Consolidated Midland, Inc. v. Arbor Valley Farms, Llc

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE

CONSOLIDATED MIDLAND, INC., ) No. 77939-7-1
)
Appellant, )
)
v. )
)
ARBOR VALLEY FARMS, LLC; ) UNPUBLISHED OPINION
JOHN ANTHONY HALL; NANCY )
HALL; GERALD HALL, ) FILED: April 8, 2019
)
Respondents. )
)

VERELLEN, J. — Consolidated Midland, Inc.(CM)agreed to withdraw its
adverse possession claims against Arbor Valley Farms, LLC and the Hall family

(AVF) in exchange for AVF dismissing its timber trespass and waste counterclaims

and granting CM a permanent easement for "access" on the "existing roads" on

AVF's property. Because the parties objectively manifested in open court their

intent to settle the lawsuit, there is an enforceable CR 2A settlement agreement.

The parties' contemplation of the need to stake the roadway does not render the

settlement a mere agreement to agree, especially in light of CM's unequivocal

statements in the trial court that the in court agreement was enforceable. The trial

court did not err when it determined the in court agreement was enforceable.

Therefore, we affirm.
No. 77939-7-1/2

FACTS

In 1981, CM purchased three parcels in North King County. T&L Nursery, a

subsidiary of CM, began operating a nursery on the property. In 1986, CM began

using a strip of land on the south border of the adjacent parcel and a strip of land

on the west border of the adjacent parcel. CM used portions of the two strips of

land as access roads. Portions were also used for employee parking, equipment

storage, and composting.

In 2012, John Hall and his parents, Jerald and Nancy Hall, purchased the

adjacent parcel and formed AVF. In early 2013, the Halls complained about CM's

use of the two strips of land. On September 17, 2014, CM filed this lawsuit to

quiet title through adverse possession. In response, the Halls and AVF denied the

adverse possession claim and raised counterclaims for timber trespass and waste.

On January 26, 2015, the court granted CM's motion for summary judgment

on the adverse possession claim. The case proceeded on AVF's counterclaims.

Trial was set for May 16, 2016.

On May 17, 2016, after pretrial motions but before jury selection began, the

parties announced to the court they had reached a settlement agreement. Under

the terms of the settlement agreement, "[t]he summary judgment on both access

roads are retracted in exchange for the granting of a permanent easement on both

access roads."' The agreement was read into the record in open court under

CR 2A.

1 Report of Proceedings(RP)(May 17, 2016) at 231.

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No. 77939-7-1/3

On the same day, the parties traveled to the subject property and placed

stakes to mark the easement boundaries. Counsel for CM drafted a handwritten

"staking agreement" generally describing the easement boundaries.2 The parties

signed the staking agreement, and it was sent to the court the following day.

The parties agreed to have Thomas Woldendorp survey the property to

establish a legal description of the easement. When Woldendorp was unavailable,

Wolfgang Mueller, the president of CM, commissioned Triad Associates to conduct

a survey. After receiving a copy of the survey, AVF objected to the survey and

claimed CM moved the stakes referenced in the handwritten staking agreement.

AVF obtained their own survey from Jeff Harstad. CM objected and claimed

AVF's survey did not reflect their earlier agreement. CM moved to enforce the

settlement agreement and asked the court to use the Triad survey to generate a

legal description of the easement. AVF also moved to enforce the agreement but

asked the court to use the Harstad survey.

On October 5, 2015, the trial court "ratified" the settlement agreement,

rescinding summary judgment and granting an easement. The court determined

"[i]t is clear that the parties intended that the easements follow the existing roads,"

but the court also acknowledged that "the parties indicated they needed to walk

the property [Ito confirm the location of the easement in question."3 The

2 Ex. 12.
3 Clerk's Papers(CP) at 424-25.

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court determined the staking agreement was ambiguous and reliance on outside

evidence was necessary for interpretation. And the court held any ambiguities in

the staking agreement must be interpreted in favor of AVF because it was drafted

by CM's counsel.

In reviewing the Triad survey commissioned by CM and the Harstad survey

commissioned by AVF, the court determined:

The Triad survey does not appear to comport in any way with the
agreement to follow the existing roads. The Harstad survey appears
to come closer. However, the Harstad survey includes a granting of
an easement from Consolidated Midland to the Halls/Arbor Valley
Farms, which was not part of the settlement agreement.[4]

The court set an evidentiary hearing "for the sole purpose of interpreting the

settlement agreement as to the location of permanent easements."5

On November 18, 2016, William Hawkins of Pace Engineers, Inc. surveyed

the location of the existing access roads. The purpose of the survey "was to

identify the property lines of the parties' parcels and to locate the existing travel

way."6

The court held the evidentiary hearing on December 6, 2016, January 17,

2017, and March 7, 2017. And on June 6, 2017, the court issued an order

finalizing settlement. In the order, the court characterized the issue as whether the

staking agreement altered or amended the May 17, 2016 in-court CR 2A

agreement.

4 CP at 425.
5 CP at 427.

6 CP at 649.

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No. 77939-7-1/5

The court found "[t]he CR 2A agreement provided the easements would be

on 'existing roads,' which are not straight."' The court also found that after arriving

at the property to place the stakes on May 17, 2016, the parties "orally agreed that

it would simplify matters for description purposes to make the easements straight

lines."8 But the court concluded it was not possible to determine where the parties

intended those lines to run because "[Mitnesses" memories were faulty as to what

photographs were taken when, what stakes were planted by whom, and where the

points of reference are.79

As a result, the court determined, the staking agreement could not alter the

in-court agreement. The court concluded the agreement clearly provided the

permanent easements would follow the existing access roads. Because the Pace

survey outlined the existing roads, the court used the Pace survey to set the

boundaries of the easement.

On December 18, 2017, the court entered the final order on CR 2A

settlement agreement consistent with the June 6, 2017 order.

CM appeals.

7 CP at 648.
8 Id.
9 Id.

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ANALYSIS

I. Contract Formation

CM argues the trial court erred when it found the in court settlement

agreement was a valid and enforceable contract. CM presents several

overlapping theories to support this argument.

Contract interpretation is a mixed question of law and fact.1° The primary

purpose of contract interpretation is to ascertain the parties' intent.11

[W]e ascertain the intent of the contracting parties "by viewing the
contract as a whole, the subject matter and objective of the contract,
all the circumstances surrounding the making of the contract, the
subsequent acts and conduct of the parties to the contract, and the
reasonableness of respective interpretations advocated by the
parties."[12]

The validity and enforceability of a settlement agreement is determined

under substantive contract law.13

First, CM contends the agreement was not enforceable because the parties

did not mutually assent to the exact boundaries of the easement.

"An essential element to the valid formation of a contract is the parties'

objective manifestation of mutual assent."14 The objective manifestation test

focuses "on the 'reasonable meaning of the contract language to determine the

10Mutual of Enumclaw Ins. Co. v. USF Ins. Co., 164 Wn.2d 411, 424 n.9,
191 P.3d 866 (2008).
11 Berg v. Hudesman, 115 Wn.2d 657, 663, 801 P.2d 222(1990).
12 Mutual of Enumclaw, 164 Wn.2d at 424 n.9 (internal quotation marks
omitted)(quoting id. at 667).
13 Evans & Sons, Inc. v. City of Yakima, 136 Wn. App. 471, 477, 149 P.3d
691 (2006).
14 Cruz v. Chavez, 186 Wn. App. 913, 920, 347 P.3d 912 (2015).

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No. 77939-7-1/7

parties' intent.'"15 "'We impute an intention corresponding to the reasonable

meaning of the words used.'"16 When considering the parties' intent, we "'give

effect to .. . the intent of the parties at the time of execution."17

On May 17, 2016, before reading the agreement into the record, AVF's

counsel informed the court, "the agreement we've reached is they want to use the

road."18 According to the terms of the agreement, "[t]he summary judgment on

both access roads are retracted in exchange for the granting of a permanent

easement on both access roads."19 When the court asked what the parties meant

by "where the roads currently are," CM's counsel responded, "[t]he existing

roads."2° Moments later, CM's counsel reiterated that the parties' agreed the

easement was on the "[e]xisting road."21 At the time of execution of the

agreement, CM and AVF mutually assented that the easement would follow the

existing access roads.

Second, CM contends the agreement was not enforceable because the

terms concerning the location and boundaries of the easement were not

15RSD AAP, LLC v. Alyeska Ocean, Inc., 190 Wn. App. 305, 315, 358 P.3d
483(2015)(internal quotation marks omitted)(quoting Viking Bank v. Firgrove
Commons 3, LLC, 183 Wn. App. 706, 712, 334 P.3d 116 (2014)).
16 Id. (quoting Hearst Commc'ns Inc. v. Seattle Times Co., 154 Wn.2d 493,
503, 115 P.3d 262(2005)).
17 Id. at 316 (emphasis added)(alteration in original)(quoting 25 DAVID K.
DEWOLF, KELLER W.ALLEN, & DARLENE BARRIER CARUSO, WASHINGTON PRACTICE:
CONTRACT LAW AND PRACTICE § 5:8, at 187-88 (3d ed. 2004)).
18 RP (May 17, 2016) at 228 (emphasis added).

19 Id. at 231 (emphasis added).
29 Id. (emphasis added).

21 Id. at 237(emphasis added).

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No. 77939-7-1/8

sufficiently definite. Rather, CM argues the parties formed an unenforceable

agreement to agree because they still needed to stake the location of the road.

"An agreement to agree is `an agreement to do something which requires a

further meeting of the minds of the parties and without which it would not be

complete.'"22 Agreements to agree are unenforceable in Washington.23

To form a contract, "the terms assented to must be sufficiently definite."24

"If an offer is so indefinite that a court cannot decide just what it means and fix

exactly the legal liability of the parties, its acceptance cannot result in an

enforceable agreement."25 "However, indefiniteness as to an immaterial term is

not fatal. Where the parties have intended to finalize a bargain, any uncertainty as

to incidental or collateral matters is generally not harmful to the validity of the

contract."26 Additionally, "Washington courts 'will not give effect to interpretations

that would render contract obligations illusory.'"27

On May 17, 2016, before the parties read the CR 2A agreement into the

record, AVF's counsel informed the court:

22Keystone Land & Dev. Co. v. Xerox Corp., 152 Wn.2d 171, 175-76, 94
P.3d 945(2004)(quoting Sandeman v. Savres, 50 Wn.2d 539, 541-42, 314 P.2d
428 (1957)).
23 Id.
24 Id. at 178.
25 16th Street Investors, LLC v. Morrison, 153 Wn. App. 44, 55, 223 P.3d
513(2009).
26 25 DEWOLF et al., § 2:27, at 90-91 (citing Restatement(Second) of
Contracts § 32-33, cmt. a (1981)).
27 SAK & Assocs., Inc. v. Ferguson Const., Inc., 189 Wn. App. 405, 412,
357 P.3d 671 (2015)(quoting Taylor v. Shigaki, 84 Wn. App. 723, 730, 930 P.2d
340 (1997)).

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No. 77939-7-1/9

[T]he only issue that we have is that we need to go out there and
actually walk the road which is the boundary. Because the
agreement we've reached is they want to use the road, we say, "Fine
we'll give you an easement for the road, but you return the adverse
possession property, and we'll just stake the road so everyone
knows exactly where it is." So that is the only issue remaining before
we can actually complete the settlement.E281

A few moments later, John Hall asked,"How does this all work?" His

counsel replied:

[T]he settlement we've agreed upon is going to be put on the record
for the court. . . . But then we still have to go out and []look at the
boundary and do the stakes. The problem is, is that if there is a
dispute on that, it kind of messes everything up. The problem is, is
that my clients want to know exactly where it is going to be on the
road. . . .[a]nd they want to visualize it. And so they need to actually
go out there and stand in the road and say,"Put a stake here, here,
here, here," and then we can measure it and then we actually have a
physical description that everyone agrees to.[29]

CM's counsel offered to "put the other terms in, then only the staking would

be left" and AVF's counsel agreed.3°

After a question from the court, CM's counsel clarified the boundaries would

be measured from the existing roads, and the parties would "stake that where

everybody knows then what the permanent easement is."31

After the agreement was read into the record, the following exchange

occurred:

COURT: From what I'm hearing, . . . I hear that there is a
settlement reached, then the only contingency is
simply the location-

28 RP (May 17, 2016) at 228-29.
28 Id. at 230-31.

3° Id. at 231.
31 Id. at 232.

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No. 77939-7-1/10

AVF: Of the road.

COURT: —that needs to be simply confirmed.

AVF: Correct.

CM: Yes.

COURT: It's not subject to dispute, we just—you just need to
go out there to make sure that it's—

CM: Existing road, we're going to stake it, and that's that.

AVF: Well, actually, wait a minute. . . . The area was that
they were going to say, "This is what! need in the
road." Because the road meanders. In fact, you
know, if you look at this, you can see immediately
what the problem is, is that the road comes around.
This one, it's not a problem, but the road comes
around this corner and it does dipsy-doodle. And so,
you know, what it is, is we asked Mr. Mueller,"What
do you need?" And he says, "I need enough space
for two of my carts to go by and a truck to go around."
And we say, "That's no problem. We can agree to
that." And that was what the basis was, that we were
going to go out and stake the road to accommodate
that. And that may take a little more, it may take a
little less of what's actually there, but it's to give him
that ability. . . . We need to go out there, we need to
stake the road, and everybody agree,"Yeah, that's
the road that's going to be"—that we agree on. And
that's the only thing that remains.[321

The agreement addressed the material terms regarding the easement. The

parties agreed the easement would be on the existing access roads. At a certain

point in the road, which the parties refer to as a "dipsy doodle," AVF agreed to

32 RP (May 17, 2016) at 237-38.

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allow CM enough room (width) for two carts33 and a truck. The purpose of staking

the road was to allow AVF to visualize the easement.

Although AVF's counsel mentioned the easement might require a little more

or a little less at the "dipsy doodle," the parties' contemplation of staking the

location did not constitute an agreement to agree. Neither party was free to walk

away from the in court agreement. The court confirmed this point on May 17,

2016 before the parties left to go stake the roads:

All right. So from my perspective, the case has been settled, can't
go home tonight and say,"Changed my mind, Judge, let's keep
going with the trial." I'm moving on to another case.[34]

In response, both parties agreed the case was settled. As long as the

easement remained on the existing road at the width of the existing travel way, as

agreed on the record, the agreement was binding. The only variation to width was

limited to a defined standard (two carts and a truck) at one single point (dipsy

doodle). In this context, staking the width of the two carts and a truck at the "dipsy

doodle" is a collateral matter. CM's argument would effectively render the in-court

agreement illusory. The parties objectively manifested an intent to be bound to a

settlement, not an agreement to agree.

In the alternative, CM argues, even if the settlement agreement was

enforceable, the failure of a condition precedent precluded enforcement. CM

argues the parties' discussion about staking the road was a condition precedent.

33 As made clear in the numerous photographs admitted into evidence, the
nursery uses unpowered uniformly sized four-wheel rectangular carts to move
plants around. See CP at 329, 330, 332.
34 RP (May 17, 2016) at 238.

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No. 77939-7-1/12

Conditions precedent are "those facts and events, occurring subsequently

to the making of a valid contract, that must exist or occur before there is a right to

immediate performance, before there is a breach of contract duty, before the usual

judicial remedies are available.'"35

Although "words such as 'provided that,'on condition,' when,"so that,'

'while,' as soon as,' and 'after' suggest" a condition precedent,36 CM fails to

provide any meaningful argument or authority to establish the parties' in-court

comments concerning staking should be construed as a condition precedent.

CM also challenges the trial court's conclusion that the staking agreement

was ambiguous. The staking agreement provides three reference points, staked

by the parties on May 17, 2016. The points connect to form a boundary on the

south and west edges of AVF's property. The trial court heard three days of

testimony concerning the location of the stakes. Neither party could identify

precisely where the stakes were placed on May 17, 2016 nor document whether

those stakes were subsequently moved. Our review of the record, along with

CM's argument, does not give any further clarity to this issue. As a result, the trial

court did not err when it concluded the staking agreement is ambiguous.

35 Tacoma Northpark, LLC v. NW, LLC, 123 Wn. App. 73, 79, 96 P.3d 454
(2004)(quoting Ross v. Harding, 64 Wn.2d 231, 236, 391 P.2d 526 (1964)).
36 Id. at 80 (quoting Jones Assoc. v. Eastside Prop., 41 Wn. App. 462, 46,
704 P.2d 681 (1985)).

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II. Judicial Estoppel

CM moved the trial court to enforce the settlement agreement. But on

appeal, CM argues the trial court erred in enforcing the agreement. Judicial

estoppel precludes CM from asserting a clearly inconsistent position.

"'Judicial estoppel is an equitable doctrine that precludes a party from

asserting one position in a court proceeding and later seeking an advantage by

taking a clearly inconsistent position."37 In determining whether judicial estoppel

applies, we consider three factors:

(1)[W]hether the party's later position is "'clearly inconsistent with its
earlier position,"(2) whether acceptance of the later inconsistent
position "would create the perception that either the first or the
second court was misled," and (3) whether the assertion of the
inconsistent position would create an unfair advantage for the
asserting party or an unfair detriment to the opposing party.[38]

"Acceptance of an initial position is a precondition to the application of

judicial estoppel."39

On appeal, CM contends the agreement is insufficiently definite to be

enforced. CM claims the parties entered into an unenforceable agreement to

agree:

[T]he exact location of the easement was a critical part of the
agreement between the parties. Indeed, the entire settlement
depended upon both sides mutual agreement to the easement
location. Although the parties "agreed to agree" once they got to the
property, the[y] ultimately found that each had a very different idea of

37 Arkison v. Ethan Allen, Inc., 160 Wn.2d 535, 538, 160 P.3d 13(2007)
(quoting Bartley-Williams v. Kendall, 134 Wn. App. 95, 98, 138 P.3d 1103 (2006)).
38 Anfinson v. FedEx Ground Package Sys., Inc., 174 Wn.2d 851, 861-62,
281 P.3d 289(2012)(quoting id. at 538-39).
39 Taylor v. Bell, 185 Wn. App. 270, 284, 340 P.3d 951 (2014).

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No. 77939-7-1/14

what the permanent easement should look like. As a consequence,
the parties did not place a material term of the purported settlement
agreement on the record, and once each party reviewed the other's
survey, it beca[me] clear that they failed to agree upon all of the
contract's material terms. Under these circumstances, a valid and
enforceable contract cannot exist.[401

This is clearly inconsistent with CM's position before the trial court. CM

moved the trial court to enforce the in court settlement agreement.41 Specifically,

CM asked the court "to intervene one more time and enforce the terms of the

settlement reached during a trial in her court and read into the record."42 And CM

framed the issue as "Whether the court should enforce the settlement agreement

reached in her court on May 17, 2016? — Yes."43 CM's proposed order provided:

1. That the Summary Judgment order of January 26, 2015 is revised
and rescinded, with the result that the property awarded to
Consolidated Midland, Inc. by adverse possession in said order is
nullified, said property returning to John Hall, Jerry Hall, Nancy Hall
and Arbor Valley Farms[.]

2. That Consolidated Midland Inc. is granted a permanent easement
for ingress and egress.[441

AVF also sought to enforce the agreement but asked the court to use

a different survey to describe the easement. In the context of addressing

AVF's arguments, Mueller declared, "I have consistently said Consolidated

will stick with what was said in court and stick with the signed staking

40 Appellant's Br. at 32-33.
41CP at 184-86.
42 CP at 185 (emphasis added).

43 Id.
44 CP at 209-10.

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No. 77939-7-1/15

agreement."45 And in CM's memorandum in opposition to AVF's motion,

CM represented, "This matter is settled. It was settled on the basis of two

unambiguous contracts—one, put on the record on May 17, 2016, and the

second, the signed Staking Agreement of May 17, 2016 setting out the

specific boundaries of Consolidated's permanent easement."46

The court accepted CM's representations when it entered its October 11,

2016 order ratifying the CR 2A agreement. The court determined, "It is clear that

the parties intended that the easements follow the existing roads."47 And the court

concluded, although the parties appeared to agree to use straight lines, "rather

than the somewhat meandering version of the existing roads," the staking

agreement memorializing the location of the straight lines was ambiguous.48 As a

result, the court denied CM's request that the Triad survey be used to define the

easement. "The Triad survey does not appear to comport in anyway with the

agreement to follow the existing roads. . . and goes into unimproved Hall/AVF

property, contrary to the settlement agreement."49 The court ordered, "the

settlement agreement entered in court on May 17, 2016 is ratified as follows: . . .

Consolidated Midland, Inc., together with John Hall, Jerry Hall, Nancy Hall, and

45 CP at 342.
46 CP at 360.
47 CP at 425.
45 CP at 424-25.
49 CP at 425.

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No. 77939-7-1/16

Arbor Valley Farms, LLC, are granted permanent easements for ingress and

egress for both access roads."5°

CM asks this court to reverse the court's order ratifying the settlement

agreement and rescinding summary judgment. The result would be to reinstate

the adverse possession judgment in favor of CM and proceed to trial on AVF's

counterclaims. This would create an unfair advantage for CM. CM repeatedly

represented to the trial court that the in court settlement agreement was

enforceable. The trial court accepted these representations when it ratified the

agreement. CM cannot assert on appeal that the in court agreement was

unenforceable.

III. Requirements of CR 2A

CM also contends the court abused its discretion in enforcing the settlement

agreement because the agreement did not strictly comply with the requirements of

CR 2A.

A trial court's authority to compel enforcement of a settlement agreement is

governed by CR 2A and RCW 2.44.010.51 We review a trial court's decision to

enforce a CR 2A settlement agreement under the abuse of discretion standard.52

A trial court abuses its discretion when its decision is manifestly unreasonable or

based on untenable grounds or reasons.53

50 CP at 426.
51 Morris, 69 Wn. App. 865, 868, 850 P.2d 1357 (1993).

52 Id.

53 Id.

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CR 2A provides:

No agreement or consent between parties or attorneys in respect to
the proceedings in a cause, the purport of which is disputed, will be
regarded by the court unless the same shall have been made and
assented to in open court on the record, or entered in the minutes, or
unless the evidence thereof shall be in writing and subscribed by the
attorneys denying the same.

Similarly, RCW 2.44.010 provides:

An attorney and counselor has authority:

(1) To bind his or her client in any of the proceedings in an action or
special proceeding by his or her agreement duly made, or entered
upon the minutes of the court; but the court shall disregard all
agreements and stipulations in relation to the conduct of, or any of
the proceedings in, an action or special proceeding unless such
agreement or stipulation be made in open court, or in presence of
the clerk, and entered in the minutes by him or her, or signed by the
party against whom the same is alleged, or his or her attorney.

CR 2A "precludes enforcement of a disputed settlement agreement not

made in writing or put on the record, whether or not common law requirements are

met."54 And even if the "in writing or put on record" requirements have not been

satisfied, the court is precluded from enforcing the agreement only if there is a

genuine dispute over the existence of material terms of the agreement.55

Here, because the parties did read the terms of the settlement agreement

into the record in open court on May 17, 2016, CR 2A does not bar enforcement of

the agreement.

54 In re Marriage of Ferree, 71 Wn. App. 35, 40, 856 P.2d 706 (1993).
55 Id. at 40-41.

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No. 77939-7-1/18

CM also argues CR 2A bars enforcement if the agreement does not contain

all material terms. But CM fails to cite any authority to support this assertion, and

a review of the rule and surrounding case law does not reveal such a requirement.

CR 2A does not preclude enforcement of the settlement agreement.

IV. Fees on Appeal

AVF seeks fees on appeal under RAP 18.9.

Under RAP 18.9(a), an appellate court "may order a party. . . who uses

these rules for the purpose of delay. . . to pay terms or compensatory damages to

any other party who has been harmed by the delay." "An appeal is frivolous if

there are no debatable issues upon which reasonable minds might differ and it is

so totally devoid of merit that there was no reasonable possibility of reversal."56

Although CM's appeal is unsuccessful, the appeal is not frivolous because it

presents debatable issues. We deny AVF's request for fees on appeal.

Therefore, we affirm.

WE CONCUR:

56 Fay v. Nw Airlines, Inc., 115 Wn.2d 194, 200-01, 796 P.2d 412, 415
(1990).

18