Montana Homes LLC v. BNSF Railway Co.

Summary

The Ninth Circuit affirmed enforcement of a settlement agreement between Montana Homes LLC and BNSF Railway Co. concerning contamination claims arising from BNSF's Livingston maintenance shop complex. Applying Montana contract law, the court held that Montana Homes unconditionally accepted the settlement through its attorney and that the settlement was enforceable despite the absence of a finalized signed agreement. The court further held that the land conveyance was severable from the release of contamination claims and affirmed enforcement of the release portion while declining to enforce the conveyance on Statute of Frauds grounds.

Holdings

1. The parties entered into an enforceable settlement agreement because Montana Homes unconditionally accepted BNSF's settlement offer, and Montana Homes did not promptly disavow its attorney's acts or otherwise manifest an intent not to be bound.
2. The property sale was severable from the release of Montana Homes' environmental claims because the agreement provided separate consideration and purposes for the two components and contained an express severability provision.

Questions Presented

1. Whether the parties formed an enforceable settlement agreement under Montana law when Montana Homes' attorney unconditionally accepted BNSF's offer and Montana Homes did not promptly disavow the attorney's authority.
2. Whether the property sale was severable from the settlement of Montana Homes' environmental claims.

Disposition

affirmed