ASSOCIATED ESTATES LLC v. BANKATLANTIC
164 A.3d 932
| D.C. | 2017Background
- AE (Associated Estates, LLC) sued BankAtlantic for breach of contract and other claims seeking >$19M; after years of discovery, a court-run settlement conference occurred April 4, 2012 before Judge Mott.
- After seven hours of separate ex parte discussions in jury rooms, the parties reached an oral settlement for $1.55M; the agreement was placed on the record, but AE's principal (Ware) initially reacted angrily and briefly left the courtroom before confirming acceptance.
- BankAtlantic circulated a draft written agreement; Ware did not immediately sign. BankAtlantic moved to enforce the oral settlement; AE (with new counsel) opposed and later moved for reconsideration, submitting Ware’s second declaration alleging undue influence by prior counsel and procedural defects.
- The trial court enforced the settlement and denied reconsideration, finding insufficient evidence of coercion or egregious procedural unconscionability; AE appealed.
- The D.C. Court of Appeals held that AE could challenge both the enforcement order and the denial of reconsideration, rejected AE’s undue-influence and procedural-unconscionability arguments, and affirmed the trial court’s orders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether settlement should be unenforceable for undue influence by AE's prior counsel | Counsel pressured Ware to settle and threatened withdrawal over unpaid fees, destroying free agency | The evidence was conclusory; counsel warned months beforehand and withdrawal threats were permissible; AE could retain new counsel | Rejected: record lacked clear, cogent proof of undue influence that destroyed free agency; enforcement affirmed |
| Whether the settlement process was procedurally unconscionable (ex parte, disclosure of mediation confidences, counsel threats, judge pressure) | Ex parte communications occurred without explicit consent; mediator confidentiality was breached; counsel coerced settlement; judge rushed Ware | Court observed implied consent to ex parte format, no showing of substantive unconscionability, and no egregious procedural unfairness | Rejected: process not egregiously unconscionable; parties had meaningful choice; enforcement affirmed |
| Whether the appeal may include the underlying enforcement order though not listed on the notice of appeal | AE contends timely Rule 59(e) motion preserved review of enforcement order | BankAtlantic contends notice limited review to denial of reconsideration | Held for AE: appellate rule amendments and appellate practice permit review of enforcement order along with denial of reconsideration |
| Whether Judge Mott should have recused | AE argued bias/necessity of recusal if enforcement reversed | BankAtlantic defended judge's conduct as appropriate | Court did not reach merits because it affirmed enforcement; recusal issue not decided |
Key Cases Cited
- Dyer v. Bilaal, 983 A.2d 349 (D.C. 2009) (contract enforceability reviewed de novo)
- Ross v. Blackwell, 146 A.3d 385 (D.C. 2016) (undue influence defined as influence that destroys free agency)
- Pierola v. Moschonas, 687 A.2d 942 (D.C. 1997) (courts require objective evidence of fraud, duress, overreaching to set aside contracts)
- Roberts-Douglas v. Meares, 624 A.2d 405 (D.C. 1993) (less required to show undue influence when confidential relationship exists)
- Vines v. Manufacturers & Traders Tr. Co., 935 A.2d 1078 (D.C. 2007) (appellate notice-of-appeal construction principles)
- Urban Invs., Inc. v. Branham, 464 A.2d 93 (D.C. 1983) (procedural unconscionability insufficient absent substantive unfairness except in egregious situations)
- Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965) (factors for procedural unconscionability and meaningful choice)
- Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (applicability of procedural rule changes to pending cases)
- Gonzalez v. Thaler, 565 U.S. 134 (2012) (Rule 3 requirements sometimes treated as jurisdictional)