Alexakis v. Mallios

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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