District Court, Salt Lake Department The Honorable Keith A.
Kelly No. 130900381
A. Snow and Alex B. Leeman, Attorneys for Appellant
Brennan H. Moss and John P. Mertens, Attorneys for Appellees
Diana Hagen authored this Opinion, in which Judges Michele M.
Christiansen and Jill M. Pohlman concurred.
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
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.
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]."
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."
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."
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.
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."
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."
ACC now appeals the district court's order granting the
motion to enforce as well as its ...