Opinion ID: 619535
Heading Depth: 3
Heading Rank: 2

Heading: The Claim of Duress

Text: Wallach's contention that the Stipulation is void on the ground that he entered into it under duress is also untenable. The law is well settled that stipulations of settlement are judicially favored and may not lightly be set aside. . . . In general, repudiation of an agreement on the ground that it was procured by duress requires a showing of both [1] a wrongful threat and [2] the effect of precluding the exercise of free will . . . . In re Guttenplan, 222 A.D.2d 255, 256-57, 634 N.Y.S.2d 702, 703 (1st Dep't 1995) (emphases added); see, e.g., Kranitz v. Strober Organization, Inc., 181 A.D.2d 441, 441, 580 N.Y.S.2d 350, 350 (1st Dep't 1992). As indicated, the threat must be wrongful. Thus, under New York law, the threatened exercise of a legal right cannot constitute duress. . . . Marine Midland Bank, N.A. v. Mitchell, 100 A.D.2d 733, 734, 473 N.Y.S.2d 664, 665 (4th Dep't 1984) (internal quotation marks omitted); see, e.g., Stewart M. Muller Construction Co. v. New York Telephone Co., 40 N.Y.2d 955, 956, 390 N.Y.S.2d 817, 817, 359 N.E.2d 328 (1976); Avey v. Town of Brant, 263 N.Y. 320, 322, 189 N.E. 233, 234 (1934). `[I]t is not duress to threaten to take action which is legally permissible.' Kamerman v. Steinberg, 891 F.2d 424, 432 (2d Cir.1989) (quoting Hammelburger v. Foursome Inn Corp., 54 N.Y.2d 580, 593 n. 4, 446 N.Y.S.2d 917, 924 n. 4, 431 N.E.2d 278 (1981)). As to the requirement that the wrongful threat have the effect of precluding the exercise of free will, the claimant must show that his acceptance of the contract terms was involuntary because the circumstances permitted no other alternative. Kamerman v. Steinberg, 891 F.2d at 431; see, e.g., International Halliwell Mines, Ltd. v. Continental Copper & Steel Industries, Inc., 544 F.2d 105, 108 (2d Cir.1976). Finally, [u]nder New York law a contract entered into under duress is generally considered not void, but merely voidable, . . . and one who would repudiate a contract procured by duress must act promptly or will be deemed to have elected to affirm it.  Scientific Holding Co. v. Plessey Inc., 510 F.2d 15, 23 (2d Cir.1974) (emphasis added); see, e.g., DiRose v. PK Management Corp., 691 F.2d 628, 633-34 (2d Cir.1982) (the person claiming duress must act promptly to repudiate the contract or release or he will be deemed to have waived his right to do so); Joseph F. Egan, Inc. v. City of New York, 17 N.Y.2d 90, 98, 268 N.Y.S.2d 301, 305, 215 N.E.2d 490 (1966); In re Guttenplan, 222 A.D.2d at 257, 634 N.Y.S.2d at 703 (An agreement procured under duress, such as a threat of criminal prosecution, . . . must be promptly disaffirmed or otherwise be deemed to have been ratified. . . .). A party may ratify a contract or release entered into under duress by intentionally accepting benefits under the contract, by remaining silent or acquiescing in the contract for a period of time after he has the opportunity to avoid it, or by acting upon it, performing under it, or affirmatively acknowledging it. VKK Corp. v. National Football League, 244 F.3d 114, 123 (2d Cir.2001) (internal quotation marks omitted) (emphases added); see also id. at 122. Wallach's assertions do not meet any part of the test for duress. First, nothing he attributes to the government shows that it made any threat, much less one that was wrongful. He principally invokes the fact that the dismissal of the criminal case against him was without prejudice. ( E.g., Wallach Aff. Exhibit W2, at 4; Wallach Opposition Memorandum at 10; see, e.g., id. at 2; Answer ¶ 10 (Wallach signed the Stipulation with a threat of a new complaint over his head); see also Wallach brief on appeal at 25 (the criminal complaint could be reopened at any time if the government would have decided to do it).) But Wallach did not proffer evidence that the government threatened to reopen the case if he failed to sign. Rather, the government was still looking into the jammers issue (Wallach Answer ¶ 10), and a new prosecution is precisely what the without prejudice nature of the dismissal gave the government the right to pursue; given that right, the threat of its exercise cannot constitute duress. Wallach's other arguments, e.g., his statements that his electronic monitoring bracelet was not removed until the morning after he signed the Stipulation ( see Wallach Aff. ¶ 41), that he was held in the U.S. against [his] will without [his] passport when the criminal complaint was dismissed (Interest Statement at 1), and that his travel documents were not returned to him until five days after he signed the Stipulation ( see Wallach Opposition Memorandum at 4) likewise fail to proffer sufficient evidence for a finding of duress. Although Wallach stated that the government had forced my signature of the stipulation agreement in return to my freedom (Wallach Aff. ¶ 43 (emphasis in original)), and that he was forced to sign the Stipulation to regain [his] liberty (Wallach Aff. ¶ 44), those statements are conclusory and do not find support in the record. For example, Wallach's own Affidavit stated that [o]n the morning of July 9, Massey informed my attorney that he had dismissed the criminal complaint, and that a stipulation and release agreement would be sent by him in one hour for our signature. (Wallach Aff. ¶ 37 (emphases added).) Moreover, emails in the record showed that the AUSA instructed the Pretrial Services Officer that EM supervision i.e., electronic monitoringof Wallach could be terminated and to close interest in the case on the morning of July 10 (Supplemental Declaration of [AUSA] Jason P. Hernandez dated February 25, 2010, Exhibit A); Wallach did not sign the stipulation until that evening, some seven hours later ( see, e.g., Wallach Aff. ¶ 39(d); id. Exhibit W1a; Answer ¶ 10). Thus, before Wallach signed the Stipulation, the criminal case had been dismissed, and the AUSA had instructed Pretrial Services that Wallach's electronic monitoring bracelet could be removed. Nor did Wallach proffer evidence that the government threatened to withhold his travel documents unless he signed the Stipulation. The only evidence we have seen in the record with respect to a request by Wallach for those documents is an email attached to his Affidavit showing that on Saturday July 11, a day after signing the Stipulation, Wallach asked his attorney to get me my passports and other stuff this coming week  (Wallach Aff. Exhibit W4 (emphasis added)); his Affidavit shows that he received them on the following Wednesday ( see Wallach Aff. ¶ 42). Second, Wallach's statements that he signed the Stipulation only because his will was overborne by the government's greater bargaining power and that he had no alternative are conclusory and are contradicted by some of the more detailed statements he has made. For example, Wallach stated that prior to the dismissal of the criminal case, he and the government had been negotiating toward a resolution that apparently would have had Wallach simply accept responsibility for a minor technical Customs violation and pay a $20,000 civil fine ( see, e.g., Wallach Aff. ¶¶ 35-36, 38; id. Exhibit W2, at 3); Wallach was informed by his attorney that the stipulation was the substitute for the [civil] compromise (Wallach Aff. ¶ 38). Wallach's attorney advised him to sign the Stipulation, pointing out that the government had the right to reopen the case against [Wallach] because the charges had been dismissed without prejudice (Wallach Aff. Exhibit W2, at 4; see also Wallach Aff. ¶ 40); and Wallach signed the Stipulation on his attorney's advice (Wallach Email ¶ 5) because it would end the saga (Wallach brief on appeal at 18). And although Wallach has attempted to explain away some of the statements he made in his September 18 email to AUSA Massey, he indisputably stated in that email, I did not have to sign the Stipulation; I was practically free when I did sign (a reasonable view, considering that the criminal case had already been dismissed); and [e]ven if I wouldn't have signed, I could have left back home (Wallach Email ¶ 4). Wallach's own statements thus preclude a finding that his will was overborne. Lastly, even assuming there had been a proffer of evidence adequate to permit an initial finding of duress, Wallach's claim would founder on his failure promptly to repudiate the Stipulation. According to the documents in the district court record, Wallach made no attempt to repudiate until four months after he had signed the Stipulation, attacking it for the first time in the Interest Statement he filed in this action in November 2009. And in the interim, in his September 18 unsolicited email sent to the government two months after he signed the Stipulation, Wallach stated, I will honor what I signed. (Wallach Email ¶ 9.) Thus, far from effecting a prompt repudiation, Wallach explicitly ratified the Stipulation.