United States District Court, S.D. Alabama, Southern Division
WILLIAM H. STEELE, UNITED STATES DISTRICT JUDGE.
matter is before the Court on the motion of the defendant
("Center") to enforce settlement. (Doc. 91). Center
seeks to enforce an asserted settlement between itself and
the counterclaim-defendant ("Renew") and, as a
result, obtain dismissal with prejudice of all claims as
between Center and Renew. Renew has filed an objection and
Center a reply, (Docs. 93, 95), and the motion is ripe for
to its counterclaim, (Doc. 13), Center entered a contract
with Renew to renovate a former church building purchased by
Center. The plaintiff ("Developers"), as surety,
issued a performance bond on behalf of Renew as principal.
Center invoked the bond after Renew allegedly defaulted, but
Developers refused to honor its obligations under the bond
and instead filed this action seeking a declaratory judgment.
Center counterclaimed against Developers for breach of
contract, civil conspiracy and declaratory
relief. Center added Renew as a counterclaim
defendant and asserted various claims. Developers filed no
claims against Renew in this lawsuit; however, as discussed
in more detail infra, Developers filed a separate
action against Renew on November 8, 2017 seeking indemnity.
Developers Surety and Indemnity Company v. Renew
Maintenance & Construction Inc., Civil Action
p.m. on October 20, 2017, counsel for Center
("Townsend") emailed counsel for Renew
("Trice") to "advis[e] that [the Center] has
come to a tentative agreement to settle its claims against
[Developers]." (Doc. 91-2 at 1). Townsend proposed that,
"if RMC can provide the ILC with $10, 000, they will
elect to dismiss their claims against them, with prejudice,
under the assumption that RMC will similarly dismiss their
claims against the ILC, with prejudice." (Id.).
Center and Renew agree that this constituted an offer to
settle and that Renew did not accept this offer.
at 11:04 a.m. on October 21, 2017, Trice responded as
Renew will agree to settle the case right now if all parties
dismiss all of their claims with prejudice. Renew will not
contribute $10, 000 or any money to settle the case at this
time. We believe ILC can get the building done with or
without the $10, 000 demanded. Please advise.
(Doc. 91-2 at 1). Center and Renew agree that this
constituted a counter-offer by Renew. They disagree, however,
as to the terms of Renew's offer. Center says the offer
was for Center and Renew to settle their dispute by
dismissing with prejudice their claims against each other.
Renew says the offer was for all parties, including
Developers, to dismiss with prejudice all claims, including
the release of any unasserted claims.
October 27, 2017, Townsend approached Trice at state court
motion docket and told him that Center accepted Renew's
offer to settle by Center and Renew dismissing their claims
against each other with prejudice. (Doc. 91-1 at 2-3). Later
that morning, Townsend e-mailed Trice and stated that,
"[p]ursuant to our conversation, please be advised that
the ILC has agreed to the below offer and will agree to
settle the pending case against RMC to the extent both
parties dismiss all of their claims against each other, with
prejudice." (Doc. 91-2 at 1). Center asserts that both
these communications constituted an acceptance of Renew's
counter-offer, forming a contract. Renew responds that
Center's purported acceptance did not match Renew's
offer, such that no contract was formed.
be effective as an acceptance, any expression of assent
restating the offer must not change the material terms of the
offer." Hall v. Integon Life Insurance Co., 454
So.2d 1338, 1342 (Ala. 1984). Any such change constitutes the
purported acceptance a mere counter-offer, Hardy Corp. v.
Rayco Industrial, Inc., 143 So.3d 172, 181 (Ala. 2013),
and a rejection of the offer. Burbic Contracting Co. v.
Cement Asbestos Products Co., 409 So.2d 1, 4 (Ala.
1982). The question is thus whether Center's purported
acceptance altered the material terms of Renew's offer.
Plainly it did.
agreed only that it would dismiss with prejudice its claims
against Renew in exchange for Renew dismissing with prejudice
its claims against Center. Renew, however, did not offer a
two-way settlement. By its express terms, Renew's offer
required the participation of "all parties, " thus
necessarily including Developers. Even assuming that
Renew's offer did not require acceptance by both Center
and Developers in order to become a contract, it patently
required Center's agreement to the dismissal of
Developers' claims in order to do so. As is clear from
Center's description of its purported acceptance, Center
expressed no such agreement and thus altered by omission a
material term of Renew's offer.
insists that the terms of Renew's offer extended only to
the claims between these two parties, because the only claims
that "remained unsettled and pending" as of October
21 were theirs inter se. (Doc. 91 at 2, 5). This
statement, however, is plainly incorrect. As to whether the
claims between Center and Developers had been settled as of
11:04 a.m. on October 21, Townsend informed Trice at 2:42
p.m. on October 20 that the settlement between Center and
Developers was merely "tentative, " (Doc. 91-2 at
1), a qualifier inconsistent with a firm settlement, and
Center offers no evidence either that its settlement had been
finalized only 20 hours later or that Renew knew it had been
finalized. As to whether Developers' claims
against Center remained pending on October 21, they most
certainly did; indeed, Center and Developers did not seek
dismissal of those claims until November 1. (Doc. 90).
from these difficulties, Center's argument depends on
ignoring the phrase, "all parties, " which it
attempts to do by replacing "all" with
"both." (Doc. 91 at 5). As discussed above,
however, the offer cannot reasonably be read as Center
wishes; the offer plainly requires an agreement to the
dismissal with prejudice of Developers' claims.
related vein, Center suggests that, even if Renew's offer
included as a term the dismissal with prejudice of
Developers' claims (and it did), Center's failure to
agree to that term is irrelevant because, by virtue of their
settlement, Center and Developers had already agreed to such
a dismissal, and Renew was aware of this. (Doc. 91 at 2, 5).
As noted above, however, all Renew was aware of was
Center's report of a "tentative" settlement
with Developers, the terms of which were not disclosed. Thus,
a dismissal with prejudice of Developers' claims was
anything but a foregone conclusion as of the morning of
October 21. Even if Center thought the term requiring
dismissal with prejudice of Developers' claims was
unimportant, likely to be satisfied anyway, or both, it has
failed to demonstrate that Alabama law permitted it to
withhold its assent to that or any other term of Renew's
offer yet still secure a valid contract.
foregoing is sufficient to require the denial of Center's
motion. There is, however, an additional fatal flaw in its
position. As noted, Renew's offer was to "settle the
case right now if all parties dismiss all of their claims
with prejudice." (Doc. 91-2 at 1). For reasons appearing
below, the Court finds that Renew's offer required
Developers to abandon, not just its filed claims against
Center, but its unfiled claims ...