                              UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                              No. 12-2232


STANLEY MARVIN CAMPBELL, Trustee        in   Bankruptcy   for   ESA
Environmental Specialists, Inc.,

                Plaintiff,

          and

PROSPECT CAPITAL CORPORATION,

                Plaintiff - Appellant,

          v.

ADKISSON, SHERBERT & ASSOCIATES,

                Defendant - Appellee,

          and

NATHAN M. BENDER; HOULIHAN SMITH & COMPANY, INC.; CHARLES J.
COLE; JACOB COLE; SANDRA DEE COLE; DAVID C. EPPLING; MICHAEL
ANTHONY HABOWSKI; TRACEY HAWLEY; JOHN M. MITCHELL; DENNIS M.
MOLESEVICH; HOULIHAN SMITH; SHELTON SMITH; SUNTRUST BANKS,
INC.; CHERRY BEKAERT AND HOLLAND LLP; ELLIOT & WARREN;
CHESTER J. BANULL,

                Defendants.



                              No. 12-2264


STANLEY MARVIN CAMPBELL, Trustee        in   Bankruptcy   for   ESA
Environmental Specialists, Inc.,

                Plaintiff,
           and

PROSPECT CAPITAL CORPORATION,

                 Plaintiff – Appellee,

           v.

ADKISSON, SHERBERT & ASSOCIATES,

                 Defendant – Appellant,

           and

NATHAN M. BENDER; HOULIHAN SMITH & COMPANY, INC.; CHARLES J.
COLE; JACOB COLE; SANDRA DEE COLE; DAVID C. EPPLING; MICHAEL
ANTHONY HABOWSKI; TRACEY HAWLEY; JOHN M. MITCHELL; DENNIS M.
MOLESEVICH; HOULIHAN SMITH; SHELTON SMITH; SUNTRUST BANKS,
INC.; CHERRY BEKAERT AND HOLLAND LLP; ELLIOT & WARREN;
CHESTER J. BANULL,

                 Defendants.



Appeals from the United States District Court for the Western
District of North Carolina, at Charlotte. Max O. Cogburn, Jr.,
District Judge.   (3:09-cv-00465-MOC-DCK; 3:09-cv-00546-MOC-DCK;
3:07-bk-31532)


Argued:   September 19, 2013              Decided:   November 7, 2013


Before AGEE, DAVIS, and DIAZ, Circuit Judges.


No. 12-2232 affirmed; No. 12-2264 dismissed by unpublished
opinion.   Judge Davis wrote the opinion, in which Judge Diaz
joined.   Judge Agee wrote a separate opinion concurring in the
judgment.


ARGUED: Karl Christopher Huth, IV, PROSPECT ADMINISTRATION, LLC,
New York, New York, for Prospect Capital Corporation. Frederick
Kingsley Sharpless, SHARPLESS & STAVOLA, PA, Greensboro, North
Carolina, for Adkisson, Sherbert & Associates. ON BRIEF: Robert

                                   2
C. Bowers, MOORE & VAN ALLEN, PLLC, Charlotte, North Carolina,
for Prospect Capital Corporation.


Unpublished opinions are not binding precedent in this circuit.




                                3
DAVIS, Circuit Judge:

     Prospect Capital Corporation (“Prospect”), a New York-based

private equity firm, made a substantial commercial loan to ESA

Environmental         Specialists,         Inc.       (“ESA”),     a     Charlotte,        North

Carolina-based            environmental       and      industrial      engineering         firm.

Thereafter, ESA’s financial condition deteriorated rapidly and

it filed       a    voluntary       Chapter      11    petition     in    bankruptcy;       the

Chapter 11 case was soon converted to a Chapter 7 liquidation. 1

     Prospect,            alleging    gross      misconduct      by    the     officers      and

directors of ESA and several others, filed suit in the United

States    District         Court     for   the       Southern    District      of    New    York

against    a       host    of   defendants,          including     Adkisson     Sherbert       &

Associates (“ASA”), ESA’s North Carolina accounting and auditing

firm, against which Prospect asserted claims for professional

negligence. The case was transferred to the federal district

court for the Western District of North Carolina, where the ESA

bankruptcy was pending.

     In    the      North       Carolina    district       court,      Prospect       and    ASA

entered    into      settlement        negotiations        by    telephone       and    email.

After     their           counsel     exchanged          several       draft        settlement

     1
        In Campbell v. Hanover Ins. Co. (In re ESA Envtl.
Specialists, Inc.), 709 F.3d 388 (4th Cir. 2013), we considered
issues unrelated to those presented here arising out of the ESA
bankruptcy.




                                                 4
agreements, Prospect refused to sign. This prompted ASA to move

the court to enforce an alleged oral settlement agreement, and

for an order of dismissal and an award of attorney’s fees.

      After conducting an evidentiary hearing, the district court

rendered findings of fact and conclusions of law, holding that

(1) the parties had indeed reached a binding and enforceable

oral settlement agreement, and (2) Prospect had not proceeded in

bad faith such that an award of attorney’s fees was warranted.

The district court refused to dismiss Prospect’s claims but it

did certify its order for immediate appeal. Prospect filed a

timely appeal from the district court’s order, and ASA timely

filed a protective cross-appeal.

      Upon   our     review     of    the     district    court’s        findings      and

conclusions, we discern no clear error or abuse of discretion

warranting     the      reversal      of    the    district      court's     judgment.

Accordingly,       we   affirm       the    judgment     of   the    district       court

enforcing    the     parties’    agreement,        and   we   dismiss      the    cross-

appeal.

                                            I.

      Prospect     loaned     more     than      $12   million      to   ESA.     In   its

capacity as ESA’s accounting firm, ASA had provided financial

information to Prospect in connection with the loan. Among other

claims against numerous parties, Prospect sued ASA alleging that

ASA   negligently       provided      inaccurate       information        about    ESA’s

                                             5
financial status. On September 2, 2011, after the transfer of

the case to the Western District of North Carolina, the district

court     ruled     that    Prospect’s         complaint       failed        to     allege

sufficient facts to state a claim against ASA but it granted

Prospect    leave     to    file   an     amended         complaint.      The     district

court’s    order     also    encouraged        the    parties        to   “discuss      an

amicable resolution” of the action. J.A. 134. 2

     A little over a week later, Prospect’s counsel, H. Marc

Tepper, Esq., contacted ASA’s counsel, Rich Sharpless, Esq., and

requested ASA’s consent to a motion for an extension of time for

Prospect to file its amended complaint. In the request, Tepper

indicated that the parties could “utilize this time to place all

our efforts toward reaching a settlement rather than the ongoing

expense    of     litigation.”     J.A.    612.      On    October     10,      2011,   the

parties’ attorneys discussed the possibility of a settlement and

agreed to consult with their respective clients.

     Prospect filed a Second Amended Complaint on October 14,

2011. Shortly afterwards, Sharpless asked Tepper to agree to an


     2
       Citations to “J.A. ---” are to the Joint Appendix filed by
the parties to this appeal. Volume II of the Joint Appendix,
consisting of pages 354 through 662, are under seal, in keeping
with the agreed Confidentiality Order entered by the district
court during proceedings in that court on the motion to enforce
settlement agreement. From time to time in this opinion, we
quote from the sealed Joint Appendix to portions of the record
that do not disclose confidential matters.



                                           6
extension      of   time       for   ASA    to        respond    to   the    Second     Amended

Complaint.      Tepper         agreed,      but       stated     that     the      consent   was

“contingent on our furthering our settlement discussions.” J.A.

613.

       In due course, ASA filed a motion to dismiss the Second

Amended Complaint, and Tepper sent an email to Sharpless on or

about November 1, 2011, inquiring into the status of settlement

efforts.      After       an     exchange         of     correspondence            as   to   the

settlement amount, the parties agreed over the telephone that

ASA and Cherry Bekaert & Holland (“CBH”) 3, a second CPA firm that

Prospect was proceeding against in North Carolina state court on

similar      claims,      would      each     pay       Prospect      a     sum    certain    in

exchange      for     a    dismissal         of        the      action      with    prejudice.

Specifically, as the district court later found, Sharpless and

Tepper spoke on November 22, 2011, and agreed to settle the

litigation on the following material and essential terms:

       1) ASA would pay Prospect a sum certain;

       2) Prospect would file a dismissal with prejudice of
       all claims against ASA;

       3) Prospect would release ASA from any and all claims
       it might have against ASA;

       4) The terms of the settlement would be confidential;

       5) The parties would bear their own costs.


       3
           ASA’s counsel, Sharpless, was counsel to CBH as well.



                                                  7
See J.A. 608, 614, 654.

      Also on or about November 22, 2011, Prospect filed a motion

for   an   extension      of    time     to    respond     to    ASA’s    still-pending

motion to dismiss. Prospect informed the court that “Prospect

and ASA (collectively the ‘Settling Parties’) have agreed to the

principal      terms      of     a     settlement        agreement,           but       require

additional time to complete the drafting and execution of the

settlement agreement.” J.A. 287. Prospect also stated that the

“Settling      Parties      negotiated            the    material       terms           of    the

settlement . . .” Id. The court granted the motion.

      On November 29, 2011, Sharpless emailed Tepper confirming

the   terms    of   the    agreement.         Tepper     replied    to    Sharpless             on

December 1, 2011 with a draft Confidential Settlement Agreement.

The   draft    contained       the   same      terms     that    were    in    Sharpless’s

November      29,   2011,       email,        and     included     additional            terms.

Ultimately, the parties exchanged a total of six drafts of the

document      between     December       1,       2011   and     December       15,          2011.

Prospect      had   included         New       York      choice-of-law          and          venue

provisions in the written agreement sent to ASA on December 1,

2011. ASA objected to those clauses and replaced them with North

Carolina choice-of-law and venue provisions, to which Prospect

raised no objection. Also, each of the drafts contained merger

and integration clauses and stated that no agreement would be

binding    until    both       parties     executed       and    delivered          a    signed

                                              8
agreement. ASA proposed a few revisions to the additional terms,

but   never      objected   to    the    merger   and       integration    clause   or

execution and delivery requirements.

      On    December     15,     2011,    Tepper,      on    behalf   of   Prospect,

emailed a “final” revised copy of the Confidential Settlement

Agreement to Sharpless, asking him to “Please sign and return.”

J.A. 615. On December 19, 2011, Sharpless asked Tepper for the

Tax Identification Number of Tepper’s law firm so that ASA could

issue a check for the settlement amount. Tepper emailed the Tax

Identification Number to Sharpless the same day. Two days later,

Sharpless, on behalf of ASA, emailed an executed copy of the

written agreement to Tepper. On December 28, 2011, Sharpless

mailed the settlement check to Tepper.

      The next day, December 29, 2011, Prospect filed a second

motion     for    an   extension    of    time    to   oppose    ASA’s     motion   to

dismiss. Therein, Prospect represented to the court that:

           2.    Prospect and ASA          (collectively the ‘Settling
      Parties’) have agreed to              the principal terms of a
      settlement agreement, but            require additional time to
      complete the drafting and            execution of the settlement
      agreement.

              . . .

           5.   The Settling Parties have concluded their
      settlement negotiations and now need to fully execute
      the Settlement Agreement.

           6.   Due to the holidays, no individual with
      authority to sign on behalf of Prospect will be
      available to execute the Settlement Agreement prior to


                                           9
      the January 3, 2012, deadline               to     respond   to   ASA’s
      Renewed Motion to Dismiss.

           7.   Accordingly and for the forgoing reasons,
      Prospect respectfully requests a ten-day extension of
      the January 3, 2012 deadline for Prospect to execute
      the Settlement Agreement and discontinue this action.

J.A. 290-91. The court granted the motion.

      Alas, the new year brought a refusal by Prospect to execute

the Confidential Settlement Agreement. Specifically, on or about

January   17,   2012,       Tepper    returned     the    settlement       check   to

Sharpless with correspondence stating, in part, that “Prospect

Capital Corporation has not authorized me to hold on to the

settlement check as its agent and has further authorized me to

inform you that it will not be executing a settlement Agreement

or directing our office to file a Stipulation of Dismissal as to

your client.” J.A. 641.

      On March 30, 2012, ASA filed a motion (1) to enforce what

it alleged was a binding oral agreement reached on November 22,

2011, and (2) to dismiss the case and for an award of attorney’s

fees. Meanwhile, CBH (the other accounting firm represented by

Sharpless in connection with the settlement negotiations) filed

a   similar   motion   to    enforce     the    settlement    agreement      in    the

state court litigation, but the state court apparently denied

CBH’s motion. But see infra pp. 20-21.

      On August 15, 2012, the district court held an evidentiary

hearing   during   which      it     heard    testimony    from    ASA’s    counsel,

                                         10
Prospect’s counsel, and Prospect’s corporate representative. 4 On

August 30, 2012, the district court granted in part ASA’s motion

to enforce settlement agreement and ordered the parties to file

a notice of settlement within 30 days. The court reasoned that

ASA   “produced    considerable    evidence”     that    demonstrated      an

enforceable agreement. J.A. 658. According to the court, this

included   several    months’   emails   indicating     that    the    parties

continued to iron out a final agreement but that the material

terms,    including   payment   price    and   costs    per    side,   mutual

releases, and a confidentiality requirement, were settled during

the November 22, 2011 telephone call. 5 See supra p. 7.

      Addressing   Prospect’s    contentions    that    the    choice-of-law

and venue provisions were outstanding material terms at the time

of the November 22, 2011 call, the court found that Prospect’s


      4
       At a preliminary status hearing held on June 20, 2012, in
response to the district court’s inquiry into what happened to
cause the settlement efforts to break down, Prospect’s new
attorney, Karl Huth, Esq., stated “[t]he problem is senior
management thinks this case is worth a lot more than this
proposal would have been worth.” J.A. 339.
      5
       In the proceedings before the district court, although
Prospect did not concede Tepper’s authority, it expressly and
indeed, emphatically, disclaimed reliance on any argument that
Tepper lacked actual authority to settle the case and bind
Prospect. See J.A. 465 (“I’m saying we have not contended that
he did not have authority to settle this case and that’s not an
issue before this court . . . . Prospect has made it clear
throughout the briefing that what we are contesting is whether
an agreement was ever formed. We are not contesting Mr. Tepper’s
authority . . . .”).


                                   11
counsel “willingly agreed to ASA’s revision that North Carolina

law be applicable without additional consideration from ASA.”

J.A. 658. Prospect’s willingness to accept ASA’s revision to

that term, without demanding additional consideration, indicated

to the court that, from Prospect’s perspective, the choice-of-

law and venue provisions were not material terms.

       The    court       also      found     that,    based          on    the       emails     and

counsel’s testimony, Prospect’s management did not learn of the

terms of the agreement until after ASA emailed the Confidential

Settlement Agreement and mailed the check for full payment. It

was    at    that    time    that     Prospect’s       management           refused      to    give

assent       to     the     terms      of    the     agreement,            specifically          the

settlement          amount.      The        court     concluded            that       “Prospect’s

dissatisfaction with the settlement amount, however, is simply a

risk of litigation and the nature of its investment business.

Indeed, it appears that Prospect had ‘second thoughts,’ which

are insufficient to set aside the remaining agreement.” J.A.

659.

       The    court       further      found        that     Prospect           was    judicially

estopped from denying the existence of an agreement after it

represented         to    the    court       that     the     parties           had    reached     a

settlement. The court held that for Prospect to now ask ASA to

“begin      its   settlement        negotiations           anew   .    .    .    would    clearly

impose a detriment upon ASA” and “not enforcing the contract

                                               12
would strain this court’s limited resources and permit parties

to   stall    litigation          indefinitely.”        Id.   Finally,      the    court

declined to find ASA was collaterally estopped from raising the

enforceability of the November 22, 2011 agreement based on the

North Carolina state court’s decision denying CBH’s motion to

enforce the same agreement.

      The district court denied ASA’s motion insofar as it sought

dismissal with prejudice of Prospect’s claims under Federal Rule

of Civil Procedure 41(b), finding that “‘dismissal other than on

the merits must be supported by a finding of bad faith or other

similar    abuse,’”    which        the   district       court   declined     to       find

occurred on the facts here. J.A. 661 (quoting Hensley v. Alcon

Laboratories, Inc., 277 F.3d 535, 542 (4th Cir. 2002)). For                            the

same reason, the court declined to award attorney’s fees to ASA.

      With   the   case      in    the    above   posture,       Prospect    moved       to

certify the court’s order as a final judgment under Federal Rule

of   Civil   Procedure       54(b).       The   court    granted    the     motion       on

December     10,   2012. 6    Prospect      filed    a    timely    appeal        of    the




      6
        We find the district court acted appropriately in
certifying its order under Rule 54(b). See Culosi v. Bullock,
596 F.3d 195, 203 (4th Cir. 2010).



                                           13
judgment and ASA filed a timely cross-appeal from the district

court’s refusal to dismiss Prospect’s claims. 7

                                         II.

                                         A.

     To enforce a settlement agreement under its inherent equity

power,   the     district     court   “(1)        must   find    that    the    parties

reached a complete agreement and (2) must be able to determine

its terms and conditions.” Hensley, 277 F.3d at 540-41 (citing

Moore v. Beaufort Cnty., 936 F.2d 159, 162 (4th Cir. 1991))

(further citations omitted).

     We review a district court’s findings of fact for clear

error and its decision to enforce a settlement agreement for

abuse of discretion. Id. at 541 (citing Young v. FDIC, 103 F.3d

1180,    1195    (4th    Cir.    1997)).      A    district      court   abuses        its

discretion      when    its   decision   is       “‘guided      by   erroneous    legal

principles’      or     ‘rests    upon     a       clearly      erroneous       factual

finding.’” Brown v. Nucor Corp., 576 F.3d 149, 161 (4th Cir.

2009) (quoting Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261

(4th Cir. 1999)). As in other contexts, we will reverse for

abuse of discretion only where we have a “‘definite and firm

conviction      that    the   court   below       committed      a   clear     error    of


     7
       ASA does not appeal the district court’s refusal to make
an award of attorney’s fees.



                                         14
judgment in the conclusion it reached upon a weighing of the

relevant factors.’” Brown, 576 F.3d at 161 (quoting Westberry,

178 F.3d at 261). As we have held, “[h]aving second thoughts

about    the    results      of     a   valid        settlement    agreement    does     not

justify setting aside an otherwise valid agreement, [ ], and the

fact that the agreement is not in writing does not render it

unenforceable.”         Hensley,         277     F.3d       at    540   (citations       and

quotation marks omitted).

                                                B.

      As its most vigorously advanced claims of error, Prospect

challenges the district court’s order on three closely related

grounds:       (1)    the    material      terms       of   the   settlement    were     not

finalized during the telephone call, and therefore the alleged

agreement reached during the call between Tepper, representing

Prospect, and Sharpless, representing ASA, could not serve as an

enforceable oral agreement; (2) the court erred in finding that

the     choice-of-law,         venue,      and       release      provisions    were     not

material;       and    (3)    the       court    erred      in    considering    evidence

outside the actual agreement in coming to its decision. We find

no merit in any of these contentions.

                                                1.

        The district court found that the parties had settled on

the     material       terms      of      the        agreement      during     the     phone

conversation on November 22, 2011. There is no clear error in

                                                15
this finding. Prospect never expressed an intention that the

November 22, 2011 agreement be contingent upon the approval of

its senior management. And the parties never expressly stated,

nor is there evidence in the record, that their agreement was

dependent on the execution of a writing. Prospect represented to

both ASA and the court that a settlement had been reached. The

only thing that changed between Prospect receiving the signed

draft of the agreement and the settlement check, and its sending

the January 17, 2012 letter informing ASA’s counsel that there

was     no      settlement,       was     the        fact        that     Prospect’s     senior

management expressed dissatisfaction with the settlement amount.

Prospect        largely     admitted      as     much       in     a    hearing     before   the

district court. 8

      Nor       was    there      clear      error          in     the        district   court’s

identification         of   the    material          terms       of     the    agreement:    “ASA

would     pay    a    sum   certain     to     Prospect;          Prospect       would   file   a

dismissal with prejudice [as to] all claims against ASA; the

settlement would be confidential; and the parties would bear

their own costs.” J.A. 654 (internal citations omitted). The

court stated that the terms could be found not only in the

November 29, 2011 email summarizing the parties’ agreement, but

      8
        See J.A. 339: “The problem is senior management thinks
this case is worth a lot more than this proposal would have been
worth.”



                                                16
also in the first draft of the written version, which Prospect

created. The material terms were the same in both.

     At   bottom,     as   the   district      court   and   the    parties

recognized, the issues presented at the hearing on the motion to

enforce were essentially issues of credibility. See J.A. 466

(The Court: “If the issue of authority [to settle the case] is

not in here, then I’ve got to just decide whether -- who to

believe, this gentleman or this gentleman.” Prospect’s Counsel:

“I think that’s correct, Your Honor, based on the evidence and

the testimony.”). Plainly, we have no basis on which to second

guess the district court’s factual findings.

                                   2.

     Prospect’s     contention   that   the    district   court    erred   in

finding that the choice-of-law, venue, and release provisions

were not material terms of the parties’ agreement is equally

unavailing. The district court did not err in reasoning that

Prospect’s quick acceptance of ASA’s change of the choice-of-law

and venue provisions, from New York law to North Carolina law,

without   further      consideration,         demonstrated   that     those

provisions were not of “paramount importance” to Prospect. J.A.

658. The district court also did not err in determining that the

release provision was not a material term. The parties agreed to

a complete release on November 22, 2011, and after a dispute

arose over the written version of the agreement as to whether

                                   17
ESA (the debtor in the Chapter 7 liquidation) was included in

the release, ASA ultimately accepted the release of ESA after

expressing   dissatisfaction       with    it    only   once. 9   The    district

court’s finding that ASA was ready and willing to accept the

release of ESA after mildly disputing the same is neither clear

factual error nor legal error.

      In advancing its contrary contention, Prospect’s reliance

on Chappell v. Roth, 548 S.E.2d 499 (N.C. 2001), is misplaced.

In   Chappell,   the    North   Carolina    Supreme      Court    held    that   a

settlement agreement that lacked a release provision was not

binding – but only because the negotiated agreement had a clause

which required “a ‘full and complete release, mutually agreeable

to both parties.’” 548 S.E.2d at 500. Because the negotiation

and agreement on a release was included in the terms, the court

determined that the parties never had a “meeting of the minds”

without   that   release    provision.     Id.    Unlike   in     Chappell,   the

parties   here    did    not    condition       their   settlement       on   the

negotiation of a specific release provision.

                                     3.

      Prospect   also      takes   issue    with    the    district      court’s

consideration of so-called outside evidence, including the final


      9
       Prospect had purchased most if not all of the assets of
ESA in the bankruptcy proceedings.



                                     18
settlement amount. Prospect’s position is unpersuasive. We have

specifically stated that when there is a factual dispute over

the existence of a settlement agreement (the precise issue in

this   case),   or   over   the   agreement’s    terms,    “the    court    must

‘conduct a plenary evidentiary hearing in order to resolve that

dispute,’ and make findings on the issues in dispute.” Hensley,

277 F.3d at 541 (internal citations omitted) (emphasis added).

Thus, it was entirely proper for the district court to hear the

evidence of the sequence of events that took place during the

negotiations, as well as the settlement amounts considered and

finally agreed upon.

       Similarly,    Prospect’s       reliance    on      the     merger     and

integration clauses in the draft written agreement also fails.

Again, the written agreement was never fully executed because

Prospect did not sign it; thus, those provisions could not, and

did not, guide the district court’s inquiry into whether the

parties    reached   a   settlement     during   the   November      22,    2011

telephone conference. Moreover, as ASA correctly contends, the

parol evidence rule (invoked by Prospect before us) “presupposes

the existence of a legally effective written instrument” and so

is   inapplicable    here   because    neither   party     argues    that    the




                                      19
unexecuted   written      agreement    was    binding,   as    Prospect        never

executed it. Deaton v. Coble, 95 S.E.2d 569, 572 (N.C. 1956). 10

                                       C.

     Prospect further contends that the district court failed to

give the proper collateral estoppel effect to the North Carolina

state court’s ruling that CBH, the second accounting firm sued

by Prospect, could not enforce the very settlement agreement

that the district court enforced in this case. We find no error

or abuse of discretion.

     We    review    a   district    court’s    decision      on    an   issue    of

collateral estoppel de novo. Tuttle v. Arlington Cty. Sch. Bd.,

195 F.3d 698, 703 (4th Cir. 1999). Federal courts must look to

the law of the forum from which a judgment comes to determine

its preclusive effects. Sartin v. Macik, 535 F.3d 284, 287 (4th

Cir. 2008). A successful assertion of collateral estoppel under

North Carolina law requires a party to “show that the issue in

question    was     identical   to    an    issue   actually       litigated     and

necessary to the judgment, that the prior action resulted in a

final judgment on the merits, and that the present parties are

     10
        Contrary to Prospect’s contention, the district court’s
finding that the material terms of the oral settlement agreement
are embodied in the unexecuted written agreement is not “self-
contradictory.” See Opening Br. at 2. One would surely expect
that the essential material terms of an oral agreement would
appear in the written agreement, which was, we recall, drafted
by Prospect.



                                       20
the same as, or in privity with, the parties to the earlier

action.” Id. (citing Thomas M. McInnis & Assocs., Inc. v. Hall,

349 S.E.2d 552, 556-57 (N.C. 1986)).

       The district court was correct to reject the application of

collateral estoppel in this instance. Fundamentally, even apart

from the fact that ASA was not a party to the state court action

and appears not to be in privity with CBH, Prospect has failed

to show how the state court’s “decision” is a final judgment on

the merits. 11 North Carolina law holds that a “final judgment is

one that determines the entire controversy between the parties,

leaving nothing to be decided in the trial court.” Ratchford v.

C.C.    Magnum    Inc.,   564   S.E.2d    245,     247   (N.C.    Ct.   App.   2002)

(citations       omitted).   It   is     evident    that    the    state   court’s

decision did not fully resolve the issues between the parties.

See J.A. 387, 395 (the court stating, “I am going to give you my

initial impression . . . . I will try to sort all this out and

get back to you.”). There is not even sufficient indication in

the record that the state court ruled on the motion to enforce


       11
        We acknowledge that the courts in North Carolina, like
the courts in many states and the federal courts, have allowed
nonmutual offensive and defensive collateral estoppel in some
circumstances. See Rymer v. Estate of Sorrells, 488 S.E.2d 838,
840 (N.C. Ct. App. 1997). We need not and do not explore that
issue, as the record here reflects no final judgment on the
basis of which the state court litigation might give rise to a
successful invocation of collateral estoppel.



                                         21
the settlement agreement. J.A. 393 (the court stating, “I am

fairly confident . . . I am not going to enforce [the settlement

agreement].”). Prospect fails to point to any other evidence in

the record to show that the state court reached a final judgment

on   the    merits.      Without    this    essential    element,    it   would    be

improper to apply collateral estoppel in this instance.

                                            D.

       Finally, Prospect maintains that the district court erred

in invoking the doctrine of judicial estoppel to bar Prospect

from arguing that no agreement existed based on the position it

took   in    its   two    motions    for    extensions    of     time.   Because   we

affirm the district court’s judgment for the reasons discussed,

we need not and do not consider the merits of its invocation of

judicial estoppel.

                                           III.

       ASA cross-appeals and principally argues that the district

court erred when it denied ASA’s motion to dismiss Prospect’s

claims      with   prejudice       pursuant       to   Federal    Rule    of   Civil

Procedure 41(b) based on the binding settlement agreement. In

light of our disposition of the lead appeal, the issues raised

by ASA in its cross-appeal are rendered moot and need not be

addressed. Accordingly, we shall dismiss the cross-appeal.




                                            22
                                   IV.

     For the reasons set forth, the order of the district court

granting   the   motion   to   enforce   the   settlement   agreement   is

affirmed. The cross-appeal is dismissed.

                                                   No. 12-2232 AFFIRMED
                                                  No. 12-2264 DISMISSED




                                    23
AGEE, Circuit Judge, concurring in the judgment:

       I    concur     in   the     judgment       of    the      majority,    but     write

separately to express the very narrow reasoning under which I

would affirm the district court’s enforcement of the settlement

agreement between Prospect and ASA.

       First and foremost in this case, the Court must conclude

whether Prospect and ASA reached a binding settlement agreement

during their settlement negotiations. Under North Carolina law, 1

the formation of a settlement agreement is considered according

to the established rules of ordinary contract law. Harris v. Ray

Johnson      Constr.    Co.,      534     S.E.2d   653,       654–55   (N.C.    Ct.        App.

2000). Prospect does not dispute that the elements of a contract

are present in this case—Prospect made an offer of settlement to

ASA,   ASA    accepted      that    offer,       and    the    offer   included       mutual

promises, i.e., consideration. See Normile v. Miller, 326 S.E.2d

11,    18    (N.C.     1985).       Instead,       Prospect        argues     that     ASA’s

acceptance of its offer of settlement was not effective because

the    parties       intended      that    the     settlement       agreement        not    be

binding      until      both      parties        signed       a    written     settlement

agreement.


       1
       The parties agree that the laws of North Carolina govern
the Court’s consideration of whether the parties formed an
enforceable contract, and we therefore apply North Carolina law.
See Smith v. McDonald, 895 F.2d 147, 148 (4th Cir. 1990).



                                             24
     Prospect’s argument fails, however, because the reviewing

court owes deference to the district court’s finding that the

parties reached agreement on the material terms of a settlement

prior to Prospect’s expression of intent not to be bound absent

a signed writing. Prospect offers no evidence that it expressed

such an intent during the November 22, 2011 phone conversation.

In the absence of evidence contradicting the district court’s

finding   that    the    parties   agreed     to    the    material        terms    of

settlement on November 22, 2011 without any expression of intent

that additional, binding formalities were required, I cannot say

that the district court’s finding was in clear error. N.C. Nat’l

Bank v. Wallens, 217 S.E.2d 12, 15 (N.C. 1975) (holding that

contracting      parties’    contemplation         of     “a   more        ‘complete’

document does not necessarily indicate that material portions of

the agreement have been left open for further negotiation”); see

also Warren v. Halstead Indus., Inc., 802 F.2d 746, 752 (4th

Cir. 1986) (“It is only when the reviewing court, on the entire

evidence, is left with a definite and firm conviction that a

mistake   has     been     committed   that    an       appellate      court       may

reverse.”).

     Furthermore, as the majority opinion correctly points out,

Prospect conceded before the district court that the issue of

whether a valid settlement was reached was an issue of witness

credibility.     “Absent    extraordinary     circumstances,          we    will   not

                                       25
disturb a factfinder’s credibility determinations.” Columbus-Am.

Discovery Grp. v. Atlantic Mut. Ins. Co., 56 F.3d 556, 567 (4th

Cir. 1995) (citing Fed. R. Civ. P. 52(a)). Prospect demonstrates

no such extraordinary circumstances here, and, thus, has not met

its burden on appeal. 2

     I therefore concur in the majority’s decision to affirm the

judgment    of   the   district   court,    but   do   so   based   upon   this

court’s    standard    of   review   and   Prospect’s   failure     to   submit

evidence contradicting the district court’s findings so as to

meet that standard on appeal.




     2
        The majority opinion further concludes that Prospect
failed to demonstrate that collateral estoppel applied in this
case. I agree with that determination based solely on Prospect’s
failure to demonstrate privity between ASA and CBH.



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