Opinion
11-P-243
04-09-2012
AIRGAS EAST, INC. v. MEDICAL-TECHNICAL GASES, INC.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Airgas East, Inc. (Airgas), filed a collection action against Medical-Technical Gases, Inc. (Med-Tech), in Superior Court alleging that Airgas had supplied Med-Tech with certain gases, as well as cylinders required to legally transport and contain them, and that Med-Tech had failed to pay for the gases and cylinder rentals. Med-Tech counterclaimed, alleging that it was entitled to set-offs and credits for gas cylinders that Airgas had in its possession, but which Med-Tech owned as a result of Med-Tech providing its own cylinders in lieu of paying for the rental of the Airgas cylinders. Throughout the course of the litigation, Airgas denied possessing any of Med-Tech's cylinders.
The case was tried jury-waived. During the second day of trial, the parties reported a settlement under which Med-Tech agreed to pay Airgas $67,500 in exchange for a bill of sale for all of Airgas's property which remained in Med-Tech's possession. The parties also agreed to a dismissal of Med-Tech's counterclaims. The parties reported the matter settled, but did not reduce the terms of their agreement to writing. Accordingly, an order for entry of dismissal nisi issued, requiring the parties to file an agreement for judgment or stipulation of dismissal by August 27, 2010.
At the suggestion of Airgas's counsel, Med-Tech's trial counsel prepared a draft release and settlement agreement. Shortly thereafter, Med-Tech terminated his employment. Thereafter, on August 12, 2010, Airgas's counsel drafted a proposed 'Mutual Release of All Demands' (Mutual Release) and bill of sale and sent them to Med-Tech.
The Airgas Mutual Release proposed
'a mutual release of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, and any and all claims, counterclaims, demands and liabilities whatsoever . . . and which are now the subject of an action in the Middlesex Superior Court Civil Action No. MICV2008-02764, entitled Airgas East, Inc. v. Medical-Technical Gases, Inc., d/b/a Med-Tech Gasses.'
On August 27, 2010, Med-Tech's successor counsel prepared a draft 'Settlement Agreement and General Release' (the August, 2010 Release) that included several modifications, including a provision purporting to clarify the scope of the release. That same day, the parties filed a joint motion to extend the nisi deadline, which was allowed by the court. On September 27, 2010, Airgas filed an emergency motion under Superior Court Rule 9A to vacate the order of dismissal nisi and return the matter to the trial court for decision or in the alternative to enforce the settlement agreement, asserting that the parties had agreed to settlement on the following terms: (1) payment of $67,500; (2) a bill of sale from Airgas to Med-Tech; and (3) a full general release of all claims. The motion judge, who was also the trial judge, allowed the motion to enforce the agreement.
In this appeal, Med-Tech makes no argument with respect to the terms set out in (1) or (2), supra but, as to (3), supra, argues that there was not a meeting of the minds sufficient for there to be an enforceable contract, and that, even if there was a contract, it is properly characterized as a limited release.
It is clear from the hearing transcript and from the parties' briefs that the trial judge intended to approve the plaintiff's draft Mutual Release. The arguments on appeal assume that this is what occurred below. However, as a result of an apparent scrivener's error, the judge's order purported to approve the draft August, 2010 Release prepared by the defendant's successor counsel. Throughout our decision, our discussion of the release approved by the judge refers to the plaintiff's draft Mutual Release.
On appeal, Med-Tech argues that the judge erred in declining to conduct an evidentiary hearing to determine the nature and terms of the settlement agreement. Med-Tech's reliance upon Bandera v. Quincy, 344 F.3d 47 (1st Cir. 2003), is unavailing. In that case the First Circuit explained that, while an evidentiary hearing is preferable, a judge is not totally foreclosed from resolving the matter without an evidentiary hearing. Id. at 52.
Med-Tech similarly cites Malave v. Carney Hosp., 170 F.3d 217, 220 (1st Cir. 1999), for the proposition that 'nontestimonial evidence not subject to cross-examination, ordinarily will not suffice to ground enforcement of an ostensible settlement.' In Malave, however, 'the motion papers clearly contemplated that an evidentiary hearing would be held, and the response to the motion explicitly requested such a hearing.' Id. at 221. Med-Tech made no such request here, yet complains that 'the Trial Court did not order the parties to personally appear for an evidentiary hearing.' Malave makes it clear that the burden of requesting an evidentiary hearing and assuring attendance of the witnesses was upon Med-Tech. Ibid. Indeed, Med-Tech failed to bring its president to the hearing on Airgas's motion, at which Med-Tech's defense was, in part, premised on the president's affidavit.
Furthermore, the settlement in Malave was made '[i]n the midst of discovery.' Id. at 219. In contrast, the settlement in the present case was made during the second day of a trial in which the judge could assess the facts and law of the case as well as the credibility of the witnesses. Med-Tech acknowledges that '[d]etermining [the] credibility of the witnesses is for the presiding judge.' Med-Tech concedes that the judge found its president (who testified at trial) 'to be not credible.'
A final point of significance is that Med-Tech made no contention that it could provide evidence from a live witness that it had not already set forth in the affidavits of its president and counsel. It was clear that the president denied agreeing to a release and it was equally clear that the judge had already found him not to be credible. The judge had more than sufficient evidence to determine that an enforceable settlement had been reached.
The judge then concluded that the scope of the release was as contained in Airgas's proposed Mutual Release, which we have recited in relevant part above. In his memorandum of decision and order, the judge construed this language as a general release. That was error. The language in the plaintiff's Mutual Release indicates a limited release.
General releases serve as a shield against all claims and demands arising out of any transaction between the parties prior to the effective date of the release. Leblanc v. Friedman, 438 Mass. 592, 598 (2003). Here, the proposed release, as prepared by the plaintiff, specifically limits the released claims, demands, etc., to those 'which are now the subject of an action in the Middlesex Superior Court Civil Action No. MICV2008-02764, entitled Airgas East, Inc. v. Medical-Technical Gases, Inc. d/b/a Med-Tech Gasses.' Releases of this type -- employing language specifically referring to only one occurrence or transaction -- are limited to claims and demands arising out of that specific occurrence or transaction. See Leblanc, 438 Mass. at 598-600 (holding that limiting language referencing a specific surgery constituted a release of only the claims arising out of that specific surgery). Moreover, to the extent there is any ambiguity as to the scope of the plaintiff's draft Mutual Release, we construe the document against the plaintiff, as the drafter. See id. at 599, n.6.
The judgment shall be modified to order that the corporate defendant is deemed to have signed the Mutual Release of All Demands prepared by the plaintiff, and that the scope of the Mutual Release is limited to matters that are the subject of Airgas East, Inc. vs. Medical-Technical Gases, Inc., d/b/a Med-Tech Gasses, Middlesex Superior Court, Civil Action No. 08-02764. As so modified, the judgment is affirmed.
We decline the plaintiff's request for appellate attorney's fees.
So ordered.
By the Court (Berry, Kafker & Mills, JJ.),