Opinion
No. 106,697.
2012-08-17
MEG PROPERTIES & INVESTMENTS, LLC, by and through its Member, Teri K. AUTEN and Teri K. Auten, Individually, Appellees, v. Brad L. GILCHRIST and Mary Ellen Gilchrist, Appellants.
Appeal from Miami District Court; Steven C. Montgomery, Judge. Michael W. Blanton, formerly of Leawood, now of Denver, Colorado, for appellants. Sheila M. Schultz, of Winkler, Domoney & Schultz, of Paola, for appellees.
Appeal from Miami District Court; Steven C. Montgomery, Judge.
Michael W. Blanton, formerly of Leawood, now of Denver, Colorado, for appellants. Sheila M. Schultz, of Winkler, Domoney & Schultz, of Paola, for appellees.
Before ARNOLD–BURGER, P.J., McANANY, J., and LARSON, S.J.
MEMORANDUM OPINION
PER CURIAM.
This appeal arises out of a dispute over the terms and legal effect of a settlement agreement entered into by the parties to dissolve MEG Properties & Investment, LLC (herein MEG).
Teri K. Auten, Brad L. Gilchrist, and Brad's mother, Mary Ellen Gilchrist, were members of MEG. Teri, acting as a member and individually, brought derivative and individual claims against Brad and Mary Ellen in Miami County District Court.
The parties ultimately entered into an agreement which settled the case. Brad and Mary Ellen moved to set aside the settlement and for other relief. The district court refused their request and ordered the settlement agreement to be performed. Brad and Mary Ellen appealed.
Factual and Procedural Background
In order to understand the result we reach, it is necessary to set forth the history of this case in considerable detail, which is as follows:
On April 19, 2010, Teri sued Brad and Mary Ellen, claiming Brad, the managing member of MEG, had violated his trust. Teri further alleged Mary Ellen had cooperated with Brad's violations of trust. Teri also contended she had loaned money to MEG but had not been repaid.
On April 23, 2010, before Brad and Mary Ellen had answered Teri's petition, the parties appeared for mediation at the Miami County courthouse. The courthouse was closed that day because of furloughs. The presiding judge, Steven C. Montgomery, nevertheless admitted the parties.
The mediation was conducted by the Honorable J. Patrick Brazil. After negotiating most of the day, the parties informed Judge Montgomery they had reached a settlement which they had reduced to written form. Judge Montgomery received the parties and the handwritten settlement was read into a counsel's audio recorder. As Judge Montgomery explained at a later hearing, “Because the Court's facilities and personnel were ... not on duty that day, there was no way for the Court to make an official record of the settlement.” Following the usage of Brad and Mary Ellen on appeal, this settlement is called the “First Agreement.”
Among the several items of real property, personal property, and funds at issue in the mediation was cash held in the district court. The cash was proceeds from the sale of a house belonging to MEG. Teri had alleged in her initial petition that Brad “used assets of MEG ... to purchase a residence ... and has moved into that residence and has converted it to his own use.” A receiver had been appointed and any proceeds from the sale of the residence were to be paid into the district court.
During the mediation on April 23, 2010, a question arose concerning the amount of money held by the district court. Counsel for Teri stated at a later hearing that she thought it was $34,000 based on her phone call to the district court a few days before the mediation. Counsel added, “They told me that there was 49 and that there was a check outstanding in the amount of some $15,000. In my mind, I did the math and came up with $34,000.”
Brad, acting as the manager of MEG, had signed the sales contract for the house. He also knew the proceeds had been paid into the district court. But, in testimony, he admitted only to “an idea” of the amount at issue. Brad claimed that during the mediation he had relied upon the representation of counsel for Teri regarding the amount at issue.
According to statements by counsel for Brad and Mary Ellen at a later hearing, “We had no way to verify [the amount at issue], as it was late and ... the clerk's office was closed.” Counsel also stated, “We honestly believed that there was $34,000, because that's what we were told. And it just happened to be a court furlough day.” In any event, the parties did not specify the amount at issue in the First Agreement. They instead recorded that Teri was to “receive the cash in the District Court.”
At the end of the recorded statement, Judge Montgomery questioned the parties to ensure their consent to the First Agreement. All parties said they had negotiated with assistance of counsel, that they understood the terms, that they believed the division of assets was fair, just, and equitable, and that the First Agreement constituted the final resolution of their dispute. The parties agreed further that when the terms of the First Agreement were journalized, the case would be dismissed.
According to Brad, however, Mary Ellen “had a chance to go to the court and check the records” a “few days after” the mediation. She learned that Teri would actually receive about $49,907. Brad testified he would not have entered the First Agreement had he known this.
Judge Brazil apparently conducted further mediation, perhaps by teleconference. The details of this mediation, including the timing, are unclear. Whatever occurred, counsel for Teri eventually drew up a journal entry, and counsel for Brad and Mary Ellen had objections.
On June 14, 2010, counsel for Teri e-mailed the district court, with copies to counsel for Brad and Mary Ellen, asking for “a court date to resolve these objections to my proposed journal entry. I suggest that it would take at least one and one half hours.” An assistant to Judge Montgomery responded to counsel requesting they provide a transcript of the recording of the settlement agreement, gave several available days for a hearing and noted that attorney fees may be assessed to the losing party (if there is one).
A hearing was set for July 19, 2010. The parties appeared with counsel before Judge Montgomery. The judge first stated his “understanding ... that the difficulty in this matter came to reducing the [First Agreement] which was read into the record into written form.” He therefore characterized the issue as “a journal entry dispute.”
Judge Montgomery continued as follows:
“The way the Court normally operates in these proceedings is to call the case, which I have, and to basically hear what the issue or issues are concerning the journal entry, why we can't reach an agreement, what is at issue and then basically the ... parties and their counsel are removed to another portion of the courthouse. The Court has other matters to take up this afternoon. I'll recall the case later on to determine whether or not a ... settlement has been reached with respect to the journal entry. If not, we'll take the time, where it's necessary, for the Court to make a ruling and we will have a journal entry by the time we leave here today. And certainly 60–211 is at play [ sic ]. If the Court finds that either party is taking a baseless or frivolous position with respect to the issues at hand, the Court certainly has it within its authority to impose sanctions upon the party that has taken such a position. I'm not saying that in the way of an indication that I'm going to do that, because I have no idea what the issue is as I sit here today, let alone the position of the parties.
“So would either counsel clue me in as to what the issue is? And I'll certainly give both sides the opportunity to correct that or to otherwise illuminate me. So does somebody want to take a stab at it?”
Counsel for Brad and Mary Ellen began by claiming that “[w]hen the typewritten journal entry was presented to us, there was a substantial amount of additional verbiage that was added to it outside of the [First Agreement] that was handwritten and signed off at the mediation.” One of these concerned the cash in the district court to be paid to Teri. Counsel said Teri's “position was that money was to be set aside to [Teri], no questions asked whether it was 34,000 or 50,000; and we disputed that based on the representation that was made to us.”
Counsel for Teri responded in part, “Brad ... sold that house, not Teri.” Counsel suggested Brad and Mary Ellen “could've reserved and said, no, we can wait until a later date to find out how much that is,” but instead “they're saying because I said it was a certain amount, they shouldn't have to comply with that ... agreement.” Counsel insisted the First Agreement “doesn't say that my client received only a certain amount,” rather “[i]t says all cash goes to Teri....”
After further argument on this and other disputes, Judge Montgomery stated, “All right ... I think that I have a pretty good sense of what the issues are and I'm goin' to send the parties upstairs to the big courtroom and give [ ] them an opportunity to try to come to an agreement.”
Judge Montgomery later reconvened the hearing. The judge asked, “What can counsel advise concerning your opportunity to have further discussions concerning these matters?” Counsel for Teri announced, “All the documents have been signed off on,” and “we have a journal entry of final settlement....” Counsel for Brad and Mary Ellen agreed. Judge Montgomery said he would “look forward to receiving the journal entry. I'm glad the parties were able to come to this agreement. I'm glad that you were able to put the finishing touches on the [First Agreement] that was mediated previously.”
Brad testified in the following manner at a later hearing about the negotiations over the money:
“A. Did you agree at some point to set aside more to [Teri]?
“Q. Yes. After we found out that there was more money in the court, yes.
“A. What was the purpose for that agreement?
“Q. We were trying to get this settled.
“A. Trying to get this settled, okay.
“Q. Yes.
“Q. And in renegotiations, what was the agreement that was reached with regard to the additional funds?
“A. The additional funds were going to go to—part to my mom and the rest to Teri. And in the end, there was a credit given to my mom and all of the funds went to Teri....
“Q. You made that agreement in good faith
“A. Yes.
“Q. —to resolve this issue?
“A. Yes.”
The journal entry titled “Journal Entry of Final Settlement” (Second Agreement), set out the following orders among others:
“2. The proceeds/money held by the District Court of Miami County, Kansas ... in the amount of $49,907.26, shall be set aside to Teri ... free and clear of any right, title and interest of MEG ... Brad ... or Mary Ellen.... The District Court shall pay out the same as soon as feasibly possible. Counsel for all parties shall sign the Pay Out Order and deliver it to Teri's ... counsel upon the signing of this ... [Second Agreement] by all parties and their attorneys. However, of this amount, Mary Ellen ... shall be given a credit of $5,302.59 for amounts owed to Teri ... under paragraphs 14, 17, and 18 of this Journal Entry by Mary Ellen.... Mary Ellen ... and Brad ... shall then be responsible for the remaining amounts due under the [Second Agreement] as set forth under this [Second Agreement].”
The Second Agreement concluded by stating it was the “final resolution of this pending action and all pending matters are resolved in full. Teri, Brad, and Mary Ellen provided notarized signatures dated July 19, 2010. Judge Montgomery and counsel signed as well.
Counsel for the parties filed written stipulations regarding these events in connection with a later hearing:
“7. [Counsel for Brad and Mary Ellen] were aware that the amount of $49,907.76 was being held in the district court prior to July 19, 2010 and on July 19, 2010, the date of the [Second Agreement]....
“8. On July 19, 2010, [Counsel for Brad and Mary Ellen], in good faith, renegotiated the distribution of the cash being held by the District Court of Miami County, Kansas and subsequently reached a settlement agreement as to that issue.
“9. After learning of some $49,907.76 being held by the district court, the issue of the district court proceeds was renegotiated and brought to a conclusion by the [Second Agreement] of July 19, 2010.”
The Second Agreement was filed on July 22, 2010, together with the Pay Out Order to which it referred. As provided in the Second Agreement, the Pay Out Order was signed by all counsel. It ordered “all funds ... ($49,907.76)” to be paid to Teri.
Unfortunately, the litigation continued. On September 2, 2010, Teri filed motions for citations in contempt. She alleged that Brad and Mary Ellen had failed to comply with the Second Agreement. None of Teri's complaints concerned the money held in the district court, which presumably was already paid out.
On September 29, 2010, the parties appeared with counsel before Judge Montgomery. After personally addressing Brad and Mary Ellen, the judge found them in contempt of court with respect to certain of Teri's allegations. He sentenced them to “an indeterminate length of time in the Miami County Jail” unless they paid specified amounts to Teri by October 7, 2010. He also issued bench warrants but stayed them until October 7, 2010, with the provision that if payments were made as ordered, the warrants would not be executed. Judge Montgomery awarded Teri $1,425 in attorney fees.
On December 29, 2010, Teri again filed motions for citations in contempt against Brad and Mary Ellen. Teri again alleged violations of the Second Agreement. On January 13 and 14, 2011, Brad and Mary Ellen received personal service of the contempt citation.
On January 28, 2011, Brad and Mary Ellen moved to set aside the Second Agreement. They did not cite a statutory basis for their motion. They first recited the history of the mediation, including the representation regarding the amount held by the district court, the furlough which prevented their investigation, and their later discovery that the representations were not accurate. They then pled the following:
“8. After much discussion and hesitation, [Brad and Mary Ellen] agreed to resolve the matter and in good faith move forward with the settlement in an effort to resolve this matter once and for all.
“9. The difference was divided as such: [Teri] received two-thirds of the balance and ... Mary Ellen ... received one-third of the balance.
“10. The parties finalized the [Second Agreement] which was formally approved by the Court on July 19, 2010.”
Brad and Mary Ellen next stated: “Following entry of the [Second Agreement], additional issues have arisen ... with regard to the receiver's fees, costs and expenses, and the filing of amended tax returns and payment of the same.” Brad and Mary Ellen summarized these issues and then alleged that “[t]he number of issues that have arisen since mediation and the significance of such issues is evidence that a meeting of the minds was clearly lacking following mediation of this matter.” Brad and Mary Ellen asked the district court to set aside the Second Agreement or, in the alternative, to “sever out the two significant financial issues, namely the funds on deposit with the Court and the real property taxes, and hear evidence as it relates to those issues or order the parties to further mediate these issues prior to any evidentiary hearing on the matter.”
On February 4, 2011, Teri responded by arguing “the parties finalized the [Second Agreement] which was formally approved by the Court on July 19, 2010, after the parties acknowledged that there was some $49,000 being held by the District Court. The exact amount was even set forth in the [Second Agreement].” On the day of Teri's response, the parties appeared with counsel before Judge Montgomery who noted it had not been set for hearing. Counsel nevertheless told Judge Montgomery the motion to set aside was “literally the basis for our defense ... for the contempt citation.”
The judge stated he understood but asked how he could “square” the motion to set aside with “the decision in Koch Engineering Company ” where our Supreme Court held: “Even if a court issues an erroneous order, the parties to the litigation must obey the order when it was within the court's jurisdiction, and, for the sake of orderly administration of justice, any disobedience with that order may be punished as contempt.” Koch Engineering Co. v. Faulconer, 227 Kan. 813, 829–30, 610 P.2d 1094 (1980).
Counsel for Brad and Mary Ellen argued “from April of 2010, when this matter was negotiated with the assistance of Judge Brazil, through today ... we have had at least two very significant issues, one being a $15,000 or $16,000 lack of understanding as to what the amount of funds were being held by the court at the time of settlement.” Counsel identified the other significant issue as the property taxes. Counsel repeated with respect to the first issue, “we thought there was $34,000. It turns out there was almost $49,000.” Counsel reiterated “there just cannot have been a meeting of the minds.”
Judge Montgomery noted in response:
“What ... we have here is more than just an agreement of the parties.... That agreement was adopted by the Court in a journal entry of settlement; so it's an order of the Court.... So we are, it seems to the Court, not just dealing with whether or not there was a meeting of the minds concerning the parties, but now we've got a Court order. So ... the analysis here is not necessarily on point when we just address it as a contractual issue, because it would seem to be more than that.... This would seem to fall within the purview of 60–259, which is a motion to alter or amend a Court order, because that's what we have here.”
After further argument, counsel for Brad and Mary Ellen stated: “In reality, Judge, we were trying to be softer and kinder by not using the words fraud, duress, et cetera, because there really has not been a meeting of the minds and that begs some other issue.” Counsel went on the question the representations of counsel for Teri concerning the amount of funds held by the district court in April 2010.
After further argument, Judge Montgomery concluded he could not consider the motion without evidence. Since the parties were unprepared to present evidence, the judge took the contempt issue under advisement. The judge gave counsel for Brad and Mary Ellen 10 days to file a new motion.
On February 18, 2011, Brad and Mary Ellen filed an amended motion to set aside the Second Agreement. They now cited K.S.A. 60–260(b). After again reciting the history of the mediation, including the representation by counsel for Teri, they made the following allegations concerning the outstanding check:
“6. Upon questioning regarding the significant difference in funds being held, [Teri] advised there was believed to be an outstanding check of approximately $15,000 payable to Plaster Master pursuant to a pay out order resulting from a separate lawsuit in Douglas County, Kansas District Court.
“7. [Teri's] counsel advised [Brad and Mary Ellen's] counsel that the information concerning the balance being held by the Court was obtained in early March 2010.
“8. However, the check issued by the Court to Plaster Master pursuant to the pay out order was cashed on December 30, 2009, more than two months prior.
“9. On April 23, 2010, when the parties mediated this matter, [Teri] knew the Court was holding $49,907.76 on deposit.”
Brad and Mary Ellen alleged Teri “knowingly and grossly misrepresented the amount being held by the Court with the intent that [they] rely upon it.” They argued the “misrepresentation amounts to fraud, misrepresentation or misconduct by an opposing party and is grounds for relief from the [Second Agreement] pursuant to K.S.A. 60–260(b)(3).” Brad and Mary Ellen then went on to repeat: “After much discussion and hesitation, and further mediation ..., [they] agreed to resolve the matter and in good faith move forward with the settlement in an effort to resolve this matter once and for all. They also recognized that they had “finalized the [Second Agreement],” which the district court then “formally approved ... on July 19, 2010.”
Brad and Mary Ellen nevertheless stated: “Following entry of the [Second Agreement], additional issues have arisen in this matter with respect to the receiver's fees, costs and expenses, and the filing of amended tax returns and payment of the same.” They detailed these issues, asserting again: “The number of issues that have arisen since mediation and the significance of such issues is evidence that a meeting of the minds was clearly lacking following mediation of this matter.”
Teri responded that Brad and Mary Ellen had identified no evidence supporting the fraud claim. She also noted that Brad and Mary Ellen had not alleged fraud respecting the Second Agreement, only the First Agreement. She noted further that Brad and Mary Ellen “admit repeatedly that they had all the correct information before them prior to entering into the late July 19, 2010, [Second Agreement].”
After the matter was set for hearing, a dispute arose concerning whether counsel for Teri could be called as a witness. She contended it would work a substantial hardship on her and if her counsel was a witness, counsel for Brad and Mary Ellen should be a witness as well.
Brad and Mary Ellen responded in part by alleging counsel for Teri had made a “material misrepresentation” and a “false statement of material fact that is in violation of American Bar Association Model Rule 4.1.”
Judge Montgomery issued a ruling allowing counsel for Teri to remain as an endorsed witness, while counsel for Brad and Mary Ellen were “subject to being called as rebuttal witnesses.” The judge ruled, “No counsel are disqualified as such disqualification would work substantial hardship upon the parties as provided in K.R.P.C. 3 .7(a)(3).” See Kansas Rules of Professional Responsibility 3.7(a)(3) (2011 Kan. Ct. R. Annot. 576).
The hearing was held on 2 days in April 2011. The parties testified as they had earlier alleged and we have stated, the judge asked for proposed findings of fact and conclusions of law and announced he would prepare the journal entry.
On June 6, 2011, Judge Montgomery filed his opinion. Much of it dealt with issues other than the money in the district court, which are not before us on appeal. The operative section with respect to the money was as follows:
“The only ‘final judgment’ from which the requested relief could be granted is the [Second Agreement]. That order accurately states the funds being held by the Clerk of the Court and includes a method to divide such funds. As [Brad and Mary Ellen] have failed to identify any misstatements or misinformation as to the [Second Agreement], their argument based upon K.S.A. 60–260(b)(3) fails without the need for further analysis. The Court need not address any of the other issues raised by [Brad and Mary Ellen] as to this portion of their motion as the Court's ruling on this narrow issue is dispositive. [Brad and Mary Ellen's] motion to set aside the [Second Agreement] is denied.”
Brad and Mary Ellen's motion to reconsider was denied. They have appealed.
Is the Settlement Enforceable?
Brad and Mary Ellen challenges on appeal the enforceability of both the First Agreement and the Second Agreement which they call “inextricably intertwined.” Despite this characterization, Brad and Mary Ellen raise distinct arguments against each. For the First Agreement, Brad and Mary Ellen allege they “were misled regarding the amount of funds held by the District Court that was to be distributed to Teri.” Brad and Mary Ellen conclude with respect to the cash that the First Agreement was “not enforceable because it was the result of a mutual mistake and/or fraud.”
As to the Second Agreement, Brad and Mary Ellen alleged Judge Montgomery said he “believed the First Agreement was enforceable,” he “would draft [his] own journal entry setting forth the terms of the settlement if the parties did not draft a journal entry,” and that he “would consider imposing sanctions if the parties did not draft their own journal entry setting for a final settlement.” Brad and Mary Ellen argue from these allegations that “the Second Agreement should be deemed void because it is the result of improper coercion by the District Court.”
Standards of Review
“A settlement agreement is a type of contract and is governed by contract law.” Farm Bureau Mut. Ins. Co. v. Progressive Direct Ins. Co., 40 Kan.App.2d 123, Syl. ¶ 7, 190 P.3d 989 (2008). This remains true even if the settlement agreement is incorporated into a journal entry of judgment. Boos v. National Fed'n of State High School Ass'ns, 20 Kan.App.2d 517, Syl. ¶ 1, 889 P.2d 797 (1995). Thus, while “the law encourages settlement,” Bright v. LSI Corp., 254 Kan. 853, 858, 869 P.2d 686 (1994), a settlement will not be enforced where a contract was never formed. See In re Estate of Hessenflow, 21 Kan.App.2d 761, 774–76, 909 P.2d 662 (1995) (mistake of fact, fraud), rev. denied 259 Kan. 928 (1996); Miotk v. Rudy, 4 Kan.App.2d 296, 301, 605 P.2d 587 (lack of authority), rev. denied 227 Kan. 927 (1980).
Stated another way, a district court cannot “by its imprimatur validate a settlement which is otherwise unenforceable.” See Cooley v. Cooley, 90 Ohio App.3d 706, 708, 630 N.E.2d 417 (1993). Whether the parties to a settlement have formed a contract is a question of fact. See Shamberg, Johnson & Bergman, Chtd. v. Oliver, 289 Kan. 891, 901, 220 P.3d 333 (2009). Since both the First Agreement and the Second Agreement were in writing, and because the material facts are not disputed, we exercise unlimited review over contract information. See Liggatt v. Employers Mut. Casualty Co., 273 Kan. 915, 920, 46 P.3d 1120 (2002).
Brad and Mary Ellen actually appeal from an order denying their amended motion to set aside and a “ruling on a K.S.A. 60–260(b) motion ... rests largely within the district court's discretion.” Subway Restaurants, Inc. v. Kessler, 273 Kan. 969, Syl. ¶ 2, 46 P.3d 1113 (2002). But, if a contract was never formed, a district court abuses its discretion by denying a motion to set aside a settlement. Miotk, 4 Kan.App.2d at 301; see also Dragon v. Vanguard Industries, 282 Kan. 349, 354, 144 P.3d 1279 (2006) (discretion is abused when district court goes outside the legal framework). So the question returns to contract formation which is subject to unlimited review. And, since the party alleging abuse of discretion bears the burden of proving it, Harsch v. Miller, 288 Kan. 280, 293, 200 P.3d 467 (2009), Brad and Mary Ellen bear the burden of proving there was no contract.
With respect to the allegations of coercion, duress can invalidate a settlement agreement See Libel v. Libel, 5 Kan.App.2d 367, 368–69, 616 P.2d 306 (1980) (considering whether a threat to curtail visitation of minor children invalidated agreement increasing alimony in a divorce proceeding). This would typically fit under the contract analysis, again subject to unlimited review as stated above. But, Brad and Mary Ellen now argue coercion under K.S.A. 60–260(b)(f), asserting the district court “has acted in a manner that is inconsistent with due process.” Since deprivation of due process is similarly reviewed de novo, the standard of review is unchanged. See Alliance Mortgage Co. v. Pastine, 281 Kan. 1266, 1272, 136 P.3d 457 (2006).
The First Agreement
Brad and Mary Ellen admit on appeal that “the judgment formally at issue in this appeal is ... the Second Agreement.” However, they suggest the taint alleged with respect to the First Agreement somehow was transferred to the Second Agreement. They attempt to tie them together by arguing the “Second Agreement is the result of an effort to memorialize the First Agreement.”
While this assertion may be true in the chronology of the actions of the parties, which we have set forth in great detail, the negotiations leading to the Second Agreement were distinct from those leading to the First Agreement. A comparison of the handwritten version of the First Agreement and the journal entry of the Second Agreement shows significant differences. The most significant example is the cash at issue here. The First Agreement made only a general reference to it, the Second Agreement detailed the amount and manner of transfer, including the offsetting credit to Mary Ellen. The documents do concern the same dispute over much of the same property, but the Second Agreement was clearly a distinct and different agreement.
If the Second Agreement was not a distinct contract, Brad and Mary Ellen might attempt to argue it was unenforceable because of mistake or fraud just as they do for the First Agreement. But the Second Agreement's inclusion of the exact amount of money held by the district court and the inclusion of a new benefit to Mary Ellen rules out such arguments.
This inclusion of a new benefit to Mary Ellen is consistent with the repeated testimony, stipulations, and pleadings which show Brad and Mary Ellen knew they were settling any mistake or fraud claims by entering into the Second Agreement. As was said in Boos, 20 Kan.App.2d 517, Syl. ¶ 5: “A settlement agreement substitutes new contractual obligations for what was previously claimed. The rights and liabilities of the parties become measured and limited by the terms of the settlement agreement.”
Our review of the record indicates there was no factual or legal basis for any mistake or fraud claims based on the actions of Teri and her counsel with respect to what we have called the First Agreement. Further, as we above set forth, when the Second Agreement was entered into, any legal argument as to the validity or effect of the First Agreement was extinguished for all purposes.
All arguments made by Brad and Mary Ellen with respect to the First Agreement are rejected as being without any basis for relief.
The district judge correctly held that the agreed resolution of April 23, 2010, was never reduced to the order of the court and, consequently, K.S.A. 60–260(b)(3) is not applicable to what we have called herein the First Agreement. This conclusion has not been questioned by Brad and Mary Ellen.
The Second Agreement
With respect to the journal entry of July 19, 2010, the district court correctly held this was the only “final judgment” from which the requested relief could be granted. Brad and Mary Ellen were found by the court below to have failed to identify any misstatement or misinformation as to this July 19, 2010, journal entry and their request for relief under K.S.A. 60–260(b)(3) to have failed without further analysis. Again, Brad and Mary Ellen have not on appeal questioned the validity of this ruling except by a new argument which they contend we may consider for the first time on appeal.
Brad and Mary Ellen assert that “[t]he Second Agreement came about as a result of [Judge Montgomery's] conclusion that the First Agreement was enforceable” (a statement which is of questionable validity). They then assert that “if [Judge Montgomery] had not been operating under the mistaken belief that the First Agreement was enforceable, [he] would not have compelled the parties to draft a journal entry based upon the First Agreement” (again, a conclusion which is difficult to substantiate). They conclude “the Second Agreement should be deemed void because it is the result of [this] improper coercion.”
This argument assumes that we must reach several conclusions about the trial judge's belief and actions.
The first is that the judge believed the First Agreement was enforceable. Brad and Mary Ellen rely on the judge's initial comments at the July 19, 2010, hearing. However, when read in context, it is clear they were not comments about the First Agreement but on journal entry disputes generally. The judge followed these initial comments by stating he had “no idea what the issue is as I sit here today” and then asking, “[W]ould either counsel clue me in.” Our full review of the record and the judge's statements show he had not reached any conclusion concerning the legal effect of the parties' actions.
The second assumption on appeal is that the judge compelled the parties to draft a journal entry. While perhaps any comment about sanctions were premature, it was clear that the judge began the July 19, 2010, hearing having made no decision in their case. After hearing the parties' argument, the judge said the following, “All right, ... I think that I have a pretty good sense of what the issues are and I'm goin' to send the parties upstairs to the big courtroom and give[ ] them an opportunity to try to come to an agreement.” There is nothing in this statement which shows the judge was compelling the parties to reach an agreement or draft a journal entry.
Finally, and most importantly, our complete review of the record does not show coercion by the trial judge. The cases cited by Brad and Mary Ellen, where the judge took specific steps to achieve settlement, are distinguishable. See Goss Graphics Systems v. DEV Industries, 267 F.3d 624, 627–28 (7th Cir.2001) (judge refused to reinstate case absent settlement); Kothe v. Smith, 771 F.2d 667, 668–69 (2d Cir.1985) (judge threatened money sanctions if parties did not settle, and he then imposed them for failing to settle earlier). The Second Agreement, in line with Kansas law, was “wrought by the litigants, not by the court.” Cropp v. Woleslagel, 207 Kan. 627, 633, 485 P.2d 1271 (1971).
We find a full reading of the record does not show at any place in the contentions and protracted proceedings where the district judge denied due process to all of the parties. “The basic elements of procedural due process are notice and an opportunity to be heard at a meaningful time and in a meaningful manner.” Alliance Mortgage Co., 281 Kan. at 1275. There was no due process violation here.
The trial court was patient with the parties. It granted delays for filings to change the arguments of the parties who now appeal. It held a 2–day evidentiary hearing on Brad and Mary Ellen's amended K.S.A. 60–260(b)(3) motion to set aside, including examination of opposing counsel.
We uphold all of the actions and rulings of the trial court, which are affirmed.