FIUMARA v. CAPOBIANCO (2020)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

The defendants appeal from an order allowing the plaintiff's motion to enforce a settlement. Although the defendants agree that a settlement was reached via an exchange of emails, they contend that the judge erred in finding that the parties intended that claims against Gibson Sotheby's International Realty (Sotheby's) and Paul Stec (Stec) -- as agents of the plaintiff -- be released.³ We affirm.

Our standard of review of a ruling on a motion to enforce settlement depends on which aspect of the decision is at issue. We review de novo the judge's purely legal determinations, such as whether a contract exists or whether an ambiguity exists within it. See Basis Tech. Corp. v. Amazon.com, Inc., 71 Mass. App. Ct. 29, 36 (2008). But we review the judge's factual determinations, such as the contracting parties' intent or the meaning of an ambiguous term, for clear error. See Seaco Ins. Co. v. Barbosa, 435 Mass. 772, 779 (2002) (intent of parties as to ambiguous, uncertain, or equivocal contract terms is question of fact); Fecteau Benefits Group, Inc. v. Knox, 72 Mass. App. Ct. 204, 212 (2008). “A finding is ‘clearly erroneous’ only when, ‘although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’ ” Fecteau, supra at 212-213, quoting Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 509 (1997).

Here, the parties agreed that they reached a settlement and that its terms were reflected in a series of email communications. The parties also agreed that, as part of the settlement, they intended to exchange mutual releases. The only point of disagreement was whether the intended release was to include Sotheby's and Stec. The parties asked the judge to resolve this factual question based on a documentary record, which included correspondence between their counsel, and an affidavit from defendants' counsel. Based on those materials, the judge could find the following.

Fiumara and Capobianco formed JAC Investments, LLC (JAC) in order to buy and develop a property in Somerville. The project did not go as planned and the parties' relationship soured. Ultimately, Fiumara filed suit seeking to dissolve JAC, and asserting a breach of contract claim against Capobianco. The defendants asserted counterclaims seeking to dissolve JAC, fraud in the inducement, and breach of contract. On July 27, 2018, shortly before the case was scheduled to go to trial, Fiumara offered to settle the case on two alternate bases. In one, Capobianco would buy Fiumara out of JAC; in the other, Fiumara would buy Capobianco out. The choice was left to Capobianco. However, “[i]n either scenario, the parties would execute reciprocal general releases and file a stipulation of dismissal of all pending cases between them.” In addition to settling the underlying case, the parties also intended to settle a second civil action (second case). JAC, while a party to this case, was not a party to the second case. At the same time, William Roberts was an “other interested party” to the second case, but was not a party to this case.

On August 2, 2018, the defendants' counsel sent an email “confirm[ing] that Alessandro Capobianco and Christopher Fiumara have agreed to settle all pending and other possible claims between them ․ and the consideration for that agreement includes Mr. Capobianco's payment of $275,000 to Mr. Fiumara[ ] in exchange for Mr. Fiumara's transfer or assignment of his [fifty percent] interest in JAC Investments, LLC.” The email message closed by asking that Fiumara's counsel confirm that this understanding of the agreement was correct.

Twenty minutes later, Fiumara's counsel responded that the previous email reflected “most but not all of the terms of settlement.” His message continued by stating that the parties “agree to a global settlement” consisting of various detailed terms, including a “[m]utual release of the parties for all claims that have been or could have been asserted between the parties from the beginning of time to the date of the release.” This communication closed by stating that, once confirmation of the terms was received, Fiumara's counsel would report the case settled to the clerk.

Approximately one hour later, the defendants' counsel replied, “Yes, agreed it is a global settlement as outlined [in the previous email].” Fiumara's counsel responded that he would report the case settled and get a nisi order issued, which he did.

Thereafter, Fiumara's counsel sent a draft settlement agreement containing proposed release language that:

“Upon execution of this [s]ettlement [a]greement, the defendant and Mr. Capobianco, for themselves, and on behalf of, as applicable, JAC, and together their current, former, and successor officers, employees, agents, attorneys, successors, assigns, representatives, directors, shareholders, owners, servants, administrators, insurers, parents, subsidiaries, affiliates, and related corporations, firms, associations, partnerships, successor entities, and entities, do hereby irrevocably and unconditionally release, acquit, and discharge [p]laintiff, and as applicable, JAC, and together their current, former, and successor agents, attorneys and representatives, including but not limited to Gibson Sotheby's International Realty and Paul Stec ․”

In response, defendants' counsel sent a mark-up of the draft, deleting the underscored language and replacing it with text that would exclude Sotheby's and Stec from the release.⁴

The parties reached an impasse over their disagreement about the scope of the release, which led to the motion to enforce settlement that is now on appeal.

We begin our discussion by noting that we agree with the defendants' contention that the parties' intent in this case is to be assessed as of the time they had reached an agreement as to the material terms of a settlement and agreed that the case should be reported settled to the court. See Basis Tech., 71 Mass. App. Ct. at 41-42. As of that point in time, the parties had agreed to a “global settlement” that would include “[m]utual release of the parties for all claims that have been or could have been asserted between the parties.” Beyond expressing the concept of comprehensiveness, however, the scope of the phrase “global settlement” is not self-evident. Particularly where, as here, the phrase is used in connection with settling multiple lawsuits against multiple (and differing) parties, some of whom are corporate entities, it “can support a reasonable difference of opinion as to the meaning of the words employed and the obligations undertaken.” Bank v. Thermo Elemental, Inc., 451 Mass. 638, 648 (2008), quoting President & Fellows of Harvard College v. PECO Energy Co., 57 Mass. App. Ct. 888, 896 (2003). In other words, the phrase is ambiguous.

What remains then, is whether the judge's factual finding as to the intended meaning of “global settlement” as used by the parties was clearly erroneous. Given the circumstances, it was not. The parties were in the midst of litigation on multiple fronts. All involved knew that the defendants wanted to assert claims against Sotheby's and Stec, who had been hired by Fiumara as agents, and that the only reason those claims were not pending in the underlying suit was that the judge had concluded, as a matter of discretion, that it was too close to trial to insert them into the case. Against this background, it is reasonable to infer that, had the parties intended to exclude Sotheby's and Stec from the “global settlement,” the topic would have come up during settlement negotiations. The judge could also reasonably infer that Fiumara was seeking to resolve all potential claims against him conclusively, and that excluding Sotheby's and Stec from the scope of the releases was inconsistent with that goal because it could expose Fiumara to potential future liability should Sotheby's and Stec be sued by Capobianco.

For all of these reasons, we affirm the order allowing the plaintiff's motion to enforce settlement.⁵

So ordered.

Affirmed.

FOOTNOTES

3.   Sotheby's and Stec were not parties to the litigation because the judge, given the lateness of the request, had denied the defendants' motion seeking leave to bring them into the case via a third-party complaint.

4.   The proposed replacement language was “but excluding any known or unknown person or entity that is both (i) a non-party to the above captioned civil actions (the Corporate Lawsuit and Note Lawsuits) and (ii) a non-employee of the [p]laintiff.”

5.   We deny the plaintiff's request, pursuant to G. L. c. 211A, § 15, and Mass. R. A. P. 25, as appearing in 481 Mass. 1654 (2019), for an award of attorney's fees.