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Stephens v. Jessup

United States District Court, W.D. Arkansas, Hot Springs Division

January 3, 2019



          Susan O. Hickey United States District Judge

         Before the Court is a Motion to Enforce Settlement filed by Defendant Leslie Jessup. ECF No. 76. Plaintiff Donald Stephens has responded. ECF. No. 77. This matter is ripe for the Court’s consideration.


         This action arises out of an incident in which Plaintiff Donald Stephens was accused of theft at Oaklawn Jockey Club in Hot Springs, Arkansas, and detained by Defendant Leslie Jessup. Stephens filed the present action against Jessup,[1] alleging the following causes of action: false imprisonment, conversion, defamation, violation of civil rights, and intentional infliction of emotional distress. Jessup claims that the parties reached an oral agreement to settle this matter but that Stephens refuses to honor the agreement.

         Jessup’s counsel, Jim Simpson, asserts that, during a telephone call with Stephens’s counsel, Maximillan Sprinkle, Simpson offered to settle this lawsuit for $6,000.00. Sprinkle replied that he needed to speak with Stephens about the offer. On the morning of November 20, 2018, Simpson called Sprinkle to inquire about the status of the settlement offer. Sprinkle stated that Stephens had rejected the offer. In response, Simpson asked if there was a counteroffer, and Sprinkle stated that it would take $20,000.00 to settle the case. Simpson asked Sprinkle to confirm that Stephens was making an offer to settle the lawsuit in full for $20,000.00. Sprinkle confirmed, and Simpson responded “we accept,” apparently arriving at an oral agreement. Simpson and Sprinkle then discussed settlement documents, and Simpson agreed to draft and file the documents with the Court.

         Later that same day, Sprinkle called Simpson and expressed that Stephens was unhappy with the settlement and wanted to increase the agreed upon settlement amount. Simpson refused to increase the settlement amount on behalf of Jessup, and no settlement documents have been filed with the Court. According to Simpson, Stephens has failed to abide by the terms of the settlement agreement by refusing to accept the settlement amount and dismiss the case.


         Basic principles of contract formation govern the existence and enforcement of settlement agreements. Chaganti & Assoc., P.C. v. Nowotny, 470 F.3d 1215, 1221 (8th Cir. 2006) (citing In re Airline Ticket Comm’n Antitrust Litig., 268 F.3d 619, 623 (8th Cir. 2001)). “Courts will enforce contracts of settlement if they are not in contravention of law.” DaimlerChrysler Corp. v. Smelser, 289 S.W.3d 466, 470 (Ark. 2008) (citing McCoy Farms, Inc. v. J & M McKee, 563 S.W.2d 409 (1978)). “The essential elements of a contract include (1) competent parties, (2) subject matter, (3) legal consideration, (4) mutual agreement, and (5) mutual obligations.” Id. (citing Ward v. Williams, 118 S.W.3d 513, 521 (Ark. 2003)). A court should keep in mind two legal principles when deciding whether a valid contract was entered into: (1) a court cannot make a contract for the parties but can only construe and enforce the contract that they have made; and (2) to make a contract there must be a meeting of the minds as to all terms, using objective indicators. Id. (citing Alltel Corp. v. Sumner, 203 S.W.3d 77, 80 (Ark. 2005)). Further, a party to a voluntary settlement agreement cannot avoid the agreement simply because the agreement ultimately proves to be disadvantageous or because he later feels that the amount of the settlement is unsatisfactory. Worthy v. McKesson Corp., 756 F.2d 1370, 1373 (8th Cir. 1985) (citing Trnka v. Elanco Prods. Co., 709 F.2d 1223, 1227 (8th Cir.1983)); Rutherford v. Rutherford, 98 S.W.3d 842, 845 (Ark. App. 2003) (“One party’s displeasure with an agreement that she had previously entered into is no ground for relief.”).


         In the present case, Stephens does not dispute the existence or terms of the settlement agreement.[2] Stephens also does not dispute the facts surrounding the settlement negotiations as set forth by Jessup. Simpson explicitly asked Sprinkle if Stephens was offering to settle this lawsuit for $20,000.00. Sprinkle confirmed and Simpson accepted on behalf of Jessup. There is no dispute that the parties’ attorneys came to a mutual understanding that Stephens would dismiss this matter for the sum of $20,000.00.[3] Stephens makes no argument and there is no evidence in the record that any of the essential elements of a contract are missing with respect to the settlement agreement. Thus, the Court finds that a valid and enforceable oral settlement contract was formed.

         It appears that Stephens is attempting to avoid being bound by the oral agreement to settle and dismiss all claims against Jessup for $20,000.00 because Stephens now believes the sum to be inadequate. However, as discussed above, this is not a lawful reason for Stephens to avoid the agreement. See Visiting Nurse Ass’n, St. Louis v. VNAHealthcare, Inc., 347 F.3d 1052, 1055 (8th Cir. 2003) (citing Worthy v. McKesson Corp., 756 F.2d 1370, 1373 (8th Cir.1985)) (“[T]he fact that a party decides after the fact that a contract is not to its liking does not provide a reason to suppose that a contract was not in fact formed or to release that party from its obligation.”). Accordingly, the Court finds that the Motion to Enforce Settlement should be granted.


         For the reasons stated above, the Court finds that Defendant Leslie Jessup’s Motion to Enforce Settlement (ECF No. 76) should be and hereby is GRANTED. The terms of the oral settlement agreement shall be enforced. Jessup is directed to deliver to Stephens the settlement check on or before January 11, 2019. It is further ordered that this case is DISMISSED WITH PREJUDICE. The Court retains jurisdiction to vacate this order and ...

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