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Timber Point Properties III, LLC v. Bank of America, N.A.

United States District Court, W.D. Missouri, Southern Division

July 20, 2015

TIMBER POINT PROPERTIES III, LLC, Plaintiff,
v.
BANK OF AMERICA, N.A., et al., Defendants.

ORDER GRANTING IN PART THE PARTIES' MOTIONS TO ENFORCE SETTLEMENT AGREEMENT

GREG KAYS, District Judge.

Plaintiff Timber Point Properties III, LLC ("Timber Point"), has settled this property dispute litigation with Defendants. Now before the Court is Timber Point's motion to enforce the settlement agreement (Doc. 161) and Defendants' cross-motion to enforce (Doc. 165). For the reasons below, each motion is GRANTED IN PART.

Background

This case centers on a piece of property in Branson, Missouri, that Timber Point owned. Defendant Bank of America, N.A. foreclosed on the property, with the aid of the other Defendants. Timber Point sued to regain full title to the property, contesting the process that led to the foreclosure.

Before discovery concluded, the parties negotiated a settlement. They signed a Memorandum of Settlement (Doc. 165-1) that contained the general terms that the final settlement agreement would comprise. In particular, the parties agreed that they would "execute a Settlement Agreement and Release drafted by Defendants including a mutual confidentiality provision, a non-disparagement provision, release by Plaintiff of all claims against all Defendants, [and] dismissal of the federal case with prejudice."

Defendants submitted to Timber Point their latest draft Settlement Agreement and Release of Claims (Doc. 165-4). Timber Point claims it never agreed to four terms contained in this draft: (1) a provision granting damages and fees in any action to enforce the settlement agreement (Paragraph 3.I); (2) the release of claims against Defendants (Paragraph 3.D); (3) the confidentiality provision (Paragraph 3.K); and (4) the non-disparagement clause (Paragraph 3.L). Defendants concede Timber Point never agreed to Paragraph 3.I. However, they refuse to change any of the contested language.

Standard

A district court possesses the inherent power to enforce an unambiguous settlement agreement. Barry v. Barry, 172 F.3d 1011, 1013 (8th Cir. 1999). "[A] court may enforce [a] settlement agreement that contemplates the execution of documents at a later time, " Chaganti & Assocs., P.C. v. Nowotny, 470 F.3d 1215, 1221 (8th Cir. 2006), including ordering specific performance where a settlement was reached but a release was not signed, Byrd v. Liesman, 825 S.W.2d 38, 41 (Mo.Ct.App. 1992).

In a diversity case like this one, the court must construe the agreement according to state law. Id. "In Missouri, interpreting a settlement or release agreement is a question of law, and the agreement is interpreted according to the same principles that govern the interpretation of any other type of contract.'" Harper Enters., Inc. v. Aprilia World Serv. USA, Inc., 270 F.Appx. 458, 460 (8th Cir. 2008).

Discussion

Timber Point now moves the Court to enforce the Memorandum of Settlement by striking the four contested clauses from the draft Settlement Agreement and Release. Defendants cross-move the Court to enforce the Memorandum of Settlement, arguing that its general terms are consistent with the draft Settlement Agreement and Release.

The parties do not dispute that the Memorandum of Settlement is an enforceable contract. In that contract, the parties agreed to "execute a Settlement Agreement and Release drafted by Defendants, " including certain provisions. The issue is whether Defendants have fulfilled this obligation by drafting a valid Settlement Agreement and Release. If they have, then the Court will order Timber Point to fulfill its contractual obligation to execute it. See Chaganti & Assocs., 470 F.3d at 1221. If they have not, then the Court will order Defendants to fulfill their contractual obligation by executing a new, valid settlement agreement and release that conforms with the outline in the Memorandum of Settlement.

Timber Point argues that the Settlement Agreement and Release, as drafted, is an invalid contract on three grounds. First, it includes provisions that Timber Point never agreed to. Second, it forfeits rights held by other entities. Third, ...


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