## Facts

- Plaintiffs obtained a jury verdict in a products-liability action involving defective hoses installed in their heating systems, with damages including repair/replacement costs, diminution in value, and “other costs and losses.”
- The jury allocated Goodyear’s responsibility for “other costs and losses” at 36% for two plaintiff groups and 48% for two others.
- In a prior appeal, the court held plaintiffs were entitled to prejudgment interest on the “other costs and losses” and remanded for determination of accrual dates and calculation of the interest amounts.
- On remand, counsel agreed on prejudgment-interest accrual dates but disagreed on the monetary calculations.
- Goodyear’s co-counsel emailed plaintiffs’ counsel charts reflecting Goodyear’s “calculations,” but the charts mistakenly applied 100% liability rather than the 36%/48% allocations, overstating Goodyear’s liability by more than $550,000.
- Plaintiffs treated the email and charts as an offer, purported to accept, and moved to enforce a settlement based on the mistaken figures.
- The trial court granted the motion and enforced the alleged settlement agreement.
- Goodyear appealed the order enforcing the purported settlement.

## Issues

1. Whether the email and attached charts constituted an offer capable of acceptance sufficient to form a settlement agreement.
2. If an agreement was formed, whether it was unenforceable or voidable due to Goodyear’s unilateral mistake where plaintiffs had reason to know of the error and enforcement would be inequitable.

## Decision

- The Court of Appeals reversed the order enforcing the purported settlement.
- The court held the email and charts did not constitute an offer capable of acceptance because they reflected ongoing negotiations and lacked a clear manifestation of intent to be bound.
- The court further held that, even assuming an offer and acceptance, enforcement would be barred under unilateral-mistake principles because the mistake was material, plaintiffs had reason to know of it, and enforcement would yield an inequitable windfall.
- The case was remanded with directions to allow the parties to file a satisfaction of judgment for amounts already paid by Goodyear.

## Legal Principles

- An enforceable offer requires a clear manifestation of willingness to enter a bargain such that the recipient is justified in understanding that acceptance will conclude the transaction.
- Communications made during ongoing negotiations, especially those containing qualifying language and inviting further discussion, may lack the requisite intent to be bound and thus are not offers.
- A contract or settlement may be unenforceable or voidable for unilateral mistake when the mistake concerns a basic assumption, materially affects the exchange, the non-mistaken party had reason to know of the mistake (or caused it), and enforcement would be unconscionable or would produce an inequitable result.
- A party may have a duty to inquire rather than “accept” an obviously erroneous term when the error is apparent from known, controlling allocations or the structure of the underlying judgment.

## Conclusion

The court held that a mistaken prejudgment-interest calculation sent during negotiations was not an offer and could not be converted into an enforceable settlement by “acceptance,” and that any purported agreement resting on an obvious, material unilateral mistake could not be enforced where it would produce an inequitable windfall.


Sumerel v. Goodyear Tire & Rubber Co., 232 P.3d 128 (Colo. App. 2009)