## Facts

- Cain sued Saunders arising from Saunders’s agreement to guarantee certain debts of Cain.
- The trial court granted partial summary judgment for Saunders on three claims, leaving Cain’s breach-of-contract and commercially unreasonable conduct claims.
- The parties mediated the remaining claims and executed a written settlement agreement requiring Saunders to transfer ownership of two MONY life-insurance policies identified by death benefits ($19,022 and $12,300) and to waive claims to related policies referenced in an earlier document.
- After settlement, both parties learned the policies’ combined cash value was far lower than they had believed during mediation (less than $10,000 rather than about $20,000).
- Cain refused to perform, asserting he would not have settled had he known the actual cash values; Saunders moved to enforce the settlement.
- At the enforcement hearing, Cain sought to introduce testimony about expected cash values and mediation discussions; Saunders objected based on the parol-evidence rule and mediation confidentiality rules.
- The trial court enforced the settlement agreement and entered judgment in accordance with its terms.

## Issues

1. Whether a written settlement agreement requiring transfer of specified life-insurance policies is enforceable despite both parties’ mistaken beliefs about the policies’ cash value.
2. Whether parol evidence and mediation communications are admissible to show lack of meeting of the minds or mutual mistake when the settlement terms are unambiguous.
3. Whether a mutual mistake concerning value, rather than the existence or identity of the subject matter, warrants rescission or non-enforcement of an unambiguous settlement.

## Decision

- The Alabama Court of Civil Appeals affirmed the judgment enforcing the settlement agreement.
- The court held the settlement agreement was unambiguous and required transfer of the identified policies; it did not promise any particular cash value.
- The court upheld exclusion of parol evidence offered to vary or contradict the agreement’s clear terms, including evidence of negotiating positions communicated in mediation.
- The court rejected rescission based on mutual mistake because the mistake concerned valuation/economic expectations, not the identity or existence of the policies.

## Legal Principles

- Unambiguous settlement agreements are enforced according to their written terms; extrinsic evidence is generally inadmissible to alter or contradict those terms.
- A mutual mistake about the value or expected benefits of a bargain does not, without more, render an otherwise valid and unambiguous settlement void or voidable where the subject matter exists and is correctly identified.
- Confidentiality protections applicable to mediation communications support excluding evidence of mediation negotiations, especially when no contractual ambiguity requires resort to such evidence.
- When a trial court receives ore tenus testimony, its factual determinations are given deference on appeal absent clear error.

## Conclusion

The court enforced a mediated settlement requiring transfer of two specifically identified life-insurance policies, holding that a shared mistaken assumption about cash value did not justify rescinding an unambiguous agreement and that parol evidence and mediation communications could not be used to rewrite the bargain.


Cain v. Saunders, 813 So. 2d 891 (Ala. Civ. App. 2001)