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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Lewis v. Lewis (9/14/2012) sp-6708
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER .
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
CHAD R. LEWIS, )
) Supreme Court No. S-14473
Appellant, )
) Superior Court No. 3PA-10-02973 CI
v. )
) O P I N I O N
JESSICA E. LEWIS, )
) No. 6708 - September 14, 2012
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Palmer, Vanessa White, Judge.
Appearances: David A. Golter, Golter & Logsdon, P.C.,
Palmer, for Appellant. Notice of non-participation filed by
Appellee and Kenneth J. Goldman, Law Offices of
Kenneth J. Goldman, Palmer, for Appellee.
Before: Carpeneti, Chief Justice, Fabe, Winfree, and
Stowers, Justices.
FABE, Justice.
I. INTRODUCTION
When Chad and Jessica Lewis divorced, they participated in a settlement
conference to divide their property. Following the settlement conference, the superior
court recited a proposed settlement agreement on the record, and both parties agreed to
it. Jessica then filed proposed findings of fact and conclusions of law incorporating
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terms which differed from the agreement as recited by the court. The superior court
accepted Jessica's proposed findings and decree over Chad's objection. Chad now
appeals. Because we conclude that there is no evidence that the parties agreed to the
terms set out in Jessica's proposal and because the terms recited on the record are
unenforceable, we vacate the superior court's written findings of fact and conclusions
of law and remand for a new property division.
II. FACTS AND PROCEEDINGS
Chad and Jessica Lewis were married in 1997 and separated in 2010.
Jessica filed for divorce shortly thereafter. The parties came before the superior court
for a settlement conference in July 2011. There the parties ostensibly reached an
agreement as to the division of their assets and liabilities.
Following the agreement, the superior court "[took] a stab at placing [the]
settlement agreement on the record." The court noted that the most significant asset, the
marital residence, was then encumbered with two mortgages: a Citibank mortgage and
an Alaska USA home equity line of credit (HELOC). The court stated that Chad was to
have the option either to sell the property or to refinance it in an amount that would
satisfy both the Citibank and HELOC loans and to buy out Jessica's share of the equity.
If Chad chose to refinance, the court said, Jessica's
share of the equity would be defined as fair market value on
a re-fi[nance], which the parties stipulate as $175,000, minus
the principal balance on the Citibank loan and the HELOC
times 50 percent, because she is entitled to half the equity,
minus one-half the amount of the principal balance of the
HELOC at the time of refinance, plus $4,000 to compensate
her for mortgage payments she made post-separation. The
remainder of the equity would go to Mr. Lewis and is
basically the same formula in reverse: fair-market value
minus the Citibank and the HELOC, plus one-half of the
principal balance of the HELOC loan as of the date of
-2- 6708
----------------------- Page 3-----------------------
refinance, minus $4,000 for the compensation for the
mortgage payments that [Jessica] made post-separation.
The court then gave both parties an opportunity to object or make corrections to this
formula, and neither did. The court asked Jessica's counsel to prepare factual findings
and a proposed decree memorializing the agreement.
Shortly after the settlement conference, Jessica's counsel submitted
proposed findings of fact and conclusions of law. The proposal described the division
of the equity in the house as follows:
Jessica Lewis' share of the equity is defined as the []
fair market value of the home, $175,000, (if refinanced vs.
sold) minus one half (1/2) of the Citimortgage loan and one
half (1/2) of the Alaska USA HELOC at the time of closing.
In addition, Chad Lewis owes Jessica Lewis $4,000 to
compensate Jessica Lewis for mortgage payments made post
separation.
Chad Lewis' share of the equity is defined as fair
market value of the refinance minus one half (1/2) of the
Citimortgage loan and one half (1/2) of the Alaska USA
HELOC at the time of closing.
Chad filed an objection to the proposed findings and conclusions, arguing
that the agreement set out by Jessica's counsel was different from the agreement
memorialized at the settlement conference. Specifically, Chad argued that at the
settlement conference, the parties agreed (and the trial court stated on the record) that
Chad was "to receive one half of the net proceeds after payment of the loans, plus one
half of the value of the HELOC loan from [Jessica's] share." (Emphasis in original.)
The superior court entered the findings and conclusions as proposed by
Jessica. In response to Chad's objection, the superior court noted that it "reject[ed]
[Chad's] interpretation of the settlement regarding the home. The parties agreed to share
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equally in the net proceeds (defined as net after refinance or net after sale)." (Emphasis
in original.) Chad now appeals.
III. STANDARD OF REVIEW
We analyze settlement agreements using traditional contract principles.1
Whether a party intends to be bound by an agreement is a factual question determined
by looking at "the surrounding facts and circumstances of each case, and is reviewed
under the clearly erroneous standard."2 We will find clear error only when we are "left
with a definite and firm conviction that the trial court has made a mistake."3
IV. DISCUSSION
Chad makes two arguments in this appeal. First, he argues that the superior
court's findings of fact as to the parties' intended settlement terms were clearly erroneous
insofar as they were different from the terms recited by the court and agreed to by the
parties on the record. He maintains that we should therefore reverse the superior court
with instructions to enter revised findings in accordance with the recited settlement terms
to which the parties agreed on the record. Second and alternatively, Chad argues that
there was at the very least ambiguity as to the parties' intentions and that the superior
court erred in failing to hold an evidentiary hearing to determine those intentions once
it became clear that the parties disagreed as to the terms of their supposed agreement.4
1 Crane v. Crane, 986 P.2d 881, 885 (Alaska 1999).
2 Juliano v. Angelini , 708 P.2d 1289, 1291 (Alaska 1985) (citing Thrift Shop,
Inc. v. Alaska Mut. Sav. Bank , 398 P.2d 657, 658-59 (Alaska 1965)).
3 Ford v. Ford , 68 P.3d 1258, 1263 (Alaska 2003) (quoting Hamilton v.
Hamilton , 42 P.3d 1107, 1111 (Alaska 2002)).
4 Jessica has not participated in this appeal.
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----------------------- Page 5-----------------------
If Chad's first argument is correct, and the parties did indeed both agree to
be bound by the agreement-as-recited, then that original oral agreement controls if it is
otherwise enforceable.5 If Chad's alternative argument is correct, and the parties did not
definitively agree on the intended terms, then there has been no meeting of the minds,
and therefore no contract, and the settlement agreement must therefore be vacated.6
"The formation of an express contract requires an offer encompassing its
essential terms, an unequivocal acceptance of the terms by the offeree, consideration and
an intent to be bound."7 "Mutual assent is an elementary requirement for a binding
contract."8 Here the question is whether both parties intended to be bound by the same
terms. According to Chad, "the parties' agreement was clearly recited on the record" by
the trial court, and "[t]he parties verbally agreed to this on the record," and this oral
recitation of the contract ought to control. The superior court's oral recitation stated
"that the HELOC balance would be paid entirely from [Jessica's] share of the proceeds."
The superior court, however, disagreed with Chad that the parties intended to take the
5 See Mullins v. Oates, 179 P.3d 930, 939 (Alaska 2008) ("[U]nannounced
additions to settlement agreements . . . are void. . . . The settlement - as originally
articulated at the settlement conference - remained in effect despite the flawed attempt
to insert a new term into the final settlement documents.") (citing Adams v. Adams , 89
P.3d 743, 749 (Alaska 2004) and Pierce v. Pierce , 949 P.2d 498, 500 (Alaska 1997));
1 JOSEPH M. PERILLO , CORBIN ON CONTRACTS § 2.9, at 156 (1993) (noting that when
parties intend a writing to merely memorialize a prior contract, "the contract is valid even
though they try and fail to agree upon the form and terms of the memorial").
6 See Young v. Hobbs, 916 P.2d 485, 488-89 (Alaska 1996).
7 Childs v. Kalgin Island Lodge, 779 P.2d 310, 314 (Alaska 1989) (citing
Hall v. Add-Ventures, Ltd. , 695 P.2d 1081, 1087 n.9 (Alaska 1985)).
8 Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1281 (Alaska 1985)
(citing State v. Fairbanks N. Star Borough Sch. Dist., 621 P.2d 1329, 1331 n.3 (Alaska
1981)).
-5- 6708
----------------------- Page 6-----------------------
HELOC out of Jessica's share, finding instead that the parties had intended to split
equally the net proceeds of refinance or sale.
"In determining the parties' intent, the courts look first to the parties'
expressed intentions. 'If their expressions convince the court that they intended to be
bound without a formal document, their contract is consummated, and the expected
formal document will be nothing more than a memorial of that contract.' "9
In this case, the only evidence in the record of the parties' intentions is the
recitation of the settlement agreement on the record by the trial court.10 As Chad
correctly points out, the terms offered by Jessica's counsel and signed by the superior
court were different than those recited on the record. The superior court's bare assertion
that the parties intended an agreement that was substantively different from the
agreement recited on the record is unsupported by any record evidence.
However, contrary to Chad's argument, the agreement as recited by the
superior court cannot control. Even if we were to assume that both parties definitively
manifested an intent to be bound by the agreement as recited, that agreement could not
control because under its terms, more than 100% of the home's equity is split between
the parties. Using the parties' stipulated refinance value of $175,000, the parties'
combined equity in the house is roughly $50,000.11 Under the formula recited by the
9 Juliano v. Angelini , 708 P.2d 1289, 1291 (Alaska 1985) (quoting
1 A. CORBIN , CORBIN ON CONTRACTS § 30, at 98-99 (1963)).
10 We note that there are several versions of the parties' property division
spreadsheet in the record. But spreadsheets that are prepared before the give and take
of negotiation and after the conclusion of negotiation have, at best, very limited probative
value in determining what the parties intended at the time negotiations concluded and an
agreement was ostensibly reached.
11 At the time of settlement, the balances remaining on the Citibank mortgage
(continued...)
-6- 6708
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court, Jessica's share of the equity results in her receiving approximately $19,000 of that
equity.12 The formula recited by the trial court for Chad's share of the equity, described
as "basically the same formula [as for Jessica's share] in reverse," yields a value of
$56,000.13 The court, in other words, awarded the parties a combined $75,000, or 150%
of the equity of the house. Because the parties obviously could not have agreed to these
terms, we conclude that there is no indication in the record before us of a meeting of the
minds. And as noted above, the trial court's finding as to the parties' intent is not based
on any reviewable record.
V. CONCLUSION
For the foregoing reasons, we VACATE the superior court's order and
REMAND for a new property division.
11(...continued)
and HELOC were $105,830.90 and $19,863.47, respectively. For the sake of ease, we
round these numbers to $105,000 and $20,000.
12 ($175,000 [refinance value] - ($105,000 [Citibank mortgage] + $20,000
[HELOC])) * (1/2) - 1/2($20,000 [HELOC]) + $4,000 = $19,000.
13 $175,000 [refinance value] - ($105,000 [Citibank mortgage] + $20,000
[HELOC]) + 1/2($20,000 [HELOC]) - $4,000 = $56,000.
-7- 6708
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