Radiance Capital Receivables Eighteen, LLC v. Delta Springs Developments, LLC et al
ORDER denying 55 motion to enforce judgment and 59 motion to deposit/invest funds into the Court's registry. Signed on December 5, 2017, by Chief District Judge Greg Kays. (Law clerk)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
RADIANCE CAPITAL RECEIVABLES
Case No. 4:16-cv-01196-DGK
ORDER DENYING MOTIONS CONCERNING PURPORTED SETTLEMENT
This lawsuit arises from Defendant’s Snezana Strothmann’s (“Defendant”) alleged
guarantee of a loan. The borrower defaulted, and now Plaintiff Radiance Capital Receivables
Eighteen, LLC, (“Radiance”) has sued to enforce Defendant’s alleged guarantee.
Now before the Court are Defendant’s Motion to Enforce Settlement Agreement (Doc.
55) and Motion to Pay Settlement Proceeds Into Court (Doc. 59). Defendant contends the parties
reached a settlement agreement on June 30, 2017, which Plaintiff refuses to honor. Plaintiff
responds that although the parties had extensive preliminary discussions, no settlement was ever
The motions are DENIED because the Court finds that: (1) reducing the settlement
agreement to writing was a condition precedent to the contract’s formation, a condition which
has not been met here, and (2) Defendant has not carried her burden of showing by clear,
convincing, and satisfactory evidence that a settlement agreement exists.
The parties agree on the essential facts, but dispute a few of the details. Where the
parties’ versions differ, the Court has adopted the account provided by Marc Wilson (“Wilson”),
Plaintiff’s counsel, because his account was made under oath and is credible.
On June 23, 2017, Wilson had a forty-minute phone call with Defense counsel Dan
Simon (“Simon”). The call mostly concerned discovery matters, but at some point Simon
suggested the case could be settled if the parties were in the same settlement range. Wilson told
Simon that any settlement must be subject to written agreement and review and approval by
Radiance. Wilson stated this was because he had not discussed with Radiance what other
material terms it would require. Simon agreed, indicating his client would expect the same.
Simon subsequently provided Wilson a number that Wilson took back to Radiance for
On June 26, Radiance requested additional information about Defendant’s proposed
method and timing of payments.
On June 29 at 11:25 a.m., Kelly Ricke, an attorney working with Simon, sent Wilson the
first in a string of emails.
Subject: Strothmann Discovery
Would you mind giving us until Monday on the answers to your
second rogs and requests? Thanks,
Email chain (Doc. 65-2). That afternoon, Wilson emailed back Ms. Ricke and Simon:
Yes, that sounds good. I’d like to know also if I can get the tax
returns mentioning Delta Springs. I have to head to a funeral out
of state next week, and I likely won’t get back in the office until
Friday, the deadline for motions.
Regarding the possibility of settlement, we are in the same range
we discussed, Dan, but the ultimate amount depends upon the
timing of payment (i.e., one payment within a few weeks v.
scheduled payments), and they would like legal covered on top of
that, which will range from $25-$30,000 at this point.
Please let me know your thoughts on the timing of payment and
I’ll run it by Radiance to see if they are willing to provide a
Wilson and Simon subsequently discussed the method and timing of any settlement
payments in a two and one-half minute phone call. During the call, Wilson reiterated that any
agreement must be reduced to writing and subject to review and approval by his client because
he did not know what other material terms it would require. Simon agreed.
A short time later, Simon emailed Wilson,
Confirming our call, my client and I previously discussed terms of
settlement such [that] she could arrange payment of $70,000 plus
your attorney fees if we settled all matters shortly (without
incurring much more on your or my end) and she had 30 to 60 days
to arrange payment. She is traveling to visit family today, so I will
have to coordinate with her when she lands. Let me know if this
gets it done and we can work to agree on a mutually agreeable
Wilson contacted Radiance for guidance concerning the monetary terms of a settlement.
Radiance indicated it would be willing to settle for payment of $75,000 in thirty days, and an
additional $100,000 payment in sixty days, and payment of its legal fees within 90 days. Wilson,
however, misunderstood. At 3:08 p.m. he emailed Simon,
Thanks, Dan. I've been authorized to provide this offer:
75K in 30-days, or
100K in 60 days, and
Legal fees in 90 days.
Id. (emphasis added). The next morning (June 30) Simon answered.
I heard from my client last night and she has approved the
settlement outlined in our previous E-mails. I’ll endeavor to send a
draft settlement agreement for your approval or comment over the
weekend (or upon our return from the holiday on the 5th). By
copy of this message to Kelly, I’m asking her to slow-play any
additional work on the pending litigation, so we can avoid any
further unnecessary expense (and ask that you do the same, since
your fees are being paid as part of the settlement). Assuming I can
get everything together on our end, funding within 30 days will not
be a problem. I’m glad we were able to get to this point and look
forward to putting this behind us soon.
Id. At 11:24 a.m., Wilson replied,
I am very, very sorry, but I misinterpreted my client’s offer and
forwarded you an incorrect one. It should have read “and” instead
of “or,” as follows:
75K in 30-days, and
100K in 60 days, and
Legal fees in 90 days.
I apologize for my miscommunication, but Radiance will not settle
for $75 + legal. If you want to talk, I am available at the number
Id. At 12:00 p.m., Simon wrote back,
This is a problem. I’ll talk with Kelly and my client and let you
know what she is willing to do.
Simon did not send Wilson a draft settlement, or otherwise get back to Wilson.
On July 7, Defendant asserted in a footnote to her response to Plaintiff’s First Request for
Production of Documents there was a dispute about a settlement.
That same day, Wilson filed a motion to compel in connection with Defendant’s
unsatisfactory response to Plaintiff’s First Request for Production of Documents and sent Simon
an email. In relevant part, Wilson’s email states,
Further, I was curious to see that after your late response to the
RFP and in a footnote, nonetheless, there is a “dispute” about a
You know well that we discussed that our
discussions would be reduced to writing, which you yourself
confirmed in you[r] last email to me about the subject as I prepared
for departure for my uncle’s funeral. If we had a full agreement on
a “settlement,” why indeed would you send me a draft for “review
and comment”? Methinks because we were not agreed on all
terms, but merely a target dollar amount for settlement, as we
discussed verbally. If you plan to make that claim to a judge, then
be prepared to fully back that assertion up, including the complete
set of terms to which we supposedly agreed.
On July 10, Wilson and Simon talked on the phone for approximately twenty minutes.
Simon continued negotiations on the amount Plaintiff would accept in settlement. He also
mentioned additional terms he wanted and sought to exchange draft settlement agreements that
added these terms.
On July 11, Wilson emailed Simon,
In the midst of our deadline today, I had the chance to speak with
Radiance and inform them of your position. They are willing to
consider counteroffers to the money terms immediately below [in
the email chain], but as we agreed last time, subject to comment
and approval of a draft settlement agreement. Regarding your
request for attorney-client communication and attorney work
product, they have not given me permission to share any
information about our communications.
Simon replied the next day,
Thank you for getting back to us. The response is disappointing.
At this point, it makes sense for us to simply demand that your
client honor the settlement agreement. Having relied on your
statement following our call on June 29 that “we are in the same
range,” and knowing that you and I just discussed a range of
“upper 5 figures,” I proposed the upper limit of my settlement
authority. It would not be fair, now that I showed my client’s
cards, to re-open the negotiation.
contingencies or other reasons you intend to claim there was no
contract for settlement are not accurate. There should be no
question on the simple facts: an agreement to all material terms
was reached on June 30 upon the terms you proposed on behalf of
your client that were accepted by my client. Although you try to
cancel the contract after agreement was reached because you claim
you misinterpreted your client’s offer, you refuse to provide any
evidence supporting that claim. The settlement agreement is
Defendant will pay $75,000 to Plaintiff not later than July 30,
2017. Payment will be delivered to Plaintiff’s attorneys.
Defendant will pay Plaintiff’s reasonable attorney fees and court
costs of between $25,000 to $30,000 not later than September 29,
Upon timely payment of the foregoing amounts, all matters related
to the note, guarantees and other loan documents alleged in the
pending litigation are settled.
The parties agree to take, or omit from taking, any actions
reasonably required to effect the agreement, including, without
limitation, dismissing the pending litigation with prejudice.
If there are terms or conditions you expected to be included in the
settlement agreement, please let me know what those are.
Wilson did not reply. To date, Defendant never has provided a written draft of any
purported settlement agreement.
A federal district court “has inherent power to enforce a settlement agreement as a matter
of law when the terms are unambiguous.” Harper Enters., Inc. v. Aprilia World Serv. USA, Inc.,
270 Fed. App’x 458, 460 (8th Cir. 2008). In a diversity case such as this one, “the settlement
agreement is construed according to state law.” Id. Here, Missouri law provides the rule of
Under Missouri law, whether the parties entered into an enforceable settlement agreement
is a question of contract law. Youngs v. Conley, 505 S.W.3d 305, 313 (Mo. App. 2016). The
party moving to enforce a purported settlement agreement bears the burden of proving “the
existence of the agreement by clear, convincing and satisfactory evidence.”
Mallinckrodt, Inc., 224 S.W.3d 596, 599 (Mo. 2007). Evidence is clear and convincing if it
instantly tilts the scales in the affirmative when weighed against the evidence in opposition so
that the fact finder is left with an abiding conviction that the evidence is true. Youngs, 505
S.W.3d at 314. Further,
To enforce a purported settlement, the moving party must prove
the essential elements of a contract: offer, acceptance, and
consideration. A valid settlement agreement also requires a
meeting of the minds and a mutual assent to the essential terms of
the agreement. Whether a term is material depends on the
agreement and its context and also on the subsequent conduct of
the parties, including the dispute which arises and the remedy
sought. Negotiations or preliminary steps taken in an effort to
come to an agreement on a particular term of settlement do not
constitute a contract. A mutual agreement is reached when the
minds of the contracting parties meet upon and assent to the same
thing in the same sense at the same time. A meeting of the minds
occurs when there is a definite offer and an unequivocal
Id. at 313-14 (internal citations omitted). Whether the essential elements of a contract exist is a
question of fact which the trial court may determine. Precision Invs., L.L.C. v. Cornerstone
Propane, L.P., 220 S.W.3d 301, 303 (Mo. 2007).
The Court denies the motion for two reasons. First, the record here shows that before the
attorneys began discussing settlement amounts, they agreed that any settlement would have to be
reduced to writing and reviewed and approved by their respective clients before it was final and
enforceable. Wilson repeatedly stated any agreement must be reduced to writing and subject to
review and approval by his client because he did not know what other material terms it would
require, and Defendant, through Simon, assented to this condition. This made reducing the
settlement agreement to writing a condition precedent to the contract’s formation, a condition
which has not been met here.
Defendant’s argument that executing a mutually acceptable written settlement contract
was an obligation under the contract (that is, a condition precedent to Plaintiff’s having to
perform its obligations under the contract), not a condition precedent to formation, is unavailing.
Although Missouri law does not require a settlement to be in writing, much less a condition
precedent to formation, the parties made it a condition precedent by agreement.
This case is not analogous to the decision in Schumacher v. SC Data Center, Inc., as
Defendant suggests. Schumacher was a class action in which there was no dispute that the
parties had reached a settlement. No. 2:16-CV-04078-NKL, 2016 WL 7007539, at *1 (W.D.
Mo. Nov. 29, 2016). The issue in Schumacher stemmed from the fact that before the district
court could approve the settlement under Rule 23, the Supreme Court issued a decision
invalidating the plaintiff and class members’ claims. Id. The defendant then moved to dismiss
the case, and the plaintiff moved to enforce the settlement. Id. The defendant argued there was
no settlement because the court’s approval was a condition precedent to the formation of a
settlement. Id. at 2. The court rejected this claim, holding approval under Rule 23 is not a
condition precedent to a class action settlement. Hence, Schumacher is inapplicable to the
Second, even if it was unclear whether reducing the agreement to writing and having it
reviewed and approved by their clients was a condition precedent to formation, the Court would
still deny Defendant’s motion because she has not carried her burden of showing by clear,
convincing, and satisfactory evidence that the parties had agreed on all the essential terms. To
begin, the fact that the parties disagree whether the “reduced-to-writing” requirement is a
condition precedent indicates there was not mutual assent to an essential term of a settlement
contract. But this is not the only essential term on which it is unclear whether an agreement was
reached. Although the record is clear that the parties at least made substantial progress towards
determining a settlement amount, the Court is unconvinced that they ever settled on a final
number. And assuming for the sake of argument that the parties agreed on payment of $75,000
within thirty days as part of the settlement amount, it is not clear that they reached agreement on
another essential aspect of the settlement amount—legal fees. The parties discussed Defendant
paying “[l]egal fees in 90 days,” but they did not agree on how much this would be, or even how
this amount would be determined. It appears they contemplated that the amount would be
between $25,000 and $30,000, but they never agreed on what fees could be included, when the
deadline for Defense counsel to charge fees ran, or whether Defendant’s fees were capped at
Defendant’s last email also added a new condition, that the legal fees must be
“reasonable,” language that would appear to allow Defendant to contest the amount of Plaintiff’s
legal fees, something to which Plaintiff never agreed. Given all this, the Court cannot find by
clear, convincing, and satisfactory evidence that the parties agreed on all the material terms of a
Accordingly, Defendant’s motions (Docs. 55, 59) are DENIED.
IT IS SO ORDERED.
Date: December 5, 2017
/s/ Greg Kays
GREG KAYS, CHIEF JUDGE
UNITED STATES DISTRICT COURT
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