Petition — Hunt v. Hunt
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Office-Supreme Court, U.S.
ane Sad a 8
APR 30 1981
80-2126 ve
ALEXAND«... TEVAS,
No. CLERK
Supreme Court of the United States
October Term, 1980
HUGH S. HUNT,
Petitioner,
vs.
RAY LEE HUNT, EXECUTOR OF THE
ESTATE OF H. L. HUNT,
Respondents.
PETITION FOR WRIT OF CERTIORARI
To the United States Court of Appeals
For the Fifth Circuit
HUGH S. HUNT
12219 River Road
Potomac, Maryland
(301) 299-2920
Pro Se
BALMAR REPROGRAPHICS, INC., ARLINGTON, VA—TEL. (703) 528-9000
QUESTIONS PRESENTED
Whether the Court of Appeals for the Fifth Circuit, by
applying a conflict of laws rules based upon a broad interest
analysis to a Louisiana contract in defiance of Louisiana statu-
tory law and judicial interpretation, has violated this Court’s
mandates in the Challoner, Erie, and Klaxon cases.
Whether a federal court can enforce a contract entered
into in court in settlement of litigation, which contract by its
terms violates the public policy of the forum state and would
be unenforceable in the State Courts.
iii
TABLE OF CONTENTS .
OPO eeerer rye Tey ies ee Coe
Te Cr RES 5 6 ba adek se 0 naa Oeiieh.cos ber 8 spre
TR ED 0a oe aa 0 0 oe CUR aie banereusee ees
I WS in bao 6 e000 had gH Oa Vt RAEN kee
EEE eae CP EE eee ere
id .cvi'e ct baa ces bokaks dank fae ease eeenes
Statutes and Constitutional Provisions ...............
SenSoenawss OF ERO CRI | ko 0's) ok v506.a 0h. 0 0b 90-0 bp: 0 ibe v's
Why the Writ Should De Granted ............000005-
I. THE COURT OF APPEALS FOR THE
FIFTH CIRCUIT HAS, BY IMPOSING ON
LOUISIANA THE “INTERESTS ANALYSIS”
OF THE RESTATEMENT OF CONFLICT OF
LAW SO AS TO DEFEAT THE USE OF
LOUISIANA SUBSTANTIVE LAW, BOTH
RENDERED NUGATORY THE COURT’S
MANDATE IN DAY AND ZIMMERMAN V.
CHALLONER AND EXPLICITLY DISRE-
GARDED THE SUBSTANTIVE LAW, BOTH
STATUTORY AND JUDICIAL, OF THE
FORUM STATE, LOUISIANA ...........500000-
II. THE CONTRACT IS NOT ONE TO BE PER-
FORMED SOLELY IN TEXAS BUT IN
LOUISIANA, TEXAS AND OTHER STATES
AND IS THEREFORE A LOUISIANA CON-
TRACT UNDER LOUISIANA CONFLICTS
Appendix:
A Balareeeet OC TMG: 6 oo 8h is daiseiwdsscevesess
B. Opinion and Judgment of Court of Appeals .......
C. Opinion and Final Judgment of the
CEES COMIN hn occ ok bin wh Olea Mb Oe Kae ween
D.Memorandum Ruling of the District Court........
E. Partial Transcript of Settlement Conference.......
iv
TABLE OF AUTHORITIES
Cases
Associated Press v. Toledo Investments, Inc.,
GS, AGO. TF 7S) SOP WOME TOM i kbbccersccraccccccce 10
Brinkley and West, Inc. v. Foremost Insurance
Company, 499 F.2d 928 (Sth Cir. 1974) ....13, 14, 16, 17
Challoner v. Day and Zimmerman, Inc.,
512 F.2d 77 (Sth Cir. 1975), overruled in
Day and Zimmerman v. Challoner, 423 U.S.
3, 96 S.Ct. 167,46 L.Ed. 2d ...... 8,9, 10,11, 12, 13, 1%
Doss v. Apache Power,
BO PMR ETC REE bck e i andoeed cbse pies cevacnse 16
Erie R.R. Co. v. Tompkins,
1938, 304 U.S. 64, 58 S.Ct. 817,
De RE SU CC ioc n ent beet ot se vere vee 9,11, 16,17
Fine v. Property Damage Appraisers,
393 F.Supp. 1304 (U.S.D.C., La. 1975) ........... 10, 13
Jagers v. Royal Indemnity Co.,
(La. Sup. Ct.) 276 So.2d 309 (1973) ....... 12, 13, 14,17
Klaxon Co. v. Stentor Elec. Mfg. Co.,
1941, 313 U.S. 487, 61 S.Ct. 1020,
DEES Tie Od cae keds sabwiew se owé 9,11, 12, 16
Lester v. Aetna Life Ins. Co.,
433 F.2d 884 (Sth Cir. 1970) cert. denied ............ 16
Schiffman v. Service Truck Lines, Inc.,
(La. App. 1974), 308 So.2d 824,
Pe ER BOT ache aoe Oke wide es 00d bo bee e c's 8
Sutton v. Langley,
(La. App. 1976), 330 So.2d 321; writ denied, —
322 So.2d 805 and 330 So.2d 32 (1976) .......... 13,14
Wickham v. Prudential Insurance Company of
America, (La. App. 1978) 366 So.2d 951 ............ 14
Vv
Constitutions
Constitution of the United States, Amendment 10 ........ 9
Statutes
Louisiana Civil Code, Art.10 ...........e000: 9,11, 13,15
Re Rae ID NNE BE ofS Se oka S00 Wb bb cnleavne sen 9
RA Cae CG ING Bl ob binib die Lowocdacvoncéecees 9
RA Ge Cs FUR SE occ kéccbeedeadecovdoces 9
RN As GOR IN BOT ccc recindccecovecacces 9
RUE GEE GOGO, AIG DOOD Soave kcccccccbcveiceces 9
Texts
Restatement of Conflict of Laws,
Second, Para. 6 (1969) .....cccvccccceses 12, 13, 14, 15
No
Supreme Court of the United States
October Term, 1980
HUGH S. HUNT,
Petitioner,
vs .
RAY LEE HUNT, EXECUTOR OF THE
ESTATE OF H. L. HUNT,
Respondents.
PETITION FOR WRIT OF CERTIORARI
To the United States Court of Appeals
For the Fifth Circuit
OPINIONS BELOW
The opinions of Hon. Tom Stagg, Judge of the United
States District Court for the Western District of Louisiana
dated December 17, 1978, and of the United States Court of
Appeals for the Fifth Circuit dated December 1, 1980, are in-
cluded in the Appendix.
JURISDICTION
Federal jurisdiction in the instant case is founded in the
diversity jurisdiction of 28 U.S. 1372 in that the parties are
citizens of different states and the matter in controversy
exceeds $10,000. The Court is enabled to grant a writ of
Certiorari of the United States Court of Appeals for the Fifth
Circuit rendered on December 1, 1980, upon which rehearing
was denied January 13, 1981. Mr. Justice Powell, on behalf of
your honorable Court, enlarged the time within which to file
the instant petition to April 30, 1981, by order dated April 9,
1981.
2
PARTIES
Hugh S. Hunt, Defendant
Ray Lee Hunt, Executor of the Estate of H.L. Hunt, Defendant
Frania Tye Lee, Plaintiff
Ronald Cartledge, Defendant
A list of non-party signatories to the Master Settlement
Agreement appears in that document in the Appendix.
STATUTES AND CONSTITUTIONAL PROVISION
U.S. Constitution Amendment 10. The powers not dele-
gated to the United States by this Constitution, nor prohibited
by it to the States, are reserved to the States respectively, or to
the people.
La. Civil Code Art. 10. The form and effect of public and
private instruments are governed by the laws and usages of the
places where they are passed or executed. But the effects of
acts passed in our country to have effect in another country, is
regulated by the laws of the country where such acts are to
have effect (third sentence omitted).
La. Civil Code Art. 11. Individuals cannot by their con-
ventions, derogate from the force of laws made for the preser-
vation of public order or good morals.
But in all cases in which it is not expressly or impliedly
prohibited, they can renounce what the law has established in
their favor, when this renunciation does not wound the right
of others, and is not contrary to the public well being.
La. Civil Code Art. 12. When a law is clear and free from
all ambiguity, the letter of it is not to be disregarded, under
the pretext of pursuing its spirit.
La. Civil Code Art. 984. The acceptance or rejection
made by the heir, before the succession is opened or left, is
absolutely null and can produce no effect; but this does not
prevent the heir who has thus accepted, from accepting or
rejecting validity the succession when his right is complete.
3
La. Civil Code Art. 1887. Future things may be the object
of obligation. One cannot, however, renounce the succession
of an estate not yet devolved, nor can any stipulation be made
vrith regard to such a succession, even with the consent of him
whose succession is in question.
La. Civil Code Art. 2454. The succession of a living per-
son cannot be sold.
STATEMENT OF THE CASE
Frania Tye Lee brought suit as a Louisiana resident in the
United States District Court for the Middle District of Louis-
iana on November 11, 1975 to (1) be declared putative wife
of H.L. Hunt, whom she had married in Hillsborough County,
Florida, in 1925 unaware of his pre-existing marriage, and
(2) secure her one-half community interest in the considerable
property owned by his estate in Louisiana and acquired by
him during the existence of their marital relationship. After
lengthy litigation on jurisdiction and venue questions not now
in dispute, the case was transferred to the Western District of
Louisiana, and trial commenced before Judge Stagg and a jury
on January 8, 1978. On January 16, Judge Stagg requested
Mrs. Lee, then 75 years of age, and her son, Hugh S. Hunt, to
meet with him privately in chambers in the absence of counsel
and advised them to accept a proffered settlement which they
had already rejected. Thereafter they met with their counsel,
advised them of the judge’s conversation and reluctantly
accepted the offer. Thereupon, counsel for the various parties
and several non-parties advised the court of the acceptance
of a settlement, and a proposed settlement was dictated in
the presence of counsel, the parties, and several Hunt relatives,
although Hugh, who was not represented by counsel, left the
chambers early because new conditions were incorrectly intro-
duced as having been previously discussed. Essentially, this
agreement provided for payment of $7,500,000 to Mrs. Lee
and/or her children and grandchildren, complete confiden-
tiality on both sides, a limited waiver of future inheritance
4
rights between the two sides, transfer of control of Reliance
Trusts, discontinuance of certain litigation, and the sealing of
the court record. Eleven persons, including Hugh, signed the
proposed settlement, although Hugh emphasized that in doing
so, he could not bind his family, whose signatures he was ad-
vised would be required in a formal settlement agreement to
be finalized for the settlement to be operative. Judge Stagg
then discharged the jury, and on January 23, 1978, entered a
judgment of dismissal with prejudice based upon the Janu-
ary 16 “settlement.”
Thereafter, counsel for the Estate of H. L. Hunt prepared
a “Master Settlement Agreement,” which both expanded upon
and varied significantly from the preliminary agreement of
January 16. Mrs. Lee refused to sign the Master Settlement
Agreement as offered and replaced her attorneys when they
said no further changes could be made. After a few of the
changes she wanted were made and under the pressure of
suit by her former attorneys, and following a letter to her
from the Court urging promptness, she signed the agreement
along with all the persons (most of whom were strangers to
the litigation) called upon to sign the agreement, with the ex-
ception of Hugh. (Ronald Cartledge, a party signer, has sought
to withdraw his signature on the grounds of duress, inter alia,
and having been denied by Judge Stagg, has appealed and is
scheduled to be heard on oral argument before the Court of
Appeals for the Fifth Circuit on May 19, 1981.)
The Master Settlement Agreement differed significantly
from the preliminary agreement in a number of respects. First,
whereas the preliminary agreement provided, “‘if possible”’, for
the transfer of control of Reliance Trusts, a multimillion dollar
trust established by Frania Lee for her children which had
come under the exclusive control of employees of the defen-
dants who were manipulating it to the defendants’ advantage,
the Master Settlement Agreement was silent on the point. Sec-
ond, while the preliminary agreement was silent as to the
choice of law, so that under Art. 10 of the Louisiana Civil
Code, Louisiana law would presumpiively control, Louisiana
*4
5
being both the place of signature and the location of the signif-
icant acts to be performed, the Master Settlement Agreement
introduced the law of Texas as prevailing. Third, whereas the
preliminary agreement provided that the parties relinquish
inheritance rights by operation of intestate law, the Master
Settlement Agreement expanded this to cover pre-existing
wills. Fourth, the Master Settlement Agreement created a one-
sided liquidated damages clause for breach of confidentiality
that had never been discussed. Fifth, the Master Settlement
Agreement introduced a bar to litigation arising out of both
future and separate past events, a provision never contem-
plated in the original agreement. Sixth, no provision was made
for the signing of children and spouses concerning inheritance
rights.
Counsel for the Hunt Estate then filed a petition to en-
force the Master Settlement Agreement on September 26,
1978. On the same date the district court joined Hugh as a
party defendant to the action pursuant to Fed. R. Civ. P. 19(a)
and ordered him to show cause why the settlement should not
be enforced.
In response to the petition and these orders, Hugh filed
two motions: (1) to vacate or modify judgment. Fed. R. Civ.
P. 60 (b); and, (2) to dismiss the petition pursuant to Fed. R.
Civ. P. 12(b)(1), (2), (5) and (6). On December 7, 1978, Judge
Stagg held a hearing specifically limited to the issues of which
conditions of the proposed settlement of January 16 differed
from the Master Settlement Agreement and excluded testi-
mony on any other issues. The 60(b) motion was specifically
excluded from the scope of the hearing but was not withdrawn
or abandoned. Testimony by Mrs. Lee as to her understanding
jointly with Hugh as to terms and meaning of the preliminary
agreement was excluded by the Court as “‘irrelevant,” as was
the testimony of Ronald Cartledge, who had been with his
grandmother and uncle during the trial.
On December 19, 1979, the District Court entered a
memorandum ruling, Lee v. Hunt, 483 F. Supp. 826 (W.D. La.
, 6
1975) in which it rejected all of Hugh’s Rule 12(b) claims and
held that the January 16 settlement was binding on him and
that all provisions of the Master Settlement Agreement were
within the contemplation of the earlier agreement and that,
for reasons not altogether clear, it was impossible for the Hunt
Estate to have arranged the resignation of its employees and
their replacement as Advisory Board members and trustee of
the Reliance Trusts. The Court also, acknowledging that the
agreement, which contemplated waiver of inheritance rights
in the estates of living persons, was contrary to Louisiana law,
applied the law of Texas on the presumption that the parties
must have intended the original agreement to be valid regard-
less of the very strong statutory policy of the forum and of the
fact that the original agreement was completely silent as to
choice of law. (The Master Settlement Agreement had, for the
first time, introduced the law of Texas as the law of the con-
tract months after the preliminary agreement.) The court was
silent as to how the interpretation could be reconciled with
the Erie-Klaxon doctrine. Accordingly, the court entered final
judgment on December 27, 1978, ordering Hugh to execute
the Master Settlement Agreement or a court employee to do
so in his stead and to discontinue other existing litigation in
Louisiana.
Hugh then appealed to the Fifth Circuit, basing his posi-
tion primarily upon the inconsistencies between the Master
Settlement Agreement and the preliminary agreement, and
upon the fact that the renunciation of the rights of inheritance
was Contra Bonos Mores under Louisiana law, to which the
law of the forum gave presumptive effect.
The Court of Appeals sustained the trial court on Decem-
ber 1, 1980, but disagreed with its reasoning by determining
that, under the interests analysis of the Restatement of Conflict
of Laws, the law of Texas should be applied to the preliminary
agreement and that La. Civ. Code, Art. 10 could be disre-
garded and dismissed the Louisiana law against waiver of
future inheritance rights with a footnote. The Court of Appeals
then went on to affirm the findings of the District Court on
7
the facts, concluding that there was a meeting of the minds,
despite unrefuted testimony to the contrary, in the prelimi-
nary agreement and that the Master Settlement Agreement
faithfully carried out the preliminary agreement.
Hugh filed a Petition for Rehearing December 29, 1980,
pointing out the inconsistency of the Court of Appeals con-
clusion as to Conflict of Laws both with Louisiana law and the
facts of the case and, once again, the inconsistencies between
the proposed settlement and the Master Settlement Agree-
ments. Hugh also asked that the case be remanded since there
was no evidence on the critical questions of a certain party’s
capacity to sign, and/or the transfer of control of Reliance
Trusts. The Court of Appeals denied rehearing without an
opinion on January 13, 1981.
Hugh S. Hunt has therefore filed the instant Petition for
Certiorari.
WHY THE WRIT SHOULD BE GRANTED
I. THE COURT OF APPEALS FOR THE
FIFTH CIRCUIT HAS, BY IMPOSING ON LOUIS-
IANA THE “INTERESTS ANALYSIS” OF THE
RESTATEMENT OF CONFLICT OF LAW SO AS
TO DEFEAT THE USE OF LOUISIANA SUB-
STANTIVE LAW, BOTH RENDERED NUGATORY
THE COURT’S MANDATE IN DAY AND ZIM-
MERMAN V. CHALLONER AND EXPLICITLY
DISREGARDED THE SUBSTANTIVE LAW,
BOTH STATUTORY AND JUDICIAL, OF THE
FORUM STATE, LOUISIANA.
This petition results from a renewed effort by the Fifth
Circuit to impose a broad interests analysis approach to Con-
flicts of Laws in opposition to the clearly established policies
of the legislature and courts of Louisiana. Your Honorable
Court has rejected the Fifth Circuit’s approach previously by
8
reversing the Fifth Circuit in Day and Zimmerman vy. Chal-
loner.’ Notwithstanding, the Fifth Circuit now defends its
position in that case by holding that Louisiana has adopted its
earlier opinion in Cahlloner. But, as will be shown, Louisiana
has done nothing of the sort.
This case arises as a result of a settlement agreement ar-
rived at in a federal judge’s chambers in settlement of a diver-
sity case in Louisiana. The preliminary agreement contained
provisions specifically prohibited as against public morality
by the Louisiana legislature and consequently void in appli-
cable Louisiana cases.2_ One of the signers having refused to
sign a much more elaborate final agreement, an order to en-
force the settlement was issued by the District Court, which
admitted that the contract at least partly was unenforceable
under the laws of the forum. The courts below both sought to
salvage the settlement through application of the law of Texas
despite the utter silence of the contract on the subject, despite
the unrefuted testimony that the parties on one side defi-
nitely intended that the laws of Louisiana be applied to the
settlement, and despite the explicit law of Louisiana mandat-
ing the application of its own law unless, as was not the case
here, the contract was to be completely performed elsewhere.
This case has in this respect a perhaps unique feature. A
federal district court, in a diversity case, has sponsored (see
Appendix E) a settlement agreement which its forum state
“looks upon with disfavor’ and has then sought to escape the
policy of that forum by applying foreign law. If the entire
thrust of the line of cases commencing with Erie is to create
identical outcomes in federal and state courts in a forum
state, a more inappropriate activity by a federal court would
be hard to imagine.
1. 423 U.S. 3, 96S. Ch. 167, 46 L.Ed. 2d 3, overruling Challoner
v. Day and Zimmerman, Inc. 512 F.2d 77 (Sth Cir. 1975).
2. Schiffman v. Service Truck Lines, Inc., La. App. 1974, 308
So. 2d 824,92 A.L.R. 3rd 1264.
9
Under Erie? — Klaxon* , and Challoner and in accordance
with the 10th Amendment to the United States Constitution,
the appropriate analysis of what laws must be applied must
begin with the conflicts law of the forum, which in this case is
Louisiana.
Louisiana has a statute in point. Article 10 of the Civil
Code provides as a general rule that “‘the form and effect of
public and private written instruments are governed by the
laws and usages of the places where they are passed or exe-
cuted.” In other words, unless there is an exception (which
in this case there is not) Louisiana law rules as the law of the
place of the contract.
In the instant case, that should settle matters, since it is
quite clear that the settlement sought to be enforced against
Hug.. S. Hunt is illegal under Louisiana law. The settlement
agreement provides for a mutual renunciation of rights in the
estates of the several parties. Such a provision is forbidden by
no fewer than three articles of the Louisiana Civil Code, Arts.
984, 1887 and 2454, of which 1887 may be quoted as clear,
“One can not, however, renounce the succession of an estate
not yet devolved, nor can any stipulation be made with regard
to such a succession, even with the consent of him whose suc-
cession is in question.” Article 2454 is brief and to the same
effect: “The succession of a living person can not be sold.”
Since Article 11 of the same code provides that “‘individ-
uals can not by their conventions derogate from the force of
laws made for the preservation of public order or good morals”
and Article 12 provides that such action is void, and since the
Louisiana Court of Appeals in Schiffman v. Service Truck
Lines, (La. App. 1974, 308 So. 2nd 824, 827) has specifically
held such renunciations to be “contrary to morals in the sense
3. Erie R.R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817,
82 L.EJ, 1188.
4. Klaxon Co. v. Stentor Elec. Mfg. Co., 1941, 313 U.S. 487,
62 S.Ch. 1020, 85 L.Ed. 1477.
10
of C.C. 1985 and therefore ineffective’, one would assume,
that the contract is clearly invalid under the law of the forum.
However, the local federal courts, frustrated by Chal-
loner, but still apparently unreconciled to it, have ignored the
forum’s law. The district court starts by acknowledging that
Louisiana law “looks with disfavor’ upon attempts to waive
future inheritance rights. However, stating (incorrectly) that
none of the parties is a Louisiana resident, it proceeds to ig-
nore the Louisiana rule by (a) concluding that the releases
take effect in Texas, so that Texas law should govern and (b)
that the parties must have intended Texas law to govern, since
to apply the law of the forum “would defeat the aim of the
parties, most of whom reside in Louisiana.’’®
As the Articles of the Civil Code cited above clearly indi-
cate, the aim of the parties has nothing to do with the subject,
since Louisiana forbids and voids the consummation of such
aim.
Furthermore, Louisiana case law dictates that Louisiana
will not give weight to a stipulation to adopt a foreign law as
the law of the contract if the effect is to violate Louisiana
public policy. In Associated Press v. Toledo Investments, Inc.,
(La. App.) 389 So. 2d 752 (1978), the Louisiana Court of
Appeals voided a stipulation of New York law that violated
Louisiana policy dealing with money damages. In Fine y.
Property Damage Appraisers, 393 F.Supp. 1304 (1978), the
District Court similarly refused to enforce a stipulation of
Texas law to give life to a covenant not to compete, saying
“ .. . We conclude that Louisiana has expressed strong public
policy reasons against enforcement of agreements not to com-
pete. . . . Since the application of Texas law would result in at
least partial enforcement of that agreement . . . Texas law can-
not govern the impact of the contract. We thus apply the sub-
stantive law of Louisiana, which would be the applicable law
in the absence of an effective choice of laws by the parties.”’®
5. App.,p.DI5.
6. Op. Cit., p. 1308.
11
It would follow, therefore, that unless a basis can be
found in Louisiana law for an exemption from the oft-stated
public policy quoted above, Judge Stagg’s view is clearly
wrong, and Louisiana policy and law have been violated by the
attempt to enforce the settlement.
Now we come to the second half of the lower courts’ ef-
fort to construct a contract at the expense of Hugh S. Hunt
and the Louisiana legislature. Two presumptions are brought
into play to salvage the contract. The first is to say that the
second sentence of Article 1% of the Civil Code can be made
to apply. This provides that “‘the effect of acts passed in one
country to have effect in another country, is regulated by the
laws of the country where such acts are to have effect.”” The
District Court, but not the Court of Appeals, concluded that
since the persons as to whom waiver was taking place were in
Texas, Texas law would apply as to the contract. The District
Court completely ignored the fact that many of the persons
involved in the waivers were not Texas residents. In addition,
in view of the number of Louisiana events which will be de-
tailed below that are part of the contract, this application of
foreign law is also clearly wrong under Louisiana law.
The Court of Appeals, however, saw the error of the
lower court and in effect overruled it by taking another tack,
one so clearly fraught with legal mischief as to require the
attention of this Court. That was to identify the interests
analysis of the Restatement of Conflicts of Law with the law
of Louisiana and thereby evade the Louisiana statutes alto-
gether and bring the contract under the law of Texas.’ This
the Louisiana legislature and Courts have steadfastly resisted,
and this kind of creativity flies directly in the face of the
Erie-Klaxon-Challoner line of cases and indeed would void
Challoner itself.
Some history will help explain the peculiar posture of
Louisiana choice of law rules and the federal courts. Louisiana
7. Atp. 1563.
12
is, of course, a unique state, and many of its Code sections are
different from twentieth century legal concepts. The Fifth
Circuit attempted in Challoner v. Day and Zimmerman, Inc.,
512 F.2d 77 (Sth Cir. 1975) to create an exception to the
Klaxon doctrine in a case where “one of two states related to
a case has a legitimate interest in the application of its law and
the other has none.” 443 F.2d at 890. This Court quite prop-
erly rejected that exception in Day and Zimmerman, Inc. v.
Challoner, 423 US 3, S.Ct. 167, 46 L.Ed. 2d 3 (1975) which
pointed out “‘A federal court in a diversity case is not free to
engraft onto those state rules exception or modifications
which may commend themselves to the federal court, but have
not commended themselves to the State in which the federal
court sits.” 423 US at 4, 96 S.Ct. at 168.
However, the Fifth Circuit has returned to the attack. In
the instant case, it cites Jagers v. Royal Indemnity Co., 276
So. 2d 309 (La. Sup. Ct. 1973) as authority for the proposi-
tion that “Louisiana can be read” to adopt the analysis of the
Restatement as the law of Louisiana and even to have adopted
the Fifth Circuit view in Challoner. It therefore has applied
that analysis to the instant case. In doing so, it has defied both
logic and the law of Louisiana, and if Challoner is to be vindi-
cated, this Court must intervene.
The Fifth Circuit, in the instant case, quotes dictum
from Jagers as follows:
“That some modern methods for determining whether to
apply the law of the forum are faulty in some respects should
not deter a court in the application of the law of the forum to
its citizens, when not otherwise prohibited.” A footnote refers
the reader to the Restatement of Conflict of Laws for choice
of law principles, presumably the faulty ones it was dis-
cussing.®
8. “For choice of law principles, see Restatement, Second, Con-
flict of Laws, Para. 6 (1969).
(1) A court, subject to constitutional restrictions, will follow a
statutory directive of its own state on choice of law.
13
In Brinkley & West, Inc. v. Foremost Insurance Company,
499 F.2d 928 (1974) the Fifth Circuit used Jagers as the basis
for concluding that Louisiana, by that mere footnote, had
adopted as the law of Louisiana those very principles that the
Louisiana Supreme Court had described as “faulty in some
respects.” But then, afterJagers and Brinkley, this Court spoke,
reversing the Fifth Circuit in Challoner (not before, as the
Court of Appeals opinion in the instant case states, thus mak-
ing the Fifth Circuit’s reasoning completely inappropriate.)
So, nothing daunted, the Fifth Circuit has once again
attempted to teach law to Louisiana, reaffirming its holding in
Brinkley without examining the import of this Court’s Chal-
loner decision a year after Brinkley. (Indeed, by describing
Jagers, written two years before this Court’s reversal of Chal-
loner as subsequent to Challoner, it tried to avoid the issue
by altering the calendar!)
The Supreme Court of Louisiana has not passed on the
issue of choice of laws under Article 10 since its opinion in
Jagers. Two intermediate-level Louisiana courts have since then
used the Jagers analysis in order to apply Louisiana law in cases
where Article 10 would have appeared to dictate otherwise.
In Sutton v. Langley, La. App. 330 So.2d 321, 327
(1976) writ denied, 32 So.2d 805, 820 and 333 So.2d 32
(1976) involving a Texas insurance contract that analysis citing
the Restatement was applied to bring the foreign contract
under Louisiana law on the grounds that:
(2) When there is no such directive, the factors relevant to the
choice of applicable rule of law includes:
(a) the needs of the interstate and international system
(b) the relevant policies of the forum
(c) the relevant policies of other interested states and the
relative interests of those states in the determination
of this particular issue
(d) the protection of justified expectations
(e) the basic policies underlying the particular field of law
(f) certainty, predictability and uniformity of results and
(g) ease in the determination and application of the law to
be applied
14
“The Supreme Court in Jagers, concluded that when the
foreign state has no interest in Louisiana litigation, the applica-
tion of Louisiana law by Louisiana courts will contribute
much greater predictability, certainty, and consistency to the
law. We believe the same to be true where the interests of
Louisiana outweigh the interest of the foreign states as in the
case here and we hold Louisiana court law to be applicable.”
In Wickham v. Prudential Insurance Company of America,
La. App. 366 So.2d 951 (1978) (incorrectly cited as Brannon
v. Babin, 366 So.2d 955 in the Fifth Circuit’s opinion in the
instant case), the Court of Appeals applied Louisiana law to a
Mississippi insurance contract on an interests theory citing
Jagers and obviously giving heavy weight to a strong Louisiana
policy of strict construction of insurance contracts. Neither
Sutton nor Wickham cited Brinkley, which therefore can fairly
be stated to have spent its seven-year career totally without
support from the Louisiana courts.
If one returns to what the Louisiana Supreme Court said
in the Jagers opinion, the Louisiana law in the light of these
two cases becomes extremely clear. The Jagers opinion ex-
panded Louisiana law in only one direction — it enabled
Louisiana to apply its own law to foreign events or contracts
when its citizens or public policies are involved. That is exactly
what the Louisiana Supreme Court said it was doing in Jagers’® ,
and that is exactly what the Louisiana Court of Appeals did in
both Sutton’® and Wickham.
The Fifth Circuit has done just the opposite in the instant
case! Here, the Court of Appeals has applied the Restatement
analysis, not to extend the application of Louisiana forum, as
permitted by Jagers, but to defeat it. The Fifth Circuit has
stated flatly that “the interest analysis of the second paragraph
9, “... should not deter a court in the application of the law of
the forum to its citizens. . . .”. 276 So.2d at 312.
10. Sutton at 327, “The Supreme Court in Jagers concluded that
when the foreign state has no interest in Louisiana litigation, the applica-
tion of Louisiana law by Louisiana courts will contribute much greater
15
of the Restatement is to be applied in all cases, regardless of
the literal reach of Article 10” and regardless of the Louisiana
Supreme Court’s description of that analysis as “‘fauity.”"'
II. THE CONTRACT IS NOT ONE TO BE PER-
FORMED SOLELY IN TEXAS BUT IN LOUIS-
IANA, TEXAS AND OTHER STATES AND IS
THEREFORE A LOUISIANA CONTRACT UN-
DER LOUISIANA CONFLICTS LAW.
It only remains to be pointed out that the contract is one
requiring numerous Louisiana actions and affecting Louisiana
legal questions and which therefore, under Louisiana law,
remains a Louisiana contract.'' Not only was Mrs. Lee, a
Louisiana resident, called upon to give up various inheritance
rights in various living persons (precisely what the Louisiana
legislature forbade her to do), a settlement was made in
Louisiana governing the devolution of a Louisiana ancillary
estate, involving community property accumulated during
jointure in Louisiana; Hugh was called upon to dismiss a suit
against a Louisiana Collector of Revenue based upon his status
under Louisiana statutes, court records were to be sealed in
Louisiana, and Mrs. Lee presumably required to observe a
confidentiality agreement in Louisiana. Only by nose-counting
the various Hunts (none of whom except Ray, the executor,
is a party to this case) could a preponderance of Texas inter-
ests be erected, and there is absolutely no case in Louisiana
surrendering the right of Louisiana to interpret its own con-
tracts simply because one party has more and richer non-party
relatives elsewhere. This is a Louisiana contract, invalid be-
predictability, certainty and consistency to the law. We believe the same
to be true where the interests of Louisiana outweigh the interests of the
foreign state as in the case here... .”
11. N.B. The second paragraph starts with the words ‘when there
is no such directive. . .” and is an exception to the rule: “A court . . . will
follow a statutory directive of its own state... .” The Court of Appeals is
therefore announcing that it will not follow Article 10 of the Civil Code.
That is an intolerable violation of the Klaxon doctrine and is identical
with that court’s position in both Lester and Challoner.
12. Sutton, supra.
16
cause it violates Louisiana law, and the effort to turn it into a
Texas contract is pure after-the-fact salvage to which a federal
court, bound by Eric-Klaxon, can not be a party, any more
than it should have been a forum for the confection of such a
contract in the first place.
III. SUMMARY
The intervention of this Court is essential to redress the
errors in the Fifth Circuit opinion for all of the following
reasons:
(1) The states in the Fifth Circuit must be allowed to
carry out their own statutory and judicial policies of conflict
of laws without correction and alteration from federal courts
based on the Fifth Circuit’s oft expressed affection for the
Restatement. To quote the Fifth Circuit itself, it must not
“disregard the fact that many jurisdictions have chosen to
retain the traditional rules when litigants argue that such rules
be discarded and ask the federal courts to second guess the
highest court of a state as to matters of state law.”’*® In four
cases, Lester'*, Brinkley'*, Challoner'*, and the instant
case the Fifth Circuit by devices ranging from outright rejec-
tion to skillful rewriting has sought to reform the conflict
laws of Texas and Louisiana. This Court has sought to halt
this campaign in Challoner, and in order to vindicate its own
position in Challoner must do so again;
(2) The district court has permitted a judicially dic-
tated settlement to violate the declared public policy of the
forum state on a matter held by that state’s courts and leg-
islature to be one of public morals and policy and to be
incapable of being made the subject of a valid contract in
13. Doss v. Apache Powder, 430 F.2d 1317, 1325.
14. Lester v. Aetna Life Ins. Co., 433 F.2d 884 (Sth Cir. 1970).
15, 499 F.2d 928 (1974).
16. 512 F.2d 77 (Sth Cir. 1975), overruled 423 US 3, 96 S.Ct.
167, 46 L.Ed. 213.
17
that state, and then has upheld that breach in the state’s legal
system by applying foreign contract law in a forum state
whose courts have never permitted foreign law to be so em-
ployed and whose legislature has expressly forbidden it;
(3) As a result of the above, the federal and state
courts sitting in Louisiana will apply different rules for resolv-
ing conflicts of laws. The federal courts will allow foreign law
to rule contracts made in Louisiana and to be carried out in
Louisiana; Louisiana courts will not. The federal courts will
enforce contracts made in Louisiana which are void by Louis-
iana law, based on an implied choice of foreign laws. Louisiana
courts will void the same contract even if the choice of foreign
law is explicit. In short, a separate federal interpretation of
state statutes now broods in the sky, rather than a federal
common law, but the impact on the federal-state relationship
is the same. Federal courts have erected “Federal Louisiana
law” based on Brinkley to compete with “‘Louisiana Louisiana
law” based on the Civil Code. This competition of systems is
intolerable, and the Court’s intervention is needed to right the
balance to the Erie norm. Otherwise, forum shopping will
result based on predictably different outcomes in federal and
state courts, and the state legal structure will be subverted.
Respectfully submitted,
HUGH S. HUNT
12219 River Road
Potomac, Maryland
Pro Se
April 30, 1981
Al
APPENDIX
"SUPREME COURT OF THE UNITED STATES
No. A-849
HUGH S. HUNT,
Petitioner,
Ve
FRANIA TYE LEE, ET AL.
ORDER EXTENDING TIME TO FILE PETITION FOR
WRIT OF CERTIORARI
UPON CONSIDERATION of the application of peti-
tioner,
IT IS ORDERED that the time for filing a petition for
writ of certiorari in the above-entitled cause be, and the same
is hereby, extended to and including April 30, 1981.
/s/ Lewis F. Powell, Jr.
Associate Justice of the Supreme
Court of the United States
Dated this 9th
day of April, 1981.
Bl
APPENDIX
Mrs. Frania Tye LEE, Plaintiff,
v.
Ray Lee HUNT, Executor of the
Estate of H. L. Hunt,
Defendant-Appellee,
Hugh S. Hunt, Defendant-Appellant.
No, 80-3211
Summary Calendar.
United States Court of Appeals,
Fifth Circuit,
Unit A
Dec. 1, 1980.
Suit was brought against estate executor by decedent's
alleged putative wife who claimed that she remain his putative
wife until the date of his death. The United States District
Court for the Western District of Louisiana, Tom Stagg, J.,
483 F.Supp. 826, granted petition to enforce a settlement
agreement, and appeal was taken. The Court of Appeals, Ran-
dall, Circuit Judge, held that: (1) evidence sustained finding
that defendant intended to bind himself by his signature to
the settlement agreement and that he understood the agree-
ment and that he understood the agreement to be a complete
statement of the terms of the settlement; (2) fact that defend-
ant may have been under great pressure at the time he signed
settlement agreement and that emotional strain caused him to
leave the meeting at which the settlement agreement was
signed before the meeting was completed did not establish
duress or undue influence under Texas law; and (3) evidence
sustained finding that the intent of settlement agreement
signed by defendant was fairly embodied in the subsequent
B2
master settlement agreement, and thus defendant could prop-
erly be required to execute it.
Affirmed.
1. Federal Courts « 412
Although federal courts possess the inherent power to
enforce agreements entered into in settlement of litigation,
the construction and enforcement of settlement agreements
is governed by principles of state law applicable to contracts
generally.
2. Federal Courts « 412
In cases involving the construction and enforcement of
settlement agreements, federal courts must apply the choice
of law rules of the forum state.
3. Action = 17
In determining choice of law issues, Louisiana courts
apply interest analysis principles contained in the Restate-
ment (Second) of Conflict of Laws.
4. Compromise and Settlement « 7, 11
Under interest analysis choice of law principles, Texas
law governed the interpretation and validity of settlement
agreement, since virtually all parties to the agreement were
residents of Texas and the bulk of property at issue was
located in Texas.
5. Compromise and Settlement « 21
Insofar as material facts are disputed in the course of
proceeding to enforce settlement agreement, district court
should hold hearing to obtain evidence on factual matters
in dispute.
B3
6. Compromise and Settlement « 23(3)
Evidence in proceeding on petition to enforce settlement
agreement sustained finding that defendant intended to bind
himself by his signature to the agreement and that he under-
stood the agreement to be a complete statement of the terms
of the settlement.
7, Contracts « 93(1)
Mistake generally does not excuse contractual obligations
unless it is mutual or is induced by the other party.
8. Compromise and Settlement « 8(4)
Fact that defendant may have mistakenly believed that
the applicable law exempted him from the binding force of
his signature on settlement agreement did not excuse him from
the agreement.
9. Contracts « 96
In order to prove undue influence, one must demonstrate
that persuasion, entreaty, importunity, argument, intercession,
and solicitation were so strong as to subvert and overthrow the
will of the person to whom they are directed.
10. Compromise and Settlement « 8(3)
Fact that defendant may have been under great pressure
at the time he signed settlement agreement and that emotional
strain caused him to leave the meeting at which the settlement
agreement was signed before the meeting was completed did
not establish duress or undue influence under Texas law.
11, Contracts « 51, 52
Party need not receive the benefit of a contract in order
to be bound by it; it is enough that party secking to hold
another to the contract suffer a legal detriment.
B4
12. Contracts « 50
So long as consideration is sufficient to support the con-
tract, which party actually receives the consideration is irrele-
vant. °
13. Compromise and Settlement « 6(1)
Fact that settlement agreement guaranteed defendant
none of the final settlement amount, which was to be dis-
tributed in accordance with defendant’s mother’s directions,
did not render the agreement unenforceable as to defendant.
14. Contracts « 176(2)
Under Texas law, interpretation of an unambiguous con-
tract, as well as determination of whether or not a contract is
ambiguous, is a legal question, but once it is determined that
contract is ambiguous, determination of actual intent of
parties becomes a factual question.
15. Compromise and Settlement « 23(3)
Evidence in proceeding on petition to enforce settlement
agreement signed by defendant was fairly embodied in the
subsequent master settlement agreement, and thus defendant
could properly be required to execute it,
16. Compromise and Settlement « 7
Allegation that certain provisions of master settlement
agreement were contra bones mores under Louisiana law was
irrelevant to the issue of the effectiveness of the agreement,
since the law of Texas governed the validity of the agreement.
Appeal from the United States District Court for the
Western District of Louisiana.
Before GEE, RUBIN and RANDALL, Circuit Judges.
BS
RANDALL, Circuit Judge:
This appeal arises from a suit originally filed in 1975 by
Mrs. Frania Tye Lee, who is the mother of the Appellant here-
in, Hugh S. Hunt (a/k/a Hugh Lee Hunt, hereinafter “Hugh
Hunt”), against the executor of the Estate of H. L. Hunt,
alleging a putative marriage with the late H. L. Hunt and, as
such, an entitlement to a community interest in property
acquired during the alleged relationship. After lengthy litiga-
tion on jurisdiction, venue and related matters, Lee v. Hunt,
410 F.Supp. 329 (M.D.La. 1976); Lee v. Hunt, 415 F.Supp.
245 (M.D.La. 1976); Lee v Hunt, 431 F.Supp. 371 (W.D.La.
1977) the matter was finally tried before a jury between Janu-
ary 9 and January 16, 1978. On January 16, counsel for the
respective parties requested a conference in chambers with
the trial judge, at which time they advised the court that they
had reached an agreement of settlement of the pending law-
suit. The judge requested that the parties dictate the terms of
the agreement to the court reporter in his chambers. During a
brief recess the dictated settlement was transcribed, and eleven
persons — including Hugh Hunt — thereafter signed it. The dis-
trict court discharged the jury and, on January 23, 1978, en-
tered a judgment of dismissal with prejudice based upon the
January 16 settlement. Pursuant to this agreement, counsel
for the Hunt Estate then prepared a “‘master settlement agree-
ment” which spelled out in greater detail the agreement among
the parties. All of the necessary parties (nineteen in all) signed
this document, with the exception of Hugh Hunt.
Having failed to persuade Hugh Hunt, counsel for the
Hunt Estate filed a petition to enforce the settlement agree-
ment on September 26, 1978. On the same date the district
court joined Hugh Hunt as a party defendant to the action,
pursuant to Fed.R.Civ.P. 19(a), and ordered him to show
cause why the settlement should not be enforced. In response
to the petition and these orders, Hugh Hunt filed two motions:
(1) to vacate or modify judgment, Fed.R.Civ.P. 60(b); and
(2) to dismiss the petition pursuant to Fed.R.Civ.P. 12(b)(1),
(2), (5), and (6), that is for lack of subject matter and personal
B6
jurisdiction, for insufficiency of service of process, and for
failure to state a claim upon which relief can be granted. On
December 7, 1978, the district court held a plenary hearing on
the petition. At that time counsel for Hugh Hunt withdrew the
Rule 60(b) motion. On December 19, 1979, the district court
entered a memorandum ruling, Lee v. Hunt, 483 F.Supp. 826
(W.D.La. 1979), in which it rejected all of Hugh Hunt’s Rule
12(b) claims and held that the January 16 settlement agree-
ment was binding on Hugh Hunt and that all of the provisions
of the master settlement agreement were within the contem-
plation of the earlier agreement. Accordingly, the court en-
tered final judgment on December 27, 1979, ordering Hugh
Hunt to execute the master settlement agreement.
Hugh Hunt now appeals from this order. He does not
argue with the district court’s rulir., under Rule 12(b) and
does not seek to reassert his Rule 60(b) motion. Rather, he
raises a confused variety of factual and legal challenges to the
memorandum ruling and order of the district court. These
arguments fall roughly into the following categories: (1) that
there was no “meeting of the minds” and therefore no con-
tract in the January 16 meeting; (2) that he may avoid the
contract under doctrines of duress, undue influence and failure
of consideration; (3) that the master settlement agreement is
not a reasonable expression of the terms of the January 16
agreement; and (4) that certain provisions of the agreement are
contra bones mores under Louisiana law. We deal with these
arguments in turn after determining the applicable state law
and reviewing the circumstances of the January 16 agreement.
I. CHOICE OF LAW
{1, 2] A threshold question in this case is the choice of
law by which the settlement agreement should be judged. Al-
though federal courts possess the inherent power to enforce
agreements entered into in settlement of litigation,’ the
1. £.g., Pearson v. Ecological Science Corp., $22 F.2d 171 (Sth
Cir. 1975), cert. denied sub nom. Skydell v. Ecological Science Corp.,
425 U.S. 912, 96 S.Ct. 1508, 47 L.Ed.2d 762 (1976); Massachusetts
Casualty Insurance Co. V. Forman, 469 F.2d 259 (Sth Cir. 1972); Cia
Anon Venezolana de Navegacion v. Harris, 374 F.2d 33 (Sth Cir. 1967).
B7
construction and enforcement of settlement agreements is
governed by principles of state law applicable to contracts gen-
erally. E.g., Florida Education Association, Inc. v. Atkinson,
481 F.2d 662 (Sth Cir. 1973). In accordance with Klaxon
Co. v. Stentor Electric Manufacturing Co., Inc., 313 U.S. 487,
61 S.Ct. 1020, 85 L.Ed. 1477 (1941), and its progeny, federal
courts must, in such cases, apply the choice of law rules of the
forum state, in this case Louisiana. Thus the district court cor-
rectly referred to La.Civ.Code Art. 10, which provides, in per-
tinent part:
The form and effect of public and private instruments
are governed by the laws and \sages of the places where
they are passed or executed.
It is not immediately clear how the district court went from
this provision to the conclusion that Texas law applies in this
case; the contract of settlement was executed in Louisiana.”
Nevertheless, a close analysis of the applicable choice of law
principles convinces us that Texas law does govern the inter-
pretation of the settlement agreement.
Louisiana choice of law rules (and their interpretation by
federal courts) have been in a state of confusion for some
time. During the 1960’s a line of cases evolved in both the
2. The district court reasoned as follows, 483 F.Supp. at 837:
The final subject of dispute consists of Hugh’s related objec-
tions to the choice of Texas law to govern the agreement, and to
the waiver of future inheritance rights. Hugh properly asserts that
Louisiana law looks wit! disfavor upon attempts to waive future
inheritance rights. However 1s none of the parties reside in Louis-
iana, that substantive policy is of no consequence. Article 10 of the
Civil Code requires application of the law of the place where the
contract is to have effect, which, in the case of the persons being
released by Hugh, is Texas. Hugh does not claim that the waiver is
void under the law of Texas.
Despite this analysis, the district court relied on Louisiana law elsewhere
in its opinion. 483 F.Supp. at 834, 835, 837. Similarly, both parties to
this appeal rely inconsistently on both Louisiana and Texas law.
intermediate Louisiana appellant courts’? and in this court*
which applied a more modern approach to choice of law rules
— looking to the “‘center of gravity,” or to the state with the
“most significant contracts’’ — rather than applying the literal
wording of the Louisiana Code. See generally Restatement
(Second) of Conflict of Laws §§ 6, 188 (1071). But this ap-
proach was rejected by the Louisiana Supreme Court in John-
son v. St. Paul Mercury Insurance Co., 236 So.2d 216 (La.Sup.
Ct. 1970). We subsequently recognized Louisiana’s adherence
to the strict wording of Article 10 in Lester v. Aetna Life In-
surance Co., 433 F.2d 884 (Sth Cir.), cert. denied, 402 U.S.
909, 91 S.Ct. 1382, 28 L.Ed.2d 650 (1971), but upheld the
district court’s application of the modern approach by carving
out an exception to the rule of Klaxon. We held that we were
not bound by the choice of law rule of the forum state where
only a “false conflict” exists, that is, where only one state has
any legitimate interest in the case. Our holding was not an
attempt to overrule the Louisiana Supreme Court’s strict inter-
pretation of Article 10, or to eviscerate Klaxon; rather, we
sought to except the genera! Klaxon rule only in those ex-
treme cases where “‘ . . . one of two states related to a case
has a legitimate interest in the application of its law and the
other has none.’”’ 433 F.2d at 890. Our exception was, how-
ever, rejected by the Supreme Court in Day and Zimmerman,
Inc. v. Challoner, 433 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3, over-
ruling Challoner v. Day and Zimmerman, Inc., 512 F.2d 77
(Sth Cir. 1975), in a short per curiam opinion which concluded:
3. E.g., Universal C.1.T. Credit Corp. v. Hulett, 151 So.2d 705
(La.App., 3rd Cir. 1963) (Judge Tate); Doty v. Central Mutual Insurance
Co., 186 So.2d 328 (La.App., 3rd Cir. 1966) (concurring opinion of
Judge Tate); Blanchard v. Blanchard, 180 So.2d 564 (La.App., 3rd Cir.
1965) (concurring opinion of Judge Tate). In these cases Judge Tate
found authority for the modern approach in the second sentence of
La.Civ.Code Art. 10, which provides:
But the effect of acts passed in one country to have effect in
another country, is regulated by the laws of the country where
such acts are to have effect.
4. E.g., Franklin v. Texas International Petroleum Corp., 324
F.Supp. 808 (W.D.La. 1971).
B9
By parity of reasoning, the conflict-of-laws rules to be
applied by a federal court in Texas must conform to
those prevailing in the Texas state courts. A federal court
in a diversity case is not free to engraft onto those state
rules exceptions or modifications which may commend
themselves to the federal court, but have not commended
themselves to the State in which the federal court sits.
423 U.S. at 4, 96 S.Ct. at 168. See generally C. Wright, Law of
Federal Courts § 57, at 264-265 (3rd ed. 1976).
Following Challoner, we are bound by the interpretation
of Article 10 adopted by the Louisiana courts. Subsequent to
Challoner, however, the Louisiana Supreme Court overruled
Johnson in favor of a more modem approach to conflicts of
law. Jagers v. Royal Indemnity Co., 276 So.2d 309 (La.Sup.
Ct. 1973). Unfortunately, Jagers is far from clear. Jagers
apparently created an exception to the strict Louisiana choice
of law rules by holding that only a “false conflict” existed in
the case; that is, the Louisiana Supreme Court adopted the
reasoning of this court in Lester and Challoner and held that
conflicts of law principles did not apply in cases of “false”
conflicts.’ But Jagers can be read to go even farther than this.
After holding that the state choice of law rule did not apply in
cases of false conflict, the court cryptically stated:
That some moder methods for determining whether to
apply the law of the forum are faulty in some respects
should not deter a court in the application of the law of
the forum to its citizens, when not otherwise prohibited.
A footnote to this statement is as follows:
For choice-of-law principles, see Restatement, Second,
Conflict of Laws, § 6 (1969):
5. In Challoner, the Supreme Court rejected the “false conflicts”
doctrine as an exception to the rule of X/axon. But it left the door open
for state courts to adopt the doctrine as an exception to their own local
choice of law statutes. Challoner v. Day and Zimmerman, Inc., 423 U.S.
3, 5, 96 S.Ct. 167, 168, 46 L.Ed.2d 3 (1975) (Blackmun, J., concurring).
B10
(1) A court, subject to constitutional restrictions, will
follow a statutory directive of its own state on choice of
law,
**(2) When there is no such directive, the factors relevant
to the choice of the applicable rule of law include
“(a) the needs of the interstate and international
systems,
*(b) the relevant policies of the forum,
**(c) the relevant policies of other interested states and
the relative interests of those states in the determina-
tion of the particular issue,
““(d) the protection of justified expectations,
*“(e) the basic policies underlying the particular field
of law,
“(f) certainty, predictability and uniformity of result,
and
**(g) ease in the determination and application of the
law to be applied.”
276 So.2d at 312.
[3] Shortly after Jagers, this court was faced with a Louis-
iana choice of law question in Brinkley & West, Inc. v. Fore-
most Insurance Co., 499 F.2d 928 (1974). We concluded that
the Louisiana Supreme Court’s opinion in Jagers in effect
adopts the analysis of the Restatement as the law of Louisiana.
Still the Restatement arguably allows for the strict interpreta-
tion of Article 10 in cases involving a real (as opposed to
false”) conflict of law, since the interest analysis is to be used
only where there is no statutory directive (i.e., Article 10) to
the contrary. But after finding that the conflict in Brinkley &
West, Inc. was a teal one, we went on to apply the interest
analysis set forth in the second paragraph of the Restate: .ent
provision, thereby implicitly finding that Article 10 is not to
be strictly construed even in cases of real conflicts. Since
Brinkley & West, Inc. was decided, the Jagers opinion has been
interpreted by at least two intermediate appellate courts in
Louisiana. Brannon v. Babin, 366 So.2d 955 (La.App., Ist Cir.
1978); Sutton v. Langley, 330 So.2d 321 (La.App., 2d Cir.),
B11
writ denied, 332 So.2d 805, 820, and 333 So.2d 321 (1976).
In both cases the court held that the modern “‘interest analy-
sis” is the correct choice of law rule in Louisiana — whether
the conflict is “‘real”’ or “false.”” We can therefore reaffirm our
analysis in Brinkley & West, Inc., supra, and conclude (1) that
the current approach to the choice of law in Louisiana is that
embodied in the Restatement, supra, and (2) that under that
approach the interest analysis of the second paragraph of the
Restatement is to be applied in all cases, regardless of the
literal reach of Article 10.
[4] The district court found that Texas has a greater int-
erest in this settlement than does Louisiana and that the law of
Texas accordingly must govern the interpretation and validity
of the settlement agreement. As virtually all of the parties to
the settlement agreement are residents of Texas (only Mrs. Lee
is a residence of Louisiana), and the bulk of the property at
issue is located in Texas, the district court’s conclusion is
clearly correct. We note that the parties do not challenge that
holding.®
Il. THE JANUARY 16 AGREEMENT
The judge began the January 16 meeting in his chambers
by explaining the purposes of the conference as follows:
Now, as I understand it and for the purpose of the record,
there have been discussions concerning a negotiated set-
tlement of this lawsuit, that the parties are in agreement
and for the purpose of placing the terms of the agreement
in writing, the court has made use of and is now making
use of the instantaneous court reporters who will tran-
scribe now the terms of the settlement, which will be
then typed and after being typed will be signed by all
6. Louisiana will honor a stipulation of the parties regarding the
choice of law. La.Civ.Code Art. 11; Fine v. Property Damage Appraisers,
Inc., 393 F.Supp. 1304 (E.D.La. 1975). The master settlement agreement
does provide that Texas law shall govern the agreement, and the district
court adds that such was the implicit understanding of the original agree-
ment (since the parties must have intended an enforceable contract, and
B12
parties to the lawsuit and other members of both fami-
lies will have a place to sign their names indicating their
full agreement with the terms.
Record at 3456. The judge then requested counsel for the
parties to list the provisions of the settlement agreement. Be-
fore the parties listed these terms, the judge stated again:
Well, I am providing these offices for the purpose of the
parties and when you all have reached an agreement and
are ready to execute it, then I want to supervise it.
Record at 3456. The attorney who stated the agreement be-
gan by saying the following:
Following the negotiations between all parties that are
present here and that the parties here represent that they
are authorized to speak on behalf of the other members
of their family or respective families and in order to bring
this entire litigation to a conclusion and in addition to
this litigation any other claims of any nature or kind
which any member of the Hunt family may have one
against the other of any nature or kind, the following
agreement has been reached.
Record at 3458. During the course of the discussion, Hugh
Hunt expressed some doubt as to his ability to legally sign
away his children’s rights. And, when attorneys for the Hunt
Estate said that each branch of the Hunt family would release
all of its rights of inheritance from other branches of the
family , Hugh Hunt disagreed that this had been the understand-
ing reached prior to the conference. The court appears to have
agreed with counsel for the Hunt Estate. The following
colloquy then took place:
under Louisiana law, according to Hugh Hunt’s argument, there is some
doubt about this contract’s validity). 483 F.Supp. at 837. The choice of
law is not mentioned in the January 16 conference, however, and there is
no indication that anyone was aware of Hugh Hunt’s arguments under
Louisiana law at that time. Since the applicable choice of law rule comes
to the same result, we need not reach this question.
B13
THE COURT: In other words, all of the parties who
have discussed this matter up to this point have un-
derstood that this was a final settlement.
MR. HUGH LEE HUNT: Your honor, I want to make a
statement. | am here because my mother is taking
four pills a day for her heart. I have been advised by
my attomeys that if she dies, her rights die and I will
sign whatever papers you want, and I would like to
leave the chambers, please.
THE COURT: You may, sir.
(Thereupon Mr. Hugh Lee Hunt left the chambers.)
Record at 3468. At this point the rest of the parties completed
their statement of the terms of the agreement. At the conclu-
sion of the conference, the judge had the transcript typed up.
At the end of the transcript is a place for the signatures of all
the parties; Hugh Hunt’s signature appears there. along with
that of other parties to the agreement.
Ill. THE “MEETING OF THE MINDS” IN
THE JANUARY 16 AGREEMENT
[5,6] Hugh Hunt contends that there was no “meeting
of the minds” in the January 16 conference, and that the tran-
script of that meeting therefore cannot represent a final bind-
ing contract under applicable state law. Most of this argument
consists of challenges to factual findings of the district court.
These include: (1) that Hugh Hunt did intend to bind himself
by his signature to the January 16 transcript; and (2) that he
understood the January 16 agreement to be a complete state-
ment of the terms of the settlement. 483 F.Supp. at 835. Inso-
far as material facts are disputed in the course of a proceeding
to enforce a settlement agreement, the district court should
hold a hearing to obtain evidence on the factual matters in dis-
pute. Massachusetts Casualty Insurance Co. v. Forman, 469
F.2d 259 (Sth Cir. 1972). The trial judge did hold a full hear-
ing on this petition and heard testimony from Hugh Hunt and
B14
from his mother, Mrs. Lee. Factual findings pursuant to such a
hearing must be accepted unless they are “‘clearly erroneous”
within the meaning of Fed.R.Civ.P. 52(a). Pearson v. Ecologi-
cal Science Corp., 522 F.2d 171 (Sth Cir. 1975), cert. denied
sub nom. Skydell v. Ecological Science Corp., 425 U.S. 912,
96 S.Ct. 1508, 47 L.Ed.2d 762 (1976). On the basis of the
record, and in particular the transcript of the January 16 meet-
ing, we cannot say that these findings were clearly erroneous.
{7, 8] Hugh Hunt also argues that it was his understand-
ing that counsel for the Hunt Estate would require the signa-
ture of his wife and of his descendants, while in fact the Estate
did not insist on these signatures. The district court incorrectly
relied on Louisiana law in holding that this misunderstanding
did not negate the “meeting of the minds” in the January 16
agreement. 483 F.Supp. at 834-835. But the result is no dif-
ferent under Texas law. Whether these signatures would be
required is not relevant to Hugh Hunt’s obligations. They were
purely for the benefit of the Hunt Estate, as they served only
to waive rights against the Estate and those claiming under it.
The Estate therefore has the right to waive the requirement
without forfeiting any other right under the agreement;
under Texas law, a party to a contract may waive the per-
formance of any contractual provision that is to his benefit.
E.g., Gulf Production Co. v. Continental Oil Co., 164 S.W.2d
448 (Tex. 1942). Nevertheless, Hugh Hunt maintains that he
believed that he would not be bound until his wife and de-
scendants signed, and that consequently he signed the tran-
script under a mistake of law. In the first place, mistake gen-
erally does not excuse contractual obligations unless it is
mutual (or is induced by the other party). E.g., Anderson
Brothers Corp. v. O'Meara, 306 F.2d 672 (Sth Cir. 1962).
There is no suggestion in the record that any other party
to the agreement was under the same misimpression of Texas
law, or that any party induced Hugh Hunt’s misunderstand-
ing. In the second place, a pure mistake of law generally can-
not excuse contractual obligations. E.g., Hall v. Hays, 441
S.W.2d 275 (Tex.Civ.App.—El Paso 1969, no writ history);
Ussery v. Hollebeke, 391 S.W.2d 497 (Tex.Civ.App.—El Paso
B15
1965, writ ref. n. r. ¢.); Harris v. Sanderson, 178 S.W.2d 315
(Tex.Civ.App.—Eastland 1944, 24i5 ref. w. o. m.). Therefore,
the fact that Hugh Hunt may have mistakenly understood the
applicable law to exempt him from the binding force of his
signature cannot excuse him from the settlement agreement.
IV. DURRESS, UNDUE INFLUENCE, AND
FAILURE OF CONSIDERATION
{9, 10] Hugh Hunt urges several affirmative defenses to
any contract which may have been formed in the January 16
conference. These defenses center around the emotional strain
and pressures of the settlement negotiations:
The Court should ‘consider the posture in which Hugh
Hunt found himself at that tense and compelling moment
in this already emotionally charged litigation. He unhap-
pily discovered himself inexorably drawn into the vortex
of these settlement negotiations, without benefit of per-
sonal legal counsel. He thusly became torn between his
own innermost feelings of dismay at what seemed to be
transpiring and the unclear effects thereof on his personal
welfare, as opposed to what legal counsel for his mother
were strongly pressing upon him as being in her best
interests.
Appellant’s Brief at 25. Hugh Hunt may indeed have been un-
der great pressure at this time, and the record shows that the
emotional strain caused him to leave the meeting before it was
completed. But these facts do not establish either duress or
undue influence under Texas law. One state court has defined
duress as follows:
. . . our courts of Texas have consistently followed the
rule, as a matter of law, that (1) there can be no duress
unless there is a threat to do some act which the party
threatening has no legal right to do; (2) there must be
some illegal exaction or some fraud or deception; (3) the
restraint must be imminent and such as to destroy free
agency without present means of protection.
B16
Tower Contracting Co., Inc. of Texas v. Bruden Brothers, Inc.,
482 S.W.2d 330, 335 (Tex.Civ.App.—Dallas 1972, writ ref. n.
r. 3.). See also Mitchell v. C. C. Sanitation Co,, 430 S.W.2d
933 (Tex.Civ.App.—Houston [14th dist.) 1968, writ ref. n. r.
e.); Sanders v. Republic National Bank of Dallas, 389 S.W.2d
551 (Tex.Civ.App.—Tyler 1965, no writ history). In order to
prove undue influence, one must demonstrate that “‘persua-
sion, entreaty, importunity, argument, intercession, and solici-
tation” were so strong as to “subvert and overthrow the will
of the person to whom they are directed.” DeGrassi v. DeGras-
si, 533 S.W.2d 81, 85 (Tex.Civ.App.—Amarillo 1976, writ ref.
n. r. e.), See Curry v. Curry, 270 §.W.2d 208 (Tex. 1954).
Duress and undue influence are difficult defenses to establish.
Certainly they are not suggested by the facts of this case;
emotional strain and negotiation pressures are not by them-
selves enough to overcome the will of the party to a contract,
and there is no evidence that they resulted from threats, illegal
exaction, fraud or deception.
[11-13] Hugh Hunt makes the related argument that he
received nothing in return for his signature on the transcript of
the January 16 meeting. It is true that the agreement guaran-
teed him none of the final settlement amount, which was to be
distributed in accordance with his mother’s directions. But a
party need not receive the benefit of a contract in order to be
bound by it; it is enough that the party seeking to hold another
to the contract suffer a legal detriment. So long as considera-
tion is sufficient to support the contract, which party actually
receives the consideration is irrelevant. E.G., Loomis v. Skil-
lerns—Loomis Plaza, Inc., 593 S.W.2d 409 (Tex.Civ.App.—
Dallas 1980, no writ history); Mercantile National Bank at
Dallas v. Hudgens, 412 S.W.2d 364 (Tex.Civ.App—Ft. Worth
1967, writ ref. n. r. e.); Minton v. Riverside State Bank, 399
S.W.2d 196 (Tex.Civ.App.—Ft. Worth 1966, no writ history).
V. THE MASTER SETTLEMENT AGREEMENT
Hugh Hunt argues that the master settlement agreement
which the district court ordered him to execute is not a
B17
reasonable statement of the terms of the January 16 agree-
ment, The most important area of dispute centers around the
scope of the releases contained in the final document. In brief,
the master settlement agreement provides for the following
releases:
1. Mrs. Lee and her descendants release the other
parties from all claims arising from the relationship be-
tween Mrs. Lee and H. L. Hunt, including the birth of
children from the relationship;
2. All parties accept as valid the duly probated will
of H. L. Hunt;
3. All parties waive all forced heirship rights;
4. All parties agree not to prosecute or aid in the
prosecution of suits arising from the relationship between
Mrs. Lee and H. L. Hunt, including suits to determine
status;
5. Mrs. Lee and her descendants assign to the other
parties, in shares set forth in the agreement, their rights
of inheritance from those parties, including all rights
under state intestacy statutes and all testate claims that
are not specifically established (or reestablished) after the
date of the agreement; and all other parties assign their
like rights to inheritances from Mrs. Lee and her descend-
ants, to Mrs. Lee and her descendants in specified shares;
6. All parties agree to dismiss all on-going litigation
among themselves, with the exception of one certain suit
brought by Hugh Hunt in Georgia; and
7. Mrs. Lee and her descendants release any and all
claims which they have against the other parties which do
not arise out of the relationship between Mrs. Lee and H.
L. Hunt but are already in existence at the date of the
agreement; and the other parties likewise release Mrs. Lee
and her descendants.
Record at 3255-3270. Hugh Hunt argues that these provisions
depart from the intent of the earlier agreement by broadening
the scope of the proposed releases. First, as Hugh Hunt de-
scribes the January 16 agreement it contemplated a release of
only those claims which arose out of the alleged putative mar-
riage between Mrs. Lee and H. L. Hunt, and did not call fora
release of either present or future claims which are independ-
ent of that relationship. (Cf. paragraph 7 above.) Second, he
maintains that the January 16 agreement did not contemplate
the release of inheritance rights other than those derived from
the relationship between Mrs. Lee and H. L. Hunt. Although
it is not clear precisely what rights he is referring to, they
would appear to be testate rights, ie., claims which Mrs. Lee
and her descendants may have by virtue of wills written by
other parties to the settlement agreement. (Cf. paragraph 5
above.) And third, Hugh Hunt maintains that the January 16
agreement did not call for a relinquishment by him of his
children’s rights. (Cf. paragraphs 1, 2 and 5 above.)
The transcript shows that the agreement was not clear in
all respects on January 16, and there is ample room for argu-
ment about the intended scope of the releases.’ With respect
7. The attorney for the Hunt Estate stated the agreement as fol-
lows:
MR. COOK (counsel for the Estate): Item two. That Mrs. Lee
and all of her descendants would sign a release releasing all parties
from any claim, including future inheritance rights in the Estate
of any members of the Hunt family, which release will contain ap-
propriate indemnity provisions.
MR. FRITCHIE (counsel for Mrs. Lee): You are now talking—
excuse me—I have to ask you at this point when you say “All
rights of future inheritance” he means by operation of law?
THE COURT: By operation of law.
MR. COOK: That is right.
MR. FRITCHIE: When you say, “Mrs. Lee and all of her de-
scendants,” you are talking about Mrs. Lee and those of her de-
scendants who are of the age of majority?
MR. COOK: And their respective spouses, and I think at this
time it might be well to list all of the parties to be included.
Record at 1263. Later in the meeting Hugh Hunt was asked whether his
children would sign the agreement. The following colloquy then took
place:
MR. HUGH LEE HUNT: You see, we never talked about in-
heritance rights, God forbid that something should happen that the
entire first family should be wiped out, let's say something like
that did happen.
B19
to the agreement's release of claims unrelated to the relation-
ship between Mrs. Lee and H. L. Hunt, there is language in the
transcript describing the agreement as “a final settlement” and
a release “from any claim.” But the court also describes the
agreement as only a settlement “‘as to this lawsuit and as to
any possible inheritance rights.”” There is an even more direct
conflict on the issue of inheritance rights. When asked about
them at the outset, counsel for the Hunt Estate agreed with
MR. HIRSCHKOP (counsel for Herbert and Lamar Hunt):
Give you all inheritance rights?
MR. HUGH LEE HUNT: We would have inheritance rights I
understand by Texas law.
MR. COOK: This is what is being settled at this time, this is
being released.
MR. HUGH LEE HUNT: We never agreed to this, there was no
discussion on this.
MR. HUNTER: Yes, there was.
MR. HUGH LEE HUNT: There was discussion on the fact that
we would not do anything on public statements and everything else
like that.
MR. FRITCHIE: That you would give up inheritance rights.
MR. HUGH LEE HUNT: Anything having to do with this suit,
with the issue of this suit we would not be involved in, but if you
remember there was some discussion about—
MR. HUNTER: (Interposing) What inheritance rights is any-
body conceivably talking about other than possibly collateral heirs
inheriting from someone else if they did not leave a will or some-
thing?
THE COURT: That’s the question and that is the only thing
that is being discussed and it was discussed here in chambers that
the settlement was as to this lawsuit and as to any possible inheri-
tance rights should they occur, and I understand that to be the
basis of the settlement also.
MR. HUNTER: I understand that, too, Judge there is no ques-
tion.
THE COURT: In other words, all of the parties who have dis-
cussed this matter up to this point have understood that this was a
final settlement.
Record at 1265, 1267. It was at this point that Hugh Hunt became upset
and left the judge’s chambers. No further discussion involved the releases
to be included in the final document, aside from an agreement among the
parties that all lawsuits would be dismissed except for Hugh Hunt's exist-
ing suit in Georgia.
B20
counsel for Mrs. Lee that “‘all rights of future inheritance”
meant only such rights as exist “by operation of law,” which
would appear to exclude testate rights. But at a later point in
the transcript the court refers to “‘any possible inheritance
rights should they occur,” and appears to disagree with Hugh
Hunt’s understanding that the parties had intended to limit the
releases to rights related to the subject matter of the lawsuit.
As to releases which affect the rights of the signatories’ de-
scendants, Hugh Hunt expressed some doubt as to his ability
to “legally sign away any of my children’s rights.” These
doubts were never specifically addressed by counsel for the
Hunt Estate, and the master settlement agreement does in ef-
fect waive rights of the signer’s descendants.®
{14, 15] Under Texas law, the interpretation of an un-
ambiguous contract — as well as the determination of whether
or not a contract is ambiguous — is a legal question. But once
it is determined that a contract is ambiguous, the determina-
tion of the actual intent of the parties becomes a factual ques-
tion. Trinity Universal Insurance Co. v. Ponsford Brothers, 423
S.W.2d 571 (Tex. 1968). See Pletz v. Christian Herald Associa-
tion, 486 F.2d 94 (Sth Cir. 1973); Henningan v. Chargers
Football Co., 431 F.2d 308 (Sth Cir. 1970); Roy L. Jones, Inc.
v. Home Transportation Co., 422 F.2d 179 (Sth Cir. 1970).
Hugh Hunt’s interpreatation of the intent of the January 16
agreement is arguable on the basis of vague and conflicting
statements in the transcript. But we find that the transcript
agreement is ambiguous with respect to these issues, and there-
fore we must deter to the trail court’s resolution of the factual
issue of intent unless his findings are “‘clearly erroneous.” Fed.
R.Civ.P. 52(a). The trial court considered Hugh Hunt’s argu-
ments on the scope of the releases contemplated by the Janu-
ary 16 agreement and concluded that the intent of the January
16 agreement is fairly embodied in the master settlement
8. The master settlement agreement purports to bind the heirs,
successors, assigns and legal representatives of all of the signatories. Un-
der Texas law, the waiver of future interests and expectancies may con-
tractually bind the descendants and other successors of the actual signa-
tory to the agreemen* £.g., Trevino v. Turcotte, 564 §.W.2d 682 (Tex.
1978); McConnel v. Corgey, 262 S.W.2d 944 (Tex. 1953).
B21
agreement.’ 483 F.Supp. at 854-835. In this case the trial
court’s findings are due particular deference, for the court pre-
sided over the trial and was present at the formation and exe-
cution of the agreement it was called upon to interpret. On the
basis of the transcript of the January 16 meeting, we cannot
say that the district court’s findings were clearly erroneous.
In addition to the scope of the releases Hugh Hunt points
to several other discrepancies between the January 16 agree-
ment and the master settlement agreement. First, he notes
that the requirement for the signatures of Hugh Hunt’s de-
scendants was dropped in the final document. But as we have
already stated, the Hunt Estate had preserved a right to do
this. Second, he argues that the actual distribution of the set-
tlement funds is not set out in the January 16 agreement. This
distribution was left open so that Mrs. Lee could thereafter
decide precisely how the money should be distributed for the
most favorable tax treatment. 483 F.Supp. at 836. Hugh Hunt
made no objection to this arrangement and we do not believe
that the deferral of this matter is relevant to his obligations.
Third, Hugh Hunt maintains that the provision in the master
settlement agreement stipulating that Texas law shall govern
the interpretation of the agreement was not discussed or con-
templated on January 16. It is true that the transcript of the
January 16 meeting includes no reference to the parties’ con-
tractual choice of law; but since Texas law would govern in
the absence of an agreement, the provision has no effect on
9. These arguments are not all discussed in the opinion of the
district court. That opinion does not explicitly deal with Hugh Hunt’s
contentions that (1) the January 16 agreement did not even call for a
release of present claims that were unrelated to the relationship between
Mrs. Lee and H. L. Hunt, and (2) the January 16 agreement did not con-
template his release of his children’s rights. We note that Hugh Hunt’s
argument to the district court did not clearly delineate the different
aspects of his disagreement with the release provisions of the master set-
tlement agreement. Memorandum of Hugh L. Hunt in Opposition to
Defendant’s Motion to Enforce the Settlement Agreement, Record at
2825. In the context of the arguments made to the district court, and of
that court’s order and opinion, it is clear that the district court neverthe-
less rejected these contentions as a matter of fact.
B22
any of the parties. Finally, Hugh Hunt argues that the master
settlement agreement does not honor the Hunt Estate’s pur-
ported agreement to obtain new trustees for certain trusts pre-
viously established for the benefit of Mrs. Lee’s children and
grandchildren. But the representation of counsel for the Hunt
Estate in the January 16 meeting was only that:
It is understood that Mrs. Lee and her children may want
to arrange for the appointment of a different advisory
committee or a different trustee. Ray Lee Hunt is agree-
able to this being done provided it can be legally done.
He will cooperate in every way to provide for a change
in either the advisory committee or the trustee.
Record at 1282. As the district court noted, such a change was
not possible under applicable state law. 483 F.Supp. at 836.
We conclude that the district court correctly found that the
master settlement agreement is a reasonable embodiment of
the intentions of the parties in the January 16 agreement. and
that Hugh Hunt may properly be required to execute it.
VI. THE PURPORTED ILLEGALITY
OF THE CONTRACT
[16] Finally, Hugh Hunt argues that certain provisions
of the master settlement agreement are contra bones mores un-
der Louisiana law. In particular, he points to Louisiana cases
which prohibit the renunciation of inheritance rights which
depend on the death of some living person, and to a Louisiana
constitutional provision which prohibits discrimination on the
basis of illegitimacy in matters of property or inheritance. We
doubt that these policies, even if applicable, would void the
entire contract. So long as the consideration is legal and the
provisions are separable, those contractual provisions which
are not illegal may still be enforced. Williams v. Williams, 569
S.W.2d 867 (Tex. 1978). But it is not necessary to reach this
question or to determine the precise relevance of the asserted
Louisiana policies to the master settlement agreement. As we
determined supra, it is the law of Texas that governs this
B23
contract. And, although the district court made the same
determination, Hugh Hunt has at no point contended that any
provision of the agreement is contrary to Texas law.
‘We conclude that the January 16 settlement agreement
embodied in the transcript of the conference held that day in
the judge’s chambers is an enforceable contract of settlement
under Texas law and is binding on Hugh Hunt. We also con-
clude that the master settlement agreement reasonably repre-
sents the intent of the January 16 agreement, and that Hugh
Hunt may be bound by its terms. The judgment of the dis-
trict court is affirmed in all respects.
AFFIRMED.
B24
APPENDIX
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
(Filed January 13, 1981)
No. 80-3211
MRS. FRANIA TYE LEE,
Plaintiff,
versus
RAY LEE HUNT, Executor of
the Estate of H. L. Hunt,
Defendant-Appellee,
versus
HUGH S. HUNT,
Defendant-Appellant.
Appeal from the United States District Court for the
Western District of Louisiana
ON PETITION FOR REHEARING
(January 13, 1981)
Before: GEE, RUBIN and RANDALL, Circuit Judges.
PER CURIAM:
IT IS ORDERED that the petition for rehearing filed
in the above entitled and numbered cause be and the same is
hereby denied.
ENTERED FOR THE COURT:
/s/ Carolyn Daniel Randall
United States Circuit Judge
Cl
UNITED STATES OF AMERICA
DISTRICT COURT OF THE UNITED STATES
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
(Filed December 27, 1979)
MRS. FRANIA TYE LEE,
Plaintiff,
VS. CIVIL ACTION NO. 76-0628
RAY LEE HUNT, Executor of
the Estate of H. L. Hunt,
Defendant.
FINAL JUDGMENT
This cause came on before the Court upon the Petition to
Enforce Settlement Agreement (the “‘Petition’’) filed by Ray
Lee Hunt, Executor of the Estate of H. L. Hunt (the “Estate”’).
The Petition requested, among other things, that the Court
enforce against Hugh Lee Hunt, also known as Hugh S. Hunt
(“Hugh”), the settlement agreement (the ‘Settlement’’)
entered into on January 16, 1978, by the parties in the main
action and certain other persons interested therein (including
Hugh). Such request for enforcement asked, among other
things, that the Court order Hugh to execute a ‘‘Master Settle-
ment Agreement” and seventeen “Assignment of Expectancy
Agreements” (collectively referred to herein as the “Settle-
ment Documents”) deposited with the Court pursuant to a
“Deposit Agreement” (herein so called) on September 26,
1978, and order Hugh to dismiss a certain lawsuit as required
of him by the Settlement. A plenary hearing on the Estate’s
Petition was held on December 7, 1978, at which the Court
received evidence concerning the issues raised in the Petition.
Having considered all of the evidence, the pleadings, the argu-
ments and briefs of counsel, and all other matters properly
before the Court, and in conformity with and pursuant to
C2
the Memorandum Ruling entered by the Court on Decem-
ber 19, 1979, the Court is of the opinion that the Estate is
entitled to the relief which it seeks in its Petition.
ATTEST: A TRUE COPY
DATE = 12-27-1979
ROBERT H. SHEMWELL,
CLERK
By /s/ Troy O. Sandish
Deputy Clerk, U.S. District Court
Western District of Louisiana
Accordingly, it is DECLARED, ADJUDGED, and DE-
CREED that the Settlement entered into on January 16,
1978 is a legally enforceable contract which is in all regards
binding on each of the parties to it (consisting of Frania Tye
Lee, the Estate of Howard F. Lee, Mark Steven Lee, Haroldina
Hunt Lee Franch, Ronald Andrew Cartledge, Hugh Lee Hunt,
Margaret Hunt Hill, Haroldson L. Hunt, Jr., Caroline Hunt
Schoellkopf, Nelson Bunker Hunt, William Herbert Hunt,
Lamar Hunt, Mrs. H. L. (Ruth Ray) Hunt, Ray Lee Hunt,
Ruth June Hunt, Helen Hunt Kreiling, Swanee Hunt Meeks,
and the Estate) and that by entering into the Settlement, each
of the parties to it (including Hugh) were and, as hereby de-
clared, are legally bound by and required to abide by the
terms and conditions specified in the Settlement Documents,
which documents are captioned and referenced as follows
(the terms of all of which documents are incorporated into
this Judgment by reference):
Caption Reference
Master Settlement Agreement Attached as Exhibit A to the Deposit
Agreement, an original copy of which
was received as part of Joint Exhibit 9
filed in the record of the December 7,
1978 Hearing before the Court.
A series of seventeen Assign- Original copies of which were depos-
ment of Expectancy ited with the Court pursuant to the
C3
Agreements (numbered 1 Deposit Agreement on September 26,
through 17 in the top right- 1978, and copies of which were received
hand comer) as part of Joint Exhibit 9 filed in the
record of the December 7, 1978 Hearing
before the Court.
As provided in the Deposit Agreement, the Clerk of this Court
shall retain one original copy of each of the Settlement Docu-
ments as part of the permanent record of this proceeding,
which copies shall be marked by the Clerk for identification
with this Judgment.
It is ORDERED that Hugh fully execute the Settlement
Documents previously tendered to the Clerk of this Court by
the other parties to the Settlement on or before 5:00 P.M.,
Thursday, December 27, 1979, failing which the Clerk of this
Court shall on Friday, December 28, 1979 execute the Settle-
ment Documents by signing Hugh’s name in the appropriate
spaces, which execution by the Clerk shall, pursuant to Rule
70 of the Federal Rules of Civil Procedure, have like effect as
if performed by Hugh.
It is further ORDERED that Hugh shall, within thirty
days from the date of entry of this Judgment, cause that cer-
tain action styled ‘‘Hue R. Lee, et al. v. State of Louisiana, et
al,” being Cause Number 181,791 — Division “I,” pending in
the 19th Judicial District Court, Parish of East Baton Rouge,
State of Louisiana (the “State Court Action’’) to be dismissed
by filing in the State Court Action a motion to dismiss the
State Court Action with prejudice, failing which the Clerk of
this Court shall, immediately upon the expiration of such
thirty-day period, execute such motion to dismiss by signing
Hugh’s name to it and file such motion in the State Court
Action, which execution and filing by the Clerk shall, pur-
suant to Rule 70 of the Federal Rules of Civil Procedure, have
like effect as if performed by Hugh.
It is further ORDERED that the Clerk of this Court, after
(1) execution by Hugh, or for him by the Clerk, of the Settle-
ment Documents, as ordered herein, and (2) the filing of the
C4
executed motion to dismiss in the State Court Action by
Hugh, or for him by the Clerk, as ordered herein, distribute
the Settlement Documents previously deposited with him at
the time specified in and in accordance with the “Deposit
Agreement” attached to the Petition.
It is further ADJUDGED that the dismissal with prejudice
of the action of Frania Tye Lee against Ray Lee Hunt hereto-
fore ordered by Judgment of this Court dated January 23,
1978 be and is hereby reconfirmed in all respects.
It is further ORDERED that the entire record in this pro-
ceeding be placed under seal and preserved under lock, not to
be opened except by order of this or a superior court. The
docket sheet, the official minutes and the text of this Judg-
ment (excluding the Master Settlement Agreement and Assign-
ment of Expectancy Agreements referenced herein, which
shall be placed under seal and lock as provided in the first
sentence of this paragraph) shall be exempt from the order to
seal the record.
DATED at Shreveport, Louisiana this 27th day of De-
cember, 1979.
/s/ Tom §
TOM STAGG
UNITED STATES DISTRICT JUDGE
Di
APPENDIX
IN THE UNITED STATES DISTRICT COURT FOR
‘THE WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
(Filed December 19, 1979)
FRANIA TYE LEE
versus CIVIL ACTION NO. 76-0628
RAY LEE HUNT, Executor of
the Estate of H. L. Hunt
MEMORANDUM RULING
This action comes again before the court, this time on
the motion of defendant to enforce the settlement agreement
against Hugh S. Hunt (Hugh).’ Although not formerly a party
to this litigation, Hugh, the plaintiff's only living son, has from
its inception been deeply involved in the lawsuit, if not the
moving force behind it. He has now been joined as a party to
the motion and is the only person involved in the settlement
negotiations who has not executed the final settlement agree-
ment.
The allegations of plaintiffs Complaint, more fully dis-
cussed elsewhere?, can be summarized as follows. Mrs. Lee
met “Franklin” Hunt in Tampa, Florida and they were mar-
ried in that city on November 11, 1925. Shortly thereafter,
they moved to Shreveport, Louisiana where two children were
bor to the marriage. In 1930, the family moved to Dallas,
Texas, where a third child was born. In May of 1934, Mrs. Lee
1. Also referred to in the record as “Hue R. Lee,” “Hue R.
Hunt,” and “Hugh Lee Hunt.”
2. See Lee v. Hunt, 431 F.Supp. 371 (W.D. La. 1977); Lee v.
Hunt, 415 F.Supp. 245 (M.D. La. 1976). See also this Court’s Memoran-
dum Rulings of December 14, 1977, January 10, 1978, January 11,
1978, January 12, 1978, and January 13, 1978.
D2
learned that “Franklin” Hunt was actually H. L. Hunt and that
he had been married to Lyda Bunker Hunt for some years
prior to 1925. A short time later Mrs. Lee moved to New York
where a fourth child was born.
On January 24, 1942, after Mrs. Lee had threatened suit,
Hunt paid her a substantial sum in settlement of her claims
against him, though without admitting the validity of her
claims. It is further alleged that Mr. Hunt promised to acknowl-
edge in his Will their purported marriage and the legitimacy of
their children, and to bequeath to her and their children
properties in settlement of her interest in the community.
When Hunt’s death revealed that he had not kept his promise,
Mrs. Lee filed this action seeking to be recognized as his
putative wife and declared owner of one-half of the com-
munity property acquired during the relationship. Defendant
staunchly denies most of these allegations.
Following protracted pretrial proceedings, the case was
tried to a jury beginning on January 9, 1978. On the morning
of the sixth day of trial, after plaintiff had rested her case, the
parties announced that a compromise had been achieved and
an agreement was entered into by the parties and the other
members of the Hunt families (“January 16 agreement’’). The
agreement was dictated by the parties in Chambers and signed
in the presence of the Court by all concerned (or by their
agents) including Hugh. Hugh was given a copy; he read it in
presence of the Court and acknowledged to the court that he
understood its terms. It was clearly understood that a more
formal document would be executed as soon as it could be
prepared. The jury was discharged and a judgment of dis-
missal was entered accordingly.
Hugh now claims that he did not understand the Jan-
uary 16 agreement to be binding and that, in any event, the
more formal document executed by all of the other parties to
the earlier agreement does not accurately reflect the dictated
agreement. The Court disagrees with Hugh Hunt on both
counts and, for reasons set out below he is obligated to exe-
cute the Master Settlement Agreement.
D3
Before considering the merits of these contentions, how-
ever, there are several procedural objections raised by Hugh
that must be addressed.
Following his joinder to this action, Hugh moved to
vacate the judgment of dismissal entered following the settle-
ment, thus reopening the entire action, and, alternatively, to
dismiss the proceedings against him on the basis of several
provisions of Fed. R. Civ. P. 12(b). Hugh has withdrawn the
motion to vacate the judgment under Rule 60(b).? Hugh’s
motion under Rule 12(b) presents questions of subject matter
jurisdiction, venue, personal jurisdiction, service of process,
and the sufficiency of the pleadings against him. The ques-
tions will be considered in that order.
The memorandum accompanying Hugh’s motion to dis-
miss offers little enlightenment concerning the basis for his
claim that this court lacks jurisdiction over the subject matter
of the motion to enforce the settlement agreement. He appears
to rely on the fact that he was not a party to the litigation
that was settled. While this may be offered as a defense on the
merits to the action to enforce the settlement, it has nothing
to do with the subject matter jurisdiction of this Court. It
is clear beyond cavil that a court may entertain an action to
enforce a settlement of litigation pending before it.* Pearson
v. Ecological Science Corp., 522 F.2d 171 (Sth Cir. 1975),
3. See the Transcript of the December 7, 1978 Hearing, at 9-11.
4. Even assuming the soundness of the recent decision in Fairfax
Countywide Citizens v. Fairfax County, 571 F.2d 1299 (4th Cir.), cert.
denied, 99 S.Ct. 722 (U.S. 1978) (independent basis for jurisdiction re-
quired in action to enforce settlement — as opposed to reopening the
action under Rule 60(b) — unless settlement agreement is contained, or
to be contained, in judgment), but see Aro Corp. v. Allied Witan Co.,
531 F.2d 1368 (6th Cir.), cert. denied, 97 S.Ct. 165 (U.S. 1976) (lack of
diversity does not deprive court of power to enforce settlement agree-
ment not contained in judgment), this Court has jurisdiction because
Hugh is a citizen of Maryland, plaintiff is a citizen of Georgia, and
defendant is a citizen of Texas.
D4
cert. denied sub nom. Skydell v. Ecological Science Corp.,
96 S.Ct. 1508 (U.S. 1976); Massachusetts Casualty Insurance
Co. v. Forman, 469 F.2d 259 (Sth Cir. 1972); Cia Anon
Venezalana de Navegacion v. Harris, 374 F.2d 33 (Sth Cir.
1967).
Hugh objects to venue on the ground that venue was held
proper in the main action only because defendant waived its
objection, an act which cannot be imputed to Hugh. See Lee v.
Hunt, 431 F.Supp. 371, 379 (W.D. La. 1977). This argument
fails on two counts. First, judicial economy and the policy
favoring settlement as an end to litigation require that settle-
ment agreements be enforced in the same court in which the
litigation was pending. Aro Corporation v. Allied Witan Co.,
531 F.2d 1368, 1371 (6th Cir.), cert. denied, 97 S.Ct. 165
(U.S. 1976); D. H. Overmyer Co. v. Loflin, 440 F.2d 1213
(Sth Cir.), cert. denied, 92 S.Ct. 87 (U.S. 1971). Second, an
action to enforce a settlement agreement is analogous to an
action for breach of contract. Kaspar Wire Work, Inc. v. Leco
Engineering and Machine, Inc., 575 F.2d 530, 538 (Sth Cir.
1978); Florida Education Association, Inc. v. Atkinson, 481
F.2d 662, 663 (Sth Cir. 1973). The subject and merit of the
original litigation are no longer material, the cause of action
for enforcement arises out of Hugh’s signing and repudiation
of the agreement in this district. Thus, not only is venue
proper in this district, this may be the only court in which
the matter might have been brought.’
The memorandum in support of the motion to dismiss
is also silent regarding the related questions of personai juris-
diction and insufficiency of service of process. The motion
itself simply states that Hugh has not transacted any business
5. The Court cannot agree with defendant that filing a motion to
vacate the judgment simultaneously with an objection to venue consti-
tutes a waiver of the latter. The spirit of the Federal Rules is to encour-
age unitary rather than fragmentary proceedings, even if this means
placing inconsistent claims and defenses at once before the court. 15
Wright, Miller & Cooper, Federal Practice and Procedure § 3829 at 198.
DS
or had other contacts with this state sufficient to support invo-
cation of the long-arm statute. This is clearly not so. The nego-
tiation and execution of a settlement agreement constitutes
transaction of business and, when that agreement is the subject
of a lawsuit, justifies resort to the long-arm statute. Meetings &
Expositions, Inc. v. Tandy Corporation, 490 F.2d 714, 717
(2d Cir. 1974). Further, joinder of non-parties involved in the
settlement process is a permissible alternative to an indepen-
dent action. Wood v. Virginia Hauling Co., 528 F.2d 423 (4th
Cir. 1975); Meetings & Expositions, Inc. v. Tandy Corpora-
tion, supra.
Accordingly, the motion to dismiss must be denied. The
challenge to the sufficiency of the pleadings under Rule
12(b)(6) will be referred to the merits, to which we must now
turn.
The settlement in this case is a creature of the unusual
family setting in which it was born. The agreement appears at
once generous and exacting, reflecting, perhaps, the powerful
incentives for compromise on both sides of the table. Con-
trary to the normal inference offered by a settlement at this
stage of the proceedings, Mrs. Lee was not negotiating from a
legal position of strength. A series of evidentiary rulings issued
during the trial had greatly restricted the scope of her claim
and proof.
On the second day of trial, the Court ruled that Mrs. Lee
could not introduce parol evidence to prove that the 1942
settlement with H. L. Hunt was not intended to encompass her
claim of community property.® The following day the Court
ruled that the civil effects of the alleged putative marriage
ended in 1934 when Mrs. Lee admittedly discovered the pre-
existing impediment to her marriage, namely H. L. Hunt’s
marriage to Lyda Bunker Hunt. Thus, the 1942 settlement was
not voided by the contractual incapacity between husband and
6. See the “Rulings on Evidence” filed on January 10, 1978.
D6
wife. By the same token, her claim of community property
was restricted to the period from 1925 to 1934.” Finally, on
the fourth day of trial, the Court ruled that the jury would not
be allowed to consider the claim that H. L. Hunt promised to
acknowledge their marriage in his will and to treat her children
equally with the children of his first marriage, because she was
unable to produce the corroborating witness required by the
Louisiana Dead Man’s Statute.*
Mrs. Lee’s remaining response to the Estate’s defense of
compromise and transaction was to attempt to void the 1942
agreement on grounds of fraudulent inducement — that H. L.
Hunt misrepresented, or failed to disclose, the value of the
community property.’ Beyond the difficulty of proof, this
tactic faced a serious objection of prescription due to the pas-
sage of neaiiy thirty-four years between execution of the
agreement and the filing of this suit. While none of the rulings
impaired Mrs. Lee’s chances of establishing the putative
marriage,'° she was aware of the substantial and potentially
damaging evidence to be presented by the defendant on that
issue.
Mrs. Lee thus approached the Monday morning settle-
ment weighing the sacrifice of her opportunity for official
recognition of her marriage against the benefit to herself and
her family from a multi-million dollar settlement. There was
also the consideration that a substantial settlement would tend
7. See the Memorandum Ruling filed on January 11, 1978.
8. See the Memorandum Ruling filed on January 13, 1978 (to-
gether with the first part of the Ruling of January 10). The Ruling was
issued before the testimony of Wright Matthews, and alludes to the possi-
bility that he might become the necessary corroborating witness. He did
not.
9. See the Memorandum Ruling filed on January 10, 1978, at 4-5.
10. “If the settlement was valid, it released any claim to property
of H. L. Hunt by virtue of the relationship between him and Frania Tye.
It does not defeat her right to be declared the putative wife of H. L. Hunt
if she can establish the elements of that claim, but it bars her recovery of
any property by virtue of a declaration that she was his putative wife.”
Memorandum Ruling of January 10, 1978, at 4.
D7
to confirm her claim in the public mind, thereby achieving
some degree of recognition for her marriage. The Estate, on
the other hand, was weighing these costs against its interests
in withdrawing the dispute from the public arena, avoiding the
chance of a partial verdict against it, and obtaining an end
to all future related litigation.'' Hugh’s stance in the nego-
tiations was one of embattled concession; he neither accom-
plished his goal of legitimation nor shared directly in the
spoils, nor was he even free to fight again another day. As his
counsel, perhaps unwittingly,'? stated in the briefs: ‘“‘as an
accommodation to the plaintiff, his mother, Mr. Hunt volun-
tarily agreed to execute a settlement which would terminate
this litigation in order to enable his mother to derive what-
ever benefits she could from this proposed settlement.’ *
Ordinarily, this Court would summarily enforce a settle-
ment agreement such as that dictated in Chambers on Janu-
ary 16. In this case, however, Hugh has raised factual questions
concerning the existence of an agreement and what that agree-
ment covers. In accordance with the teaching of Pearson v.
Ecological Science Corp., 522 F.2d 171, 176 n. 5 (Sth Cir.
1975), and Massachusetts Casualty Insurance Co. v. Forman,
469 F.2d 259 (5th Cir. 1972), a plenary hearing was held on
December 7, 1978 and all parties were given the opportunity
to present such evidence as they deemed material. The fol-
lowing analysis of Hugh’s objections is based on that hearing,
the record, and the Court’s own longstanding involvement
with this lawsuit.
11. “In the main demand, Mrs. Lee alleged she was the putative
spouse of H, L. Hunt. Had she been successful in such assertion, the off-
spring of the relationship might be entitled to claim various sorts of
inheritance rights as legitimate heirs or half-brothers or sisters of mem-
bers of [the other families] .”” Defendant’s Post Hearing Brief in Support
of Petition to Enforce Settlement Agreement, filed on February 7, 1979,
at 21.
12. See the “Reply Memorandum of Hugh L. Hunt in Reply to
Post Hearing Brief in Support of Petition to Enforce Settlement Agree-
ment”, filed on February 13, 1979, at 1.
13. Memorandum in Support of Motion to Vacate or Modify
Judgment and Motion to Dismiss, filed on November 22, 1978, at 2-3.
D8
IV
When presented with a settlement and asked to enforce
it, a court must first determine if a binding agreement was
actually reached and, if so, what that contract provides. Wood
v. Virginia Hauling Co., 528 F.2d 423, 425 (4th Cir. 1975).
Settlement agreements being contracts, their enforceability is
governed by the whole law of the forum state. Florida Educa-
tion Association, Inc. v. Atkinson, 481 F.2d 662, 663 (Sth
Cir. 1973). However, the parties are free to choose any law to
govern the contract’s interpretation, which must be distin-
guished from its validity or enforceability.
Several of the objections raised by Hugh at the hearing
are directed to the validity of the January 16 agreement. First,
Hugh asserts that he did not participate in any settlement
negotiations prior to the January 16 conference and that he
was not represented by counsel at that conference. Neither
circumstance is of any consequence nor is either assertion en-
tirely correct. Hugh’s letter to this Court details his involve-
ment in the settlement negotiations during the trial.'* He had
also been involved in retaining counsel for Mrs. Lee and had
consulted with them throughout the trial.’ §
The transcript of the January 16 conference shows that
Hugh was painfully aware of the effect of the agreement, he
simply didn’t want to permit it. Nonetheless, he stated “I will
sign whatever papers you want’”’ — and did. The pressure to
which he was subjected is not the sort of duress that will
relieve one of his knowing obligations. La. Civ. Code arts.
1819, 1851. See United States v. Lamont, 155 U.S. 303, 310
(1894). If Hugh is to void the January 16 agreement, he must
14. See Hugh Hunt Exhibit 1, at 2-3, filed in the record of the
December 7,1978 Hearing (e.g., “‘our intention at all times in this suit
was to go for the putative wife issue without compromise with the cash
part being negotiable.”’).
15. Id. at 4. (“I even asked our attorneys to hint to the other
Hunt families to allow the putative if they did not have to pay any
money, but our attorneys did not want to consider even mentioning that
idea to them.”’). Hugh signed the contract retaining plaintiff's counsel
and agreed to retain them if the evidence revealed any cause of action on
his behalf.
D9
fails to state the dollar amount of the settlement and that it
was not intended to become binding until signed by his wife
and major children. The first objection is overcome by La. Civ.
Code ‘art. 1894: “An agreement is not the less valid, though
the cause be not expressed.” The second objection is not so
easily met.
At the outset of the settlement conference, the Court
stated that the transcript would have a place for the partici-
pants “to sign their names indicating their full agreement with
the terms.”'* This sobering theme was repeated throughout
the agreement, as when the Court reminded Hugh, just before
he left the room, “‘that this was a final settlement.”'’ There
is no reasonable basis for believing that the January 16 agree-
ment was not intended to bind the signatories. It is true that
the agreement contemplated that the spouses and major chil-
dren of Mrs. Lee’s children, or their representatives, would
be required to sign the more formal document.'* However,
it is equally true that this requirement was inserted solely
for the benefit of the Estate and other Hunt families, and
could thus be waived by them.'*® Probst v. DiGiovanni, 95
So.2d 321, 324 (La. 1957); Cuna v Elton Lumber Co., Ltd.,
88 So. 493 (La. 1921); Lotz v. Hessler, 369 So.2d 265 (La.
App. 4th Cir.), writ denied, 371 So.2d 1343 (La. 1979). The
more formal does not require the signatures of his spouse and
children because the Estate determined to its satisfaction that
16. Trial transcript at 1256.
17, Id. at 1267.
18. “It is understood that this release will be signed by Mrs. Lee
and her children and grandchildren. . . . Or their representatives.” Trial
transcript at 1273 (counsel for the Estate).
19. “In our discussion, I indicated that it was represented to me
that the major children of these people need not sign, had no legal rights.
If we discover they do have legal rights, we are going to require them to
“[I)f we determine that they (spouses) have legal . . . rights, we
are not going to be signing that release if they don’t.” Trial transcript at
1265 and 1274. (Counsel for children of Lyda Bunker Hunt.)
D10
these persons have rights derivative only from Hugh, and his
signature alone suffices.? °
Hugh contends that the requirement that his own family
sign the more formal document was the cause of his agreement
to be bound. But this is not a case of reciprocal agreements;
Hugh would derive no benefit from the agreement of his
family, nor would they benefit from his agreement. Rather, it
was from their refusal to sign that he hoped to benefit, to be
released from his agreement. This argument can only be under-
stood from the point of view of a promisor in bad faith. No
good faith party to a contract can have as his motive the de-
feat of the agreement. However, the record is replete with
instances of such an attitude on the part of Hugh. Shortly
after the settlement conference, Hugh condemned the agree-
ment, stating “if I could get out of it I would get out of it.”?'
This Court will not assist Hugh in that effort. See La. Civ.
Code art. 1901. The January 16 agreement was voluntarily
executed with knowledge of its binding effect, and any mis-
take of law or fact on Hugh’s part cannot void it. La. Civ.
Code arts. 1825, 1846(2). The question thus becomes whether
the document that Hugh has refused to sign is an accurate
reflection of the January 16 agreement.
V.
The January 16 agreement clearly contemplated that a
more formal document would be drafted embodying the re-
leases described in the agreement. Preparation of this docu-
ment, the “‘Master Settlement Agreement’’, was commenced
immediately after the conference by all counsel involved in
that agreement. Contrary to the statement of Hugh’s counsel
in the briefs, it did not take eight months of hard negotiating
to confect that document. By the time of the February 25
conference, the document was largely complete. At that point,
however, Hugh stated that he needed time to consult his
20. Post Hearing Brief in Support of Petition to Enforce Settle-
ment Agreement, filed on February 7, 1979, at 20.
21. Transcript of December 7, 1978 Hearing, at 94.
D1!
counsel. While the parties awaited his response, Mrs. Lee dis-
charged her counsel and was delayed in enrolling new counsel.
Finally, Hugh refused to sign and the Deposit Agreement and
other papers relating to this motion had to be prepared.
It should be noted that all of the eighteen necessary
signatories other than Hugh, many of whom have interests
similar to his, have signed the agreement, reflecting their be-
lief that it accurately represents their earlier agreement. The
Estate contends that the result should be the same even if
the Master Settlement Agreement were materially different,
because Hugh cannot be heard to complain of the non-
performance of a condition of the earlier agreement, (i.e.,
that a representative more formal document be drafted) when
he caused that non-performance by refusing to negotiate in
good faith. The Court need not rely on that defense because
it finds that all of the provisions of the Master Settlement
Agreement are within the contemplation of the January 16
agreement.? ?
Hugh maintains that the Master Settlement Agreement
departs from the January 16 agreement in its treatment of
five subjects: confidentiality, the Reliance Trusts, distribution
of the settlement proceeds, the scope of the releases, and the
choice of law to govern interpretation of the agreement. The
arguments will be considered in that order.
The January 16 agreement permanently prohibits public
communication by any party to the agreement concerning the
lawsuit or the relationship between Mrs. Lee and H. L. Hunt
and between their respective families. It also provides that the
more formal document shall contain “appropriate indemnity
provisions.” Hugh complains that the Master Settlement
Agreement is too restrictive and objects to its provision for
liquidated damages. While certainly more specific, the master
22. “The obligation of contracts extends not only to what is ex-
pressly stipulated, but also to everything that by law, equity or custom,
is considered as incidental to the particular contract, or necessary to
carry it into effect.” La. Civ. Code art. 1903.
D12
agreement is no more restrictive than the broad language of
the initial agreement. Further, the provision that any profits of
the breach of confidentiality shall constitute liquidated dam-
ages is the minimal indemnity provision that could reasonably
be deemed appropriate. The fact that this and other provisions
of the master agreement apply to non-signatory members of
Mrs. Lee’s family is of no consequence because the agreement
holds Mrs. Lee liable for their conduct.? *
Hugh also objects to the master agreement’s provision
that the record be sealed by order of Court, on the grounds
that it binds persons not parties to the lawsuit. His interpreta-
tion of the master agreement is accurate but it represents
merely the consent of the parties to the Order previously
entered by the Court on January 23, 1978. The restrictions
imposed upon Mrs. Lee’s disposition of certain items of
jewelry and personal letters that had been introduced as evi-
dence at the trial are necessary incidents of their release from
the custody of the Clerk, an act to which Hugh does not
object.
The next subject of dispute is the master agreement’s
failure to address the desire of Mrs. Lee and Hugh to obtain
a new trustee or advisory board for the Reliance Trusts. These
trusts were formed by Mrs. Lee in 1941 for the benefit of her
four children. In the January 16 agreement the Estate agreed
to see what it could do about installing officers more to the
liking of Hugh and Mrs. Lee. Upon reviewing the act estab-
lishing the trusts, the Estate concluded, and the Court agrees,
that no one can effect the removal of the officers except the
officers themselves, without terminating the trust.2* Accord-
ingly, reference to the substitution of trust officers was appro-
priately omitted from the master agreement.
23. See Master Settlement Agreement at 12, Joint Exhibit 9 filed
in the record of the December 7, 1978 Hearing.
24. See the Act of Donation of April 12, 1941, filed in the record
on December 28, 1978.
D13
At the close of the settlement conference the question of
distribution of settlement funds was raised. The concern was
that improved tax treatment could be obtained if any money
destined for other members of Mrs. Lee’s family went directly
to them rather than passing through Mrs. Lee first. Mrs. Lee
stated that at least half of the money would go to trust funds
being established for her grandchildren. The Master Settlement
Agreement provides that the entire amount shall be paid
jointly to Mrs. Lee, her lawyers, her two living children, and
the major children of her two deceased children.?* The change
is not a material one since Mrs. Lee and the other recipients
of the funds have approved the manner of payment. Hugh has
no proper interest in the matter.
The most significant subject of dispute is the scope of
the releases. Hugh objects to the release of future claims
against members of the other families which are not related to
the subject matter of the lawsuit. And well he might object
but for the fact that no such release is required by the master
agreement. That agreement, like the January 16 agreement,
requires a release of all claims, present and future, arising out
of the subject matter of the lawsuit — the relationship between
Mrs. Lee and H. L. Hunt. However, only existing claims be-
tween members of the different families are released if they
are not related to the lawsuit.
The January 16 agreement provides that members of each
family shall release all inheritance rights in the estates of mem-
bers of the other families. Hugh claims that the January 16
agreement was intended to release only rights of intestate suc-
cession while the master agreement would cover testamentary
rights, as well. All parties knew that the settlement agreement
was to end all rights arising from the relationship between
Mrs. Lee and H. L Hunt. Obviously, this would include rights
as heirs at law in the intestate succession of any member of
the other families. Less obviously, it would include any right
under a testamentary bequest referring to “‘brothers and
25. See Joint Exhibit 8 filed in the record of the December 7,
1978 Hearing.
D14
sisters.”” It may be difficult to understand why so much energy
would be expended regarding release of a right which could
be changed at any time by the testator. Part of the debate is,
no doubt, attributable to the difficulty of reviewing and
amending the myriad wills and trust documents. However, all
parties were also aware that the claim could be made that a
certain member of one of the families no longer possessed
testamentary capacity. Thus it was clearly understood that
existing testamentary rights would also have to be released,
allowing them to be specifically re-established after the date
of the settlement if the testator wished to include members
of the other families. The Master Settlement Agreement is
reasonably designed to fulfill that intent.
Hugh also objects to one of the final provisions of the
master agreement: “The conditions, terms, provisions and
covenants contained in this agreement shaJi apply to, inure
to the benefit of, and be binding upon the parties hereto, and
their respective heirs, successors, assigns, and legal representa-
tives.”?° This provision adds nothing to what the law govern-
ing contracts already provides. See, e.g., La. Civ. Code arts.
1997, 1999,
The final subject of dispute consists of Hugh’s related
objections to the choice of Texas law to govern the agree-
ment, and to the waiver of future inheritance rights. Hugh
properly asserts that Louisiana law looks with disfavor upon
attempts to waive future inheritance rights. However, as none
of the parties reside in Louisiana, that substantive policy is
of no consequence. Article 10 of the Civil Code requires
application of the law of the place where the contract is to
have effect, which, in the case of the persons being released
by Hugh, is Texas. Hugh does not claim that the waiver is void
under the law of Texas.
For the same reason, it is clear that the parties intended
Texas law to govern the agreement. Under accepted canons of
26. Master Settlement Agreement, at 15, Joint Exhibit 9 filed in
the record of the December 7, 1978 Hearing.
D15
construction, the parties must be deemed to have intended to
create an enforceable contract. A court should not lightly read
an agreement in such a way as to frustrate this intent. To
require application of Louisiana law would defeat the aim of
the parties, most of whom reside in Louisiana. Accordingly,
the Court finds that the Master Settlement Agreement prop-
erly reflects the intent of the parties to the January 16 agree-
ment.
CONCLUSION
Having found that Hugh S. Hunt is properly before this
Court, that he executed a binding contract on January 16,
1978, and that this contract obligates him to execute the
Master Settlement Agreement and accompanying documents,
the Court does hereby order him to do so. Although at the
December 7, 1978 hearing he agreed to waive the opportunity
to comply with this Order, the Court will extend him a brief
opportunity once more.
If Hugh has not executed the documents by 5:00
O’Clock P.M. on Thursday, December 27, 1979, the Court
will direct the Clerk to execute them in his place by a judg-
ment to be submitted by counsel for the Estate on Friday,
December 28, 1979.
THUS DONE AND SIGNED in chambers at Shreveport,
Louisiana, this 19th day of December, 1979.
/s/ Tom Stagg
TOM STAGG
UNITED STATES DISTRICT JUDGE
El
APPENDIX
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
TOM STAGG
DISTRICT JUDGE
UNITED STATES COURT HOUSE
SHREVEPORT, LOUISIANA 71161
P.O. Box “C” March 24, 1978
ph. 318/226-5260
Mrs. Frania Tye Lee
68 Peachtree Circle, N.E.
Atlanta, GA 30309
RE: Transcript of settlement
conference of January 16, 1978
Dear Mrs. Lee:
My law clerk, Tom Arceneaux, discussed with me your
request for a copy of the transcript of the settlement confer-
ence held on the last day of the trial. Enclosed is the copy you
requested.
I hope that matters are progressing well with respect to
the final settlement papers, and that this matter can be com-
pleted soon. Further delay would not be to anyone’s advan-
tage.
Yours very truly,
/s/ Tom Stagg
Tom Stagg
TS/dc
CERTIFIED MAIL —
RETURN RECEIPT REQUESTED
Civil Action No. 76-0628
E2
... Let’s go on.
MR. COOK: Item two. That Mrs. Lee and all of her de-
scendants would sign a release releasing all parties from any
claim, including future inheritance rights in the Estate of any
members of the Hunt family, which release will contain appro-
priate indemnity provisions.
MR. FRITCHIE: You are now talking — excuse me — I
have to ask you at this point when you say “All rights of
future inheritance” he means by operation of law?
THE COURT: By operation of law.
MR. COOK: That is right.
MR. FRITCHIE: When you say, “‘Mrs. Lee and all of her
decedents,”” you are talking about Mrs. Lee and those of her
decedents who are of the age of majority?
MR. COOK: And their respective spouses, and I think at
this time it might be well to list all of the parties to be in-
cluded.
MR. HUNTER: Let me say when you say “respective
spouses,” again I have not conferred —
THE COURT: (Interposing) What rights do spouses have
in the succession of somebody anyway, Sidney? I don’t know.
You can instruct me because I would —
MR. COOK: (Interposing) Well, let us list all of the par-
ties that we are talking about who will sign.
MR. HIRSCHKOP: I don’t know if there is dower right
that is in here.
MP.. FRITCHIE: That would be Haroldina?
MR. HUNTER: Haroldina.
MR. HUGH LEE HUNT: I don’t know if I can legally
sign away any of my children’s rights. You folks are attorneys,
you know better than I that — i
MR. HUNTER: (Interposing) It was my understanding,
gentlemen, that we are talking about four branches of
Mrs. Lee’s family.
One branch would be Mr. Lee, the second branch would
be Howard’s family which would be now, as I appreciate his
wife, Eloise, and his son, Mark.
E3
The third branch would be Haroldina signing, although
I have no authority relative to her husband. And I don’t know,
I did not and cannot, you know, I am asking something. I
don’t represent that gentleman.
I have spoken to Mrs. Haroldina French, and she has
authorized me to say she would execute the document as far
as she is concerned and then we would have Ronnie through
his guardian and, Ronnie, are you now of age yourself, Ron-
nie?
MR. RONNIE CARCARILDGE: Yes, I am.
MR. HUNTER: We would have Ronnie and Frania in the
capacity of guardian for him.
Now, those were the ones whom we would contemplate,
as I say, I do not represent Eloise but I understand that she
would, from someone, the information that has been made
available to me that she would sign such a document.
MR. FRITCHIE: I think Mr. Ray Lee Hunt has indicated
that.
MR. HUNTER: He is the one that told me that.
MR. HIRSCHKOP: In our discussion, I indicated that it
was represented to me that the majority children of these
people need not sign, had no legal rights. If we discover they
do have legal rights, we are going to require them to sign.
MR. HUNTER: Well, who are you speaking of that are
majority?
MR. HIRSCHKOP: Do you have children of age, over
age?
MR. HUGH LEE HUNT: Yes.
MR. HIRSCHKOP: Will they sign?
MR. HUGH LEE HUNT: I don’t know, I can’t speak.
MR. HIRSCHKOP: If we determine —
MR. FRITCHIE: (Interposing) You would recommend
that they sign?
MR. HUGH LEE HUNT: You see, we never talked inheri-
tance rights, God forbid that something should happen that
the entire first family should be wiped out, let’s say something
like that did happen.
MR. HIRSCHKOP: Give you all inheritance nghts?
E4
MR. HUGH LEE HUNT: We would have inheritance
rights I understand by Texas law.
MR. COOK: This is what is being settled at this time, this
is being released.
MR. HUGH LEE HUNT: We never agreed to this, there
was no discussion on this.
MR. HUNTER: Yes, there was.
MR. HUGH LEE HUNT: There was discussion on the
fact that we would not do anything on public statements and
everything else like that.
MR. FRITCHIE: That you would give up inheritance
rights.
MR. HUGH LEE HUNT: Anything having to do with this
suit, with the issue of this suit we would not be involved in,
but if you remember there was some discussion about —
MR. HUNTER: (Interposing) What inheritance rights is
anybody conceivably talking about other than possibly col-
lateral heirs inheriting from someone else if they did not leave
a will or something?
THE COURT: That’s the question and that is the only
thing that is being discussed and it was discussed here in cham-
bers that the settlement was as to this lawsuit and as to any
possible inheritance rights should they occur, and I understand
that to be the basis of the settlement also.
MR. HUNTER: I understood that, too, Judge, there is no
question.
THE COURT: In other words, all of the parties who have
discussed this matter up to this point have understood that
this was a final settlement.
MR. HUGH LEE HUNT: Your Honor, I want to make a
statement. I am here because my mother is taking four pills a
day for her heart. I have been advised by my attorneys that if
she dies, her rights die and I will sign whatever papers you
want, and I would like to leave the chambers, please.
THE COURT: You may, sir.
(Thereupon, Mr. Hugh Lee Hunt left the chambers.)
MR. HERBERT HUNT: Just out o1 curiosity, where does
that leave it?
ES
THE COURT: Hold it, Mr. Reporter.
(Thereupon, an off-the-record discussion was had.)
THE COURT: Let’s continue, Mr. Reporter.
Sidney, you have another paragraph to dictate?
MR. COOK: I have several here.
THE COURT: Well, let’s get after it.
MR. RAY HUNT: I would like to be clear that I am here
in a dual capacity, one as executor of the estate and, secondly,
representing my sisters, my mother and myself and... .
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.