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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. McGraw v. Cox (9/14/2012) sp-6709

McGraw v. Cox (9/14/2012) sp-6709

        Notice: This opinion is subject to correction before publication in the PACIFIC  REPORTER . 

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CHAD R. LEWIS,                                 ) 

                                               )       Supreme Court No. S-14473 

                        Appellant,             ) 

                                               )       Superior Court No. 3PA-10-02973 CI 

        v.                                     ) 

                                               )       O P I N I O N 

JESSICA E. LEWIS,                              ) 

                                               )       No. 6708 - September 14, 2012 

                        Appellee.              ) 


                Appeal from the Superior Court of the State of Alaska, Third 

                Judicial District, Palmer, Vanessa White, Judge. 

                Appearances:      David   A.   Golter,   Golter   &   Logsdon,   P.C., 

                Palmer, for Appellant.      Notice of non-participation filed by 

                Appellee      and   Kenneth     J.   Goldman,     Law     Offices    of 

                Kenneth J. Goldman, Palmer, for Appellee. 

                Before:     Carpeneti,     Chief    Justice,  Fabe,    Winfree,    and 

                Stowers, Justices. 

                FABE, Justice. 


                When Chad and Jessica Lewis divorced, they participated in a settlement 

conference to divide their property.        Following the settlement conference, the superior 

court recited a proposed settlement agreement on the record, and both parties agreed to 

it.  Jessica then filed proposed findings of fact and conclusions of law incorporating 

----------------------- Page 2-----------------------

terms which differed from the agreement as recited by the court.                  The superior court 

accepted   Jessica's   proposed   findings   and   decree   over   Chad's   objection.      Chad   now 

appeals.     Because we conclude that there is no evidence that the parties agreed to the 

terms   set out in   Jessica's   proposal and   because   the   terms   recited   on   the   record   are 

unenforceable, we vacate the superior court's written findings of fact and conclusions 

of law and remand for a new property division. 


                Chad   and   Jessica   Lewis   were   married   in   1997   and   separated   in   2010. 

Jessica filed for divorce shortly thereafter.        The parties came before the superior court 

for   a   settlement   conference   in   July   2011.  There   the   parties   ostensibly   reached   an 

agreement as to the division of their assets and liabilities. 

                Following the agreement, the superior court "[took] a stab at placing [the] 

settlement agreement on the record."   The court noted that the most significant asset, the 

marital residence, was then encumbered with two mortgages:  a Citibank mortgage and 

an Alaska USA home equity line of credit (HELOC).   The court stated that Chad was to 

have the option either to sell the property or to refinance it in an amount that would 

satisfy both the Citibank and HELOC loans and to buy out Jessica's share of the equity. 

If Chad chose to refinance, the court said, Jessica's 

                share of the equity would be defined as fair market value on 

                a re-fi[nance], which the parties stipulate as $175,000, minus 

                the principal balance on the Citibank loan and the HELOC 

                times 50 percent, because she is entitled to half the equity, 

                minus one-half the amount of the principal balance of the 

                HELOC at the time of refinance, plus $4,000 to compensate 

                her for mortgage payments she made post-separation.  The 

                remainder      of  the  equity   would     go  to  Mr.   Lewis    and   is 

                basically    the   same   formula    in  reverse:   fair-market   value 

                minus   the   Citibank   and   the   HELOC, plus   one-half of   the 

                principal    balance    of  the  HELOC       loan   as  of  the  date  of 

                                                   -2-                                             6708

----------------------- Page 3-----------------------

                 refinance,     minus    $4,000     for  the   compensation       for   the 

                 mortgage payments that [Jessica] made post-separation. 

The court then gave both parties an opportunity to object or make corrections to this 

formula, and neither did.       The court asked Jessica's counsel to prepare factual findings 

and a proposed decree memorializing the agreement. 

                 Shortly     after  the   settlement    conference,     Jessica's    counsel    submitted 

proposed findings of fact and conclusions of law.              The proposal described the division 

of the equity in the house as follows: 

                         Jessica Lewis' share of the equity is defined as the [] 

                 fair market value of the home, $175,000, (if refinanced vs. 

                 sold) minus one half (1/2) of the Citimortgage loan and one 

                 half (1/2) of the Alaska USA HELOC at the time of closing. 

                 In   addition,   Chad     Lewis    owes    Jessica   Lewis    $4,000    to 

                 compensate Jessica Lewis for mortgage payments made post 


                         Chad   Lewis'   share   of   the   equity   is   defined   as   fair 

                 market   value   of   the   refinance   minus   one   half   (1/2)   of   the 

                 Citimortgage   loan   and   one   half   (1/2)   of   the   Alaska   USA 

                 HELOC at the time of closing. 

                 Chad filed an objection to the proposed findings and conclusions, arguing 

that   the   agreement   set   out   by   Jessica's   counsel   was   different   from   the   agreement 

memorialized       at   the  settlement   conference.      Specifically,   Chad      argued    that   at   the 

settlement conference, the parties agreed (and the trial court stated on the record) that 

Chad was "to receive one half of the net proceeds after payment of the loans, plus  one 

half of the value of the HELOC loan from [Jessica's] share."                 (Emphasis in original.) 

                 The superior court entered the findings and conclusions as proposed by 

Jessica.    In response to Chad's objection, the superior court noted that it "reject[ed] 

[Chad's] interpretation of the settlement regarding the home. The parties agreed to share 

                                                    -3-                                              6708

----------------------- Page 4-----------------------

equally in the net proceeds (defined as net after refinance or net after sale)."  (Emphasis 

in original.) Chad now appeals. 


              We analyze settlement agreements using traditional contract principles.1 

Whether a party intends to be bound by an agreement is a factual question determined 

by looking at "the surrounding facts and circumstances of each case, and is reviewed 

under the clearly erroneous standard."2    We will find clear error only when we are "left 

with a definite and firm conviction that the trial court has made a mistake."3 


              Chad makes two arguments in this appeal. First, he argues that the superior 

court's findings of fact as to the parties' intended settlement terms were clearly erroneous 

insofar as they were different from the terms recited by the court and agreed to by the 

parties on the record.  He maintains that we should therefore reverse the superior court 

with instructions to enter revised findings in accordance with the recited settlement terms 

to which the parties agreed on the record.    Second and alternatively, Chad argues that 

there was at the very least ambiguity as to the parties' intentions and that the superior 

court erred in failing to hold an evidentiary hearing to determine those intentions once 

it became clear that the parties disagreed as to the terms of their supposed agreement.4 

       1      Crane v. Crane, 986 P.2d 881, 885 (Alaska 1999). 

       2      Juliano v. Angelini , 708 P.2d 1289, 1291 (Alaska 1985) (citing Thrift Shop, 

Inc. v. Alaska Mut. Sav. Bank , 398 P.2d 657, 658-59 (Alaska 1965)). 

       3      Ford v. Ford , 68 P.3d 1258, 1263 (Alaska 2003) (quoting Hamilton v. 

Hamilton , 42 P.3d 1107, 1111 (Alaska 2002)). 

       4      Jessica has not participated in this appeal. 

                                             -4-                                       6708

----------------------- Page 5-----------------------

              If Chad's first argument is correct, and the parties did indeed both agree to 

be bound by the agreement-as-recited, then that original oral agreement controls if it is 

otherwise enforceable.5  If Chad's alternative argument is correct, and the parties did not 

definitively agree on the intended terms, then there has been no meeting of the minds, 

and therefore no contract, and the settlement agreement must therefore be vacated.6 

              "The formation of an express contract requires an offer encompassing its 

essential terms, an unequivocal acceptance of the terms by the offeree, consideration and 

an intent to be bound."7    "Mutual assent is an elementary requirement for a binding 

contract."8  Here the question is whether both parties intended to be bound by the same 

terms.  According to Chad, "the parties' agreement was clearly recited on the record" by 

the trial court, and "[t]he parties verbally agreed to this on the record," and this oral 

recitation of the contract ought to control.   The superior court's oral recitation stated 

"that the HELOC balance would be paid entirely from [Jessica's] share of the proceeds." 

The superior court, however, disagreed with Chad that the parties intended to take the 

       5      See Mullins v. Oates, 179 P.3d 930, 939 (Alaska 2008) ("[U]nannounced 

additions to   settlement agreements . . . are void. . . . The settlement - as originally 

articulated at the settlement conference - remained in effect despite the flawed attempt 

to insert a new term into the final settlement documents.") (citing Adams v. Adams , 89 

P.3d 743, 749 (Alaska 2004) and Pierce v. Pierce , 949 P.2d 498, 500 (Alaska 1997)); 

1 JOSEPH M. PERILLO , CORBIN ON  CONTRACTS  2.9, at 156 (1993) (noting that when 

parties intend a writing to merely memorialize a prior contract, "the contract is valid even 

though they try and fail to agree upon the form and terms of the memorial"). 

       6      See Young v. Hobbs, 916 P.2d 485, 488-89 (Alaska 1996). 

       7      Childs v. Kalgin Island Lodge, 779 P.2d 310, 314 (Alaska 1989) (citing 

Hall v. Add-Ventures, Ltd. , 695 P.2d 1081, 1087 n.9 (Alaska 1985)). 

       8      Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1281 (Alaska 1985) 

(citing State v. Fairbanks N. Star Borough Sch. Dist., 621 P.2d 1329, 1331 n.3 (Alaska 


                                             -5-                                       6708

----------------------- Page 6-----------------------

HELOC out of Jessica's share, finding instead that   the   parties had intended to split 

equally the net proceeds of refinance or sale. 

                 "In   determining   the   parties'   intent,   the   courts   look   first   to   the   parties' 

expressed intentions. 'If their expressions convince the court that they intended to be 

bound without a formal document, their contract is consummated, and the expected 

formal document will be nothing more than a memorial of that contract.' "9 

                 In this case, the only evidence in the record of the parties' intentions is the 

recitation   of   the   settlement   agreement   on   the   record   by   the   trial   court.10 As   Chad 

correctly points out, the terms offered by Jessica's counsel and signed by the superior 

court were different than those recited on the record. The superior court's bare assertion 

that   the   parties   intended    an  agreement      that  was    substantively    different    from   the 

agreement recited on the record is unsupported by any record evidence. 

                 However, contrary to Chad's argument, the agreement as recited by the 

superior court cannot control.        Even if we were to assume that both parties definitively 

manifested an intent to be bound by the agreement as recited, that agreement could not 

control because under its terms, more than 100% of the home's equity is split between 

the   parties.   Using   the   parties'   stipulated   refinance   value   of   $175,000,   the   parties' 

combined equity in the house is roughly $50,000.11                Under the formula recited by the 

        9       Juliano      v.  Angelini ,   708   P.2d    1289,    1291    (Alaska     1985)    (quoting 

1 A. CORBIN , CORBIN ON CONTRACTS  30, at 98-99 (1963)). 

        10       We note that there are several versions of the parties' property division 

spreadsheet in the record.        But spreadsheets that are prepared before the give and take 

of negotiation and after the conclusion of negotiation have, at best, very limited probative 

value in determining what the parties intended at the time negotiations concluded and an 

agreement was ostensibly reached. 

        11       At the time of settlement, the balances remaining on the Citibank mortgage 


                                                    -6-                                              6708

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court, Jessica's share of the equity results in her receiving approximately $19,000 of that 

equity.12 The formula recited by the trial court for Chad's share of the equity, described 

as "basically the same formula [as for Jessica's share] in reverse," yields a value of 

$56,000.13  The court, in other words, awarded the parties a combined $75,000, or 150% 

of the equity of the house.  Because the parties obviously could not have agreed to these 

terms, we conclude that there is no indication in the record before us of a meeting of the 

minds.  And as noted above, the trial court's finding as to the parties' intent is not based 

on any reviewable record. 


              For the foregoing reasons, we VACATE the superior court's order and 

REMAND for a new property division. 


and HELOC were $105,830.90 and $19,863.47, respectively.  For the sake of ease, we 

round these numbers to $105,000 and $20,000. 

       12     ($175,000 [refinance value] - ($105,000 [Citibank mortgage] + $20,000 

[HELOC])) * (1/2) - 1/2($20,000 [HELOC]) + $4,000 = $19,000. 

       13     $175,000 [refinance value] - ($105,000 [Citibank mortgage] + $20,000 

[HELOC]) + 1/2($20,000 [HELOC]) - $4,000 = $56,000. 

                                             -7-                                         6708 

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