                                                                         FILED
                                                                     Apr 10 2019, 7:11 am

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
                                                                          and Tax Court




ATTORNEYS FOR APPELLANT                                     ATTORNEY FOR APPELLEES
Richard K. Shoultz                                          William H. Walden
Neal Bowling                                                Munster, Indiana
Lewis Wagner, LLP
Indianapolis, Indiana

Paul B. Poracky
Koransky Bouwer & Poracky, P.C.
Dyer, Indiana


                                             IN THE
    COURT OF APPEALS OF INDIANA

Ana Martins,                                                April 10, 2019
Appellant-Defendant,                                        Court of Appeals Case No.
                                                            18A-CT-2740
        v.                                                  Appeal from the Lake Superior
                                                            Court
Richard Hill and Diana Hill,                                The Honorable John M. Sedia,
Appellees-Plaintiffs.                                       Judge
                                                            Trial Court Cause No.
                                                            45D01-1405-CT-113



Sharpnack, Senior Judge.




Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019                           Page 1 of 10
                                           Statement of the Case
[1]   Ana Martins appeals the trial court’s order granting Richard and Diana Hill’s

      Motion to Enforce Unconditionally Accepted Qualified Settlement Offer. We

      reverse and remand.


                                                           Issue
[2]   Martins raises one issue, which we restate as: whether the trial court erred in

      granting the Hills’ Motion.


                                   Facts and Procedural History
[3]   On August 15, 2012, Ana Martins rode her bike on or near a paved bike path in

      Crown Point, Indiana. The Hills were riding a tandem bike on the same path,

      and they and Martins collided. The Hills and Martins each claimed to have

      suffered injuries from the collision.


[4]   This case began on May 9, 2014, when the Hills filed a complaint against

      Martins and the City of Crown Point. The Hills alleged that Martins was

      negligent and that the City negligently designed, constructed, and operated the
                      1
      bike path.


[5]   On June 13, 2014, attorney Julie Havenith filed an appearance on behalf of

      Martins. After requesting and receiving an extension of time, Martins, through




      1
          The trial court later granted summary judgment to the City, ending its participation in the case.


      Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019                                      Page 2 of 10
      Attorney Havenith, filed an answer to the Hills’ complaint on August 13, 2014.

      Martins denied liability and raised affirmative defenses, including contributory

      negligence.


[6]   Meanwhile, on August 7, 2014, attorney Paul Poracky also filed an appearance

      on behalf of Martins. That same day, Martins, through Attorney Poracky, filed

      a counterclaim against the Hills, alleging negligence.


[7]   On October 19, 2015, attorney Richard K. Shoultz filed an appearance on

      behalf of Martins. Next, Attorney Havenith withdrew her appearance. On

      December 18, 2015, Martins, through Attorney Shoultz, moved to extend the

      discovery and mediation deadlines. The trial court granted the request.

      Meanwhile, the case was submitted to mediation by order of the court. On

      August 25, 2016, the mediator reported to the trial court that the parties could

      not reach an agreement.


[8]   The case continued to move forward, with Attorneys Poracky and Shoultz

      separately filing pleadings on behalf of Martins. Attorney Shoultz also

      communicated with the Hills’ attorneys. On September 4, 2018, the Hills filed

      a Motion to Enforce Unconditionally Accepted Qualified Settlement Offer,

      citing recent communication among the attorneys. Martins, through Attorney

      Shoultz, filed a response. We discuss the circumstances of the purported

      settlement offer and purported acceptance in more detail below.


[9]   The trial court held a hearing on September 19, 2018, and granted the Hills’

      motion. The court ordered that “the settlement of this case, including the filing

      Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019        Page 3 of 10
       of a stipulated dismissal of the Hills’ claim and Martins’ counterclaim with

       prejudice, be completed within thirty (30) days of the date of this order.”

       Appellant’s App. Vol. II, p. 18. The court further designated its order as a final

       judgment. Martins filed a motion to correct error, which the court denied. This

       appeal followed.


                                      Discussion and Decision
[10]   Martins argues that the trial court erred in determining the parties had

       negotiated a valid settlement agreement and ordering that it be implemented.

       There are no factual disputes, and the parties are raising questions of law,

       which we review de novo. See Conwell v. Gray Loon Outdoor Mktg. Grp, Inc., 906

       N.E.2d 805, 813 (Ind. 2009) (whether a contract exists is a question of law).


[11]   Settlement agreements are governed by principles of contract law. Ind. State

       Highway Comm’n v. Curtis, 704 N.E.2d 1015, 1018 (Ind. 1998). A valid contract

       requires offer, acceptance, consideration, and manifestation of mutual assent.

       Family Video Movie Club, Inc. v. Home Folks, Inc., 827 N.E.2d 582, 585 (Ind. Ct.

       App. 2005).


[12]   The General Assembly has enacted Indiana Code section 34-50-1-1 et seq.,

       known collectively as the Qualified Settlement Offer statutes, to govern a subset

       of settlement discussions in tort cases. Ind. Code § 34-50-1-1 (1998). If a party

       presents a qualified settlement offer under the statutes, and the other party does

       not accept the offer and later receives a judgment that is less favorable than the

       terms of the offer, the trial court “shall” award attorney’s fees, costs and

       Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019         Page 4 of 10
       expenses to the offeror in an amount not to exceed $1,000. Ind. Code § 34-50-

       1-6 (1998).


[13]   To be considered a qualified settlement offer, the offer must:


               (1) be in writing;


               (2) be signed by the offeror or the offeror’s attorney of record;


               (3) be designated on its face as a qualified settlement offer;


               (4) be delivered to each recipient or recipient’s attorney of record:


               (A) by registered or certified mail; or


               (B) by any method that verifies the date of receipt;


               (5) set forth the complete terms of the settlement proposed by the
               offeror to the recipient in sufficient detail to allow the recipient to
               decide whether to accept or reject it;


               (6) include the name and address of the offeror and the offeror’s
               attorney of record, if any; and


               (7) expressly revoke all prior qualified settlement offers made by
               the offeror to the recipient.


       Ind. Code § 34-50-1-4 (1998). In addition, an offer must “must resolve all

       claims and defenses at issue in the civil action between the offeror and the




       Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019            Page 5 of 10
       recipient before the qualified settlement offer may be accepted by the recipient.”

       Ind. Code § 34-50-1-3 (1998).


[14]   The Qualified Settlement Offer statutes set forth the requirements for an

       acceptance, as follows:


               An acceptance of a qualified settlement offer must be:


               (1) unconditional;


               (2) in writing;


               (3) signed by the accepting recipient or the accepting recipient’s
               attorney of record; and


               (4) delivered:


               (A) by registered or certified mail or by a means that verifies the
               date of receipt;


               (B) to the offeror or the offeror’s attorney of record; and


               (C) not more than thirty (30) days after the recipient receives the
               qualified settlement offer.


       Ind. Code § 34-50-1-5 (1998).


[15]   Indiana Code section 34-50-1-6 (1998) is in derogation of the common law rule

       that each party generally pays their own attorneys’ fees. Courter v. Fugitt, 714

       N.E.2d 1129, 1132 (Ind. Ct. App. 1999). We construe that statute narrowly.


       Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019            Page 6 of 10
       Id. Further, “[w]e presume that ‘the legislature did not intend by statute to

       make any change in the common law beyond what it declares either in express

       terms or by unmistakable implication.’” Id. (quoting Chavis v. Patton, 683

       N.E.2d 253, 258 (Ind. Ct. App. 1997)). Nothing in the Qualified Settlement

       Offer statutes alters the fundamental common law requirements for a contract:

       offer, acceptance, consideration, and manifestation of mutual assent.


[16]   In the current case, Martins, through Attorney Shoultz, sent the Hills a letter on

       August 31, 2018. The letter provided:


               Defendant, Ana Martins, by counsel, pursuant to I.C. §34-50-1-1
               et seq., hereby offers settlement to resolve all remaining claims
               and defenses at issue in this action between Plaintiffs, Richard
               and Dianna [sic ]Hill, and Defendant, Ana Martins, in the
               amount of One Hundred Thousand Dollars ($100,000.00). In
               exchange, Plaintiffs agree to execute and sign a full and final
               release from any and all liability with respect to any claim or the
               assertion of any and all claims against Defendant.


               Plaintiffs must further acknowledge that the release of all claims
               comprises the entire agreement between the Plaintiffs and
               Defendant, and that Plaintiffs will agree to and execute a
               Stipulation of Dismissal, with prejudice, of their claims against
               Defendant.


               This offer is a Qualified Settlement Offer pursuant to Ind. Code
               §34-50-1-1 et. seq. which could result in Plaintiffs being required
               to reimburse Defendant for attorney fees, costs and expenses if a
               more favorable verdict is received by the Defendant at trial.


               This Qualified Settlement Offer expressly revokes all prior
               settlement offers or Qualified Settlement Offers made by the
       Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019            Page 7 of 10
               Defendant (offeror) to the Plaintiffs (recipient). Pursuant to Ind.
               Code § 34-50-1-5, this Offer must be accepted within thirty (30)
               days after receipt of this letter.


               Please make written response to this offer to Richard K. Shoultz
               at Lewis Wagner, [address], within thirty (30) days. Thank you.


       Appellant’s App. Vol. II, p. 56.


[17]   On September 2, 2018, the Hills’ attorney responded via email:


               Richard Hill accepts the offer as long as everyone dismisses and
               everything is over. As long as this is the case, you no longer need
               to drive to Hammond Tuesday. Please confirm and I will call
               the court first thing Tuesday.


       Id. at 57.


[18]   Later on the same day, Attorney Shoultz responded as follows, in relevant part:


               I have been trying to reach Paul Poracky to confirm if Ms.
               Martins will agree to dismiss her counterclaim but have not
               received a response. I do not have authority to dismiss her claim.
               Thus, I hope we hear from Paul before tomorrow morning.


       Id. at 72. After this exchange, the Hills filed their Motion to Enforce

       Unconditionally Accepted Qualified Settlement Offer, which resulted in the

       trial court issuing the final judgment that is the subject of this appeal.


[19]   A close review of the plain language of the parties’ communications reveals that

       there was no mutual assent and no contract was formed. Attorney Shoultz’s

       letter discussed the Hills’ claims and Martins’ defenses but omitted any mention
       Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019            Page 8 of 10
       of Martins’ counterclaim. In addition, the letter emphasized the release and

       dismissal of the Hills’ claims against Martins, with no mention of the release

       and dismissal of her counterclaim.


[20]   The Hills argue that Attorney Shoultz’s offer necessarily included Martins’

       counterclaim because Indiana Code section 34-50-1-3 requires that a qualified

       settlement offer “must resolve all claims and defenses . . . between the offeror

       and the recipient.” Nevertheless, the counterclaim was not included in

       Shoultz’s offer. As a result, we must conclude that the offer failed to meet the

       requirements for a qualified settlement offer.


[21]   Although the offer did not meet the requirements of Indiana Code section 34-

       50-1-3, it was an offer that, if accepted, would have created an enforceable

       contract for the Hills to settle and dismiss all claims against Martins in

       exchange for $100,000. In any event, the Hills’ response did not qualify as an

       acceptance. “It is well settled that in order for an offer and an acceptance to

       constitute a contract, the acceptance must meet and correspond with the offer in

       every respect.” I.C.C. Protective Coatings, Inc. v. A.E. Staley Mfg. Co., 695 N.E.2d

       1030, 1034 (Ind. Ct. App. 1998), trans. denied. An acceptance which varies the

       terms of the offer is considered a rejection and operates as a counteroffer, which

       may be then accepted by the original offeror. Id. at 1035.


[22]   In this case, the Hills’ response to Martins’ offer was in substance a counteroffer

       because it added an additional term: “as long as everyone dismisses and

       everything is over.” Appellant’s App. Vol. II, p. 71. In addition, the Hills’


       Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019           Page 9 of 10
       response indicated negotiations were not at an end, because it asked Martins to

       “please confirm” that everyone was “dismiss[ing].” Id.

                                                                                          2
[23]   Based on the plain language of the parties’ communications, they failed to

       agree upon a contractual settlement of the case under the Qualified Settlement

       Offer statutes or otherwise. We conclude the trial court erred in granting the

       Hills’ Motion to Enforce Unconditionally Accepted Qualified Settlement Offer

       because there was neither a valid offer under the Qualified Settlement Offer

       statutes nor a valid acceptance.


                                                   Conclusion
[24]   For the reasons stated above, we reverse the judgment of the trial court and

       remand for further proceedings.


[25]   Reversed and remanded.


[26]   Robb, J., and Crone, J., concur.




       2
         The parties dispute whether Attorney Shoultz had been granted the authority to negotiate with the Hills’
       attorney as to Martins’ counterclaim. It is unnecessary for us to address this issue because we have resolved
       the appeal based on the language of the parties’ communications.

       Court of Appeals of Indiana | Opinion 18A-CT-2740 | April 10, 2019                               Page 10 of 10
