Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions


Touch N' Go
®, the DeskTop In-and-Out Board makes your office run smoother.

 

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 . 

        Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 

        303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email 

        corrections@appellate.courts.state.ak.us. 



                THE SUPREME COURT OF THE STATE OF ALASKA 



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. 



I.      INTRODUCTION 



                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. 



II.     FACTS AND PROCEEDINGS 



                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 

                 separation. 



                         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. 



III.   STANDARD OF REVIEW 

              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 



IV.    DISCUSSION 



              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 

1981)). 



                                             -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 



                                                                                           (continued...) 



                                                    -6-                                              6708
 


----------------------- Page 7-----------------------

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. 



V.     CONCLUSION 



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



REMAND for a new property division. 



       11(...continued) 



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 

Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous


IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC