Estate of Bossio v. Bossio

Decision Date09 May 2016
Docket Number14–1329.,Nos. 14–1328,s. 14–1328
Citation785 S.E.2d 836,237 W.Va. 130
CourtWest Virginia Supreme Court
PartiesESTATE OF Luigi BOSSIO a/k/a Louis Bossio, Petitioner/Defendant Below v. Bernard V. BOSSIO, Respondent/Plaintiff Below and Sam Bossio, Petitioner/Defendant Below v. Bernard V. Bossio, Respondent/Plaintiff Below.
Dissenting Opinion of Justice Benjamin

Jason E. Wingfield, Esq., David M. Jecklin, Esq., Michelle L. Bechtel, Esq., Gianola, Barnum, Bechtel, and Jecklin, L. C., Morgantown, WV, for Petitioner Estate of Luigi, Bossio.

Samuel H. Simon, Esq., Matthew J. Lauman, Esq., Houston Harbaugh, P.C., Pittsburgh, PA, for Petitioner Sam Bossio.

Brian T. Must, Esq., Joshua D. Baker, Esq., Metz Lewis Brodman Must O'Keefe LLC, Pittsburgh, PA, and Alex J. Shook, Esq., Hamstead, Williams & Shook, PLLC, for Respondent.

WORKMAN, Justice:

This is an appeal of the Circuit Court of Monongalia County's orders, following a bench trial, finding that the parties are bound by the terms of a 1990 stock purchase agreement requiring petitioner Estate of Luigi Bossio to sell to Bossio Enterprises the corporate shares owned by Luigi Bossio at the time of his death in 2007. The circuit court found that respondent Bernard Bossio proved the existence and terms of a “missing” 1990 stock purchase agreement which purportedly required that Luigi Bossio's shares be redeemed by the corporation rather than passing to his Estate.

Based upon our review of the briefs, legal authorities, appendix record, and upon consideration of arguments of counsel, this Court finds that the circuit court's conclusion that respondent proved, with clear and convincing evidence, the terms of the 1990 stock purchase agreement was not clearly erroneous. Accordingly, we affirm the September 5, 2014 and December 1, 2014 orders of the circuit court.

I. FACTS AND PROCEDURAL HISTORY

Bossio Enterprises (hereinafter the corporation) was formed in 1979 to own and operate Mario's Pizza located in Morgantown, West Virginia. At the time of incorporation, the shares were equally split between Luigi Bossio and each of his two sons, petitioner Sam Bossio (hereinafter petitioner Bossio) and respondent Bernard Bossio (hereinafter respondent).1 The corporation eventually sold off the pizza shops and its various franchises and began acquiring commercial and residential real estate. All parties agree that in 1981, discussions were had among the Bossios about entering into a stock purchase agreement which would require the corporation to purchase the shares of any deceased member such that ownership and management of the corporation would remain with the original owners and any surviving spouses would not obtain an interest in the corporation.

The 1982 Stock Purchase Agreement

To that end, respondent testified that in 1981 Joseph Marshalek, the corporation's in-house accountant and CFO, suggested and facilitated the formation of a stock purchase agreement, which was prepared by Morgantown attorney David Straface. At trial, respondent introduced an unsigned draft document purporting to be the 1982 stock purchase agreement, asserting that the original, executed document could not be located.2 The document further contains handwritten notes which Mr. Marshalek acknowledged were his notations for purposes of discussing the various provisions of the agreement with the Bossios. Respondent testified that he, his father and brother all executed the document in Mr. Marshalek's office in 1982 and placed the agreement in a manila envelope marked “buy/sell agreement,” which was then placed in the company safe in his office. The manila envelope, which was empty when respondent went to retrieve it for purposes of this litigation, was introduced into evidence. Respondent testified that he had not been in his office in the warehouse where the safe was housed for many years. Respondent denied that any copies of the agreement were made. Mr. Marshalek testified somewhat cryptically that although he did not recall “specifically” that the stock purchase agreement was executed in 1982, he recalled “generally” that the agreement was executed to the “best of his recollection.” Mr. Straface had no recollection of preparing such a document, but his file contained a copy of the unsigned draft agreement which was introduced into evidence. Petitioner Bossio could not recall executing such a document, but testified that it was “possible.” Petitioner Bossio further testified that he paid little attention to the legal minutiae of the corporation. The executor of the petitioner Estate, Antoinette Summers, had no personal knowledge of the execution of the agreement, nor did Luigi's widow, Emilia Bossio.

Critically, the draft 1982 stock purchase agreement required the corporation to maintain life insurance policies on each of the members, the proceeds from which would be utilized to redeem any deceased member's shares in accordance with the agreement. The agreement further provided that the agreement would terminate in the event any of the insurance policies lapsed, thereby presumably depriving the corporation of the funds and ability to redeem any deceased member's stock. The unsigned agreement introduced at trial also contained an attached schedule of insurance reflecting that three separate policies of $100,000 were procured on the members from Equitable, along with the policy numbers. It is undisputed that these policies were in fact purchased and lapsed in early 1996 for non-payment of premiums.

The 1990 Stock Purchase Agreement

Respondent testified that at some point in 1990, a decision was made to revise the 1982 stock purchase agreement. Respondent testified that the corporation had been forced to borrow against the policies and was having difficulty making the premium payments; therefore, the agreement was to be revised to eliminate the requirement of the life insurance policies to fund redemption of the stock. Mr. Straface was again allegedly retained to revise the agreement and respondent alleges that he and petitioner Bossio executed the new agreement in Mr. Marshalek's office and then took it to their father, who executed it at his home. Petitioner Bossio, again, had no recollection of executing such an agreement but could not “rule it out.” Respondent testified that the agreement was placed in the same manila envelope in the company safe as the 1982 agreement. No copy of this purported document—signed or unsigned, draft or otherwise—was produced at trial. Mr. Marshalek had no recollection of whether such a document was prepared or executed. However, Mr. Straface produced a copy of the 1982 draft agreement from his file, which contained his handwritten note “did new K [contract] 1990.”3 Moreover, the stock certificates contained a typewritten endorsement on the back which reads:

This certificate is transferable only upon compliance with the provisions of an agreement dated 10–1–90, among Bossio Enterprises, Inc., Louis Bossio, Sam Bossio and Bernard Bossio, a copy of which is on file in the Office of the Secretary of the Corporation.

Respondent testified that the only substantive difference between the 1982 and 1990 stock purchase agreements was that the life insurance requirement was made optional, rather than mandatory, and that any reference to the agreement terminating upon lapse of the policy was eliminated. Respondent introduced a partially executed stock purchase agreement from BHM Enterprises (an unrelated company which Respondent, petitioner Bossio, and two cousins formed), which he maintains is identical to the 1990 stock purchase agreement and similarly reflects these revisions. Respondent's testimony about the alleged changes and substance of the 1990 stock purchase agreement which he seeks to enforce was the only evidence on that issue.

Luigi Bossio died testate in 2007 and his ten shares of stock in the corporation are not mentioned in his will.4 As a result, the shares passed to his estate as personal property; the petitioner Estate refused to sell the shares back to the corporation. Respondent filed the instant action seeking to enforce the alleged terms of the purported 1990 stock purchase agreement, demanding that petitioner Estate sell the shares back to the corporation, which would thereby increase his interest in the corporation from one-third to one-half. A bench trial was held following which the circuit court entered an order concluding that respondent had proven that the parties intended to enter into an arrangement where, upon the death of one of the shareholders of the corporation, the corporation would purchase the stock of the deceased shareholder and that such an agreement was executed in 1982 and revised in 1990.5 The circuit court further found that the 1990 agreement was identical in all respects to the 1982 agreement except that it eliminated the life insurance requirement and the “consequences” of not having life insurance, i.e. the termination of the agreement as a whole. This appeal followed.

II. STANDARD OF REVIEW
In reviewing challenges to the findings and conclusions of the circuit court made after a bench trial, a two-pronged deferential standard of review is applied. The final order and the ultimate disposition are reviewed under an abuse of discretion standard, and the circuit court's underlying factual findings are reviewed under a clearly erroneous standard. Questions of law are subject to a de novo review.

Syl. Pt. 1, Pub. Citizen, Inc. v. First Nat. Bank in Fairmont, 198 W.Va. 329, 480 S.E.2d 538 (1996). Although the circuit court's findings are contained in the order under the heading “conclusions of law,” its findings with regard to the existence and content of the subject stock purchase agreements are plainly findings of fact, subject to a clearly erroneous standard. With these standards in mind, we turn to the parties' arguments.

III. DISCUSSION

Although both petitioners set forth four assignments of error, all assignments...

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