seemed to “contemplat[e] Global locating an aircraft for Lojy, such as the Cessna Caravan presently being proposed.”The response from defense counsel on June 2, 2014, proposed the following terms: “Ward locates an appropriate aircraft for LOJY, and both parties act in good faith towards that selection.” There are no other communications between the parties about the specific aircraft that defendants were agreeing to locate, or the other duties that plaintiff alleges were part of the 2014 settlement agreement, before they reported to the court that the matter had settled.
Ex. 1 at 1.
Ex. 8.
Defendants presented several proposed airplanes to plaintiff in the weeks and months following the June 6 “settlement,” though plaintiff did not accept any of them. One of the main sticking points was that defendants were having a difficult time locating an airplane on a “lease to purchase” basis, rather than simply a lease. The pre-settlement emails in June of 2014 exclusively referred to an “LPA.” Defense counsel identified early on that there was a possibility that no “lease purchase agreement” could be arranged, though there are not any communications attempting to provide for that contingency. The parties did not agree, however, as to whether any lease purchase agreement would be between plaintiff and defendants, or plaintiff and “whatever entity owns the plane.” And when defendants provided a Cessna 208b for plaintiff's consideration in October of 2015, Barakat responded by asking whether defendants could “do anything to facilitate this deal? Cash? Financing? Sales support?
See Ex. 27 at 1-2.
See Ex. 19 at 1-3; Ex. 20 at 1; Ex. 21 at 3; Ex. 27 at 1-2.
Ex. 8.
See Ex. 9 (“In terms of the 120K, what if there is never a successful LPA? Obviously, all sides want there to be. I can assure you we do because Keith wants the money and/or to be done.”).
Ex. 16.
Regulatory compliance?” None of these terms were part of the initial email negotiations in May and June of 2014, and this further demonstrates how plaintiff seemed to present a moving target of duties that defendants were supposed to undertake, and that the parties fundamentally did not agree on what defendants had agreed to do in acquiring an aircraft for plaintiff and settling the dispute.
Ex. 30 at 1-3.
Finally, there are several emails after June 6, 2014, that suggest the parties themselves at the time did not believe the matter had truly settled. On December 3, 2014, plaintiff's counsel wrote to defense counsel:
It seemed that we had a 120 day period from the court to wrap this thing up. It appears that time limit has passed and the court has forgotten about this case. Can we do our best to try to get this matter wrapped up in the next 30 days?
Ex. 24.
On March 27, 2015, defense counsel emailed plaintiff's counsel:
Does the Court want any kind of update?
Ex. 26 at 1.
That same day, plaintiff's counsel emailed defense counsel:
I think the court is doubt 5 months overdue on its last scheduled time to check in with us. I don't see any reason to wake the court up to this case right now, if we are finally close to getting it settled.
Id.
And finally, on September 12, 2016, plaintiff's counsel wrote to defense counsel that he “need[ed] to get back to Captain Barakat in regard to Keith Ward's position in regards to settling these claims.” All of these email show that the agreement had not yet crystallized into an enforceable contract with all material terms defined.
Ex. 32 at 1.
Plaintiff's arguments in the briefing and at oral argument regarding these facts is somewhat difficult to parse. Plaintiff asserts that email communication between the parties after the matter purportedly settled on June 6, 2014, shows that plaintiff was not “insisting on strict compliance with the terms of the parties' settlement agreement” but was instead “broadening his expectations, to make it easier for defendants to provide them with the aircraft lease they were initially supposed to provide to plaintiff prior to the filing of the 2010 lawsuit.” Resp. 7, ECF 71. But the evidence shows that plaintiff moved the target by, for example, insisting that defendants help “facilitate [a] deal” by providing additional funds, or assistance with “sales support” or “regulatory compliance,” none of which was part of the initial negotiations.
Ex. 30 at 1.
Alternatively, plaintiff argues that defense counsel's testimony regarding the negotiations should either be excluded entirely or should be given controlling weight to the extent he testified he “would never have . . . represented to a court that a case was settled I didn't believe that it had been.” Resp. 8, ECF 71. Part of the underlying problem here, according to plaintiff, is that when litigating the purported 2019 settlement agreement, plaintiff agreed to waive the attorney-client privilege “because it was necessary to determine all the circumstances and communications between [plaintiff] and [plaintiff's counsel] concerning the discussion of the proposed terms of that agreement.” Id. at 6. Defendants, though, did not waive the privilege when it came to the 2014 settlement agreement. Id. Thus, plaintiff argues, as a matter of fairness or “due process,” defendants should be “barred from proffering [defense counsel's] deposition testimony” regarding the 2014 settlement agreement. Id. But defense counsel's testimony about his subjective belief regarding the agreement is only marginally relevant, if at all, in determining the parties' objective manifestations of intent. And if the court were to heed plaintiff's call to exclude defense counsel's testimony, plaintiff has not pointed to any other evidence in the record that creates an issue of fact regarding whether the parties actually had a meeting of the minds that created an enforceable contract. See Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (a district court is not required to comb the record to find some reason to deny a motion for summary judgment). For all these reasons, plaintiff has not carried its burden to show the parties entered into a binding, enforceable agreement in 2014 on the terms that plaintiff alleges in the complaint; therefore, defendants are entitled to partial summary judgment.
V. Plaintiff's Remaining Claims
Finally, defendants are also entitled to summary judgment on plaintiff's remaining claims for fraud in the inducement, fraud, negligent misrepresentation, and breach of the implied duty of good faith and fair dealing because each of those claims necessarily depends on the allegation that the parties entered into an enforceable agreement in 2014. See Compl. ¶¶ 11-24, 28-30, ECF 1. For instance, plaintiff alleges that defendants falsely or negligently misrepresented the terms of, or breached the implied duties inherent in, the purported 2014 settlement agreement. Id. As explained above, there was no enforceable settlement agreement in 2014, so plaintiff's remaining claims fail as a matter of law.
RECOMMENDATIONS
Defendants' Motion for Partial Summary Judgment [ECF 68] should be granted.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Monday, July 10, 2023. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.