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Ali Haghighi v. Russian-American, 97-1966 (1999)

Court: Court of Appeals for the Eighth Circuit Number: 97-1966 Visitors: 11
Filed: Apr. 07, 1999
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 97-1966 _ Ali Haghighi, doing business as * International Radio Network, * * Appellee, * Appeal from the United States * District Court for the District v. * of Minnesota. * Russian-American Broadcasting Co., * * Appellant. * _ Submitted: March 8, 1999 Filed: April 7, 1999 _ Before FAGG, LAY, and WOLLMAN, Circuit Judges. _ FAGG, Circuit Judge. Russian-American Broadcasting Co. (RABC), a provider of ethnic programming, entered into a con
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                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 97-1966
                                  ___________

Ali Haghighi, doing business as     *
International Radio Network,        *
                                    *
                 Appellee,          * Appeal from the United States
                                    * District Court for the District
      v.                            * of Minnesota.
                                    *
Russian-American Broadcasting Co., *
                                    *
                 Appellant.         *
                               ___________

                          Submitted: March 8, 1999
                              Filed: April 7, 1999
                                 ___________

Before FAGG, LAY, and WOLLMAN, Circuit Judges.
                           ___________

FAGG, Circuit Judge.

      Russian-American Broadcasting Co. (RABC), a provider of ethnic
programming, entered into a contract with the International Radio Network (IRN), a
Minnesota distributor of radio programming to subscribers, allowing IRN to
rebroadcast RABC’s Russian language radio programs. Believing RABC had
wrongfully attempted to provide programming directly to IRN’s radio subscribers,
IRN later brought this diversity action against RABC. RABC denied it had breached
the contract and filed a counterclaim seeking recovery of overdue payments IRN
allegedly owed.
       The parties decided to mediate their dispute, and after choosing a mediator,
they signed a mediation agreement that said:
       The parties . . . acknowledge and agree to be bound by the following
       ground rules: . . . Minnesota Civil Mediation Act [Minn. Stat. § 572.31-
       .40]. Pursuant to the requirements of the Minnesota Civil Mediation
       Act, the mediator hereby advises the parties that: . . . (d) a written
       mediated settlement agreement is not binding unless it contains a
       provision that it is binding.

After negotiating that day, the parties signed a handwritten settlement agreement that
did not state it was binding, as both the mediation agreement and the Act required.
See Minn. Stat. § 572. 35 subd. 1 (a mediated settlement agreement is not binding
unless it states it is binding). Nevertheless, the parties acted as if they were bound by
the handwritten document, even though they negotiated alternative settlement
proposals for several months.

       When the additional negotiations were unsuccessful, IRN filed a summary
judgment motion to enforce the handwritten document. Following an evidentiary
hearing, see Sheng v. Starkey Labs., Inc., 
53 F.3d 192
, 194-95 (8th Cir. 1995), the
district court concluded in a March 1997 order that IRN had carried its burden of
proving the handwritten document is a binding and enforceable settlement agreement.
Referring to its conclusion in a prehearing order issued in November 1996, the court
said neither the Act nor the mediation agreement precluded the settlement
agreement’s enforcement. In the earlier order, the court recognized that § 572.35
subd. 1 appears to preclude enforcement, but the court did not believe the Minnesota
legislature intended that result in mediations in which “both parties are represented
by counsel and are fully aware of the binding effect of a settlement agreement.” The
court thus granted IRN’s motion to enforce the handwritten document.

      RABC appealed and asked the district court to stay enforcement of its order
pending appeal. IRN opposed the motion, arguing the district court’s order was not


                                          -2-
a final order. The district court granted a stay, stating, “[T]he issue of whether [the
Act] bars enforcement of the handwritten document is a controlling question of law
as to which there is substantial ground for difference of opinion. . . . This lawsuit will
turn on the Eighth Circuit’s interpretation of . . . § 572.31.” The district court
concluded that judicial economy would be furthered by an interlocutory appeal even
if its order was not a final one.

       RABC then designated a single issue for appeal: whether the Act bars
enforcement of the handwritten document as a binding settlement agreement. IRN
filed a motion seeking to certify a question of law to the Minnesota Supreme Court.
In blocked-off text on the first page of its memorandum in support of its motion, IRN
set out the question this way:
       Whether a settlement agreement that was prepared by the parties’
       attorneys after the conclusion of a mediation session is rendered
       unenforceable by virtue of . . . Minn. Stat. § 572.31, subd. 1, even
       though the parties fully intended to be bound by the agreement.

Embedded in the general text of the same document, IRN said, “The issue to be
determined is whether the statute applies to the facts of this case, as well as whether
its provisions have been waived.” We later certified the following question to the
Minnesota Supreme Court:
       Whether a handwritten document prepared by the parties’ attorneys at
       the conclusion of a mediation session conducted pursuant to the . . . Act
       and signed contemporaneously on each page by the respective parties
       attending the mediation session but which does not itself provide that
       the document is to be a binding agreement, is rendered unenforceable as
       a mediated settlement agreement by virtue of Minn. Stat. § 572.35, subd.
       1?

The Minnesota Supreme Court concluded the statute’s plain language rendered the
handwritten document unenforceable, even if that result was unintended. See



                                           -3-
Haghighi v. Russian-American Broadcasting Co., 
577 N.W.2d 927
, 930 (Minn.
1998). The court said:
      The plain language of the Minnesota Civil Mediation Act requires that
      a mediated settlement agreement prepared at the conclusion of a
      mediation session conducted under this Act contain a provision stating
      that the settlement agreement is binding. Because the handwritten
      document does not contain such a provision, it is . . . unenforceable.

Id. RABC now
contends the district court’s ruling that the document is enforceable
must be reversed because the ruling is contrary to the Minnesota Supreme Court’s
response to our certified question. IRN responds that the question we certified was
too narrow to dispose of all the issues in this appeal. IRN argues the Act does not
apply at all because the mediation agreement did not provide for termination of
mediation on written notice, one element of an agreement to mediate as defined by
the Act. See Minn. Stat. § 572.33 subd. 3. The record shows, however, that both
parties signed the mediation agreement, in which they agreed to be bound by the Act
and its requirement that “a written mediated settlement agreement is not binding
unless it contains a provision that it is binding.” Further, in certifying the issue to the
Minnesota Supreme Court, we concluded the “mediation session [was] conducted
pursuant to the . . . Act.” IRN also contends the Act is inapplicable because the
handwritten document was prepared after the mediation terminated. We disagree.
The handwritten document was drafted and signed immediately after negotiations,
when the mediator concluded the parties had reached an agreement and brought them
together. We thus reject IRN’s attack on the Act’s applicability.

      IRN next argues that if the Act applies, the language in the handwritten
document satisfies the Act’s requirement that the document indicate it is binding
because the document states it is a “Full and Final Mutual Release of All Claims.”
IRN also says we should reform the settlement agreement. IRN did not raise these

                                           -4-
issues in the district court, however, so we decline to consider them. See Browning
v. President Riverboat Casino-Missouri, Inc., 
139 F.3d 631
, 637 (8th Cir. 1998).

       IRN last asserts RABC waived the Act’s requirement that an enforceable
settlement agreement state it is binding, because RABC failed to include this
language in later settlement documents that it drafted and proposed. IRN contends
the district court made this alternative ruling in its November 1996 order. Again, we
disagree. Although the district court made the statement about waiver in the
prehearing November order, the district court did not mention waiver in its
posthearing order issued in May 1997, and the district court’s later statements about
certification make clear that the court believed the entire case turned on interpretation
of the Act. The district court’s statement about waiver in the prehearing November
order is simply dicta. After the evidentiary hearing, the district court made no factual
finding that RABC had waived its statutory protection. Waiver requires evidence of
a voluntary and intentional relinquishment or abandonment of a known right, see
Montgomery Ward & Co. v. County of Hennepin, 
450 N.W.2d 299
, 304 (Minn.
1990), and there is no evidence that RABC intentionally waived its right to have the
Act enforced. Besides, a statutory right cannot be waived if waiver would violate
public policy. See Stephenson v. Martin, 
259 N.W.2d 467
, 470 (Minn. 1977) (per
curiam). Here, the Act is “likely . . . intended . . . to encourage parties to participate
fully in a mediation session without the concern that anything written down could
later be used against them.” 
Haghighi, 577 N.W.2d at 930
. This intent would be
frustrated if settlement documents that do not state they are binding can be enforced
against the parties.

      In sum, in response to our certified question, the Minnesota Supreme Court has
decided the Act precludes enforcement of the handwritten settlement document, and
we are bound by that decision, see Burlington Northern R.R. Co. v. Kmezich, 
48 F.3d 1047
, 1049 (8th Cir. 1995). There is no waiver. We thus reverse and remand for
appropriate proceedings.

                                           -5-
A true copy.

      Attest:

               CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




                              -6-

Source:  CourtListener

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