JAMES O. MORRIS v. JOHN WILLIAM MAAS; MADOLYN MAAS MASON; GEORGE LUBBERS; AND JOYCE LUBBERS
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RENDERED: February 12, 1999; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1997-CA-002743-MR
JAMES O. MORRIS
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE ERNEST A. JASMIN, JUDGE
ACTION NO. 95-CI-003943
JOHN WILLIAM MAAS;
MADOLYN MAAS MASON;
GEORGE LUBBERS; AND
JOYCE LUBBERS
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
DYCHE, GUIDUGLI AND McANULTY, JUDGES.
GUIDUGLI, JUDGE.
James O. Morris, Jr. (Morris) appeals from a
judgment of the Jefferson Circuit Court which upheld a settlement
entered into between him and appellees, John William Maas (Maas)
and Madolyn Maas Mason (Mason), George Lubbers, and Joyce
Lubbers.
We affirm.
This case stems from a probate dispute over the will of
John C. Maas (Mr. Maas).
as the Tucker Lake Resort.
Mr. Maas operated a swimming lake known
The property was owned by John C.
Maas, Enterprises, Inc. (the Corporation).
Mr. Maas retained 800
shares of the corporate stock, and transferred his remaining 1200
shares to his son (Maas), and his daughter (Mason).
Morris
managed the Resort during its final years of operation.
For
reasons not apparent from the record, Mr. Maas adopted Morris
prior to his death.
Mr. Maas died testate on April 13, 1995.
Pursuant to
his last will and testament, Mr. Maas left his entire estate to
Maas and Mason.
On July 17, 1995, Morris filed an action seeking
to set aside the will on the ground that Mr. Maas lacked
testamentary capacity and was under undue influence from Maas and
Mason.
Morris sought to enforce a previous will executed by Mr.
Maas on February 3, 1992, under which he would have received 600
shares of Mr. Maas’ corporate stock.
Prior to trial, Morris, Maas, and Mason entered into a
compromise settlement of Morris’ claims.
Pursuant to the
settlement, the property was to be sold and Morris was to receive
10% of the net sales proceeds.
In a letter dated August 27,
1996, Gregory King (King), counsel for Maas and Mason, sent a
letter to Charles Theiler (Theiler), counsel for Morris, setting
forth and confirming the following settlement terms, which are
pertinent to this appeal:
...
2. Mr. Morris may make his own bid if he
wishes to purchase the property, but shall
not have first right of refusal. My clients
agree to provide Mr. Morris with the price at
which the property will be offered for sale
on the open market, and agree that the
property shall be sold to the highest,
qualified bidder.
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3. Mr. Morris shall be prohibited from
participating in any way in the sale process
or efforts, either as a representative or
advisor of the sellers, or as a
representative or advisor to any prospective
purchasers. If Mr. Morris knows, or becomes
aware of, any potential purchasers, he may
provide that information to the realtor whom
the defendants retain to sell the property.
...
6. The Circuit Court shall be informed of
the settlement, and the hearing scheduled for
September 3, 1996, shall be canceled. The
Circuit Court action shall remain open so
that either party may petition the Court, if
necessary, to enforce the terms of this
settlement. Upon completion of the
settlement terms, Morris shall dismiss the
action, with prejudice, each side to pay its
own costs and attorney fees.
On November 6, 1996, King wrote Theiler and advised him that the
property would be listed for $1.2 million dollars.
This was
followed by a letter of correction from King dated November 8,
1996, advising that the property would be listed at $1.3 million
dollars and that Maas and Mason had received one offer which they
planned to make a counteroffer on.
The property was ultimately
listed with a real estate agent on April 1, 1997, for $1.75
million dollars.
In June 1997, Morris retained new counsel and filed a
motion with the trial court requesting a pre-trial conference.
Morris alleged that the settlement was in reality a nullity
and/or that Maas and Mason had breached its terms.
Maas and
Mason responded by filing a motion which sought to enforce the
settlement.
At the hearing on the parties’ motions, Theiler
testified that he had Morris’ express authority to enter into the
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compromise settlement with Maas and Mason.
Theiler testified
that it was his understanding that the property would be listed
with a realtor within a reasonable period of time.
Theiler
indicated that he believed a reasonable period of time to be one
or two weeks and agreed that the settlement did not provide a
time frame for listing the property.
Although the agreement did
not contain a “time is of the essence” clause, Theiler testified
that time was of the essence to the extent that the case was
settled and Morris wanted the sale to proceed within a reasonable
time.
Theiler acknowledged that one of the letters from King
indicated that a bid on the property had been received and that a
counteroffer was forthcoming.
Theiler also agreed that the
settlement did not set forth a price on the property and that it
was his understanding that an appraisal would be done.
Lisa Vogt (Vogt), counsel for the Corporation, also
testified at the hearing.
According to Vogt, an offer was
received from a Mr. McClellan in the amount of $858,000 on
November 6, 1996.
Due to the offer Maas and Mason delayed in
listing the property in order to attempt to carry out the sale
without having to pay commission.
According to Vogt, Maas and
Mason made a counteroffer of one million dollars on November 22,
1996. McClellan accepted the counteroffer and on December 6, 1996
a sales contract was drafted.
The contract was contingent on
McClellan being able to obtain financing by December 20, 1996.
When McClellan failed to meet the deadline it was extended to
December 27, 1996, but he also failed to meet that deadline.
McClellan made additional offers on December 28, 1996, in January
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1997, and on February 4, 1997, all of which were rejected.
According to Vogt, the property was not listed during this time,
but A & B Realty had been contacted in October 1996 in regard to
listing the property.
Sherry Baumann, an agent with A & B Realty, testified
that Maas and Mason made arrangements with her to list the
property in the event the negotiations with McClellan were
unsuccessful.
Baumann began preparing to list the property in
February 1997, when it became apparent that McClellan was not
going to be able to purchase it.
Baumann testified that once the
preliminary work was completed, the property was listed on
April 1, 1997.
Morris testified that he had authorized Theiler to
enter into negotiations to settle the dispute.
He further
testified quite clearly that he discussed the terms of the
settlement with Theiler and agreed that he gave Theiler authority
to accept the terms of settlement set forth in King’s letter of
August 23, 1996.
Morris stated that he knew an offer had been
received but denied knowing any of the specifics.
He indicated
that time was of the essence to him regarding the listing of the
property and that he thought the property was going to be listed
in one or two weeks.
Morris testified that he would have never
agreed to settle if he would have known that the property was not
going to be listed until April at a price of $1.75 million.
In
his opinion the property will not sell at that price due to the
lack of utilities.
Morris stated that an appraisal done on
behalf of McClellan came in at $1.1 million.
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On October 10, 1997, the trial court entered an order
upholding the compromise settlement.
First, the trial court
found that the settlement was in fact valid and that Morris had
given Theiler authority to agree to the terms of the compromise
settlement.
The trial court also held that Maas and Mason did
not breach the settlement agreement:
First, the compromise agreement does not call
for immediate listing of the property.
Indeed, the agreement itself sets forth no
time period for performance. Second, an
increase in the purchase price is for the
benefit of all those involved. The only
reference to price in the agreement is that
the Defendants would inform the Plaintiff of
the purchase price of the property. However,
the Court can find no bad faith in the
Defendants failure to do so. Finally, the
lack of an appraisal results in a reduced
cost and therefore a higher net for all the
participants herein. There being no
reference to an appraisal in the agreement
itself, the Court can find no breach.
This appeal followed.
Somewhat incredulously, Morris’ first argument on
appeal is that he never agreed to the specific terms of the
compromise settlement.
Having reviewed the videotape of the
hearing, we find that this is a blatant misstatement of fact.
Not only did Morris testify that he gave Theiler permission to
enter into settlement negotiations, he clearly agreed on crossexamination that he gave Theiler authority to accept those terms.
We agree with Morris that an attorney has no right to settle his
client’s case in the absence of express authority to do so.
Clark v. Burden, Ky., 917 S.W.2d 574, 575 (1996).
However, the
record clearly shows that Theiler had express authority to
settle.
This argument is entirely without merit.
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Morris’ second argument is that the compromise
settlement is unenforceable because there was no meeting of the
minds regarding the settlement terms.
Morris maintains that in
order to be enforceable, there must be an offer and acceptance,
full and complete terms, and mutual concession or yielding of
claims.
Hines v. Thomas Jefferson Fire Ins. Co., Ky., 267 S.W.2d
709, 711 (1954).
It appears that Morris is arguing that there
was no meeting of the minds as to when the property was to be
listed, therefore, there was no agreement.
This Court has held:
The primary object in the construction of a
compromise agreement is to arrive at and
effectuate the intention of the parties,
which, when the agreement is in writing, is
to be determined from the writing itself.
Where the agreement fixes no time for
performance, the law implies a reasonable
time.
Withers v. Commonwealth, Dept. Of Transportation, Bureau of
Highways, Ky. App., 656 S.W.2d 747, 749 (1983).
Although both
Morris and Theiler testified that a “reasonable period of time”
for the property to be listed was one or two weeks after the
agreement was entered into, we do not believe this to be
appropriate given the fact that Maas and Mason were in good faith
negotiations with McClellan for the sale of the property from
November 1996 to February 1997.
The facts also showed that the
property was listed as soon as practicable after it became
apparent that McClellan would be unable to buy it.
Based on the
foregoing, we are not willing to hold that the delay was
unreasonable.
If time was of the essence, as Morris testified it
was, it should have been included in the terms of the settlement.
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Distillery R & W Workers v. Brown-Forman Distillers Corp., Ky.,
213 S.W.2d 613, 612-613 (1948).
Morris next argues that if we find the compromise
settlement to be enforceable, Maas and Mason breached it by both
failing to timely list the property and to advise him of the
sales price.
Having decided that Maas and Mason acted in good
faith in not listing the property prior to April 1997, we are not
inclined to hold that their conduct in that aspect constitutes a
breach.
As to Morris’ argument regarding the sales price of the
property, it is also without merit.
First, Morris was informed
as to what the listing price would be in November 1997 prior to
the time that Maas and Mason began negotiating with McClellan.
There is nothing in the agreement which sets a minimum or maximum
price for the property.
In fact, there is nothing in the
agreement which allows Morris any input whatsoever in regard to
the sales price.
Additionally, there is no evidence in the
record to show that Maas and Mason somehow contrived to keep
Morris in the dark regarding the listing of the property.
Morris
testified that he learned of the listing on April 2, 1997 from
the MLS, the day after it was listed.
Finally, Morris alleges that because the settlement
agreement contemplated a sale of real property it is not
enforceable because it did not comply with the Statute of Frauds
(KRS 371.010).
We disagree.
The agreement between the parties
to this matter is not by any stretch of the imagination a
“contract for the sale of real estate.”
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It is merely a
settlement agreement and as such does not fall within the statute
of frauds.
Having considered the parties’ arguments on appeal, the
order of the Jefferson Circuit Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
Theodore H. Amshoff, Jr.
Paul P. Clemens
Louisville, KY
W. Gregory King
J. Gregory Cornett
Louisville, KY
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