The Honorable Karen M. See, United States Bankruptcy Judge for the Western District 1

of Missouri, sitting by designation.

United States Bankruptcy Appellate Panel

FOR THE EIGHTH CIRCUIT

 

No. 97-6091EMSL

 

In re: *

*

Popkin & Stern, *

*

Debtor. *

* Appeal from the United

States

Robert J. Blackwell, Liquidating Trustee * Bankruptcy Court for the

of the Popkin & Stern Liquidating Trust * Eastern District of Missouri

*

Plaintiff-Appellee, * [UNPUBLISHED]

*

v. *

*

Ronald U. Lurie, *

*

Defendant-Appellant. *

 

Submitted: January 12, 1998

Filed: March 5, 1998

 

Before KRESSEL, William A. HILL, and SCOTT, Bankruptcy Judges.

 

KRESSEL, Bankruptcy Judge.

Ronald U. Lurie appeals from the bankruptcy court’s order 1

reviving the plaintiff’s
2

judgment against him. Because we agree with the bankruptcy

court that nothing in the settlement agreement between the

parties constituted a release or a satisfaction of that

judgment, we affirm.

BACKGROUND

This dispute goes back to the bankruptcy case of Popkin &

Stern, a St. Louis law firm of which Lurie was a partner.

Originally commenced on March 26, 1992, by an involuntary

petition, Popkin & Stern converted the case to a case under

chapter 11 and Blackwell was subsequently appointed the

trustee. On August 27, 1993, the bankruptcy court confirmed

a plan proposed by Popkin & Stern. That plan provided for the

creation of a liquidating trust to collect Popkin & Stern’s

assets and distribute them to creditors pursuant to the terms

of the plan. The plan provided that Blackwell would be the

trustee of the liquidating trust.

As part of his duties as the liquidating trustee,

Blackwell sued Lurie and on October 20, 1994, the bankruptcy

court entered a judgment in favor of Blackwell and against

Lurie in the amount of $1,121,743.00. Blackwell commenced

another adversary proceeding against Lurie and his two adult

children, Michael Lurie and Ryan Lurie, and a third adversary

proceeding against Lurie’s wife, Nancy F. Lurie.

During 1995, Blackwell, Lurie, Nancy Lurie, Michael Lurie,

and Ryan Lurie came to a settlement of the two pending

adversary proceedings and the judgment against Lurie. It is

that global settlement agreement dated September 13, 1995,

which is the centerpiece of the dispute between the parties to

this appeal. The global settlement agreement provided that on

the 30th day after the date upon which the approval order of

the bankruptcy court was entered, there would be a closing at
3

which there would be a transfer of property and execution of

all documents. On October 19, 1995, the bankruptcy court

approved the agreement. 

However, it wasn’t long before the parties were back in

court and on November 21, 1995, the bankruptcy court extended

the closing date so that it would occur no later than December

29 and tentatively set December 20, 1995, as the closing date.

However, on
 Neither the response nor the supplement memorandum have been made part of the 2

record on this appeal. In fact, the appellant has not filed any sort of designation of record or

provided the court with any record other than transcripts of hearings held on December 15, 1995,

and April 16, 1996. His only attempt to create a record seems to be the attachment to his reply

brief of an affidavit of Richard F. Huck, III, dated February 10, 1997--obviously, post-hearing

evidence which is not part of the record on appeal.

 In his brief, Lurie complains in passing about the fact that the bankruptcy judge 3

conducted the hearing by telephone from Kansas City. But, as part of the statement of issues

recited in his memorandum, he does not make an issue out of the way that the hearing was

conducted. Lurie had the opportunity to file two written responses to the motion which the

bankruptcy court considered before entering its order. 

4

December 15, 1995, a hearing was held at which the bankruptcy

court took testimony, received other evidence and subsequently

made detailed findings of fact and conclusions of law on the

record and in a written order dated January 18, 1996. While

extremely lengthy and detailed, the thrust of the opinion is

that Lurie and his wife Nancy Lurie could not close the global

settlement agreement. In fact, there never was a closing.

Under Missouri law, judgment liens survive for only three

years. Mo. Rev. Stat. § 511.360. Therefore, on September 26,

1997, Blackwell filed a motion for revival of judgment. The

bankruptcy court scheduled a hearing and entered an order to

show cause setting a hearing for October 20, 1997. Lurie filed

a response to the motion on October 14, 1997, and a

supplemental memorandum on October 20, 1997, but did not

personally appear at the hearing. 

2

The court held a hearing on Blackwell’s motion on October

20, 1997, and on October 23, 1997, entered an order for

3

revival of judgment. It is from this order that Lurie appeals.

DISCUSSION
5

While Lurie’s arguments are lengthy and sometimes

convoluted, they can be distilled to one point. In spite of

the fact that he was unable to perform and did not perform his

obligations under the global settlement agreement, he claims

that the settlement agreement,
6

releases him from any liability on the judgment. Paragraph V

of the global settlement agreement provides for mutual releases

among the parties “as of the Closing Date.” Since the closing

date is set in the agreement as being 30 days after court

approval and that date has come and gone, Lurie argues that the

release is effective notwithstanding that no closing was ever

held and, in fact, the bankruptcy court found that Lurie was

unable to perform his obligations under the agreement which

would enable a closing to be held.

However, the final paragraph of section V explicitly

provides that “the releases, and hold harmless provisions of

this paragraph V. . .shall become automatically effective and

enforceable without further action at the time of the Closing.”

And, in fact, a careful review of the global settlement

agreement reveals that the parties’ obligations are all tied

to the actual closing, not a hypothetical closing date. The

setting of the closing date is intended to be an indication of

an obligation to close on or within a certain time, but has no

independent effect of its own. Since Lurie never performed his

obligations under the global settlement agreement, he cannot

claim the benefit of the bargained-for release. See, Williams

v. AgriBank, FCB, 972 F.2d 962, 967 (8th Cir. 1992) (“When one

party to a settlement agreement refuses to comply with its

terms, the other party can abandon the settlement and proceed

on the original cause of action.”) Campbell v. Shaw, 947 S.W.2d

128, 131 (Mo. Ct. App. 1997) (“When a party fails to perform

according to the terms of a contract, it must be determined

whether the breach is material. If the breach is material or

if the breaching party’s performance is a condition to the

aggrieved party’s performance, the aggrieved party may cancel

the contract.”) McKnight v. Midwest Eye Institute of Kansas

City, Inc., 799 S.W.2d 909, 915 (Mo. Ct. App. 1990) (“The

judgment gave effect to the principle that a material failure

of one party to give performance gives the other party the
7

right to repudiate the contract.” Quoting Boten v. Brecklein,

452 S.W.2d 86, 92 (Mo.1970). “It gives effect also to the

cognate principle that a party who is the first to violate the

contract by failure to give material performance may not claim

its benefits.”)

CONCLUSION

We simply cannot agree with Lurie that he is entitled to

the benefit of the release even though no closing was held and

he did not perform and was unable to perform his obligations
8

under the global settlement agreement. We therefore affirm the

bankruptcy court’s judgment and order of revival of judgment

dated October 21, 1997, and entered October 23, 1997.

A true copy.

Attest:

CLERK, U.S. BANKRUPTCY APPELLATE PANEL FOR THE

EIGHTH CIRCUIT.