Advantage Properties v. Commerce Bank, N.A. ( 2000 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
NOV 13 2000
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
ADVANTAGE PROPERTIES, Inc.,
Plaintiff-Appellant,
v. No. 00-3014
(D.C. No. 99-CV-1078-MLB)
COMMERCE BANK, N.A., (D. Kan.)
Defendant-Appellee.
ORDER AND JUDGMENT *
Before BALDOCK, ANDERSON, and HENRY , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
Plaintiff-appellant Advantage Properties, Inc. (Advantage) appeals the
district court’s order enforcing the settlement agreement entered into by
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Advantage and defendant-appellee Commerce Bank (Commerce). We have
jurisdiction pursuant to 28 U.S.C. § 1291, and following our review of the
parties’ briefs and the appellate record, we affirm.
I. Background
On March 1, 1999, Advantage, a minority-owned construction company,
filed a complaint against Commerce alleging racial discrimination in violation of
the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §1691, and the Kansas
Consumer Protection Act (KCPA), Kan. Stat. Ann. § 50-623. The complaint
alleged that Commerce placed more stringent requirements on Advantage prior to
closing a loan than those required of nonminority applicants.
Commerce moved to dismiss Advantage’s KCPA claims, alleging that
because the statute only applies to “individual[s] or sole proprietor[s],”
Advantage failed to state a claim for relief. Id. § 50-624(b). Advantage
subsequently moved to join Gregory Barnes, its president and sole stockholder, as
a necessary party. In recommending that Commerce’s motion to dismiss be
granted and the joinder motion be denied, the magistrate judge agreed with
Commerce that, as a corporate entity, Advantage could not assert a claim under
the KCPA. See Wayman v. Amoco Oil Co. , 923 F. Supp. 1322, 1363 (D. Kan.
1996) (holding that “a corporation or similar entity that has suffered an injury as a
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result of a ‘deceptive’ or ‘unconscionable’ act or practice cannot assert a claim
under the KCPA”). When Advantage did not file objections to the magistrate
judge’s report and recommendation, the district court adopted it as its own.
The parties entered mediation and reached an oral settlement agreement.
When Advantage refused to sign the written agreement, Commerce moved the
district court to enforce the agreement, counsel for Advantage moved to
withdraw, and the matter was set for hearing on November 15, 1999. At the
hearing, Advantage requested a continuance in order to obtain new counsel. The
district court granted the continuance, reset the hearing for December 13, 1999,
and directed new counsel for Advantage to enter an appearance on or before
November 30, 1999.
At the December 13th hearing, Advantage, represented by Barnes, appeared
with new counsel retained the day before. New counsel for Advantage was from
Oklahoma and was not admitted to practice in Kansas district courts. He
requested a continuance in order to complete the admission process, review the
case, and prepare for hearing. The court agreed to another continuance
conditioned upon Advantage’s willingness to pay the expenses of the participants
and witnesses who had traveled from Kansas City to Wichita for a second hearing,
an amount approximated at between $3,000 and $4,000. When Barnes advised the
court that Advantage could not afford to pay these expenses, the court denied the
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continuance and scheduled the hearing to go forward later that same day.
Following testimony by the Commerce representative, the mediator, and former
counsel for Advantage, the court enforced the settlement and ordered Barnes to
sign the settlement check on behalf of Advantage.
Advantage states its issues on appeal as: (1) whether the district court
lacked subject matter jurisdiction over Gregory Barnes, individually; (2) whether
there was evidence that Advantage intended to make Barnes a party to the
settlement agreement; (3) whether there was a meeting of the minds as to the
release of Barnes’ individual claims; (4) whether the district court’s denial of a
second continuance violated Advantage’s due process rights; and (5) whether
there was inferred fraud, duress, undue influence, or mistake in the inducement in
the settlement agreement.
II. Discussion
The trial court’s enforcement of a settlement agreement is reviewed by this
court for an abuse of discretion. See United States v. Hardage , 982 F.2d 1491,
1495 (10th Cir. 1993). Issues involving the formation, construction and
enforceability of a settlement agreement are resolved by applying state contract
law. See Carr v. Runyan , 89 F.3d 327, 331 (7th Cir. 1996); Central Kan. Credit
Union v. Mutual Guar. Corp. , 886 F. Supp. 1529, 1537 n.2 (D. Kan. 1995).
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Kansas law favors agreements executed in the compromise and settlement
of disputes. See Ferguson v. Schneider Nat’l Carriers, Inc. , 826 F. Supp. 398,
400 (D. Kan. 1993). “[I]n the absence of bad faith or fraud, when parties enter
into an agreement settling and adjusting a dispute, neither party is permitted to
repudiate it.” Id.
In the settlement agreement at issue here, the parties allegedly agreed that
all claims that “were, or could have been, asserted by ADVANTAGE and/or
BARNES against COMMERCE” were settled in exchange for a cash payment of
$20,000 to be split evenly between Advantage and its counsel. Appellant’s App.
at 48. In addition, Commerce agreed to provide Advantage with a satisfaction of
judgment in its suit against Lucky 7 Payday Loan, Inc., another corporation
owned by Advantage. See id.
Initially, Advantage argues that because the district court denied its motion
to join Barnes as a party, the district court had no jurisdiction to enforce a
settlement agreement that purported to dispose of Barnes’ individual claims
against Commerce. A party must support its argument with legal authority. See
Primas v. City of Okla. City , 958 F.2d 1506, 1511 (10th Cir. 1992) (holding that a
party has a duty to cite authority for any argument raised). Because Advantage
fails to cite this court to any authority for its contention, and because in our
research we could find none, we consider the issue insufficiently developed to
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invoke appellate review. See United States v. Hardwell , 80 F.3d 1471, 1492
(issue is waived when party fails “to make any argument or cite any authority to
support his assertion”), reh’g granted in part on other grounds , 88 F.3d 897
(10th Cir. 1996).
Second, Advantage asserts that there was no evidence establishing that it
intended to release Barnes’ individual claims in the settlement agreement.
Advantage argues that because Barnes was not allowed to join as a party, his
individual claims were “carved out” of the settlement agreement, and because
Commerce objected to Barnes appearing on behalf of Advantage at the hearing, it
recognized that Barnes was not a party to the action. Appellant’s Br. at 20.
Advantage concludes that this supports its argument that Barnes did not intend to
release his individual claims. This argument is both convoluted and specious.
Although Barnes was not a party to the lawsuit except in his capacity as
representative of Advantage, he certainly was a party to the settlement agreement.
If he desired to preserve his individual claims, he could have raised that issue for
negotiation during the mediation. There was no indication in the testimony of the
witnesses at the hearing, however, that Barnes sought to release only the claims of
the corporation. In fact, all of the witnesses testified that the terms of the written
agreement reflected the parties’ agreement following mediation. Further, the
district court offered Barnes ample opportunity to question the witnesses and
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challenge their testimony regarding the terms of the agreement, an offer he
declined.
Next, Advantage asserts that there was no meeting of the minds as to the
terms of the settlement agreement releasing Barnes’ individual claims. See Albers
v. Nelson , 809 P.2d 1194, 1198 (Kan. 1991) (“In order to form a binding contract,
there must be a meeting of the minds on all essential elements.”). Advantage
contends that the testimony at the hearing proved that it never intended to release
Barnes’ individual claims. We do not agree.
Under Kansas law, when a dispute arises as to the terms of a settlement
agreement, “the agreement ‘must be construed in light of its language and the
circumstances surrounding its making.’” Central Kan. Credit Union , 886 F.
Supp. at 1538 ( quoting In re Estate of Engels , 692 P.2d 400, 404 (Kan. Ct. App.
1984)). “Once it is shown that an attorney has entered into an agreement to settle
a case, a party who denies that the attorney was authorized to enter into the
settlement has the burden to prove that authorization was not given.” Turner v.
Burlington N. R.R. , 771 F.2d 341, 345-46 (8th Cir. 1985). The written agreement
reflects the parties’ intent to end all litigation arising out of Advantage’s attempt
to obtain the loan from Commerce. The agreement does not contain any language
reflecting an intent to reserve Barnes’ right to institute any further litigation.
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Here, both Advantage’s former attorney and the Commerce representative
testified that the terms of the agreement were those agreed upon at the mediation
conference. See Appellant’s App. at 88-90. Because Advantage did not meet its
burden of proving an intent different than that reflected in the written agreement,
the court was correct in enforcing the agreement as written. See In re Estate of
Engels , 692 P.2d at 404 (“In the absence of language to the contrary, it must be
presumed the parties intended to settle the entire dispute.”). To do otherwise
would have given the parties’ agreement the unreasonable effect of allowing
Advantage to take advantage of the favorable terms of the agreement while
allowing Barnes to relitigate the same issues in the future.
Advantage’s fourth issue claims that the district court’s denial of a second
continuance was a violation of its due process rights. We review the district
court’s denial of a continuance “under the standard of arbitrary abuse of
discretion, upon a showing of manifest injustice.” Morrison Knudsen Corp. v.
Fireman’s Fund Ins. Co. , 175 F.3d 1221, 1229 n.4 (10th Cir. 1999) (quotation
omitted). We will not reverse the court’s decision on a continuance “unless we
conclude that the denial was arbitrary or unreasonable and materially prejudiced
the appellant.” Id. (quotation omitted).
When determining whether the denial of a continuance is unreasonable or
arbitrary, we look to several factors, including:
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“[1] the diligence of the party requesting the continuance; [2] the
likelihood that the continuance, if granted, would accomplish the
purpose underlying the party’s expressed need for the continuance;
[3] the inconvenience to the opposing party, its witnesses, and the
court resulting from the continuance; [4] the need asserted for the
continuance and the harm that appellant might suffer as a result of
the district court’s denial of the continuance.”
United States v. Rivera , 900 F.2d 1462, 1475 (10th Cir. 1990) ( quoting United
States v. West , 828 F.2d 1468, 1470 (10th Cir. 1987)).
The district court clearly informed Advantage that it needed to have new
counsel enter an appearance on or before November 30, 1999, and that the hearing
would go forward on December 13, 1999, without further continuance.
Advantage not only failed to obtain counsel within the court’s time restraints, it
requested an additional continuance while being aware that the court had
specifically stated no further continuances would be granted. Despite the court’s
clear pronouncement on further continuances, it did offer Advantage another
continuance conditioned upon Advantage’s agreement to reimburse the hearing
participants for their time and expenses. Advantage declined this offer.
Furthermore, Advantage made no showing as to how a continuance would have
accomplished its goals. The third factor, inconvenience to the parties and
witnesses, was stressed by the court as several participants, including counsel for
Advantage, had come from Kansas City at considerable expenditure of time and
money. Although Advantage asserts that the continuance was necessary to give
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its new counsel an opportunity to prepare for hearing, it fails to advise us how
further preparation would have affected the outcome of the hearing. Therefore,
we conclude that the district court’s denial of a second continuance was well
within the proper exercise of the court’s discretion.
Although Advantage frames its final issue as asserting that it was under
duress and undue influence in agreeing to the terms of the settlement, its
argument appears to have little to do with duress or undue influence. The Kansas
Supreme Court has held that whether facts offered in a particular case “are
sufficient to constitute duress is a question of law” and that “[t]o constitute duress
there must be a wrongful act or wrongful threat which compels apparent assent by
another to a transaction without his volition.” Hastain v. Greenbaum , 470 P.2d
741, 746 (Kan. 1970) (quotation omitted). Duress cannot be found where the
claiming party had the opportunity to reflect and had the benefit of counsel. See
id. at 748; see also White v. General Motors Corp. , 908 F.2d 669, 673 (10th Cir.
1990) (applying Kansas law to a determination of the existence of duress).
Advantage does not identify any word or deed by any party to the
agreement or counsel which would fit within this definition of duress. The thrust
of its argument centers on its belief that its counsel did not adequately prosecute
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its motion to join Barnes as a party. 1
Whether counsel’s advocacy of this motion
was adequate may or may not be adequate basis for a claim against counsel, but it
does not rise to the level of duress or undue influence. Advantage’s remaining
arguments on this issue are equally as unpersuasive.
III. Conclusion
“A trial court has the power to summarily enforce a settlement agreement
entered into by the litigants while the litigation is pending before it.” Hardage ,
982 F.2d at 1496. Here, because there was a dispute as to the terms of the
agreement, the district court held an evidentiary hearing as required. See id. In
so doing, the court was generously indulgent, giving Advantage every opportunity
to be adequately represented and to state its position and offer its evidence.
Advantage failed to avail itself of these opportunities.
The record indicates that the parties entered into settlement negotiations in
good faith, and in reaching an agreement, Advantage had representation and the
benefit of counsel. All Barnes offered at the hearing was an expression of
displeasure with the terms of the agreement. Even if we were to conclude that
1
We note that in its brief Advantage, citing to the record, states that its
former counsel admitted that the motion to join Barnes “was not well prosecuted.”
Appellant’s Br. at 27. We have read the hearing transcript carefully and can find
no instance where counsel made such an admission. In this light, we caution
counsel regarding taking undue liberties with representations of the record.
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this constituted conflicting evidence, the other evidence amply supports the
district court’s factual finding that there was a meeting of the minds as to the
terms of the agreement and that the parties entered into a valid oral contract to
settle the action. In this light, the court’s finding was not clearly erroneous,
see Fed. R. Civ. P. 52(a) and its order to enforce the contract as written was not
an abuse of discretion, see Hardage , 982 F.2d at 1495.
The judgment of the United States District Court for the District of Kansas
is AFFIRMED.
Entered for the Court
Robert H. Henry
Circuit Judge
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