As we've noted before, we think courts generally don't like it when they are asked to revisit a dispute that was settled by agreement. Yes, settlement agreements are contracts, and just like every other contract they are subject to enforcement, breach actions, and the like.
But our experience is that courts are not keen on revisiting, because when you settle, you settle. Write up that settlement agreement well, counsel, because if everyone isn't going in with eyes wide open about what they are agreeing to, what they aren't agreeing to, and what are the potential risks down the road, you probably won't get a second judicial bite to complain.
The Colorado Court of Appeals' opinion in Denver v. Monaghan Farms, No. 22CA0956-PD (June 29, 2023) just might reflect that sense (or maybe the party arguing that the settlement agreement didn't do what the other party said just didn't have winning arguments). But either way, the court rejected every argument by the former property owner/condemnee, and held in favor of the current property owner/condemnor.
Back in 1988 Denver was going to take Monaghan's property for what would become DIA (the airport). Just comp determined to be in the range of $27 million and while the case was pending before the Colorado Supreme Court, the parties settled. $30 million compensation (that represented an agreed-upon amount, not necessarily just compensation), the parties executed a mutual release, and the trial court entered a follow up order transferring title to Denver "free and clear of all liens and encumbrances." Slip op. at 4.
Flash forward a few decades, to 2017 to be precise. "[A]fter learning that Denver planned to lease part of the condemned property for private commercial use instead of for DIA, [the former owner] sent a letter to Denver requesting good faith negotiations under the settlement agreement, contending that it retained a 'right to reversion' if the parcels were no longer used by DIA. Id. There was also a claim that the use DIA intended to make of the parcel wasn't a public use.
Denver instituted a quiet title action: we own the property and can do with it what we want. The trial court held in favor of Denver. The use DIA intended to make was a public airport use, and there's no reversionary interest anyway because the transfer to Denver agreed to in the the settlement agreement had no strings attached (fee simple absolute).
The court of appeal agreed. When an agreement contains the language "free and clear of all encumbrances," that describes a fee simple interest, free of a right of reverter. Slip op. at 14. The court also rejected Monaghan's argument that the condemnation wasn't expressly to take a fee simple interest, thus the settlement agreement didn't (and couldn't) convey more. The court held that there's no requirement for a condemnation to be for "fee simple absolute" in order to take a fee simple absolute interest. The interest taken is the interest taken and "[t]he lack of certain 'magic words' doesn't change the nature of the estate that Denver obtained." Slip op. at 13.
You can read the rest of the opinion for the reasons why the court also rejected the balance of the (former) owner's argument.
But we're filing this one under the "when you settle, you settle" label. It's going to be a tough road to get a court to look at it differently.
Denver v. Monaghan Farms, No. 22CA0956-PD (Colo. Ct. App. June 29, 2023)
