Opinion
No. CV05-4009789S
May 2, 2008
MEMORANDUM OF DECISION ON MOTION FOR SUMMARY JUDGMENT
(1)The defendants have filed motions for summary judgment directed against an action for declaratory relief pursuant to Connecticut General Statutes § 52-59, P.B. § 17-54.
The defendant was employed by the city and assigned to a city department. He was a member of a union, Local 3144. In February 2004 he was informed that sexual harassment charges had been made against him and he would be suspended. He was notified that the city was going to conduct a pre-termination hearing to determine his employment status. The union represented him at the hearing and there he was informed that based on interviews with the people making the accusations, the city decided to terminate his employment.
In his complaint the plaintiff alleges that at no time has the city shared with him the results of its investigation as to the allegations on which his termination was based. After the hearing the union conducted an investigation and likewise did not share the results with the plaintiff. Not knowing the specific allegations made against him or the names of his accusers he was prevented from refuting the charges.
The plaintiff was informed that as a result of its investigation it would no longer represent his interests or defend him at any arbitration.
Subsequent to the pre-termination hearing the city and the union arrived at a "settlement agreement" which called for his resignation in return for a payment of $7,500, full payment of accrued vacation and sick pay, two months additional medical coverage and a promise by the city not to oppose any claim by the plaintiff for unemployment compensation. The agreement also provided "there would be no public discussion of the terms of the agreement or the issues surrounding the subject matter that brought about the agreement."
The complaint alleges that the city and union told him that if he did not sign the agreement he would be terminated and would receive none of the benefits negotiated thereunder.
At the time he was told he must sign the agreement or be terminated without its benefits the complaint alleges he had financial problems, medical problems and bills — these problems are continuing in nature. He was also taking care of an elderly family member, and would have faced the prospect of embarrassing allegations being made public. Because of the foregoing he alleges that when he signed the agreement "he had no reasonable alternative but to acquiesce to the defendant's (city's) ultimatum and accept the settlement agreement."
The complaint further alleges that the city violated the agreement by allowing its employees "to publicly discuss the matters that led to said agreement at a department staff meeting."
As a result of the foregoing the plaintiff asks that the "settlement agreement" be declared null and void.
In response to a motion by the city to strike for failure to join or give notice to an interested party, the plaintiff did in fact cite in the union as a party in the case.
(2)
The standards to be applied in deciding a motion for summary judgment are well known. If there is a material issue of fact the court should not grant such a motion. If there is not, however, the court should grant such a motion to allow parties to avoid the inconvenience and expense of litigation.
(3)
Two basic issues are presented in this case. The first issue is whether the settlement agreement should be voided "because there are genuine issues of material fact regarding whether the plaintiff was subjected to undue influence."
The second issue is that framed by the plaintiff to claim that "even if the settlement agreement is legally enforceable" its terms are questions of fact not amenable to summary judgment procedure. This is connected to a claim that the city violated a term of the agreement which limit the city or its employees from talking about "the terms and conditions of the agreement" with any third persons — third persons being defined to include "any past or present employees of the city." The plaintiff also cites another paragraph of the agreement which says that "the city agrees that it not in a public forum or in the media make any disparaging remarks about Gengaro or the circumstances surrounding his employment and/or his separation from employment from the city."
(a)
The court in Doherty v. Sullivan, 29 Conn.App. 736, 741 (1992) set forth the principle which both sides seem to agree is determinative of the first issue. There the court said that: "Our law has long been clear that a `compromise agreement . . . if free from fraud, mistake, or undue influence is conclusive between the parties . . .'" cf. Azzolina v. Sons of Italy, 119 Conn. 681, 689 (1935).
There appears to be no claim of fraud or mistake here, at least none has been raised in opposition to the motion for summary judgment. The only question addressed by the parties is whether undue influence on the plaintiff should render the agreement null and void. What is "undue influence" in a context such as this where the viability of a settlement agreement is at issue? In Reynolds v. Molitor, 184 Conn. 526 (1981) the concept is defined as follows: "Undue influence is the exercise of sufficient control over the person, the validity of whose act is brought in question, to destroy his free agency and constrain him to do what he would not have done if such control had not been exercised," id., p. 528. The court went on to say since direct evidence may be difficult to obtain "undue influence may be proved circumstantially . . . Relevant circumstances include the grantor's health and its effect upon his mental and physical functions, his dependence on the person alleged to have influenced him, and the opportunity to exert influence available to that person," id., p. 529.
Along the same lines in a case challenging the viability of an agreement in a family case the court quoted from an article in Am.Jur. to the following effect insofar as it is relevant to this case: "It is stated generally that there are four elements of undue influence (1) a person who is subject to influence (2) an opportunity to exert undue influence (3) a disposition to exert undue influence and (4) a result indicating undue influence." Quoting from this earlier edition of Am.Jur. the court said also that "relevant factors include age and physical and mental condition of the one alleged to have been influenced, whether he had independent or disinterested advice in the transaction." Pickman v. Pickman, 6 Conn.App. 271, 275 (1989). The current section of Am.Jur. bears the same section number as the CT Page 6976 Pickman cite, § 36 in the 25 Am.Jur.2d article on Duress and Undue Influence and it cites for authority at footnote 7, page 476 Restatement (2d) Contracts § 177. That section discusses when undue influence makes a contract voidable. Its first subsection reads.
(1) Undue influence is unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relation between them is justified in assuming that the person will not act in a manner inconsistent with his welfare.
Leaving aside the definitions of undue influence it is clear that the burden of proving it is on the party who alleges it, Pickman, 6 Conn.App. at page 276; Stanton v. Grisley, 177 Conn. 558, 565 (1979). Issues of undue influence often arise in cases where wills are contested. In Salvatore v. Hayden, 144 Conn. 437, 440 (1957) the court made the following remarks about the burden of proof on this issue: "Undue influence need not be proved by direct evidence; it may be inferred from all the circumstances" and as to the case under review the court said: "There was evidence of sufficient facts and circumstances from which the jury reasonably could have found undue influence."
In Lee v. Horrigan, 140 Conn. 232 (1953) the court set forth a more nuanced exposition of the foregoing quoting from earlier cases: "It is conceded that no direct evidence of undue influence was adduced, and none was necessary, provided the foundation was laid for a reasonable inference that the will was not such as the testator would have made, if left entirely to his own discretion, and that his free agency and independence had been overcome, so that he was constrained to do what he was unable to refuse and too weak to resist . . . On the other hand, the rule which dispenses with the necessity of direct proof of undue influence, does not relieve the contestant from the burden of laying a `safe foundation of material facts proven, and inferences which fairly and convincingly lead to that conclusion' . . .," id., pp. 237-38.
Applying these general principles to the case before the court as it relates to the motion for summary judgment the court will first examine the settlement agreement and the circumstances of its signing.
Paragraph 10 states several acknowledgments to the following effect, that he
(c) Acknowledges that he has been advised to consult with an attorney regarding this agreement and the release of claims contained therein.
(e) Acknowledges that he is informed and is aware that he has at least 21 days from the date he is presented with this Agreement within which to consider the terms of the Agreement and that he is knowingly and voluntarily executing the Agreement.
(f) Acknowledges that he can revoke this Agreement within the seven (7) day period following the date on which it was signed by her (sic) providing written notice of such revocation to Joanne Courtemanche, Executive Assistant to the Director of Labor Relations at the City, 165 Church Street, New Haven, Conn. 06510.
Mr. Gengaro signed the agreement June 9, 2004. In the body of the agreement he represented that "he is able to read the language and understands the meaning and effect of this agreement and that he has read and understands this Agreement and the effect thereof." The court in First Charter National Bank v. Ross, 29 Conn.App. 667, 671 (1992) in any event said that "the general rule is that where a person (who is) of mature years and who can read and write, signs or accepts a formal written contract affecting his pecuniary interests, it is (that person's) duty to read it and notice of its contents will be imputed to (that person) if (that person) negligently fails to do so." The court in Phoenix Leasing, Inc. v. Kosinski, 47 Conn.App. 650, 654 (1998) quotes this language which goes on to say that "this rule is qualified by the intervention of fraud, artifice or mistake not due to negligence," id.
Nothing in the language of the document, particularly the opportunity it gave Mr. Gengaro to seek advice or review its contents has the indicia of the exercise of such undue influence so as to destroy his ability to appreciate the consequences of his signing or overbear his will in that regard. None of Gengaro's subsequent actions indicated he was acting under the constraint of an agreement he would not otherwise have signed but for the exercise of undue influence. A Mr. Hibson who is the city director of the office of Labor Relations said by way of affidavit that, Gengaro did not revoke the agreement in the seven-day grace period "but in fact contacted the office of Labor Relations several times after the settlement agreement was signed to confirm that various payments would be forwarded to him in a timely fashion." In fact at oral argument Mr. Gengaro's counsel seemed to concede he had received various benefits under the agreement.
The court will now examine the affidavit submitted by the plaintiff. But it should be noted that one problem with the plaintiff's opposition to the motion for summary judgment is that the court is confined to the representations in his affidavit. It cannot take into account representations made by counsel at oral argument on the motion. The affidavit states the plaintiff was suspended without written or oral notice "as required." There is no indication as to what agreement or documents set forth this requirement or how the suspension can be considered a factor in any claim of undue influence. Was the suspension, with or without pay? How did a suspension occurring without notice factor in Gengaro's decision to sign the final settlement agreement?
The affidavit then goes on to state the following.
6. . . . I was informed by Local 3144, Council #4, AFSCME AFL-CIO that the union had conducted their own investigation into the allegations surrounding my suspension.
7. At no time subsequent to the Union's investigation, has Local 3144, AFSCME AFL-CIO ever presented me with written or oral evidence regarding their investigation, but did however inform me that a decision had been made that they would not represent my interests any longer, including any requests I might make regarding an arbitration hearing, if I did not agree to enter into the Settlement Agreement.
8. At the same time, I was informed by Local 3144, Council #4, AFSCME AFL-CIO that if I did not enter into the Settlement Agreement that I would be terminated by the City of New Haven, with no accruals of vacation, sick, personal days consideration.
9. Other than being presented with the general allegations against me, I was never offered any of the specific allegations regarding the complaints made against me by either the City of New Haven, or Local 3144, Council #4, AFSCME AFL-CIO.
CT Page 6979
10. But for Local 3144, Council #4, AFSCME AFL-CIO's ultimatum that if I did not sign the Settlement Agreement, the union would no longer represent me, and the City of New Haven's ultimatum that if I did not sign the Settlement Agreement I would be terminated, I would have challenged any action to terminate me by the City of New Haven in an arbitration hearing, which was ultimately never offered to me.
Also the mere fact that the city indicated it would terminate Gengaro if he did not sign the agreement without more cannot be considered the exercise of undue influence. If this were not the case, no settlement agreement in the employment context would ever pass muster. Every time the employer offered a settlement agreement instead of outright termination, no matter how generous the terms of the agreement might be under the circumstances, a claim of undue influence would allow the agreement to be voided.
It is true that the union decided not to represent Gengaro. But there is no evidence to indicate the city and the union were in some sort of collusion to abort Gengaro's right to union representation. The events proceeded as follows (1) the city made clear Gengaro would be terminated if a settlement agreement was not arrived at and signed by Gengaro (2) the union said it would not represent him at arbitration in the event the agreement was not signed. There's a disconnect between the two predicates to the problem before the court as presented by the plaintiff. If Gengaro did not sign the agreement, the union could have represented him and obviously the present action would not be before the court since there would be no agreement to be declared null and void. The decision of the union not to represent Gengaro is the ultimate reason why this case and this motion are before the court. Subsection (3) of Section 177 of the Restatement while not directly on point is of some relevance. It reads as follows.
(3) If a party's manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the undue influence either gives value or relies materially on the transaction.
The union was a "party" to this agreement so the "third party" characterization is not directly on point but the union in large measure was a nominal party. The consideration passed between the city and Gengaro, the substantive obligations were placed upon only the city and the plaintiff. The union functioned, for all intents and purposes, as the representative of Gengaro for signing purposes. The point then under the Restatement is that the city pursuant to the agreement which was signed June 9, 2004 sent a $7,500 check for Gengaro's benefit to the union. The check had to be sent within thirty days of the June signing date. Another aspect of consideration was that Gengaro was to remain on the city health plan for June and July of 2004. The city has given value for the effectuation of the settlement agreement. How can a contractual arrangement be declared null and void when one of the parties has received the major part of the benefits contracted for? The action was not brought until almost a year after the signing of the agreement.
But the plaintiff makes additional argument. In his affidavit Mr. Gengaro states that "other than being presented with the general allegations against me, I was never offered any of the specific allegations regarding the complaints made against me" by either the city or the union. Apart from the threat of termination this is the only allegation against the city that could tie into an argument that somehow Gengaro could rely on an undue influence claim. These bare boned facts alone do not rise to the level which would permit the court to conclude that the city had such control over the situation Gengaro was faced with that his "free agency" was destroyed and he was "constrained" to do what he would not otherwise have done, see Reynolds v. Molitor, supra. What is the substance of the "general allegations" Gengaro referred to and knew about, did he have any other resources to find out more detailed information, did he explicitly request more detailed information and was he denied that information? Was this lack of more detailed information, even if the just mentioned factors are ignored, the basis for his signing the agreement or was it the fact that the union would not represent him in arbitration? Again what did the city have to do with this union decision and even if the city had given Gengaro more information would that have changed the union's decision? The court believes that the city and the union should prevail on this aspect of the motion for summary judgment which argues that the settlement agreement cannot be declared null and void.
(b)
In a second argument the plaintiff says that "even if the settlement agreement is legally enforceable the interpretation of the terms of the settlement agreement are a question of fact and not a matter of summary judgment." This argument is difficult to understand since the relief sought in this action for declaratory relief is that the settlement agreement be declared "null and void."
In any event the plaintiff seems to maintain that the city breached certain parts of the agreement. Section 8(c) states that "the city agrees that it will not in a public forum or in the media make any disparaging remarks about Gengaro, or the circumstances surrounding his employment and/or his separation from employment from the city." The plaintiff then refers to Section 8(a) of the agreement which explicitly applies to Gengaro only and says that he shall not "in any manner publish, publicize, disclose or otherwise make known or permit or cause to be made known to any third person the terms and conditions of this agreement." "Third person" is defined as "members of Gengaro's non-immediate family, any past or present employees of the city or any member of such employee's family, union, association or group."
The immediate problem for the plaintiff is how his claim that the parties had an "understanding" that paragraph 8(a) of the contract would apply to the city could be advanced without violating the parole evidence rule. The language of that paragraph is clear and unambiguous in stating that it applies to Gengaro and not to any other party to the agreement, Jay Realty, Inc. v. Ahearn Development Corp., 189 Conn. 52, 56 (1963), see also Heyman Associates No. 1 v. Ins. Co. of Philadelphia, 218 Conn. 281, 288-89 (1991).
But leaving that aside the agreement in paragraph 9 explicitly provides that if any provision of the agreement by any of the parties are breached "the breaching party shall be liable to the non-breaching party for costs, damages, and expenses relating in any manner to said breach including, without limitation, attorneys fees and costs." There is no contractual provision providing that the agreement shall be null and void ab initio if any of its provisions are violated.
But even beyond all the foregoing the plaintiff claims the agreement provisions he relies upon were breached because "the city did contravene (those) terms of the agreement when the Director of the Livable City's Initiative, Andrew Rizzo, at a department wide staff meeting, offered an open door to any employee who felt a need to discuss the plaintiff's situation." The court is not exactly clear as to what this means but apart from its mere statement in the brief of the plaintiff it is not supported by any affidavit or documentation. Furthermore it is not clear that any employee accepted the invitation and chose to go through the open door for the purposes of discussing any forbidden subject.
Indeed the city submitted an affidavit by Mr. Rizzo wherein he stated at no time in a forum of any kind did he make disparaging comments about Gengaro. At a staff meeting he said he merely informed the Livable City Initiative Staff "that the plaintiff's situation was resolved and he would not be returning to work." He denies making any disparaging remarks about Gengaro at the meeting or going into "the circumstances regarding his employment and/or separation from employment" by the city. No counter-affidavit was submitted by the plaintiff. Based on Rizzo's affidavit no violation of 8(c) of the agreement can be found or even of 8(a) if that section were held to apply to the city. The "terms and conditions" of the agreement were not discussed, no disparaging remarks about Gengaro were made, and the circumstances surrounding his employment or separation from city employment were not alluded to.
In any event based on the foregoing the court grants the defendant City's motion for summary judgment and that of the union.