Case Title: Alexakis v. Mallios

Citation: 

Docket Number: 001364

State: virginia

Court: Virginia Supreme Court

Date: 2001-04-20T00:00:00Z

Document:
Present:  All the Justices 
 
KOSTAS ALEXAKIS 
 
v.  Record No. 001364     OPINION BY JUSTICE ELIZABETH B. LACY 
 
 
 
April 20, 2001 
DIMITRI P. MALLIOS, AS EXECUTOR 
OF THE ESTATE OF RAYMOND A. 
GIOVANNONI, ET AL. 
 
FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA 
Donald M. Haddock, Judge 
 
 
In this appeal, we consider whether a settlement 
agreement recited in open court was valid and binding upon all 
parties. 
 
Kostas Alexakis filed an amended motion for judgment 
against Dimitri P. Mallios, Executor of the Estate of Raymond 
A. Giovannoni (the Estate), American Grill Enterprises, Inc. 
(AGE), and others, seeking, inter alia, specific performance 
of an alleged contract for the purchase of certain property 
from the Estate.  The property consisted of real property and 
a lease for the operation of a restaurant.  Both Alexakis and 
AGE had engaged in negotiations with Mallios to purchase the 
property from the Estate.  The defendants filed various 
counterclaims and cross-claims. 
On the day of trial, February 28, 2000, the parties 
informed the trial judge that they had reached an agreement 
resolving all claims.  The agreement was recited in open court 
and all counsel and parties consented to the terms of the 
agreement. 
The settlement agreement provided that Alexakis would 
purchase the property for $4,350,000.  Of that amount, 
$3,900,000 was to be paid in cash and the balance would be 
paid by a note bearing interest at eight percent.  Alexakis 
and the Estate were to execute the same two purchase contracts 
and an addendum that were previously executed between the 
Estate and AGE in April 1999, except as modified to reflect 
the change in the name of the parties and the purchase price.  
If the purchase did not occur pursuant to the agreement, AGE 
acquired the right to purchase the property for $4,300,000.  
Mutual releases were to be executed and an order of dismissal 
with prejudice was to be entered.  Following the recitation of 
these conditions and agreement on the record by all parties 
and counsel, the trial court stated "I am going to consider 
the matter settled and you all get me an order and enter that 
in accordance with the stipulations that you've just entered 
into no later than Wednesday of next week." 
 
The Estate submitted a motion for entry of an order of 
settlement and dismissal.  Alexakis objected to entry of the 
Estate's proposed order, asserting that certain provisions of 
the contracts submitted by the Estate had not been modified in 
accordance with the settlement agreement.  Alexakis contended 
 
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that provisions in the original contracts relating to a 
$50,000 deposit by the purchaser and the treatment of the 
deposit upon default by the purchaser or seller should have 
been modified as part of the agreed upon " 'financing terms 
and associated provisions.' "  Alexakis also objected to a 
provision in the addendum added by the Estate that the 
contract was not assignable.  Alexakis moved for the entry of 
an alternative order which required the execution of the 
contracts modified to reflect Alexakis' position. 
 
At a hearing on the motions, the trial judge found that 
the "settlement is very clear, specifically on the record."  
The trial court entered an order dismissing the case with 
prejudice and reciting that the parties were bound by the 
settlement agreement "made and consented to by all parties and 
counsel on the record in open Court" as contained in the 
transcript incorporated by reference.  The order also released 
a lis pendens that had been placed on the property.  The trial 
court denied Alexakis' motion to vacate the order. 
Alexakis appeals, asserting first that the trial court 
erred in considering the matter settled and dismissing the 
various claims with prejudice because, as in Montagna v. 
Holiday Inns, Inc., 221 Va. 336, 269 S.E.2d 838 (1980), the 
parties had not agreed on the terms of the settlement.  This 
lack of agreement or meeting of the minds is shown, according 
 
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to Alexakis, because "each side drafted different contracts 
for the purchase" of the property.  Relying on Nationwide 
Mutual Insurance Co. v. Martin, 210 Va. 354, 171 S.E.2d 239 
(1969), Alexakis also asserts that when this disagreement over 
the contract terms was presented to the trial court, the trial 
court should have considered the disagreement and should have 
allowed Alexakis "the right to renounce the purported 
compromise and prosecute his original claims."  The facts of 
this case, however, are distinguishable from those in Montagna 
and Martin. 
In Montagna, the defendants in a wrongful death action 
filed a plea of release based on a prior purported settlement 
agreement with the parents of the deceased.  The parents, 
through their attorney, had agreed to a sum certain for 
payment of expenses.  However, the insurance company, while 
agreeing to the amount of the settlement, indicated to the 
parents' counsel that settlement would require the concurrence 
of a qualified representative of the decedent's estate and 
subsequent court approval of the settlement.  This condition 
was never communicated to the parents of the deceased.  This 
condition did not relate merely to the "mechanics of 
fulfilling a binding agreement" but was an "undisclosed 
condition upon the settlement as a whole to which the 
beneficiaries had not consented."  221 Va. at 348, 269 S.E.2d 
 
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at 845-46.  Thus, the Court in the Montagna case concluded 
that the parties never reached a mutual agreement on the 
essential elements of the settlement. 
In contrast, the record in this case unquestionably shows 
that, on February 28, 2000, all parties and their counsel 
agreed to a compromise, or settlement, of all claims.  The 
settlement recited in open court provided that Alexakis had 
the right to purchase the property at a specific price with 
specific agreements regarding amounts to be paid in cash and 
amounts to be financed.  If Alexakis did purchase the 
property, the Estate would pay AGE $125,000.  If Alexakis did 
not close on the property, the agreement set out the price and 
terms upon which AGE could purchase the property.  It was 
agreed that time was of the essence and closing was to occur 
within sixty days.  The terms governing the sale were to be 
those contained in the contracts and addendum previously 
executed by the Estate and AGE.  This agreement was embodied 
in the transcript of the February 28, 2000 proceedings. 
Unlike the circumstances presented in the Montagna case, 
there were no undisclosed provisions to which the parties had 
not consented.  The contracts and addendum were available to 
all parties.  When the settlement terms were recited for the 
record on February 28, Alexakis did not raise any questions, 
qualifications, or objections regarding the contract terms.  
 
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The parties agreed that the contracts would be "exactly the 
same and we will just change the name and the price."  There 
is nothing ambiguous or technical about the terms of the 
settlement.  Any undisclosed interpretation Alexakis may have 
had regarding the contract terms cannot defeat the unambiguous 
terms of the agreement into which he entered voluntarily.  
Wells v. Weston, 229 Va. 72, 79, 326 S.E.2d 672, 676 (1985).  
Furthermore, if Alexakis' concerns arose after the February 28 
hearing, they came too late.  "Once a competent party makes a 
settlement and acts affirmatively to enter into such 
settlement, [his] second thoughts at a later time upon the 
wisdom of the settlement do not constitute good cause for 
setting it aside."  Snyder-Falkinham v. Stockburger, 249 Va. 
376, 385, 457 S.E.2d 36, 41 (1995).  Thus, we reject Alexakis' 
claim that there was no agreement or meeting of the minds 
regarding the settlement recited in open court on February 28, 
2000. 
Alexakis' reliance on Martin for the proposition that 
when the "parties appeared in court in disagreement over the 
terms of the settlement, the court erred in refusing to 
consider the disagreement and in considering the case settled" 
is likewise misplaced.  The facts of Martin are completely 
different from the facts in this case.  Martin involved an 
insurer's repudiation of a settlement agreement, based on 
 
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allegations of fraud, prior to any proceeding in court.  The 
"procedure chosen by Martin to resolve the controversy" was a 
motion to confirm the out-of-court settlement.  210 Va. at 
355, 171 S.E.2d at 240.  The parties then prepared for a jury 
trial on the motion, including summoning a number of witnesses 
to support the insurer's fraud allegations.  On the day of 
trial, before any evidence was taken, the trial court entered 
an order confirming the prior settlement because it found that 
the insurer had failed to exercise due diligence in 
discovering the alleged fraud. 
The trial court's judgment was reversed on appeal for a 
number of reasons:  there was no evidence in the record to 
support the factual findings of the trial court; the trial 
court could not endorse the settlement as "agreed" because at 
the time of trial the settlement had been repudiated; and 
settlements can always be rescinded or avoided for fraud.  Id. 
at 357, 171 S.E.2d at 241-42. 
In contrast, here the settlement agreement had been 
recited in a prior hearing and the trial court stated it 
considered "the matter settled."  The settlement had not been 
repudiated, and there were no allegations of fraud.  Thus, the 
reasons for reversing the trial court's judgment entering the 
confirmation order and remanding the case for an evidentiary 
hearing in Martin do not exist in the instant case, and we 
 
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reject Alexakis' contention that the trial court should have 
allowed him to renounce the settlement and prosecute his 
original claims. 
Finally, Alexakis asserts that a binding settlement must 
contain all the essential elements of a contract, including 
valuable consideration.  Montagna, 221 Va. at 346, 269 S.E.2d 
at 844.  This settlement fails, Alexakis contends, because 
there was no valuable consideration.  Again we disagree. 
Alexakis was given the opportunity to purchase the 
property for a named price, financed in a specific way, within 
a certain period of time.  If Alexakis purchased the property, 
the Estate would pay AGE a fixed sum.  If Alexakis did not 
purchase the property, AGE would have the opportunity to 
purchase it.  In exchange for these conditions, all parties 
agreed to release all claims against all other parties to this 
dispute.  "A promise to forebear the exercise of a legal right 
is adequate consideration to support a contract."  Hamm v. 
Scott, 258 Va. 35, 38, 515 S.E.2d 773, 774 (1999).  Thus, the 
settlement does not fail for lack of valuable consideration. 
In summary, we hold that the trial court did not err in 
dismissing Alexakis' amended motion for judgment with 
prejudice because the parties' intention to compromise and 
settle their various claims was objectively manifested in the 
hearing on February 28, 2000, Snyder-Falkinham, 249 Va. at 
 
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381, 457 S.E.2d at 39, there were no undisclosed terms of the 
settlement and there was a meeting of the minds, Montagna, 221 
Va. at 347, 269 S.E.2d at 844-45, and the settlement contained 
all the essential elements of a valid contract.  Id. at 346, 
269 S.E.2d at 844.  Accordingly, the judgment of the trial 
court will be affirmed. 
Affirmed. 
 
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