Settlement Agreement within foreclosure proceedings in Georgia

Foreclosure Proceedings initiated after Loan Modification approved in Georgia

BUTLER v. HOUSEHOLD MORTGAGE SERVICES, INC. et al.
A03A2174.

Case Law
COURT OF APPEALS OF GEORGIA
266 Ga. App. 104; 596 S.E.2d 664; 2004 Ga. App. LEXIS 304; 2004 Fulton County D. Rep. 878

March 4, 2004, Decided

Facts: After a mortgagee initiated foreclosure proceedings, the mortgagor's attorney contacted the mortgagee's attorney and discussed settlement of the parties' dispute. The mortgagee's attorney sent the mortgagor a settlement offer, and the mortgagor's attorney responded the next day, stating that the mortgagor accepted the offer but asking the mortgagee's attorney to add two conditions the attorneys discussed when they discussed settlement by telephone. The mortgagor's attorney wrote a follow-up letter several days later which confirmed his understanding that the parties had reached a settlement, but the mortgagee's attorney responded with a letter which stated that the parties had not settled the case. When the mortgagee attempted to proceed with the foreclosure action, the mortgagor filed suit, seeking an order enforcing the settlement agreement.

Issue: Was there settlement agreement.

Ruling: None. The addition of the two conditions discussed in the mortgagor's attorney's letter created a counteroffer to the settlement offer, and the trial court ruled correctly that the parties had not settled the case and that the mortgagee could proceed with foreclosure.

Lesson Learned:An agreement alleged to be in settlement and compromise of a pending lawsuit must meet the same requisites of formation and enforceability as any other contract. In this regard, it is well settled that an agreement between two parties will occur only when the minds of the parties meet at the same time, upon the same subject.

Written by Kevin Levonas and Jerry L.