Kaiser v. Trace, Inc.

Filing 19

MEMORANDUM DECISION AND ORDER. Defendant's Motion to Enforce 16 is DENIED. As the pre-trial motion deadline has passed and trial is set for August 12, 2014, the parties are directed to notify the Court immediately if they will seek amendment of the Scheduling Order. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

KIMBERLY KAISER,
Case No. 1:13-CV-00010-EJL-CWD
Plaintiff,
MEMORANDUM DECISION
AND ORDER

v.
TRACE, INC.,
Defendant.

Currently pending before the Court is Defendant’s Motion to Enforce

Settlement Agreement (“Motion to Enforce”) (Dkt. 16). In the interest of avoiding
further delay and because the Court conclusively finds that the decisional process
would not be significantly aided by oral argument, the Court will address and
resolve this motion without a hearing. Therefore, having carefully reviewed the
record, the Court enters the following Order.
BACKGROUND
On August 8, 2012, Plaintiff Kimberly Kaiser (“Kaiser” or “Plaintiff”) filed
a Complaint in Idaho state court alleging violation of the Idaho Human Rights Act,
I.C. § 67-5901 et. seq., against Defendant TRACE, Inc. (“Defendant” or

“TRACE”). (Dkt. 1.) After Kaiser filed an Amended Complaint in December,
2012, Defendant removed the case to federal court pursuant to Title VII of the
Civil Rights Act, as amended by the Pregnancy Discrimination Act of 1978, 42
U.S.C. § 2000e, because Kaiser’s claims gave rise to a dispute related to workplace
discrimination and retaliation and involved a federal question. (Id., ¶ 3.)
The parties eventually participated in mediation with mediator James D.
Huegli (“Huegli”) on October 21, 2013. (Dkt. 16-1, p. 1.) In support of its Motion
to Enforce, Defendant submitted an affidavit from Huegli stating the parties were
successful in reaching a settlement agreement through mediation. (Dkt. 16-2, p. 1.)
Following the mediation, Huegli sent an email to counsel for the parties
summarizing the parties’ settlement agreement. Huegli’s October 21, 2013 email
memorialized the following settlement terms:
1. The plaintiff will dismiss the case with prejudice and without costs;
2. The defendant will pay the entire mediation fee and pay for Plaintiff’s out
of pocket costs . . . [of] about $1600. Plaintiff will submit either a
summary of those costs or a letter from counsel that the amount
represents the costs expended.
3. Defendant will prepare a standard release between the parties.
(Id., p. 4.)

The Court was also notified on October 22, 2013 that the case had been settled in
its entirety in mediation and that a stipulation of dismissal would be forthcoming.1
(Dkt. 12.)
Defendant thereafter paid the entire mediation fee and prepared and
delivered a Settlement Agreement and Release of All Claims (“Settlement and
Release”) to Kaiser’s counsel for Kaiser’s signature. (Dkt. 16-1, p. 2.) Defendant
also drafted a check payable to Kaiser’s counsel for approximately $1600 of out of
pocket expenses, but held the check awaiting Kaiser’s signature upon the
Settlement and Release and stipulation to dismiss the case with prejudice. (Dkt.
16-3, p. 2, ¶ 4.) Kaiser’s counsel subsequently informed Defendant that Kaiser had
decided not to continue with settlement discussions, and would proceed with
prosecuting her case. (Dkt. 16-3, p. 10.) On December 13, 2013 the Court was
notified that the terms of the settlement agreement were not fulfilled.2 (Dkt. 13.)

1

The terms of the settlement agreement were not provided to the Court.
The parties dispute which party notified the Court that the settlement agreement had
not been fulfilled. Kaiser claims Defendant’s counsel notified the Court that the terms of
the settlement agreement had not been fulfilled, and that this notice constituted evidence
both that the parties did not intend to be bound until the terms of the mediated settlement
were reflected in an executed, written agreement, and that even if the Court finds there
was an enforceable settlement agreement, Defendant accepted Kaiser’s rescission of the
alleged agreement. (Dkt. 17, pp. 2-3.) Defendant counters “[t]he Court’s December 13
Order followed TRACE’s receipt of Ms. Kaiser’s counsel’s December 2nd letter stating
that Ms. Kaiser refused to sign the release and wished to continue prosecuting her case.
As such, until receiving Ms. Kaiser’s January 9, 2014 Opposition [to Defendant’s Motion
to Enforce], TRACE and its counsel assumed Ms. Kaiser’s counsel contacted the Court
and cause the December 13 notification to be issued.” (Dkt. 18, p. 2.) Which party
notified the Court of the settlement is immaterial to resolution of this case, as the Court
2

Defendant thereafter filed the instant motion, claiming Kaiser’s refusal to perform
constitutes a breach of the settlement agreement and asking this Court to order
Kaiser to perform under the agreement.

ANALYSIS
Defendant claims that the parties entered into an enforceable settlement
contract on October 21, 2013 when the parties orally agreed to a settlement during
mediation. Kaiser denies that the oral agreement comprised all of the material
terms of the settlement, and suggests the parties intended to formalize the
agreement in writing. Generally, oral agreements do not have to be reduced to
writing to be enforceable. McColm-Traska v. Baker, 88 P.3d 767, 770 (Idaho
2004) (citing Lyle v. Koubourlis, 771 P.2d 907, 909 (Idaho 1988). However, oral
settlement agreements must comply with the general requirements for contracts.
Id. Thus, for an oral settlement agreement to be enforceable, there must be
manifestation of mutual intent to contract, as well as a meeting of the minds
regarding the essential terms of the agreement. Lawrence v. Hutchinson, 204 P.3d
532, 538 (Idaho App. 2009). To be enforceable, a “contract must be complete,

does not decide the Motion to Enforce on the basis of rescission, but instead finds the
evidence does not establish a meeting of the minds with respect to the settlement
agreement.

definite, and certain in all its material terms, or contain provisions which are
capable in themselves of being reduced to certainty.” Id. (citations omitted).
Where, as here, the parties enter into an oral agreement but contemplate a
formal writing, the question of whether the parties become bound prior to the
drafting and execution of the formal writing, “is largely a question of intent.”
Kohring v. Robertson, 44 P.3d 1149, 1154 (Idaho 2002). The intent of the parties
is to be determined by:
the surrounding facts and circumstances of each particular case. The
stipulations are best evaluated by looking to the very words of counsel and
their clients. Circumstances which have been suggested as being helpful in
determining the intention of the parties are: whether the contract is one
usually put in writing; whether there are few or may details; whether the
amount involved is large or small; whether it requires a formal writing for a
full expression of the covenants and promises; and whether the negotiations
themselves indicate that a written draft is contemplated at the final
conclusion of the negotiations.
Lawrence, 204 P.3d at 538 (internal citations omitted).
The Court notes there were few details associated with the settlement, the
amount involved was small, and Defendant and the mediator, if not Kaiser,
believed this matter was conclusively settled during mediation. Nevertheless, the
only evidence of the terms of the oral settlement agreement before the Court is
Huegli’s October 21, 2013 email to the parties summarizing the mediated
settlement. (Dkt. 16-2, p. 4.) Of the three settlement terms listed in that email, the
third term, that “Defendant will prepare a standard release between the parties,”

suggests the parties contemplated a written release as the final conclusion of the
negotiations. More importantly, Huegli’s email states Defendant would prepare a
“standard release,” but does not contemplate additional settlement terms that were
ultimately included in the Settlement and Release. For instance, the Settlement
and Release states:
Kimberly Kaiser will not apply for any employment with TRACE or its
subsidiaries or agents, nor will she direct any prospective employer inquiries
to TRACE. Kimberly Kaiser affirms that TRACE is under no obligation to
respond to any of Kimberly Kaiser’s prospective employer inquiries.
TRACE shall suffer no liability as a result of Kimberly Kaiser’s ineligibility
for employment with TRACE nor shall it suffer any liability as a result of
any of Kimberly Kaiser’s prospective employer inquiries.
(Dkt. 16-3, ¶ 7.)
The Settlement and Release also provides:
Should TRACE have to enforce this Agreement, Kimberly Kaiser shall be
responsible for payment of all of TRACE’s attorney fees and costs incurred
as a result of such enforcement action.
(Id., at ¶ 8.)
Moreover, the Settlement and Release mandates that Kaiser forever forgives and
releases TRACE from any and all claims arising out of or in any way related to
Kaiser’s suit, but does not contain a mutual release of any and all claims TRACE
may have against Kaiser. (Id., ¶ 1.) The Court is doubtful Kaiser contemplated
such a unilateral agreement when she agreed to preparation of a “standard release.”
Given these circumstances, the Court finds there was no meeting of the
minds regarding the terms of settlement. Regardless of whether Defendant added

additional terms to its “standard release,” or the terms included therein appear in
every TRACE release, Kaiser clearly did not contemplate such conditions at the
time she orally agreed to settle the case at mediation. In a dispute over contract
formation, it is incumbent on the party attempting to establish the existence of an
enforceable agreement to “prove a distinct and common understanding between the
parties.” Lawrence, 204 P.3d at 538 (citing P.O. Ventures, Inc. v. Loucks Family
Irrevocable Trust, 159 P.3d 870, 875 (Idaho 2007) and Inland Title Co. v.
Comstock, 779 P.2d 15, 17 (Idaho 1989)). Kaiser claims both that the parties
intended to finalize the agreement in writing and that receipt of the Settlement and
Release was her first opportunity to review all of the specific terms of the proposed
settlement agreement.3 Further, Huegli’s email summarizing the settlement
explicitly stated Defendant would prepare a “standard release,” but did not list any
of the other requirements Defendant ultimately included in the Settlement and
Release. Given these circumstances, the Court finds the parties did not agree to all
material terms of the settlement agreement. As such, the October 21, 2013 oral

3

Defendant contends that if the release was material to Kaiser, she should have
conditioned settlement on her review and approval of the same, and that she instead
“agreed to a release prepared by TRACE, without reservation.” (Dkt. 18, p. 3.) If this
were the case, then Defendant could include any term it wanted, including conditions
never discussed in mediation nor contemplated by Kaiser, in its “standard release” and
claim Kaiser was bound by them. Moreover, that Kaiser rejected settlement and
proceeded to prosecute her claims shortly after her first opportunity to review the terms
of the Settlement and Release suggests she did not agree to be bound by any release
prepared by Defendant, without reservation.

agreement was not an enforceable contract. The Court accordingly DENIES
Defendant’s Motion to Enforce.
ORDER
Defendant’s Motion to Enforce (Dkt. 16) is DENIED. As the pre-trial
motion deadline has passed and trial is set for August 12, 2014, the parties are
directed to notify the Court immediately if they will seek amendment of the
Scheduling Order.

DATED: May 1, 2014

_________________________
Edward J. Lodge
United States District Judge