Blum v. Morgan Guar. Trust Co. of New York, 82-8149

• Decision Date: 22 July 1983
• Docket Number: No. 82-8149,82-8149
• Citation: 709 F.2d 1463
• Parties: 13 Fed. R. Evid. Serv. 1010 Peter E. BLUM and Robert S. Prather, Jr., Plaintiffs-Appellants, v. MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1463

709 F.2d 1463

13 Fed. R. Evid. Serv. 1010

Peter E. BLUM and Robert S. Prather, Jr., Plaintiffs-Appellants, v. MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Defendant-Appellee.

No. 82-8149.

United States Court of Appeals, Eleventh Circuit.

July 22, 1983.

Troutman, Sanders, Lockerman & Ashmore, Carl E. Sanders, John J. Dalton, Robert L. Mote, William N. Withrow, Jr., Atlanta, Ga., for plaintiffs-appellants.

Hansell, Post, Brandon & Dorsey, Charles E. Watkins, Jr., Atlanta, Ga., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before GODBOLD, Chief Judge, RONEY, Circuit Judge, and PITTMAN ^*, District Judge.

PITTMAN, District Judge:

This diversity action was brought by appellants, Peter E. Blum and Robert S. Prather, against appellee, the Morgan Guaranty Trust Company of New York (Morgan), to enforce an alleged oral agreement compromising a promissory note suit brought against the appellants and Larry D. Spielberger, in which Morgan had been awarded judgment against Blum, Prather and Spielberger, jointly and severally, for over three million dollars plus interest. Morgan Guaranty Trust Co. v. Blum, No. C75-2406A (N.D.Ga. Mar. 14, 1979), aff'd, 649 F.2d 342 (5th Cir.1981) ("note suit"). The complaint sought specific enforcement of the alleged oral settlement agreement through a court order requiring Morgan to execute settlement papers to be prepared by plaintiffs to embody the alleged oral agreement. Morgan moved for summary judgment based on stipulations entered into between Morgan, Blum, and counsel for both parties on May 3, 1977 and July 12, 1978, prohibiting the introduction into evidence of settlement negotiations among the parties. Morgan later submitted a supplemental motion for summary judgment that asked the district court to assume, for purposes of summary judgment, that there was an agreement as described by the plaintiffs, alleging that the agreement as thus described was not capable of specific enforcement as a matter of law. Both motions were opposed by the appellants.

The district court denied Morgan's motion based on the stipulations upon concluding that the stipulations allowed the plaintiffs to introduce evidence of settlement discussions occurring after the entry of final judgment in the note suit. The court granted Morgan's motion based on the agreement, concluding that the agreement as described by the plaintiffs, as a matter of law, did not meet the standards of completeness, definiteness, and clarity required for a court decree enforcing documents to be submitted as implementation of the alleged settlement.

The district court correctly determined that the alleged compromise is unenforceable as a matter of law, and the judgment of the district court should stand.

Morgan's first motion is based on the application of written stipulations that, it is argued, were offered to prevent admission of this evidence of the negotiations on which the appellants based their claim of a settlement agreement. Both stipulations provide as follows:

WHEREAS, the defendants in the above-entitled action wish to discuss settlement and compromise of their differences directly with an officer or officers of the plaintiff; and

WHEREAS, the plaintiff is willing to meet with the defendants and to hear such proposals; and

WHEREAS, the parties wish to express in writing their agreement that all such discussions be considered negotiations in settlement and compromise and that no party to the above-entitled action shall attempt to submit as evidence anything said or done by any other party at such meeting;

NOW, THEREFORE, for and in consideration of the premises and the mutual promises of the parties, it is hereby AGREED and STIPULATED:

(1) That until the above-entitled litigation is concluded by final judgment, settlement or otherwise, conversations between the defendants, singly or in combination, with any officers, directors, employees or agents of the plaintiff are for the purpose of negotiating an attempt to settle and compromise the above-entitled litigation, and nothing said or done in any such meeting or meetings shall be admissible in evidence in the above-styled case or in any other case involving the same or similar issues.

(2) The parties further agree that the fact that such meeting or meetings have occurred to negotiate a possible settlement or compromise of the above-entitled litigation shall not be admissible in evidence in this or any other case involving the same or similar issues.

Stipulations to limit the introduction of certain evidence are valid contracts under Georgia law. See Woodson v. Burton, 241 Ga. 130, 243 S.E.2d 885 (1978). The first paragraph of the stipulation precludes the admission into evidence of settlement discussions "until the [note suit] is concluded by final judgment...." The district court concluded that because a "final judgment" was entered in the note suit, i.e., summary judgment in favor of Morgan, the plaintiffs may, in this action, introduce evidence concerning settlement discussions entered into after the entry of summary judgment.

We disagree. The entry by a trial court of a judgment that is appealed is not a final judgment that concludes the litigation. The district court gave the stipulation an overly narrow reading. The district court erred in holding that the addition of the word "concluded" in the settlement agreement did not alter its meaning. Blue v. Morgan Guaranty Trust Co., No. C79 -866A (N.D.Ga. Oct. 5, 1981) at 9 n. 2 (hereinafter No. C79-866A). Final judgment for purposes of appeal and final judgment that concludes litigation are separate and distinct. It is clear that the agreement provided that nothing about the meeting would be admissible "until the ... (note suit) litigation is concluded ..." by final judgment, settlement, or otherwise. Although a final, appealable order was entered in the note suit ¹, it cannot be said that the note suit litigation was "concluded" thereby. We conclude that the parties thereto intended to exclude evidence of settlements until such time as the parties to the note suit had exhausted their appellate recourses. Until such time, in the absence of a compromise, a matter cannot be said to be concluded.

Thus, the district court erred in considering evidence of settlement discussions between Blum and officials of Morgan. For the reasons set forth below, we conclude that the district court should have granted Morgan's first motion for summary judgment based upon the stipulations.

A motion for summary judgment may be made solely on the basis of the complaint, in which case the motion is to be treated as the functional equivalent of a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6). 6 J. Moore, Moore's Federal Practice p 56.11 (2d ed. 1982). In this posture, the court must construe the complaint liberally in favor of the plaintiff, taking the facts as alleged as true. The motion should be denied if a claim has been pleaded.

The complaint makes the following allegations: On March 18, 1979, shortly after judgment was entered in the note suit, John Wendelken, Assistant Vice-President of the defendant, flew to Atlanta, Georgia, and met with Blum to discuss settlement of the matter without further post-trial and appellate...