“I Settled, But The Dispute Continues?”

Most people think settlement ends a dispute. But a settlement agreement is a legally binding contract, and disputes regarding compliance can arise. A recent decision from the Washington Court of Appeals, Cai v. Wen, illustrates how a settlement compliance dispute unfolds.

Following an investment dispute, Daoying Cai and Boheng Wen entered into a settlement agreement in which Wen agreed to pay $650,000 to Cai in June 2022. Because Wen did not have the funds, his children agreed to sell their homes to fund the payment. However, post-settlement enforcement action went on for years. When Wen failed to provide a deed of trust against one of the homes as promised, Cai moved the court to enforce the settlement agreement. The court granted the motion. When Wen’s daughter refused to provide requested assurances to the title company handling the sale of her home, the court granted Cai’s motion and declared Cai’s legal authority to sell the property. When the sale stalled because the title company refused to insure the transaction, Cai moved again to enforce the settlement agreement. The court again granted Cai’s motion. The sale eventually closed May 2023, but the net proceeds did not cover the $650,000. In May 2025, Wen moved to enforce the settlement agreement, arguing that Cai (1) breached the settlement agreement by not seeking the home’s maximum price and (2) violated the confidentially term. The Court of Appeals agreed with the trial court’s finding that Cai did not breach the settlement agreement.

Wen’s main argument that Cai breached the settlement was premised on the home’s sale price. Wen argued that Cai failed to “use all efforts to obtain the maximum sale price,” as required by the settlement. However, “all efforts” was left undefined. Wen and Cai’s appraisers valued the home similarly at $1,050,000 and $1,037,800 respectively. But Cai’s appraiser found that because of the housing market, the property’s uniqueness, and necessary repairs, listing around $900,000 would be appropriate. The home was listed at $899,800. After negotiations with the only offeror, $840,000 was accepted as the sale price. The court found that since Cai (1) conducted an independent appraisal, (2) listed the home as both single-family and multi-family to broaden the market and (3) considered recent market trends, there was no breach, and “all efforts” to obtain the maximum sale price were made. Regarding the confidentiality breach, the court found that since Wen was required to uphold his end of the agreement and failed to do so, the confidentiality provision did not apply.

A settlement agreement finalizes a dispute, until a party fails to comply with that agreement. Cai illustrates that parties may need to utilize settlement enforcement litigation to ensure the other side holds up its end of the bargain. Furthermore, when terms like “all efforts” are undefined, the court looks to the facts of the case and reasonableness to fill in the blanks. In this case, “all efforts to obtain the maximum sale price” meant Cai had to make reasonable efforts to obtain the best sale price.

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