ST. LOUIS — The Western District of the Missouri Court of Appeals held a lower court ruling that there was no error in the court's ruling that no settlement agreement was reached because there was no meeting of the minds regarding lien prioritization.
"In their sole point on appeal, Appellants contend the trial court erred in denying their motion to enforce settlement because there was a meeting of the minds as to the material terms of the agreement, resulting in a valid and binding settlement agreement," Judge Gary D. Witt wrote in the Sept. 10 opinion. "We affirm the judgment of the trial court that no settlement agreement was reached and remand for further proceedings."
In the case, the appellants appealed a decision by the Jackson Circuit Court. They sought enforcement of a settlement agreement in a class action suit against the respondents.
The plaintiffs claimed the apartment complex was not maintained in a safe, sanitary or habitable condition, and sued for negligence, breach of the implied warranty of habitability and violations of the Missouri Merchandising Practices Act (MMPA).
The case proceeded to mediation on Oct. 17, 2023, but no settlement was reached during the session. However, negotiations continued after the mediation. The plaintiffs made a settlement offer and both parties discussed potential settlement terms.
On Oct. 26, 2023, a phone conversation took place between the attorneys representing both parties. The plaintiffs claimed that an agreement was reached during this call, and the mediator congratulated the parties. Subsequently, the plaintiffs sent draft settlement documents for review.
Contention then arose regarding the prioritization of lien payments on the apartment complex, which had various debts and liens.
The founder of Strategic Properties LLC, who was involved in negotiations, believed the plaintiffs agreed that any judgment would be subordinate to the existing liens on the property, the opinion states.
The plaintiffs, however, asserted they never agreed to subordinate their judgment lien. The defense's lawyer refused to finalize the settlement without explicit language on lien priority.
Negotiations broke down when the plaintiffs refused to include such language.
The plaintiffs filed a motion to enforce the settlement, arguing that an agreement had been reached in the Oct. 26, 2023, phone call.
The trial court, however, denied this motion, finding that no enforceable settlement existed because there was no "meeting of the minds" on the issue of lien prioritization, a material term of the agreement.
The plaintiffs appealed, but the appellate court upheld the trial court's ruling, affirming that no binding settlement agreement had been reached and remanding the case for further proceedings.
The court emphasized that mutual agreement on all essential terms, including lien priority, was necessary for a valid contract, which was absent in this case.
"After our review of the record, we cannot say that the trial court's finding that there was not a meeting of the minds and a mutual assent to the essential terms of the settlement agreement during the parties' call on October 26th was erroneous," Witt wrote. "The trial court did not err in finding that Appellants 'failed to prove the parties entered into an enforceable settlement agreement in this case.'"
The trial court's judgment that no settlement agreement was reached was affirmed and the case was remanded for further proceedings.
Gregory Alan Leyh, Andrea Mari Knernschield and Nicholas Raymond Leyh represent the appellants.
Brian Todd Goldstein, James Terrence Schmidt, Leawood, Jeffrey Douglas Lester, Grace Elizabeth Olson and Timothy Michael Sutton represented the respondents.
Attorneys did not respond to requests for comments.
Missouri Court of Appeals, Western District case number: WD87149