Sumerel v. Goodyear Tire & Rubber Co.

232 P.3d 128

Bob SUMEREL; Sallie Sumerel; Steven M. Berzin; Ann C. Berzin; Dane W. Dicke; Kerry S. Dicke; and Bart Kaufman, as trustee for the Grantor Retained Income Trust, Plaintiffs-Appellees,v.GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation, Defendant-Appellant.

No. 07CA2465.

Colorado Court of Appeals Div. VII.

May 28, 2009.

Rehearing Denied July 9, 2009.

Certiorari Dismissed Sept. 28, 2009.

COPYRIGHT MATERIAL OMITTED

Holland & Hart, LLP, Stephen G. Masciocchi, David L. Black, Denver, Colorado; William W. Maywhort, Colorado Springs, Colorado; J. Lee Gray, Greenwood Village, CO, for Plaintiffs-Appellees.

Davis Graham & Stubbs, LLP, Andrew M. Low, Geoffrey C. Klingsporn, Terry R. Miller, Denver, CO, for Defendant-Appellant.

Opinion by Judge GABRIEL.

Defendant, Goodyear Tire & Rubber Company (Goodyear), appeals from the district court's order holding that Goodyear had entered into a valid and enforceable settlement agreement with Bob and Sallie Sumerel, Steven and Ann Berzin, Dane and Kerry Dicke, and Bart Kaufman (collectively plaintiffs). Because we conclude that the November 2, 2006 e-mail and erroneous charts that Goodyear's counsel sent to plaintiffs' counsel did not constitute an offer capable of acceptance, and because even if there were such an offer, any agreement based on it would be unenforceable, we reverse and remand to allow the parties to file a satisfaction of judgment for the amounts already paid by Goodyear.

I. Background

The facts before the district court were largely uncontested, and in the one instance where there was a dispute, the court assumed the truth of the facts as asserted by Goodyear. The undisputed and assumed facts are as follows:

In 2002, plaintiffs and two entities successfully tried a products liability action against Chiles Power Supply Company, which is not a party to this appeal, and Goodyear, which designed and manufactured a defective hose that was installed in plaintiffs' and the two entities' heating systems. After trial, the jury awarded plaintiffs and the two entities approximately $1.3 million against Goodyear, including, as applicable to plaintiffs and the two entities, repair and replacement costs, diminution in value damages, and “other costs and losses” incident to having to repair and replace their heating systems. In addition, the jury found that Goodyear was responsible for 36% of such “other costs and losses” suffered by the Berzins and Dickes and 48% of those incurred by the Sumerels and Mr. Kaufman.

The district court entered judgment on the jury's verdict and awarded prejudgment interest on the repair costs but not on the “other costs and losses” awarded to plaintiffs. Both sides then appealed. Specifically, plaintiffs appealed, among other things, the court's decision not to award prejudgment interest with respect to the “other costs and losses” awarded them. Goodyear appealed, among other things, the award of the “other costs and losses” damages. As pertinent here, a division of this court upheld the award of “other costs and losses” to plaintiffs and further held that plaintiffs were entitled to prejudgment interest on those damages. Sumerel v. Goodyear Tire & Rubber Co., 2005 WL 1476425 (Colo.App. No. 02CA1997, June 23, 2005) (not published pursuant to C.A.R. 35(f) ). The division, however, remanded the case to the district court “to determine from the existing record the proper accrual dates for prejudgment interest on other costs and losses” and to calculate and award such interest. Id.

After the case was remanded, Goodyear's lead attorney, Roger Thomasch of Ballard Spahr Andrews & Ingersoll, LLP, discussed with plaintiffs' lead attorney, William Maywhort of Holland & Hart LLP, a potential compromise on the applicable accrual dates. Thomasch proposed certain accrual dates and advised Maywhort of the amount of prejudgment interest that would result from using these proposed dates. Thomasch's calculation of these amounts took into account the jury's 36% and 48% allocations of fault, and Thomasch expressly conveyed that fact to Maywhort.

Following up on the discussion between Thomasch and Maywhort, co-counsel for plaintiffs, Lee Gray, an associate at Holland & Hart, called Michael Brooks of Wells Anderson & Race, co-counsel for Goodyear. Although the parties appear to have agreed on the applicable accrual dates with little difficulty, they had trouble getting their calculations of prejudgment interest based on these dates to match. Thus, in mid-October 2006, Brooks advised Gray that his calculations showed a total amount owed by Goodyear of approximately $2.7 million. At some point within the following few days, Gray responded that this amount appeared to be larger than his own estimates by “about six figures.” Gray did not elaborate or share any more information regarding his calculations.

After attempting to determine the source of the discrepancy, on October 23, 2006, Brooks called Gray and speculated that the “six-figure” discrepancy may have resulted from a failure by plaintiffs to include in their calculations the full amount of post-judgment interest applicable to Mr. Kaufman, who had been awarded additional sums as a result of the prior appeal. Gray responded, “[T]hat could be it,” “[T]hat might be it,” or words to that effect. Brooks took from Gray's response that Gray either agreed or had no basis to disagree that Brooks had found the source of the discrepancy, although the parties had not yet exchanged their respective calculations. Without Gray's calculations, Brooks could not be sure whether he had, in fact, resolved the discrepancy.

Believing that he may have discovered the source of the discrepancy, however, on November 2, 2006, Brooks sent Gray an e-mail, stating, “Here are our charts providing the numers [sic] that Goodyear believes are appropriate.... Please review these, then let's discuss.” Attached to this e-mail were charts that reflected Goodyear's then existing calculations as to the total amounts due to each plaintiff.

After reviewing these charts, Maywhort noticed that Goodyear's calculations did not agree with plaintiffs' numbers. Moreover, as plaintiffs concede, plaintiffs' counsel recognized that Goodyear's calculations had failed to reduce the damages for “other costs and losses” according to the jury's finding that Goodyear was only liable for 36% of the Berzins' and Dickes' and 48% of the Sumerels' and Mr. Kaufman's “other costs and losses.” Instead, Goodyear's calculations were erroneously based on an allocation of 100% of those costs and losses to Goodyear. This was in contrast to other categories of damages set forth in Goodyear's charts, in which Goodyear had correctly applied the jury's fault allocations. Goodyear's error resulted in an overstatement of the damages due by more than $550,000.

Plaintiffs' counsel did not call this obvious error to Brooks's attention or to the attention of any other representative of Goodyear. Instead, Maywhort later claimed that he and his firm had surmised that since Goodyear alone had invited the jury to award “other costs and losses,” Goodyear may have concluded that it was solely responsible for any such damages awarded. Maywhort took this position even though (1) the parties had tried the allocation of fault issue and the jury had allocated only 36% and 48% of such losses to Goodyear, and (2) Maywhort had previously discussed prejudgment interest calculations with Thomasch, Thomasch provided calculations that were based on the correct allocated fault percentages, and Thomasch called these allocations to Maywhort's attention.

Gray, in contrast, attributed the more than $550,000 overstatement of damages to a possible desire on Goodyear's part to “sweeten the pot.” As noted above, however, the jury had already determined liability, and the record shows that the parties were not negotiating the amounts due but rather were attempting to determine why there was a discrepancy in their mathematical calculations. Accordingly, the record belies the existence of any pot to be sweetened.

Ultimately, neither Gray nor any of plaintiffs' co-counsel called Brooks to discuss his charts, as Brooks had requested. Rather, Maywhort, who had not been directly involved in the more recent discussions regarding the calculations, left a voicemail message for Thomasch, who also had not been directly involved, stating that plaintiffs accepted Goodyear's November 2, 2006 “offer.” Maywhort then followed his voicemail with a fax confirming plaintiffs' acceptance of that purported “offer.” Notably, neither Maywhort nor Gray informed Brooks of plaintiffs' “acceptance,” nor was Brooks copied on Maywhort's fax to Thomasch.

Thereafter, Brooks and Gray discussed, among other things, whether the parties needed a settlement agreement or release, or whether a satisfaction of judgment would suffice to conclude the case. They agreed on the latter, and Brooks prepared a form of satisfaction of judgment that he sent to Gray on November 16, 2006, with a notation that the document was a draft for discussion purposes only. That same day, before anyone had signed the satisfaction of judgment, Brooks realized the error in his earlier calculations. He immediately called the error to Gray's attention and sent Gray corrected versions of the charts and a revised satisfaction of judgment with corrected numbers.

Rather than acknowledging the error, signing the revised satisfaction, and concluding the action for the amounts actually awarded by the jury, Gray indicated that he needed to consult with his colleagues and would get back to Brooks. Then, on November 21, 2006, Maywhort wrote Brooks and demanded that Goodyear adhere to the parties' alleged agreement, which would have resulted in plaintiffs' receiving over $550,000 more than what was due them. When Goodyear refused to do so, plaintiffs filed a motion to enforce the purported “settlement agreement.” The district court granted plaintiffs' motion, and Goodyear now...