LaFave v. Nationstar Mortgage LLC

Background

Theresa LaFave sued Nationstar Mortgage LLC, doing business as Mr. Cooper, over the foreclosure of her home. The complaint asserted claims concerning Minnesota’s foreclosure-by-advertisement requirements, breach of contract, mortgage-servicer licensing requirements, and quiet title. LaFave sought to void the December 18, 2018 sheriff’s sale, restore her ownership, and obtain damages and attorney fees.

The parties notified the court in December 2019 that they had settled. They signed a December 6, 2019 Memorandum of Understanding stating that they had reached a settlement. The memorandum identified the property, the parties’ obligations, and deadlines, and gave LaFave opportunities to reinstate or pay off her mortgage. It also provided for dismissal of the case with prejudice. The parties expected Nationstar to prepare a more detailed written settlement agreement containing standard terms.

LaFave did not exercise the options described in the memorandum. Nationstar later contacted her lawyer, who said he would respond after hearing from LaFave, but LaFave took no further action. Her lawyer eventually withdrew after being unable to reach her despite repeated attempts. At the time of the motion, LaFave was proceeding without a lawyer.

Motion and analysis

Nationstar moved to enforce the settlement or, alternatively, to dismiss the case for failure to prosecute under Federal Rule of Civil Procedure 41(b). LaFave was served with the motion, supporting documents, and hearing notice, but she filed no response and did not appear at the hearing.

The court explained that settlement agreements are contracts and require offer, acceptance, consideration, and mutual agreement on the material terms. It applied an objective standard, meaning the parties’ outward statements and conduct mattered rather than their unexpressed intentions. A later written document does not prevent enforcement when the parties have already agreed on the essential terms and left only details for later drafting.

The court found that the memorandum contained the settlement’s material terms. The statement that the parties “have reached a settlement,” the identification of the property and obligations, the deadlines, and the signatures of both sides’ lawyers showed mutual agreement. The court found no evidence that LaFave’s lawyer lacked authority to agree for her. The reference to a final written agreement was understood as leaving details for counsel to complete, not as preventing a binding agreement.

Ruling

The court held that the parties reached a valid and enforceable settlement. Judge Eric C. Tostrud granted Nationstar’s Motion to Enforce Settlement or, alternatively, Dismiss for Lack of Prosecution. The court dismissed the entire action with prejudice and ordered each party to bear its own costs and attorney fees. Judgment was ordered to be entered accordingly.