Contracts Enforceability

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WI Court of Appeals – District I

Case Name: Richard A. Mueller v. TL90108, LLC

Case No.: 2022AP001440

Officials: White, C.J., Donald, P.J., and Geenen, J.

Focus: Contracts Enforceability

The Wisconsin Court of Appeals affirmed a lower court’s decision refusing to enforce a settlement agreement between Richard A. Mueller, Joseph L. Ford III, and TL90108, LLC, over the ownership of a rare Talbot Lago automobile. The car, missing since 2001, resurfaced in 2015 when TL attempted to title it, triggering a stolen vehicle alert. Mueller and Ford, claiming ownership, sued TL for replevin and a declaration of ownership. TL’s motion to dismiss was initially granted but reversed on appeal.

A mediation on October 29, 2021, resulted in a Settlement-in-Principal Term Sheet (SIP), outlining financial terms and provisions for releases and dismissal of claims, including confidentiality and non-disparagement clauses. Despite subsequent mediation sessions and drafts, disputes arose over these terms. In June 2022, the mediator, Judge David E. Jones, submitted final settlement documents, which Mueller and Ford refused to sign. TL moved to enforce the SIP, claiming it was enforceable on its own and that Judge Jones had the authority to finalize the settlement documents. Mueller and Ford cross-moved to declare the SIP unenforceable.

The circuit court ruled the SIP unenforceable due to the indefinite nature of the confidentiality and non-disparagement terms, which lacked clear parameters. The court also found that Judge Jones lacked authority to finalize the settlement documents, as his role was limited to resolving disputes over the final agreement, not the SIP itself.

On appeal, TL argued that the terms were sufficiently definite and that Judge Jones had the necessary authority. The Court of Appeals disagreed, affirming that the indefinite terms prevented the SIP from being an enforceable contract and that Judge Jones’s authority did not extend to resolving disputes about the SIP. The court referenced a similar case, Ponfil Trust, where vague terms in a mediation agreement prevented enforceability.

The decision emphasized that enforceable contracts must have definite and certain terms and that mediator authority is limited to resolving disputes within the scope defined by the agreement.

Affirmed.

Decided 06/11/24

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