Berardi v. Meadowbrook Mall Co.

• Decision Date: 01 November 2002
• Docket Number: No. 30517.,30517.
• Court: West Virginia Supreme Court
• Parties: Jerry A. BERARDI, Betty J. Berardi, and Bentley Corporation, Plaintiffs Below, Appellants, v. MEADOWBROOK MALL COMPANY, an Ohio Limited Partnership, and the Cafaro Company, an Ohio Corporation, Defendants Below, Appellees.

572 S.E.2d 900

212 W.Va. 377

Jerry A. BERARDI, Betty J. Berardi, and Bentley Corporation, Plaintiffs Below, Appellants, v. MEADOWBROOK MALL COMPANY, an Ohio Limited Partnership, and the Cafaro Company, an Ohio Corporation, Defendants Below, Appellees.

No. 30517.

Supreme Court of Appeals of West Virginia.

Submitted October 8, 2002.

Decided November 1, 2002.

Brent E. Beveridge, Beveridge Law Offices, Fairmont, for the Appellants.

Kevin S. Kaufman, Kaufman & Bowen, Bridgeport, for the Appellees.

PER CURIAM:

Jerry A. Berardi (hereinafter referred to as "Mr. Berardi"), Betty J. Berardi, and Bentley Corporation, plaintiffs below/appellants (hereinafter collectively referred to as "the Berardis"), seek reversal of a summary judgment granted to Meadowbrook Mall Company, an Ohio Limited Partnership, and the Cafaro Company (hereinafter referred to as "Cafaro Company"), an Ohio Corporation, defendants below/appellees (hereinafter collectively referred to as "Meadowbrook" or where necessary "Cafaro Company"). After reviewing the briefs, considering pertinent authorities, and hearing the arguments of counsel, we affirm the circuit court.

I. FACTS AND PROCEDURAL HISTORY

Between 1985 and 1987, the Berardis leased space for three restaurants from Meadowbrook.¹ In 1990, the Berardis were delinquent in their rent. Cafaro Company, an affiliate of Meadowbrook, sent a letter dated October 1, 1990, to Mr. Berardi citing the arrearages. The letter informed him that a lawsuit would be filed in Ohio requesting judgment for the total amount of the arrearages. The letter proposed that after filing the suits, a consent judgment would be forwarded to Mr. Berardi granting judgment for the full amount of arrearages. Once the consent judgment was signed by both parties and filed with the court, the letter pledged, no steps to enforce the judgment would be undertaken providing the Berardis continued to operate their three restaurants consistent with the then present payment arrangement. Mr. Berardi signed the letter on October 5, 1990.

In April 1996, Meadowbrook caused to be filed in the Circuit Court of Harrison County, West Virginia, abstracts of judgment of the Ohio lawsuits. A motion to set aside the judgment was filed on behalf of the Berardis by their attorney, Mr. John Farmer after April 4, 1997, when a lien check disclosed the entry of judgments.² The lien check occurred as a result of the Berardis refinancing the "Goff Building" — a building they owned. The lien on the Goff Building impeded the refinancing.

Correspondence was exchanged between counsel for the parties starting on at least April 22, 1997. The correspondence ultimately led, in June 1997, to the Berardis and Anthony Cafaro (an authorized agent for Meadowbrook) signing a "Settlement Agreement and Release" settling the 1990 Ohio judgments. In this document, the Berardis acknowledged the validity of the 1990 Ohio judgments and that the aggregate due under them, plus interest and leasehold charges, was $814,375.97. The Berardis agreed to pay Meadowbrook $150,000 on the date the Goff Building refinancing occurred, and also to pay Meadowbrook $100,000 plus 8.5% interest per year on the third anniversary of the initial $150,000 payment. These payments would discharge the Berardis from all other amounts due and owing. The payment of the initial $150,000 would also result in Meadowbrook releasing the lien against the Goff Building.

The agreement additionally recited:

Berardis hereby release and forever discharge Meadowbrook, its employees, agents, successors, and assigns from any and all claims, demands, damages, actions, and causes of action of any kind or nature that have arisen or may arise as a result of the leases, or Guaranties whether said claims are known or unknown, contingent, or liquidated, from the beginning of time to the effective date of the agreement. Berardis acknowledge there was no unethical behavior on behalf of Meadowbrook Mall Company, its employees, agents.

Nevertheless, on October 2, 2000, the Berardis filed a complaint against Meadowbrook alleging that Meadowbrook breached the October 1990 agreement by attempting to enforce the 1990 Ohio judgments, that Meadowbrook extorted by duress and coercion the 1997 agreement, and that Meadowbrook and other business entities had conspired to enter into extortionate agreements with their tenants. Meadowbrook filed a motion to dismiss under the 1997 settlement. The Berardis then filed an amended complaint alleging breach of contract of the 1990 agreement, fraud in obtaining the confessed 1990 Ohio judgments, that Meadowbrook extorted money from the Berardis under the 1997 agreement as they were attempting to secure a business loan, and conspiracy in committing extortion. Meadowbrook's answer included the affirmative defenses of, inter alia, accord and satisfaction, estoppel, laches and payment, release and waiver, and a counterclaim to enforce the 1997 agreement. Meadowbrook sought summary judgment, which the circuit court granted. From this summary judgment, Berardi now appeals.

II. STANDARD OF REVIEW

"Pursuant to Rule 56 of the West Virginia Rules of Civil Procedure, summary judgment is required when the record shows that there is `no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Consolidation Coal Co. v. Boston Old Colony Ins. Co., 203 W.Va. 385, 390, 508 S.E.2d 102, 107 (1998). "A circuit court's entry of summary judgment is reviewed de novo." Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). However, "in making a ruling, `the judge must view the evidence presented through the prism of the substantive evidentiary burden.'" Williams v. Precision Coil, Inc., 194 W.Va. 52, 62, 459 S.E.2d 329, 339 (1995) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202, 215 (1986)). "In cases of substantial doubt, the safer course of action is to deny the motion and to proceed to trial." Id. at 59, 459 S.E.2d at 336. Our review here is further circumscribed because it involves a settlement agreement and we have said that, "when this Court undertakes the appellate review of a circuit court's order enforcing a settlement agreement, an abuse of discretion standard of review is employed." DeVane v. Kennedy, 205 W.Va. 519, 527, 519 S.E.2d 622, 630 (1999).

III. DISCUSSION

The Berardis contend that because the 1997 agreement was coerced by economic duress, the circuit court erred in finding it was enforceable. They also assert that even if the 1997 agreement is valid, it does not impede their ability to sue Cafaro Corporation.

Meadowbrook retorts that the 1997 settlement agreement is valid and was not the result of economic duress in a legal sense. It contends the release was an arms-length transaction between sophisticated business people represented by counsel which is indisputably valid. Finally, they assert that the plain language of the agreement clearly includes Cafaro Corporation and that if the 1997 agreement is valid, it encompasses Cafaro as well as Meadowbrook.

The Berardis imply that summary judgment is inappropriate in complex cases or ones involving motive and intent. We reject characterizing this case as "complex." Further, economic duress must be viewed in terms of a plaintiff's reasonable response, Syl. Machinery Hauling, Inc. v. Steel of West Virginia, 181 W.Va. 694, 384 S.E.2d 139 (1989) (defendant's wrongful activities cannot leave the plaintiff any "reasonable alternative but to acquiesce"), so that "[t]he defense of economic duress does not turn only upon the subjective state of mind of the plaintiffs, but it must be reasonable in light of the objective facts presented." Freedlander, Inc. v. NCNB Nat'l. Bank, 706 F.Supp. 1211, 1212 (E.D.Va.1988) (applying Virginia law), aff'd, 921 F.2d 272 (4th Cir.1990) (per curiam) (unpublished) (text available at 1990 WL 209860).³

"Summary judgment is not a remedy to be exercised at the circuit court's option; it must be granted when there is no genuine disputed issue of a material fact." Powderidge Unit Owners Ass'n v. Highland Properties, Ltd., 196 W.Va. 692, 698, 474 S.E.2d 872, 878 (1996); Payne v. Weston, 195 W.Va. 502, 506, 466 S.E.2d 161, 165 (1995) (same). Thus, summary judgment is properly available. See 76 C.J.S. Release § 85 at 635-36 (1994) ("Where the evidence on an issue involving a release is undisputed or clearly warrants but one conclusion, the court may take the case from the jury and direct a verdict or finding on that issue.").

"We begin our discussion of this issue by reiterating, at the outset, that settlements are highly regarded and scrupulously enforced, so long as they are legally sound." DeVane, 205 W.Va. at 534, 519 S.E.2d at 637.⁴ "The law favors and encourages the resolution of controversies by contracts of compromise and settlement rather than by litigation; and it is the policy of the law to uphold and enforce such contracts if they are fairly made and are not in contravention of some law or public policy.' Syllabus point 1, Sanders v. Roselawn Memorial Gardens, 152 W.Va. 91, 159 S.E.2d 784 (1968)." Syl. pt. 6, DeVane. Those who seek to avoid a settlement "face[] a heavy burden[,]" Id. at 534-35, 519 S.E.2d at 637-38 and "[s]ince ... settlement agreements, when properly executed, are legal and binding, this Court will not set aside such agreements on allegations of duress ... absent clear and convincing proof of such claims." Syl. pt. 2, in part, Warner v. Warner, 183 W.Va. 90, 394 S.E.2d 74 (1990).

The Berardis contend the 1997 settlement is invalid as it was procured by "economic duress:"

The concept of "economic or business duress" may be generally stated as follows: Where the plaintiff is forced into a transaction as a result of unlawful threats or wrongful, oppressive, or unconscionable conduct on the part of the defendant which leaves the plaintiff no reasonable alternative but to

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