Paul R. Ponfil Trust, Plaintiff-Respondent,
Charmoli Holdings, LLC, Defendant-Appellant, ABC Company, Defendant.
from an order of the circuit court for Ozaukee County: No.
2016CV429 SANDY A. WILLIAMS, Judge.
Neubauer, C.J., Reilly, P.J., and Gundrum, J.
This case addresses the enforceability of a purported
settlement agreement entered into by the parties at the end
of mediation, in which the parties agreed to sign a separate
"substantive agreement" that would address
"such things" as liability and indemnity in
"usual form." The circuit court found that the
agreement was binding, while acknowledging that the
additional terms remained to be agreed upon. The settlement
agreement is unenforceable as it lacks agreement on material
terms. We reverse and remand.
Charmoli Holdings, LLC (Charmoli), and the Paul R. Ponfil
Trust (the Trust) jointly own property with a quarry, which
an affiliated entity previously operated, in Cedarburg,
Wisconsin. The Trust filed this action in November 2016.
During a mediation session on February 6, 2018, the parties
prepared and signed a handwritten one-page document captioned
"Mediation Settlement Agreement" (the Agreement).
The opening line of the Agreement states: "This Case Is
Settled In Full As Follows:" The parties then set forth
five paragraphs of terms, including (1) Charmoli's
payment of $500,000 to the Trust within thirty days, (2) the
Trust's quitclaim of its interest in one forty-acre
parcel to Charmoli, (3) Charmoli's quitclaim in another
forty-acre parcel to the Trust, and (4) dismissal of the
lawsuit upon the payment and conveyances. In the fifth
paragraph (Paragraph 5) the parties " agree[d] to sign a
separate substantive agreement covering such things as
liability & indemnity in usual form."
The Trust provided a first draft of an agreement to address
Paragraph 5. The draft provided as follows:
This Agreement is intended to incorporate the Mediation
Agreement, identify the terms of resolution, and to allow for
the resolution and satisfaction of any and all claims between
them and do so to the extent such claims were asserted within
or outside the Lawsuit, as described below, subject to the
rights and obligations that survive this agreement.
The Trust's draft agreement provided a lengthy and
involved indemnity/hold harmless provision, which noted that
the property at issue is "the subject of operations that
include but are not limited to the deposit of materials from
outside sources, with such deposits commonly referred to as
fill," which activities have been taking place "for
an extended time period" and "are expected to
continue in the future." The draft addressed the scope
as to persons and entities, past and future activities,
claims related to the fill materials, and detailed the scope
of the indemnity and hold harmless agreement. It addressed a
mutual release. The draft addressed affiliated entities,
including R&R Excavating and Bulldozing and the R&R
Liquidating Trust. The draft also included an integration
clause, proposing to supersede all prior agreements,
including the Agreement.
Charmoli responded with its own version. Charmoli revised the
scope and substance of the indemnity, with an environmental
indemnity clause, hold harmless provision, financial
limitations as to indemnity, aggregate liability, claims
procedures, a cooperation clause, and the control and defense
of indemnity claims. The scope of the environmental issues
was addressed with multiple definitions, such as definitions
of "Clean-up," "Contaminants,"
"Environmental Laws," "Low Hazard
Exemption," "Regulatory Actions," as were the
scope of "Indemnitees," "Indemnitors,"
and "Third Party Claims."
The Trust responded with another draft, which now provided
that the "Mediation Agreement and this Agreement
represent the entire agreement between the Parties."
Ultimately, despite many communications between the parties,
no agreement was reached on "such things as liability
& indemnity in usual form."
The Trust filed a motion seeking to compel enforcement of the
Agreement under Wis. Stat. § 807.05
(2017-18). The Trust asked the circuit court to draft
a release and indemnification in "usual form,"
requesting the court to "adopt the construction which
will result in a reasonable, fair ...