Opinion ID: 2095087
Heading Depth: 1
Heading Rank: 2

Heading: breach of the settlement agreement

Text: [¶ 10] In Count I of the amended complaint, John and Craig claimed that Jeffrey, Diane, SCC, and RDC breached the settlement agreement in that they did not make the settlement payments when they were due. The preliminary payment due on or before March 8 was not paid until April 10. The remaining payments for the redemption of the SCC and RDC shares and for Craig's interest in the 4S Partnership were due on March 23. The payment to Craig for the partnership was made on July 12, as was the payment for the SCC shares. The payment for the RDC shares was not made until September 10.
[¶ 11] Jeffrey and Diane contend that the trial court erred when it concluded that John and Craig had not released Jeffrey and Diane from the claim of breach of the agreement. Jeffrey and Diane had the burden of proving the affirmative defense of release, which is similar to the defense of accord and satisfaction, by a preponderance of the evidence. Cf. E.S. Herrick Co. v. Me. Wild Blueberry Co., 670 A.2d 944, 946 (Me.1996) (stating that the party asserting the defense of accord and satisfaction has the burden of proof). The interpretation of an ambiguous release is a question of fact, Hawkes v. Commercial Union Ins. Co., 2001 ME 8, ¶ 20, 764 A.2d 258, 266-67, which we review for clear error, E.S. Herrick Co., 670 A.2d at 946. However, when the defense of release is based upon an unambiguous writing, the inquiry is a question of law, Hawkes, 2001 ME 8, ¶ 20, 764 A.2d at 266-67, which we review de novo, Moody v. State Liquor & Lottery Comm'n, 2004 ME 20, ¶ 16, 843 A.2d 43, 49. [¶ 12] Jeffrey and Diane argue that the releases signed by John and Craig relieved Jeffrey and Diane of liability for the late payments on the SCC shares and the 4S Partnership. The release that the parties signed on July 12 states that John and Craig release Jeffrey and Diane: from any and all manner of actions, suits, damages, attorney fees, and claims of whatsoever kind or nature . . . now existing or which may result from the existing state of things, as of the effective date of this Agreement, which [John and Craig] ever had or now have, in any way related to the business of Shostak Construction Corporation. Also on July 12, when Craig received his payment for the 4S Partnership, he released Jeffrey and Diane from any and all claims, causes of actions or liabilities in any way related to the 4S Partnership or the real property. [¶ 13] John and Craig contend that they released Jeffrey and Diane in the SCC release only as to claims related to the business of SCC. They argue that their claim for breach of the settlement agreement and request for interest on the late payments is not a claim relating to SCC's business. We disagree. Business is a very broad term, and the redemption of SCC shares clearly related to the business of SCC. If the parties had intended to exclude certain claims from the release, that is what they should have stated. Indeed, that was exactly what they stated in the RDC release. In contrast to the SCC and 4S Partnership releases, the RDC release, signed on September 10, expressly excluded all issues unresolved and referred to in the Court Order dated August 22, 2001. The RDC release demonstrates that the parties knew how to be precise. [¶ 14] In the SCC release, John and Craig released all claims now existing or which may result from the existing state of things, without reservation. As of the date of the release agreement, July 12, John and Craig's claims for interest were now existing. The unambiguous SCC release agreement bars John and Craig's recovery of interest for the untimely redemption of the SCC shares. [¶ 15] The 4S Partnership release is similar to the SCC release. In it, Craig released Jeffrey and Diane from any and all claims ... in any way related to the 4S Partnership or the real property. Because of this release Craig cannot recover on his interest claim regarding the partnership. [¶ 16] We do not agree with John and Craig's contention that the court's August 22 order demonstrates that they had not released their claim to interest because it followed their signing of the SCC release and Craig's signature on the 4S Partnership release. That order recites that a disputed issue is [w]hether interest should be paid on the Shostak Construction redemption price, the [4S] acquisition price, the Rockwood Development stock purchases and, if so, for what period. The order is simply a recitation of the contested issue and nothing more.
[¶ 17] Jeffrey and Diane claim that their late purchase of the RDC shares was justified by John and Craig's breach of the agreement. The court concluded that Jeffrey and Diane were not justified in delaying the purchase. The court interpreted the agreement's time requirements for the purchase of RDC shares as independent of John and Craig's obligation to turn over the RDC corporate records. We review the court's construction of the unambiguous contract de novo. See Willis Realty Assocs. v. Cimino Constr. Co., 623 A.2d 1287, 1288 (Me.1993). [¶ 18] Jeffrey and Diane contend that John and Craig's failure to turn over the RDC corporate records by February 16 caused them to withhold payment. According to Jeffrey and Diane, the records delivered on February 16 were not complete. As a result, they were not able to determine if John and Craig had satisfied their representation that they had managed RDC in the ordinary course of business with proper corporate governance since May, 1999. Jeffrey and Diane argue that the settlement agreement made the RDC payment contingent on the fulfillment of John and Craig's obligations. The agreement states: In the event that Jeffrey and Diane are unable to close the entire transaction on or before March 23, 2001, they shall pay $727,500.00 to Craig and John to redeem their [SCC] stock and also pay $27,500.00 to Craig to buy out his partnership interest in 4-S. Thereafter, Diane and Jeffrey shall have an additional 45 days from [March 23] in which to close the purchase and/or redemption of the [RDC] stock for $1,400,000.00. We agree with John and Craig's assertion that the phrase unable to close means that only Jeffrey and Diane's inability to close by March 23 allows a later purchase of the RDC shares. [¶ 19] The representation by John and Craig that RDC had been run in the ordinary course of business was independent of the provisions regarding the closing date and the consequences of Jeffrey and Diane's inability to close. Because Jeffrey and Diane did not present any evidence to the trial court on their inability to close by the closing date, the court did not err in determining that they breached the settlement agreement with regard to the RDC payment and in finding that John and Craig were entitled to interest for that late payment.