Isidor Paiewonsky Associatesv.Sharp Properties

United States District Court, D. Virgin Islands, D. St. Thomas and St. JohnMar 27, 1991
761 F. Supp. 1231 (D.V.I. 1991)

Civ. A. No. 87-44.

March 27, 1991.

Richard Grunert, for plaintiffs I. Paiewonsky Assoc., and L.S. Holding, Inc.

Frederick Watts, for defendant Sharp Properties.

Linda Shelby, for defendant Bared.

Deborah Butler, for defendants West Indies Corp., and Ari Corp.


MEMORANDUM OF DECISION


McGLYNN, District Judge.

This case comes before the court on a Motion for Entry of Judgment. The plaintiffs, Isidor Paiewonsky Associates, Inc., (IPA) and L.S. Holding, Inc., contend that they are entitled to entry of judgment in their favor based upon the terms of a proposed settlement agreement. Two of the three defendants, Bared Jewelers of the V.I., Inc., (Bared) and Ari Corporation, (Ari), assert that the plaintiffs are not entitled to entry of judgment in their favor because Bared and Ari never assented to the terms of the proposed settlement agreement.

I. BACKGROUND

The plaintiffs were the owners of a piece of real estate on the main street of St. Thomas. This piece of real estate was designated parcel 38A. Parcel 38A adjoined another piece of real estate owned by co-defendant Sharp Properties, Inc. (Sharp). Sharp's property was designated parcel 38. Sharp had leased parcel 38 to co-defendant Ari, which, in turn, had subleased the property to co-defendant Bared.

The plaintiffs initiated suit based upon the assertion that they were entitled to a prescriptive easement over a portion of parcel 38. The case was originally brought in the Territorial Court of the Virgin Islands in 1983, but was later transferred to the District Court of the Virgin Islands on February 9, 1987.

The case immediately proceeded to a nonjury trial with a Special Master presiding. On February 13, 1987, a proposed settlement agreement was read into the record in open court.

Each party made a separate statement on the record indicating their position with respect to the proposed settlement agreement. The parties intended that the statements made in the presence of the court would be transposed into a formal written agreement soon after the proceeding. The parties, however, failed to mutually agree upon terms which they felt accurately reflected the statements that had been made in open court.

The transcript of this proceeding appears in Appendix A of this opinion.

The meaning of the statements made by the respective parties is the sole issue presented by the plaintiffs' motion. The plaintiffs allege that the Plaintiffs' Written Agreement for Mutual Settlement, which the plaintiffs and co-defendant Sharp have signed, accurately reflects the agreement to which all the parties consented at the February 13, 1987 proceeding. The plaintiffs assert that because the Plaintiffs' Written Agreement for Mutual Settlement accurately reflects the settlement agreement made in open court, the court must enter judgment against the nonsignatory co-defendants Bared and Ari.

The authenticity of the transcript of the proceeding has not been disputed by any of the parties.

The text of the Plaintiffs' Written Agreement for Mutual Settlement appears at Appendix B of this opinion.

Plaintiffs' Supplemental Brief to its Motion for Entry of Judgment at 3.

Id. at 3-4.

Bared and Ari, however, contend that the Plaintiffs' Written Agreement for Mutual Settlement goes well beyond the oral representations made at the court proceeding. Furthermore, Bared and Ari argue, the oral representations made at the proceeding did not constitute a settlement agreement. Bared and Ari contend that because the Plaintiffs' Written Agreement for Mutual Settlement does not accurately reflect the representations made in open court, and because no settlement was ever reached, judgment cannot be entered in favor of the plaintiffs.

See Memorandum in Opposition to Motion for Entry of Judgment of Bared Jewelers of the V.I., Inc. at 2-3.

See id. at 2-5.

See id. at 6.

II. DISCUSSION

A district court has jurisdiction to enforce a settlement agreement entered into by litigants in a case pending before it. Rosso v. Foodsales Inc., 500 F. Supp. 274, 276 (E.D.Pa. 1980); see also Hobbs v. American Investors Management, Inc., 576 F.2d 29 (3d Cir. 1978). In this circuit, "an agreement to settle a lawsuit, voluntarily entered into is binding upon the parties whether or not made in the presence of the court, and even in the absence of a writing." Green v. John H. Lewis Co., 436 F.2d 389, 390 (3d Cir. 1970).

The construction and enforcement of settlement agreements are governed by principles of local law applicable to contracts generally. See e.g. Plymouth Mutual Life Insur. Co. v. Illinois Mid-Continent Life Insur. Co., 378 F.2d 389 (3d Cir. 1967); Florida Educ. Ass'n v. Atkinson, 481 F.2d 662 (5th Cir. 1973). The local law generally applicable to contracts in the Virgin Islands is the Restatement (Second) of Contracts. Ventura v. Pearson, 17 V.I. 107, 111 n. 2 (Terr.Ct.St.C. 1987).

The only essential prerequisite for creation of a valid contract is that the parties mutually assent to the terms and conditions of the agreement. Id. at 111; Pugh v. Super Fresh Food Markets Inc., 640 F. Supp. 1306, 1308 (E.D.Pa. 1986) (citing Main Line Theatres, Inc. v. Paramount Film Distributing Corp., 298 F.2d 801, 802 n. 1, 803 (3d Cir. 1962). The manifestation of mutual assent almost invariably takes the form of an offer by one party which is accepted by the other party. Ventura, 17 V.I. at 111 (citing Restatement (second) of Contracts § 22).

An offer is "the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it." Restatement (Second) of Contracts § 24. Assent is completed only upon acceptance of the offer by the offeree. Id. §§ 35(1), 36. An offer is accepted if, and only if, the terms of the acceptance mirror those of the offer. See id. §§ 35(2), 36(a)(1), 38, 39.

III. ANALYSIS

In the case sub judice, there is a question as to whether all the parties mutually assented to the terms and conditions expressed at the proceeding before the Special Master. According to the transcript, the attorney for the plaintiffs, who addressed the court initially, stated that he would outline the plaintiffs' understanding of the proposed agreement. The plaintiffs' understanding of the agreement was that "[e]ach party would grant the other an easement over that portion of the right of way that l[aid] within the boundary of the granting party's property."

After the plaintiffs' attorney read the proposed agreement into the record, the Special Master asked the other parties whether they agreed with the proposal. The attorney for co-defendant Sharp agreed, and added that co-defendants Bared and Ari had "agreed to the continuation of the access that was agreed upon in the June 1984 stipulation, and that [Sharp] specifically reserve[d] [its] right to continue [the] arbitration of [its] cross-claim over and against . . . Bared . . . and [Ari]."

Although the attorney for Bared stated that Bared and Ari "ha[d] no objection on the settlement," the attorney for Ari later commented that "Bared and Ari Corporation d[id] not acknowledge any liability or any involvement or participation in whatever easement that may have been formed by the recognition of the easement of the parties in the settlement."

These two statements contradict each other. The first statement clearly evinces the unconditional assent of Bared and Ari to the terms of the proposed settlement agreement. The second statement, however, appears to negate this assent. The meaning of these statements, when taken together, is therefore unclear.

Because the meaning of these statements is unclear, the court is unable to determine whether Bared and Ari assented to the terms of the settlement agreement as proposed by the plaintiff. The resolution of this case, however, is not dependent upon the assent of Bared and Ari to the terms of the proposed settlement agreement.

The terms of the agreement at issue were proposed to facilitate the creation of mutual easements in Parcels 38 and 38A. An easement, by definition, consists of an aggregate of rights possessed by one person with respect to land owned by another. 3 R. Powell P. Rohan, Powell on Real Property 34-31 ¶ 407 (1952) (emphasis added).

Parcel 38A is owned by the plaintiffs. Parcel 38 is owned by co-defendant Sharp. Co-defendants Bared and Ari do not possess an ownership interest in either property. Because Bared and Ari do not possess an ownership interest in either property, their assent to the proposed settlement agreement is unnecessary.

The proposed settlement agreement can be enforced as long as the owners of Parcels 38 and 38A agree to its terms. The owners of Parcels 38 and 38A, the plaintiffs and co-defendant Sharp respectively, assented to the terms of the proposed settlement agreement. Both parties signed the Plaintiffs' Written Agreement for Mutual Settlement and are bound by its terms.

The terms of the Plaintiffs' Agreement for Mutual Settlement are, of course, subject to the legal formalities necessary for the creation of easements.

IV. CONCLUSION

In accordance with the foregoing discussion, the plaintiffs' Motion for Entry of Judgment shall be granted pursuant to the terms articulated in the Plaintiff's Written Agreement for Mutual Settlement.

APPENDIX A

APPEARANCES: RICHARD GRUNERT, Esq. (For Plaintiff I. Paiewonsky Assoc., and L.S. Holding, Inc.)

FREDERICK WATTS, Esq. (For Defendants Sharp)

LINDA SHELBY, Esq. (For Defendant Bared)

DEBORAH BUTLER, Esq. (For Defendant Ari Corp.)

and

FREDERICK WATTS, Esq. (For Plaintiffs Sharp)

DEBORAH BUTLER, Esq. (For Defendant West Indies Corp., and Ari Corporation)
Avlyne Adams, Official Court Reporter, St. Thomas, Virgin Islands

THE CLERK: Isidor Paiewonsky Associates, et al, versus Sharp Properties Inc., et al, and Sharp Properties Inc., versus West Indies Corporation and Ari Corporation.

ATTORNEY GRUNERT: Ready for the Plaintiff.

ATTORNEY WATTS: Ready for Sharp Properties.

ATTORNEY SHELBY: Ready for Bared.

ATTORNEY BUTLER: Ready for Ari Corporation.

ATTORNEY GRUNERT: Your Honor, the parties have reached an agreement in principal to settle this case, which they intend, forthwit, to work into a formal written agreement — more detailed than the outline I will read now. I would now like to outline what my understanding is of the agreement that we have reached and have you inquire whether the parties agree to it.

Each party would grant the other an easement over that portion of the right of way that lies within the boundary of the granting party's property. The right of way is shown on a site plan prepared by Peter Brill, and would be defined as follows:

The east border of the right of way would be the western building line of the existing buildings, now located on parcel number 38 or a continuation of such building line area where the buildings do not now exist.

The west border would be a line parallel 12 feet west of the side building line, except for the existing easement at the northerly end where the two buildings are already closer than 12 feet where it would be from the existing building to the existing building.

The northern end of the right of way would be the existing northern boundary adjacent to Dronningens Gade or Main Street of the existing easement.

The south end of the right of way would be the existing property lines of parcels number 38 and 38a, adjacent to the Waterfront access road from the southwest corner of the existing building on 38 or an extension of that building line up to the boundary, and from that southwest corner to a point of the Sharp's Properties, 12 feet west of that point.

The actual construction of an improvement passageway would not be necessary until some major construction is proposed on the Sharp's Property. Until then, the parties would continue to operate substantially as they have been doing under the stipulation entered on June 4, 1984. When the time comes to improve the passageway, the Paiewonskys would share in it as a joint project for which the parties would share the expenses.

Now, there have been certain modifications of the right of way as shown on this site plan, and I have marked from points A to B on the Sharp's side of the right of way, they would have the right to cantilever out of the right of way a second and third story from points A to B that I have shown here, not more than 4 feet from over the right of way, and at a level that would not be lower than 13 feet above the ground surface of the right of way. I have marked on the Paiewonsky's side of the right of way — I've marked points C and D. Between points C and D, the Paiewonsky's would have the right to cantilever the second and third stories of their building out over the right of way in a distance not exceeding 4 feet and also not lower than 13 feet above the ground level of the right of way.

I have marked on the drawing points E and F, which are the beginning and the end of the existing right of way. Over the existing right of way, between points E and F, the Sharps would have to build a second and third story out over the entire width of that existing right of way. Again, at a level not lower than 13 feet above the ground level of the right of way.

Mr. Watts, I believe that covers the —

ATTORNEY WATTS: I believe the —

ATTORNEY GRUNERT: — basic out —

ATTORNEY WATTS: I believe the only thing in that statement, that developmental expenses were to be shared equally.

THE COURT: Of the passageway.

ATTORNEY WATTS: Before we leave that point, Mr. Grunert, do you agree?

ATTORNEY GRUNERT: Yes. The expenses of improving the right of way would be equally shared.

ATTORNEY WATTS: Thank you.

THE COURT: I think he said that.

ATTORNEY GRUNERT: Now, on the southwestern corner of the Sharp's property, this is shown on Exhibit 5, a wedge-shaped encroachment of a flower bed — that's a brick flower wall — a wall of a flower bed encroaches onto the Sharp's property for some small distance. The Paiewonskys acknowledges that easement — I'm sorry, acknowledges that encroachment and agree that they will remove that encroachment at any time within 120 days of written notice.

Now, Your Honor, as I mentioned, we intend to reduce to a formal written agreement with additional details, that being the basic outline. In the event that we cannot, as sometimes happen when you try to negotiate a detailed agreement, additional disagreements can possible arrive. If for any reason we are not able to come to a written agreement based on this outline to which every party would agree, then we would intend to come back and ask you to complete the hearing of the issues in the case. We hope that wouldn't happen. But until we have —

THE COURT: I knew I should have never let Judge Christian appoint —

ATTORNEY GRUNERT: — until we have a final written agreement — until all the parties —

THE COURT: I guess that survives the expiration of my term. I can't get rid of the —

ATTORNEY GRUNERT: If I may suggest — if we can't do it within three weeks we should presume that we have reached a longer head and come back to you.

THE COURT: Mr. Watts, you have heard the representation of Mr. Grunert, that is the agreement of your client?

ATTORNEY WATTS: Yes, Your Honor. I would also understand that with regard to the pending matters involving the Ari Corporation, and as to Mr. Bared, that they have agreed to the continuation of the access that was agreed upon in the June 1984 stipulation, and finally, that we specifically reserve our right to continue our arbitration of our cross-claim over and against Mr. Bared's company and Mr. Kimelman's company.

THE COURT: Mrs. Shelby?

ATTORNEY SHELBY: We have no objection on the settlement. We understand that Mr. Watts is reserving his right of cross-claim. We would like to know if you would like to act as our arbitrator?

THE COURT: We will cross that bridge when we get to it. Miss Butler?

ATTORNEY BUTLER: Your Honor, I believe the only other matter is that Bared and Ari Corporation do not acknowledge any liability or any involvement or participation in whatever easement that may have been formed by the recognition of the easement of the parties in the settlement.

THE COURT: What's our next Exhibit number? I think it's 23. We will have that map referred to as part of the settlement agreement as Plaintiff's Exhibit 23. It will remain part of the Record with representations by Counsel.

I will ask Mr. Fischer, Mrs. Cassinelli, Mr. Kimelman, Mr. and Mrs. Sharp, and Mr. Bared, each of you raise your right hands and be sworn.

ATTORNEY GRUNERT: Perhaps they would like to look at the point in the map.

THE COURT: Leave it on the witness stand. Mr. and Mrs. Bared, up there. Mr. and Mrs. Sharp, not Bared. Mr. and Mrs. Sharp, Mrs. Cassinelli, Mr. Bared and Mr. Kimelman, are you ready to take your oaths?

WALTER FISCHER, THEODORE SHARP, ELIZABETH SHARP, LOUIS BARED, ANNA CASSINELLI, and HENRY KILMELMAN, after having been produced and first duly sworn, testified as follows:

THE COURT: I will ask you as a group then I will ask each of you to respond individually. The question will be number one, have each of you heard the representations of your Lawyers, and for the Record, so that it will be understood of course, onto Mrs. Cassinelli, on behalf of Isidor Paiewonsky Associates Corporation as President, Walter Fischer, West Indies Corporation, Mr. and Mrs. Sharp, Sharp Properties, Mr. Bared, Bared Jewellers, and Henry Kimelman, ARI Corporation, each of you have heard the representations of your Lawyer as with respect to the settlement. Mr. Fischer?

MR. FISCHER: I agree.

THE COURT: Mr. Kimelman?

MR. KIMELMAN: I agree.

THE COURT: Mrs. Cassinelli?

MRS. CASSINELLI: I agree.

THE COURT: Mr. and Mrs. Sharp?

MR. SHARP: I agree.

MRS. SHARP: I agree.

THE COURT: Mr. Bared?

MR. BARED: I agree.

THE COURT: If you would prepare a settlement it is to be understood that the agreement that have been represented by your Attorney is in fact the agreement of each of you and by which on the understanding it is reduced to writing, it is agreed that each of you are willing to live by it, and it is accepted by you Mr. Bared?

MR. BARED: I agree.

THE COURT: Mr. Sharp?

MR. SHARP: I agree.

THE COURT: Mr. Sharp?

MR. SHARP: I agree.

MRS. SHARP: I agree.

THE COURT: Mrs. Cassinelli?

MRS. CASSINELLI: I agree.

THE COURT: Mr. Kimelman?

MR. KIMELMAN: I agree.

THE COURT: Mr. Fischer?

MR. FISCHER: I agree.

THE COURT: Any other questions?

ATTORNEY GRUNERT: You might want to mention the three weeks limit.

THE COURT: There is a three week limitation before you come back, right?

ATTORNEY STOUT: Either that or before.

ATTORNEY WATTS: Judge, I have already committed to Mr. Grunert and to Mr. Stout that I will devote whatever remaining time we have today to assist in putting as much meat on the bones as we possibly can.

THE COURT: Everybody, when are the Sharps suppose to be leaving?

MRS. SHARP: The 19th.

THE COURT: Plenty of time to get it down. I thank all of you. I appreciate what you have done. Last night, 5:15, I asked all the Lawyers to come in and see if there was any way we could avoid what was expected today and probably next Tuesday, and through the good graces of each of your Lawyers and the willingness of Mr. and Mrs. Sharp and Mrs. Cassinelli, and with the assistance of Mr. Bared, the footwork began, and the people, as you all are reasonable people in Court, as we said, have agreed to resolve without coming to Court. We thank each of you.

ATTORNEY BUTLER: Thank you for your patience.

* * * * * * REPORTER'S CERTIFICATE:

I, Avlyne Adams, an Official Court Reporter for the Territorial Court of the Virgin Islands, do hereby certify, that I have reported, by machine shorthand, in my official capacity, the proceedings had and testimony adduced upon the trial in the case of ISIDOR PAIEWONSKY ASSOCIATES, INC., and L.S. HOLDING, INC., versus SHARP PROPERTIES, INC., BARED JEWELLERS OF THE VIRGIN ISLANDS, INC., and ARI CORPORATION, and SHARP PROPERTIES INC., versus WEST INDIES CORPORATION AND ARI CORPORATION, in said Court, on this the 13th day of February 1987.

I further certify that the foregoing 11 pages constitutes the official transcript of said proceedings as taken from my machine shorthand notes.

IN WITNESS WHEREOF, I have subscribed my name, this the 17th day of February 1988.

(s) Avlyne Adams Avlyne Adams, Official Court Reporter