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ACC Capital Corp. v. Ace West Foam Inc.

Court of Appeals of Utah

March 1, 2018

ACC Capital Corporation, Appellant,
v.
Ace West Foam Inc., Ace West Foam #3 Inc., Ace West Trucking Inc., and Donald O. Rooks Jr., Appellees.

         Third District Court, Salt Lake Department The Honorable Keith A. Kelly No. 130900381

          John A. Snow and Alex B. Leeman, Attorneys for Appellant

          Brennan H. Moss and John P. Mertens, Attorneys for Appellees

          Judge Diana Hagen authored this Opinion, in which Judges Michele M. Christiansen and Jill M. Pohlman concurred.

          OPINION

          HAGEN, JUDGE

         ¶1 ACC Capital Corporation (ACC) appeals the district court's denial of its motion for summary judgment and enforcement of a subsequent settlement agreement. The district court did not abuse its discretion in enforcing the settlement where the parties executed a Memorandum of Understanding (the MOU) during mediation, the terms of which were sufficiently definite to be enforced. Further, the district court's factual finding that there was no misrepresentation or mutual mistake of fact that would render the agreement null and void was not clearly erroneous. Accordingly, we affirm the enforcement of the settlement agreement.

         BACKGROUND

         ¶2 The parties entered into a lease agreement concerning the use of "custom built trailer-mounted nitrogen generators" that are typically utilized in the oil and gas drilling industry. ACC sued Ace West Foam Inc. (Ace West), claiming that Ace West had breached the lease.

         ¶3 The parties submitted cross-motions for summary judgment, which the district court denied. The court determined that there were several "material fact disputes concerning [Ace West's] defenses and the amount of damages that may be owing to [ACC]."

         ¶4 After the court denied the summary judgment motions, the parties participated in court-ordered mediation. At the mediation session, the parties executed the MOU. The district court found that the MOU outlined the following terms:

ACC will inspect and pick two of [Ace West's] foam compressor units, obtain possession of them, and then sell them with the two previously leased trailer-mounted nitrogen generators that were in the possession of [ACC]. . . . [The MOU] sets out a minimum sales price of $1, 425, 000 for the four items (two generators with two compressors), along with a schedule of what further consideration will be exchanged, depending on the ultimate sales price achieved. . . . If the units do not sell at the minimum price "then [Ace West] will pay ACC $125, 000, " which "is intended as damages if Ace West does not sell the four units."

         ¶5 The last provision of the agreement stated that the parties "will work in good faith and make reasonable efforts to bring about this resolution and settlement, including the preparation and execution of a more formal settlement agreement and release of all claims, as well as stipulation and order for dismissal with prejudice."

         ¶6 After the mediation session, the parties exchanged correspondence to create a "more formal settlement agreement, " as directed in the MOU. Ultimately, these negotiations broke down, and ACC sent a letter to Ace West purporting to withdraw its settlement offer.

         ¶7 Ace West subsequently filed a motion to enforce the MOU. The district court determined that the MOU was an enforceable settlement agreement, containing "proper legal consideration because performance or a return promise was bargained for by each of the parties." Furthermore, there was mutuality of agreement because "[b]oth parties executed the agreement, " as well as mutuality of obligation because "ACC agreed to dismiss its claims in return for payment and performance on behalf of Ace West." The court concluded that the MOU contained "all of the material terms agreed to between the parties" and was "fully enforceable."

         ¶8 The court also rejected ACC's alternative argument that the MOU "should be set aside due to mistake, misrepresentation, or fraud" regarding the value of the foam compressors. The court made a specific factual finding that it did "not find credible any assertion by ACC that Ace West warranted that the foam compressors were worth any particular value."

         ¶9 ACC now appeals the district court's order granting the motion to enforce as well as its ...


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