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HomeMy WebLinkAbout95-612 Orphans // 94-717 EquityRANDALL L. VALK, · Plaintiff · VS. : : DAUPHIN DEPOSIT BANK AND: TRUST COMPANY, a division of : DAUPHIN DEPOSIT CORP. : and RICHARD P. VALK, : Defendant : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION 21-95-612 RANDALL L. VALK, individually and on behalf of VALK MANUFACTURING COMPANY, Plaintiffs VS. RICHARD P. VALK, TED P. VALK, ELLIOTT K. BRAVERMAN and JAMES F. HAY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 717 EQUITY 1994 CIVIL ACTION - EQUITY IN RE: MOTION TO ENFORCE SETTLEMENT BEFORE HESS, J. ORDER AND NOW, this / ~"* day of December, 1998, the petition of the settling defendants for specific performance and enforcement of a settlement agreement is DENIED BY THE COURT, KefA. Hess, J. Michael Bangs, Esquire For the Plaintiff Thomas French, Esquire Michael A. Finio, Esquire R. Stephen Shibla For the Defendants :rim RANDALL L. VALK, Plaintiff VS. DAUPHIN DEPOSIT BANK AND TRUST COMPANY, a division of DAUPHIN DEPOSIT CORP. and RICHARD P. VALK, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION 21-95-612 RANDALL L. VALK, individually and on behalf of VALK MANUFACTURING COMPANY, Plaintiffs VS. RICHARD P. VALK, TED P. VALK, ELLIOTT K. BRAVERMAN and JAMES F. HAY, De~ndants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 717 EQUITY 1994 CIVIL ACTION - EQUITY IN RE: MOTION TO ENFORCE SETTLEMENT BEFORE HESS, J. MEMORANDUM AND ORDER In the captioned cases, certain defendants have petitioned for specific performance seeking the enforcement of an alleged agreement to settle these matters. The evidence at our recent hearing was to the effect that the plaintiff, Randall L. Valk, authorized his attorney, Robert L. O'Brien, Esquire, to send a letter dated December 11, 1997, informing the settling defendants of his willingness to settle both the equity and Orphans' Court actions in return for payment on behalf of the settling defendants of $620,500.00. The proposed settlement would 21-95-612 ORPHANS' COURT 717 EQUITY 1994 also include an agreement on the part of these defendants to cooperate in attending any proceedings against Elliott Braverman. The settlement also involved the repurchase of Randall Valk's shares of Valk Manufacturing Company at "book value." Mr. O'Brien's letter went on to say: The settlement would include other items discussed such as a return of all copies of your records, confidentiality agreement for the nonderivative case and a complete mutual release to be executed by all parties. By letter dated on or about December 18, 1998, the settling defendants, through their attorney, R. Stephen Shibla, Esquire, accepted "the settlement proposal as set forth in your second letter of December 11, 1997 (copy attached)." At the hearing of this matter, Mr. Randall Valk confirmed that he had authorized his attorney to send a letter on December 11, 1997. This, however, was the first letter sent by Mr. O'Brien. It was Mr. Valk's intention, at that time, that a monetary amount be proposed and that other matters would be the subject of continued negotiation. Having received Mr. O'Brien's first letter, Mr. Shibla contacted Mr. O'Brien the same day requesting a more comprehensive proposal. While Mr. O'Brien no doubt felt that he had the authority to extend an offer of final settlement, the plaintiff through his testimony has repudiated the proposal stating adamantly that he had no knowledge of the second letter and that it was his intention to reserve certain other issues for another day. These issues included the tax treatment of the monies payable to him under the agreement and the mechanism whereby his lawsuit would be 21-95-612 ORPHANS' COURT 717 EQUITY 1994 continued against defendant Elliott K. Braverman. Mr. Valk admits that he first discussed the matter of tax treatment with his accountant in January of 1998, after the December exchange of letters. Because of his position that he had not, as yet, agreed to a final settlement, he felt at liberty to insert into a proposed final settlement agreement reference to tax treatment. It is this provision in the subsequently proposed settlement agreement which was not acceptable to the settling defendants. The legal principles applicable to this case were set out in Rockey v. Big Springs School District. Therein the court noted: Settlement agreements are highly favored. Muhammad v. Strassburger, 526 Pa. 541,546-52, 587 A.2d 1346, 1348-51 (1991). There is a presumption that a settlement entered into by an attorney has been authorized by the client, although rebuttal of the presumption will render the purported settlement ineffective. See generally Annotation, Authority of Attorney to Compromise Action, 30 A.L.R.2d 944 (1953); Garabedian v. Allstates Engineering Co., 811 F.2d 802, 803 (3d Cir. 1987). This presumption is fundamental to the effective functioning of our adversary system which is grounded, in part, upon two interrelated understandings: (1) that attorneys speak for their clients, both to the court and to opposing counsel, and (2) that attorney-client communications are privileged. Being able to rely upon counsels' representations of their clients' positions serves the salutary purpose of avoiding intrusion into the attorney-client relationship. Of course, there will be occasional situations where an attorney, by mistake or otherwise, will misrepresent a client's position. This can easily be determined and 3 21-95-612 ORPHANS' COURT 717 EQUITY 1994 addressed by a fact-finding exercise, once the client has come forward to deny the attorney's representations. Otherwise, no inquiry into the conversations or understandings between clients and their counsel is warranted .... Rockey v. Big Spring School District, 699 A.2d 1331, 1334 (Pa. Cmmwlth. 1997). An extremely important aspect of the settlement of this case with certain defendants was Mr. Valk's insistence that this matter proceed against defendant Elliott Braverman. Even as recently as our hearings on the matter of specific performance, there was no agreement between the parties as to how this would be accomplished. To the extent that a settlement was reached, it failed to include some material terms. This lawsuit has been pending for several years. The complexity of the case is exacerbated by animosities that are familial and personal in nature. That the attorneys involved would be eager to settle the case is understandable. In Rockey, the disagreement between the parties involved the amount of just compensation in a condemnation proceedings. Essentially, it was alleged that the parties, through counsel, had reached an agreement concerning the amount to be paid. In the matter sub judice there are actually two cases; one in the Orphans' Court and one in Equity. This case includes a stockholder's derivative action which cannot be dismissed or compromised without court approval. This matter is far more complicated than the one in Rockey. Settlement here cannot be accomplished piecemeal. We do not believe that the plaintiff assented, on December 1 lth, to all the material terms necessary to settle this litigation. To the extent that he bears the burden of proving his 4 21-95-612 ORPHANS' COURT 717 EQUITY 1994 repudiation of the purported settlement in December, he has met that burden. Moreover, at least one aspect of the plaintiff's proposal in January of 1998 was not acceptable to the defendants. ORDER AND NOW, this /5~' day of December, 1998, the petition of the settling defendants for specific performance and enforcement of a settlement agreement is DENIED Michael Bangs, Esquire For the Plaintiff Thomas French, Esquire Michael A. Finio, Esquire R. Stephen Shibla For the Defendants BY THE COURT, :rim