The Whole Tooth

A brother and sister who took over their father’s dental practice had a falling out leading to a settlement agreement that the sister sought to render unenforceable. 

The Idaho Supreme Court affirmed the district court’s conclusion that the deal was done

This consolidated appeal concerns the enforceability of a settlement agreement and a noncompete clause. Elizabeth and Jason Carter are siblings and licensed dentists. They bought Carter Dental from their father in 2006 and worked together as partners in a professional association for more than a decade. In 2020, Jason accused Elizabeth of misusing the practice’s funds for her own benefit. Litigation ensued, during which the parties agreed to mediation. The mediation resulted in an agreement containing 14 bullet points providing that Elizabeth would sell her shares in the dental practice to Jason and not compete against the practice for two years. Those bullet points were later incorporated into a formal settlement agreement. Jason’s counsel then drafted a written mutual release, which Elizabeth refused to sign.

All or nothing

Either the entire agreement stands, or the entire agreement falls. Elizabeth cannot embrace parts of the district court’s judgment that benefit her without also accepting that the full judgment dismissed all claims. Elizabeth received $115,000 from Jason as part of the settlement agreement, her Capital One credit card was paid, and a dental malpractice insurance tail coverage policy was purchased for her. With dismissal, Elizabeth also avoided facing allegations of the underlying litigation which averred that she used nearly $500,000 in Carter Dental funds solely for her personal benefit. Elizabeth cannot accept these benefits while continuing to argue against other terms of the settlement. As noted, the first of the fourteen terms of the agreement provides that “[a]ll claims dismissed with prejudice.” As a result, we hold that Elizabeth is estopped from now arguing on appeal that parts of the agreement are unenforceable.

Fees were awarded to the brother and the practice. (Mike Frisch)