DMC WASHINGTON LLC V INTERNATIONAL TRANSMISSION CO
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STATE OF MICHIGAN
COURT OF APPEALS
DMC WASHINGTON, L.L.C.,
UNPUBLISHED
February 19, 2008
Plaintiff-Appellant,
v
No. 274450
Macomb Circuit Court
LC No. 2003-002744-CK
INTERNATIONAL TRANSMISSION
COMPANY,
Defendant-Appellee.
Before: Gleicher, P.J., and O’Connell and Kelly, J.J.
PER CURIAM.
Plaintiff appeals as of right the trial court’s stipulated order of dismissal, which preserved
its right to appeal the trial court’s July 1, 2004, opinion and order vacating its February 4, 2004,
opinion and order enforcing a settlement agreement between the parties. We reverse and remand
for further proceedings.
I. Basic Facts and Proceedings
Plaintiff, a real estate development company, owns a landlocked parcel of farmland in
Washington Township. Defendant owns an adjacent parcel of land providing access to 32 Mile
Road, and its overhead electric transmission lines cross over plaintiff’s property. Plaintiff
proposed an exchange of easements, whereby plaintiff would grant defendant a utility easement
in exchange for an ingress and egress easement for an access drive to 32 Mile Road.
At a settlement conference in this trespass action, the parties agreed on the record to
exchange easements, conditioned on defendant confirming its ownership of the adjacent parcel.
Defendant thereafter refused to execute the easement agreement, and plaintiff moved the trial
court to enforce the settlement agreement. Defendant argued that the settlement agreement was
not enforceable because it did not own frontage on 32 Mile Road, there was a misunderstanding
about the length of the access easement, and the essential terms—i.e., location and scope of the
easement—were not expressed on the record or in writing as required by MCR 2.507. The trial
court granted plaintiff’s motion, finding that defendant owned the strip of land over which
plaintiff requested access, there was no misunderstanding regarding the access easement, and the
record was “sufficiently specific to bind the parties to the exchange of easements.” Defendant
objected to plaintiff’s proposed order, which set forth specific provisions regarding the
easements. The trial court vacated its earlier opinion and order, concluding that no settlement
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agreement was ever reached because the parties could not “agree on the most basic of the
settlement terms—where the access road [was] to be located, what the size of the road [should]
be, whether Plaintiff, alone [was] entitled to use the easement, whether the grant of an access
easement also encompasse[d] the right to install utilities in the easement, the scope of
Defendant’s easement on Plaintiff’s property, etc.” Plaintiff moved for reconsideration and
requested an evidentiary hearing, but the trial court denied this motion. The parties later
stipulated to dismiss plaintiff’s complaint, subject to plaintiff’s right to appeal the order vacating
the prior order granting plaintiff’s motion to enforce the settlement agreement and the order
denying plaintiff’s motion for reconsideration of the vacation order.
II. Analysis
Plaintiff argues that the trial court erred in determining that an enforceable settlement
agreement was never established. We agree. We review de novo questions of law, including
issues regarding the existence and interpretation of a contract. Kloian v Domino’s Pizza, LLC,
273 Mich App 449, 452; 733 NW2d 766 (2006). However, a trial court’s ultimate decision
regarding enforcement of a settlement agreement is reviewed for an abuse of discretion. Groulx
v Carlson, 176 Mich App 484, 493; 440 NW2d 644 (1989). An abuse of discretion occurs when
the trial court chooses an outcome that falls outside the permissible principled range of
outcomes. Woodard v Custer, 476 Mich 545, 557; 719 NW2d 842, 849 (2006).
“An agreement to settle a pending lawsuit is a contract and is to be governed by the legal
principles applicable to the construction and interpretation of contracts.” Kloian, supra at 452
(internal quotation marks and citation omitted); see also Mikonczyk v Detroit Newspapers, Inc,
238 Mich App 347, 349; 605 NW2d 360 (1999). A “contract requires mutual assent or a
meeting of the minds on all the essential terms.” Kloian, supra at 453. “A meeting of the minds
is judged by an objective standard, looking to the express words of the parties and their visible
acts, not their subjective states of mind.” Id. at 454 (citation omitted). However, an agreement
to settle a lawsuit is not enforceable, even if satisfies general contract principles, unless it also
satisfies the requirements of MCR 2.507(G).1 Columbia Assoc, LP v Dep’t of Treasury, 250
Mich App 656, 668-669; 649 NW2d 760 (2002). MCR 2.507(G), which governs agreements
between parties, provides:
An agreement or consent between the parties or their attorneys respecting
the proceedings in an action, subsequently denied by either party, is not binding
unless it was made in open court, or unless evidence of the agreement is in
writing, subscribed by the party against whom the agreement is offered or by that
party’s attorney.
In this case, the parties appeared in court at a settlement conference and announced that they had
agreed to dismiss the case in exchange for a mutual exchange of easements. We must determine
1
Before MCR 2.507 was amended, effective May 1, 2006, current subsection (G) was codified
as subsection (H).
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whether the parties’ statements in court show mutual assent on all material terms of an
agreement, thereby establishing an enforceable settlement agreement.
The agreement in this case involves an exchange of easements. An easement is an
interest in land, and this Court has held that the essential terms of an agreement involving the
sale of land are identification of the parties, the property, and the consideration. Zurcher v
Herveat, 238 Mich App 267, 282-283, 290-291; 605 NW2d 329 (1999). At the settlement
conference, the parties expressed on the record that they had agreed to a “simple swap of
easements[,]” whereby defendant would receive “an easement to maintain their power lines
where they are” and consisting of “[w]hatever easement they need to make in their power
lines[,]” and plaintiff would receive an “easement for the access road” located “across
[defendant’s] property to the right of way.” The record identifies the parties involved (plaintiff
and defendant), the property to be burdened by the easements (each other’s adjoining property),
and the price or consideration (a swap of easements and dismissal of plaintiff’s lawsuit). The
parties also identified the purpose of the respective easements (a transmission line easement for
defendant and a road access easement for plaintiff). Thus, the record reflects the parties’ intent
to be bound and their assent on all material terms of an agreement to exchange easements.
We find defendants contention that an enforceable agreement did not arise because there
was no mutual assent on various details of the easements to be exchanged to be without merit.
Uncertainty regarding details, or the omission of certain details, does not preclude an enforceable
agreement. See, Nichols v Seaks, 296 Mich 154, 159; 295 NW 596 (1941).
The parties’ statements on the record in court indicate that they agreed that plaintiff
would receive a road access easement “across [defendant’s] property to the right of way.” A
description of the land “is acceptable if it discloses with sufficient certainty what the intention of
the grantor is with respect to the quantity and location of the land to which reference is made so
that its identification is practicable.” Zurcher, supra at 282 (internal quotation marks and
citation omitted). The parties’ description in court was sufficient to identify what the parties
intended with respect to plaintiff’s easement, namely, a road access easement over defendant’s
property to the right of way. Further, when a contract contains essential terms, but omits certain
details, the law may supply the missing details by construction. Nichols, supra at 159.
Moreover, the trial court has the discretion to supply the term under a reasonableness standard
based on the facts and circumstances of the case. See J W Knapp Co v Sinas, 19 Mich App 427,
430-431; 172 NW2d 867 (1969). Any uncertainty regarding various other terms of plaintiff’s
road access easement (e.g., whether other persons would be permitted to use it, plaintiff’s right to
dedicate the land for public usage, signage, landscaping, and utilities), it was not necessary that
the parties agree on all terms that were not essential to a contract. Moreover, with regard to the
scope of the easement, a conveyance of an easement necessarily conveys “all such rights as are
incident or necessary to the reasonable and proper enjoyment of the easement.” Unverzagt v
Miller, 306 Mich 260, 265; 10 NW2d 849 (1943) (conveyance of easement permitted use by
easement holders’s invitees) (internal quotation marks and citation omitted); Tomecek v Bavas,
276 Mich App 252, 276-278; 740 NW2d 323 (2007). Thus, defendant’s agreement to convey a
road access easement encompassed any matters that were incident or necessary to the reasonable
and proper use of the property for that purpose.
Finally, defendant’s argument that the parties failed to agree on the scope of defendant’s
transmission line easement is without merit. The record reflects that the parties agreed that
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defendant would receive “an easement to maintain their power lines where they are[.]” Further,
the parties agreed that the easement would be broad, describing it as “[w]hatever easement they
need to make in their power lines[.]” Thus, the record establishes the parties’ mutual assent to
both the location of the easement (where the power lines were located) and an easement that was
broad in scope considering the purpose of the easement (whatever easement defendant needed to
maintain its power lines). Plaintiff’s agreement to convey a transmission line easement also
encompassed all rights as were incident or necessary to the reasonable and proper enjoyment of
such an easement. Unverzagt, supra at 265; Tomecek, supra at 276-278.
The trial court erred in finding that an enforceable settlement agreement was not
established and therefore abused its discretion in vacating its earlier order granting plaintiff’s
motion to enforce the settlement agreement.2 Accordingly, we reverse the opinion and order
vacating the order granting plaintiff’s motion to enforce the settlement agreement and remand for
enforcement of the parties’ settlement agreement. In its discretion, the trial court may conduct
further proceedings, if necessary, to resolve any issue with respect to the details of the
settlement. J W Knapp, supra at 427.
Reversed and remanded. We do not retain jurisdiction.
/s/ Elizabeth L. Gleicher
/s/ Peter D. O’Connell
/s/ Kirsten Frank Kelly
2
Given our resolution of this issue, it is unnecessary to address plaintiff’s additional argument
regarding the trial court’s failure to conduct an evidentiary hearing.
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