In this special action the Court of Appeals thinks it has found a new wrinkle in the law of contracts.

Perry sued Bennett (Ronan was the trial court judge). At mediation, Perry agreed to settle for $400,000 but Bennett didn’t. Bennett later told his lawyer to tell the mediator that he would pay that after all if Perry agreed to the settlement by a certain date, which was five days later. The lawyer told the mediator of Bennett’s change of heart but for some reason didn’t mention the deadline. By the time the mediator told Perry’s lawyers that Bennett would pay the money – to which Perry promptly agreed – the deadline had passed. Bennett refused to settle.

Perry moved to enforce the “settlement agreement.” The trial court denied the motion and set the case for trial. Perry took special action, which the court accepted on the grounds that this is an issue of first impression and of statewide importance.

Perry relied on Restatement (Second) of Contracts §49, which says that when communication of an offer is delayed, “if the delay is due to the fault of the offeror or to the means of transmission adopted by him, and the offeree neither knows nor has reason to know that there has been delay, a contract can be created by acceptance within the period which would have been permissible if the offer had been dispatched at the time that its arrival seems to indicate.” That means, says the court, that acceptance after a deadline is possible if the offer is delayed. Perry therefore had five days to accept the offer, its acceptance was within that period, so there was a settlement contract.

Perhaps. That does, though, assume the conclusion. It also changes the facts. Bennett didn’t say “five days”; he said acceptance had to be made by a certain date. What if he actually meant it? What if, for example, he had a deadline of his own from other creditors and after Perry’s deadline passed had to pay all his money to someone else? Would that make a difference? Not to this court’s reasoning.

The court admits that neither of the only two other cases that cite §49 apply it as this opinion does. One case held that §49 didn’t apply because the offeree knew of the delay (the postmark on the offer letter told him).  In the other case, an offeror delivered an offer to the offeree after the deadline stated in the offer; the court ruled that by doing so the offeror waived it. Restatement §49, it said, applies only when the offer is made late but within the deadline (so that, for example, if the offer says “five days” and the offeree doesn’t get it until the fourth day but for some reason doesn’t know there has been a delay, the offeree still has five days). Our Court of Appeals thinks that the language of the section doesn’t say that – in which event it thinks that one can “extend” a deadline that has already passed, a position another court would not have been unreasonable to doubt.

This court also thinks it would be unfair if Bennett could refuse the settlement because he would then be able to negotiate further, knowing that Perry would settle for $400,000. But Bennett already knew that; he learned it at the arbitration. And how is that unfair? As far as these facts show, Perry would have settled for $300,000, or $200,000, or fifty cents. Doesn’t a factual conclusion require facts?

Bennett, according to the court, didn’t brief §49. So, the court accepted special action on an issue of first impression (viz., §49) and of statewide importance based on incomplete briefing. The court points out in a footnote that it could consider Bennett as having confessed error “but we decline to do so.” How magnanimous of it, not to decide an issue of first impression and of statewide importance by default. Now, you obviously shouldn’t be able to block your opponent’s special action by the simple expedient of not briefing the issues. But the court was really reaching to take this, and clearly did so because it thought it saw an easy solution that would make some law along the way.

What did Bennet brief instead? The question of authority. His argument (reading between the lines a bit) was that he never gave anyone actual authority, and no one had apparent authority, to settle the case after the deadline. The court mentions in a footnote that it need not address that argument because §49 solves the case.

But does it? Why didn’t Bennett brief §49? Well, we can only assume. We assume his lawyer realized that authority was the anterior question. §49 says nothing of authority (about which the Restatement is elsewhere quite specific). How does delay create authority or apparent authority? If there is an answer to that question then it was incumbent on this court to explain it – because if there isn’t, this whole thing is wrong.

(link to opinion)

This is a debate about what had been a settled point regarding attorneys fees on appeal.

The opinion affirms the denial of a motion to set aside a default judgment. That part is of no interest or importance. The opinion is published because the dissent wants to vent about attorneys fees. (The rule about publishing only the publishable part apparently doesn’t apply when its only a dissent that raises something publishable. But we don’t like that rule anyway, so we’re not complaining.)

Ezell, the winning party, asked for fees on appeal but cited no authority for it. That has happened many times before and the courts routinely deny the request, in a sentence or two, for that reason. This court does so, too. But Judge Gemmill must have had an epiphany, or woke up on the other side of the bed that morning, or really doesn’t like Mr. Quon, or something.

He dissents, arguing that ARCAP 21(c)(1) – request for fees to be made in the brief – doesn’t specifically require a statement of a basis for them. Requiring a basis is a “trap” for the “unwary.” If the basis for fees is “readily ascertainable” – i.e., if the party mentioned it in the court below, as Ezell had – then the court should consider it, among other “factors” such as whether the trial court awarded fees. Anything else is a “mechanical approach.”

The majority’s position is in essence that Rule 21 is a procedural rule; it governs when to say something, not what to say. The majority cites a dozen cases in the last fifteen years or so that required a statement of the basis for fees; the Appellate Handbook and Attorneys’ Fee Manual also state the requirement. And the majority politely suggests that there is a difference between the “unwary” lawyer who falls into “trap” and one who just hasn’t paid attention.

The majority fails to appreciate that paying attention can be so drearily mechanical, far less artistic than making a basic mistake and then convincing a judge to feel sorry for you that you made it.

The dissent agrees, though,  that requiring an explanation of the basis for fees would be a good idea. In a footnote, it says “a rule change is respectfully suggested” to include the requirement specifically. Supreme Court Rule 28 explains how to go about requesting a rule change; mysteriously, it doesn’t include making footnotes in dissents. Perhaps that’s another thing that people are “unwary” of. Or perhaps the rules apply only to mere lawyers.

(link to opinion)