Opinion
14-P-714
02-20-2015
J2 INTERACTIVE, LLC v. BLUEWARE, INC.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
J2 Interactive, LLC (J2), filed the underlying complaint against BlueWare, Inc. (BlueWare), alleging breach of contract, breach of the covenant of good faith and fair dealing, and violation of G. L. c. 93A. After the exchange of initial written discovery, the parties entered into settlement negotiations, most of which was conducted via electronic mail (e-mail) between the parties' counsel. After J2 served a motion to enforce what it asserted to be a binding settlement agreement, the Superior Court allowed J2's motion and accordingly entered judgment. BlueWare now appeals. We reverse.
Discussion. "An enforceable agreement requires (1) terms sufficiently complete and definite, and (2) a present intent of the parties at the time of formation to be bound by those terms." Targus Group Intl., Inc. v. Sherman, 76 Mass. App. Ct. 421, 428 (2010). Regarding the first prong, we review the parties' settlement communications de novo to determine whether they establish a "sufficiently clear and complete agreement." Basis Technology Corp. v. Amazon.com, Inc., 71 Mass. App. Ct. 29, 36 (2008). As for the second prong, the factual finding of BlueWare's contemporaneous intent to be bound is reviewed under the "clearly erroneous" standard of Mass.R.Civ.P. 52(a), as amended, 423 Mass. 1402 (1996). See Basis Technology Corp., supra. The materials before us demonstrate that there was neither sufficient completeness nor present intent to be bound by the proposed settlement terms.
Shortly after the filing of the complaint, the parties began negotiating a settlement of J2's claims. The progression of these negotiations is primarily documented through a series of e-mail exchanges, which, for all relevant purposes, begin on December 18, 2012, and end on March 5, 2013. The trial judge found, and J2 argues in its brief, that the e-mail and draft settlement agreement sent on February 13, 2013, represent sufficiently complete and definite terms. We are not so persuaded.
While the December 18, 2012, e-mail establishes that the parties were in agreement over one material term -- that BlueWare would pay $182,500 to settle J2's claims -- the subsequent e-mails demonstrate that other material terms had yet to be worked out. Specifically, the parties had yet to agree as to whether payments would be made in one or multiple installments, whether and what type of interest would accumulate on the remaining balance, and what would occur if timely payments were not made. Despite J2's claims to the contrary, these terms are not immaterial. In the words of J2's negotiating attorney, "getting paid relatively quickly [was] very important to [his] client."
The back and forth over payment terms, in addition to J2's new inclusion of an untimely payment clause in the February 13, 2013, draft, convince us that the proposed agreement was not complete. Furthermore, the language within the e-mails between J2 and BlueWare highlight that at no time did both parties have the requisite present intent to be bound by any of the exchanged drafts. See Massachusetts Mun. Wholesale Elec. Co. v. Danvers, 411 Mass. 39, 46 (1991) (words of parties are considered when ascertaining intent). A conclusion to the contrary would be clearly erroneous. See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 509 (1997). Thus, with essential terms that remained unresolved and the parties' visible reservation of their commitment to be bound, the proposed agreement is "incomplete and nonbinding." Targus Group Intl., Inc., 76 Mass. App. Ct. at 429.
The clause stated that, in the event that BlueWare failed to make timely payments, J2 would be permitted to either (1) seek enforcement of the settlement agreement, with BlueWare to cover J2's attorney's fees, or (2) seek to recover the full amount of their damages, not limited by the amount of the settlement agreement.
On February 13, 2013, for example, BlueWare's e-mail stated, "in order to make the settlement payment (assuming we get this agreement finalized)," while J2's attorney wrote, "Let me know if your client will agree." On March 5, 2013, J2's attorney stated, "[T]here is no chance that I can get this approval by my client unless it is approved by your client as a binding offer."
Conclusion. In accordance with the reasons detailed above, it was error to allow J2's motion to enforce a settlement agreement.
Judgment reversed.
Order allowing motion to enforce settlement agreement reversed.
By the Court (Kafker, Meade & Maldonado, JJ.),
The panelists are listed in order of seniority.
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Clerk Entered: February 20, 2015.