UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 94-1382
No. 94-1456
XEROX FINANCIAL SERVICES LIFE INSURANCE COMPANY, ET AL.,
Plaintiffs, Appellees,
v.
HIGH PLAINS LIMITED PARTNERSHIP, ALLIED FIRST CLASS PARTNERS, INC.,
ALLIED PROGRAMS CORPORATION, M.S. STERMAN & ASSOCIATES,
and THE MAYFLOWER GROUP, LTD., ET AL.,
Defendants, Appellees.
MARSHALL S. STERMAN,
Defendant, Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Torruella, Chief Judge,
Boudin, Circuit Judge,
and Barbadoro,* District Judge.
George W. Mykulak with whom Louis J. Scerra, Richard M. Gilbert
and Goldstein & Manello, P.C. were on briefs for appellant.
J. Timothy Eaton with whom Michael W. Coffield, Theodore S.
Harman, Coffield Ungaretti & Harris, John J. Curtin, Jr., Patricia J.
Hill, Daniel S. Savrin and Bingham, Dana & Gould were on brief for
plaintiffs.
January 17, 1995
*Of the District of New Hampshire, sitting by designation.
BOUDIN, Circuit Judge. This appeal has its origin in a
settlement agreement that purported to resolve the claims and
counterclaims of approximately a dozen corporations,
partnerships, and other business entities in at least four
separate lawsuits. The settlement went awry; and one side
sought to enforce consent judgments filed as part of the
settlement. The subject of those judgments sought to undo
them and now appeals from the district court's denial of his
efforts.
I. THE HISTORY
The appellant Marshall S. Sterman ("Sterman") and his
now- deceased partner Lester Grant owned or controlled a
number of business entities ("the Sterman entities") that
engaged in real estate development projects in a number of
states in the late 1980s and early 1990s. To finance these
projects, the Sterman entities entered into transactions with
appellee Xerox Financial Services Life Insurance Company and
appellee Van Kampen Merritt, Inc. and related companies
(collectively, "Xerox-VKM"). Xerox-VKM provided financing to
the Sterman entities in exchange for security interests in
the real estate and in bonds related to the development
projects.
The Sterman entities allegedly defaulted on certain of
their obligations relating to at least three projects, and a
succession of lawsuits began. The first suit was brought
-2-
-2-
against the Sterman entities by Xerox-VKM in Illinois federal
district court on February 27, 1992, and related to a
Pennsylvania hotels development project.1 A second
transaction involved a hotel in Colorado; a Sterman entity
had agreed to repurchase bonds from Xerox-VKM and Sterman had
personally guaranteed the obligation. When the repurchase
did not occur, Xerox-VKM filed two lawsuits.
The first of those two lawsuits was brought against the
Sterman entities in the same Illinois court as the
Pennsylvania hotels lawsuit on March 13, 1992.2 The other
concerned Sterman's own guaranty which contained an
arbitration clause; Sterman was domiciled in Massachusetts
and, to compel arbitration, Xerox-VKM brought suit against
him personally in the federal district court in Massachusetts
on May 4, 1992.3 In this action Sterman failed to respond
to the complaint and the court entered a default order
against him.
The three suits just described are the centerpiece of
the present litigation but are not an exhaustive list of the
disputes between the parties. Xerox-VKM brought yet another
1Van Kampen Merritt, Inc. v. Pilgrim Financial Servs.,
Inc., No. 92-C-1476 (N.D. Ill.).
2Xerox Financial Servs. Life Ins. Co. v. Mayflower
Group, Ltd., No. 92-C-1809 (N.D. Ill.).
3Xerox Financial Servs. Life Ins. Co. v. Sterman, No.
92-11029-Z (D. Mass.).
-3-
-3-
lawsuit against the Sterman entities in New Mexico relating
to a nursing home development in that state. In several of
the lawsuits, the Sterman entities filed counterclaims. In
addition, several other transactions between the parties had
gone wrong and were the subject of litigation- and workout-
related discussions between the parties.
Against this background, in May 1992 the parties
negotiated a global settlement agreement to resolve all
pending and a host of potential lawsuits. The agreement,
signed on May 19, 1993, was a lengthy document stipulating
that it would be governed by Illinois substantive law. The
parties agreed to execute mutual releases. The Sterman
entities agreed to transfer their interests in several
properties to Xerox-VKM; these were apparently properties in
which Xerox-VKM had security interests but for which they
wanted clear title. Sterman personally agreed to pay Xerox-
VKM $125,000 in 60 days--July 19, 1993--and to execute a note
for four more annual installments in the same amount.
In return, Xerox-VKM agreed that, in addition to
releasing the Sterman entities from various claims, Sterman
himself could within 60 days repurchase from Xerox-VKM
certain bonds he had originally sold them relating to a
development in Brush, Colorado ("the Brush bonds"). The
bonds were priced at nearly $5 million but Sterman apparently
calculated that he could buy them at the stipulated price and
-4-
-4-
then resell them for a profit of more than $450,000. The
bond repurchase was proposed by Sterman as part of the
settlement but the terms were contained in a separate
agreement.
The settlement agreement contained a back-up enforcement
mechanism that is the center of this appeal. Sterman agreed
to the entry of a consent judgment against him personally in
one of the Illinois actions (concerning the Pennsylvania
hotels) and in the Massachusetts action (concerning the
Colorado hotel); but the settlement agreement provided that
Xerox-VKM would not enforce either judgment so long as
Sterman complied with his obligations under the settlement
agreement. Motions for entry of the consent judgments noted
this condition.
Pursuant to the settlement agreement, the parties made
the property transfers from the Sterman entities to Xerox-VKM
on May 19, 1993, coincident with the signing of the
agreement. On June 7, 1993, the consent judgment against
Sterman and in favor of Xerox-VKM was entered in the pending
Massachusetts case in the amount of about $2.3 million; and
on June 9, 1993, a similar judgment was entered in the amount
of about $3.5 million in the original Illinois action. On
-5-
-5-
July 15, 1993, Xerox-VKM registered the Illinois judgment in
Massachusetts. 28 U.S.C. 1963.4
All that remained was for Sterman to purchase the Brush
bonds by the July 19 closing date and to make the $125,000
payment on that date, leaving Xerox-VKM with the note to
cover four more installments. Sterman was unable to purchase
the bonds or pay the first installment on July 19. It
appears that he had more difficulty arranging in advance to
resell the bonds than he had expected and that he had planned
to use the profits on the resale of the bonds to pay the
first installment. Xerox-VKM refused Sterman's request for a
delay of two months and began steps to collect on their
judgments in Massachusetts.
Although Sterman resided in Beverly, Massachusetts,
apparently there was a scarcity of assets held in his own
name. Xerox-VKM thus initiated so-called attachments on
trustee process directed at a number of business interests in
Massachusetts. This procedure is used under Massachusetts
state court rules primarily to attach interests in the hands
of a third party that are owed to or indirectly owned by a
judgment debtor; and the procedure is available to judgment
creditors in Massachusetts federal courts. See Fed. R. Civ.
P. 64; Mass. R. Civ. P. 4.2.
4Van Kampen Merritt, Inc. v. Sterman, No. 93-MC-10542
(D. Mass.).
-6-
-6-
Xerox-VKM filed motions to initiate the attachments in
both the Massachusetts dockets: the original Massachusetts
consent judgment and the new docket that reflected the
registration of the Illinois consent judgment. Judge Zobel
presided over both cases and eventually consolidated them, so
we discuss the proceedings without differentiating between
the two dockets. The original motion to initiate the
attachments ex parte was filed on August 12, 1993, and
allowed almost immediately.
On October 20, 1993, Sterman filed a motion captioned as
one "to dissolve trustee process and for other equitable
relief." In substance, Sterman claimed that he had not
breached the settlement agreement, and that even if he had,
the fault lay with Xerox-VKM. Alternatively, he said that
Xerox-VKM had to give him credit for the value of the
properties transferred on May 19, 1993, and that it was an
impermissible penalty for Xerox-VKM to collect almost $6
million in judgments for Sterman's failure to pay a $125,000
debt. After briefing and argument, Judge Zobel denied the
motion. Sterman did not seek to appeal.
Proceedings continued to implement the attachments,
including discovery directed against the putative "trustees"
who Xerox-VKM thought owed money to Sterman or held interests
owned by him. Then on February 1, 1994, Sterman filed a new
motion captioned as one "to modify judgment amounts or for
-7-
-7-
entry of satisfaction of judgment or for accounting and for
stay." This motion repeated in detail the penalty and
credit-for-previously-transferred-property claims made in the
November motion; in a footnote the new motion also sought to
incorporate the old one by reference. After briefing and
argument, Judge Zobel denied the motion on February 25, 1994.
In a memorandum and order Judge Zobel said that Sterman
had breached the settlement agreement by failing to make the
promised $125,000 payment and Xerox-VKM was therefore
entitled to enforce the judgments. Further, Judge Zobel
concluded that Sterman "has used a variety of means to
obstruct collection of this debt"; and for this reason Judge
Zobel granted Xerox-VKM's recently filed "emergency motion
for further injunctive relief" under Fed. R. Civ. P. 65(b).
The order enjoined Sterman, and others under his control or
in concert with him, from concealing or otherwise disposing
of any interest held by or due to Sterman.
Sterman filed a timely notice of appeal from the new
order, entered February 25, 1994, and it is that appeal that
is now before us. Judge Zobel's order also provided that
discovery should be completed by the end of May 1994 and a
further conference was scheduled for June 1994. However, the
briefs are silent as to what developments, if any, have
-8-
-8-
occurred in the district court since the order now sought to
be appealed.
II. THE ISSUES
1. The first question concerns our jurisdiction, and a
related claim of waiver raised by Xerox-VKM. The district
court's order was in part an explicit preliminary injunction;
such injunctions can be appealed immediately, 28 U.S.C.
1292(a)(1), and Sterman's appeal was filed within the
requisite period. But, argues Xerox-VKM, this should not
give Sterman a right to relitigate issues on appeal that he
raised by motion in October 1993, lost in the district court,
and chose then not to appeal. According to Xerox-VKM,
Sterman has "waived" his right to review of the district
court's rejection of his attacks on the judgments. These, of
course, are the only issues that Sterman wants to litigate on
this appeal.
We regard both of Sterman's motions in the district
court as in substance motions under Fed. R. Civ. P. 60(b) to
set aside final judgments. In form the consent judgments
were both final judgments; the principal relief sought in
Sterman's two motions was effectively to set aside the
judgments; and the arguments made in the motions concerned
the validity and enforceability of the judgments rather than
the technicalities of trustee process. Apparently both sides
share this view.
-9-
-9-
Ordinarily the denial of a Rule 60(b) motion is
immediately appealable since there is nothing left to do in
the district court. See, e.g., FDIC v. Ramirez Rivera, 869
F.2d 624, 626 (1st Cir. 1989). Here neither denial of Rule
60(b) relief ended the proceedings; they were ongoing at the
time of both orders and so far as we know continue today.
This raises interesting questions about the appealability of
a Rule 60(b) denial in the context of an ongoing district
court proceeding. See 15B C. Wright & A. Miller, Federal
Practice and Procedure 3916, at 363 (2d ed. 1992)
("[Appeal] may be denied if the motion seems bound up with
other proceedings that remain to be concluded.").
In our view it is sufficient that as part of its
February order the district court entered a preliminary
injunction in aid of enforcement of the judgments. The
preliminary injunction is immediately appealable and is
itself colorably dependent on the denial of motions to vacate
the judgments. "Our jurisdiction embraces a consideration of
such questions as are basic to and underlie the order
supporting the appeal." Alloyd Gen. Corp. v. Building
Leasing Corp., 361 F.2d 359, 363 (1st Cir. 1966). Certainly
the district court would not have continued the enforcement
proceedings if it had agreed that the judgments deserved to
be set aside.
-10-
-10-
This brings us to Xerox-VKM's waiver argument. The
analogy it offers is to one who, having suffered an adverse
judgment, seeks to set it aside under Rule 60(b); fails; does
not appeal; and then, when the time for appealing has passed,
renews the very same arguments in a new motion under Rule
60(b) and then seeks to appeal the new denial. In Burnside
v. Eastern Airlines, 519 F.2d 1127 (5th Cir. 1975), cited to
us by Xerox-VKM, the court held that the moving party could
not effectively pursue an out of time appeal by the expedient
of renewing the same motion later on.
The difficulty with the analogy is that even if the
October and February motions are treated as raising the same
arguments, although with different emphases, it is by no
means clear that Sterman could have appealed the denial of
the October motion. At that time, there was no grant of a
preliminary injunction as the vehicle for an immediate
appeal. Xerox-VKM gives us no reason or precedent to show
that such an appeal was possible. If an appeal was not
possible, the waiver argument is pretty lame.
In these somewhat unusual circumstances, we think that
the proper course is to reject the waiver argument and to
treat Sterman's claims as sufficiently related to the clearly
appealable injunction to justify our consideration of them on
the merits. Since we think that the claims fail on the
merits, it is enough to assume arguendo that the waiver and
-11-
-11-
relatedness points are resolved in Sterman's favor. See,
e.g., Rhode Island Hosp. Trust Nat'l Bank v. Howard
Communications Corp., 980 F.2d 823, 829 (1st Cir. 1992)
(avoiding difficult jurisdictional issue to resolve merits of
interlocutory appeal).
2. We turn now to the main arguments raised in
Sterman's February motion under Rule 60(b). The consent
judgments are on their face unqualified final judgments
against Sterman, totally almost $6 million. Still, under the
settlement agreement the enforcement of the final judgments
was made contingent on Sterman's breach of the agreement.
Had Sterman complied with the agreement, Sterman would be
entitled to some form of protection--we need not decide what
kind. But despite Sterman's original claim to have complied,
it is undisputed that he did not pay the $125,000 promised by
July 19 as provided in the written agreement.
Sterman might still obtain relief by an affirmative
showing of grounds sufficient to persuade a district court to
exercise its authority under Rule 60(b) to set aside the
judgments.5 Rule 60(b) needs to be emphasized because,
while Rule 60(b) relief is not wholly a matter of discretion,
5How far the Massachusetts district court had authority
to set aside the Illinois judgment is a debatable point, see
Carteret Sav. & Loan Ass'n v. Jackson, 812 F.2d 36, 39 (1st
Cir. 1987); Indian Head Nat'l Bank v. Brunelle, 689 F.2d 245,
249-51 (1st Cir. 1982); see also 11 Wright & Miller, supra,
2865, at 224 (1st ed. 1973), but one that need not be
resolved in view of our disposition of the merits.
-12-
-12-
relief from a final judgment is "extraordinary"; discretion
plays a role; and neither the grounds nor the procedures are
as rigidly prescribed as those that would attend an ordinary
lawsuit seeking a judgment in the first instance. Vasapolli
v. Rostoff, 39 F.3d 27, 37 n.8 (1st Cir. 1994).
Against this background, we consider first Sterman's
argument that the judgments represent a contract "penalty"
forbidden by Illinois law, in view of the supposed
disproportion between the $125,000 immediately owed and the
almost $6 million sought to be collected under the judgments.
The parties appear to treat Illinois law as controlling on
this point because of the stipulation in the settlement
agreement. They are arguably mistaken (for reasons explained
below) but state law is pertinent by analogy and Illinois is
a perfectly good example.
Illinois does refuse to enforce penalties in contracts,
see, e.g., Lake River Corp. v. Carborundum Co., 769 F.2d
1284, 1288-91 (7th Cir. 1985); Bauer v. Sawyer, 134 N.E.2d
329, 333-34 (Ill. 1956), but the rule may have little to do
with final judgments. Indeed, even a contract agreeing to
settle a pending or threatened suit--technically, a contract
of "accord" --may be enforceable despite claims that it
constitutes a penalty. Williston says that the penalty
defense is not available in such cases; and the sparse case
law is divided, weighted slightly in favor of Williston. See
-13-
-13-
generally 5 Williston, Contracts 780, at 700-01 (3d ed.
1961).6
The rationale for the rule against enforcing penalties
in contract cases is not crystal clear. But it is not hard
to imagine why a court might be loath to enforce a contract
provision specifying a disproportionately large sum--which
courts call a penalty--for breach of the contract. The
parties may make such an agreement far in advance of the
dispute and may not appreciate the full impact if the
unlikely breach does occur. Contract damages, broadly
speaking, aim at compensation, not at punishment. Finally,
courts do not like results that appear unjust. See Lake
River, 769 F.2d at 1288-91.
The force of such concerns is lessened where one is
dealing with a contract of accord that is entered into after
the dispute has arisen. At this point, the parties are
focusing on the strength of the claims, the likely damages
and the costs of litigating. If the defendant, or potential
defendant, now consents to judgment in a specific amount, it
6Compare Resolution Trust Corp. v. Avon Ctr. Holdings,
Inc., 832 P.2d 1073, 1075 (Colo. Ct. App. 1992) (holding that
the penalty analysis is inappropriate); (Crosby Forrest
Products, Inc. v. Byers, 623 So.2d 565, 568 (Fla. Dist. Ct.
App. 1993) (same); Security Pacific Nat'l Bank v. Roulette,
492 N.E.2d 438, 441 (Ohio 1986) (same), with Sybron Corp. v.
Clark Hosp. Supply Corp., 143 Cal. Rptr. 306, 310 (Cal. Ct.
App. 1978) (finding an unenforceable penalty); Aubrey v.
Angel Enters., Inc., 717 P.2d 313, 315 (Wash. Ct. App. 1986)
(same). See generally 5 Williston, Contracts 780, at 700-
01 (3d ed. 1961).
-14-
-14-
is ordinarily done with eyes wide open, and in large matters
usually with legal advice. These attitudes seem to underlie
the Williston view that the defendant should be constrained
in attacking his own settlement.
Courts that share this view may also feel that the
plaintiff, who in settlement often accepts less than is
claimed, ought not then be forced to litigate anew about the
propriety of the discounted amount. After all, the
settlement may be attractive just because it assures that
litigation about liability and amounts is over. If this view
is taken of a contract in accord, one would expect the same
considerations to apply several times over to insulate from
penalty defenses a court-entered consent judgment, which is
one step further down the line (and a very important step).
The present case is somewhat different from an ordinary
consent judgment since Sterman's consent judgments, although
final in form, were contingent as to enforcement on a default
by Sterman. In that sense the analogy to a contract in
accord may be a good one. We have found no Illinois state
decisions on whether the penalty defense applies to contracts
of accord.7 To the extent we were forced to guess at what
7Two federal decisions cited to us assume without
discussion that Illinois would apply its penalty analysis to
a settlement agreement. Justine Realty Co. v. American Nat.
Can Co., 976 F.2d 385 (8th Cir. 1992), Yockey v. Horn, 880
F.2d 945 (7th Cir. 1989). But neither decision considers the
possible distinction between ordinary contracts and contracts
of accord.
-15-
-15-
Illinois law might be, we would incline toward following the
Williston view that something far more than a showing of
"penalty" is needed to defeat an obligation expressly assumed
to settle a pending or threatened law suit.
What is more, we are not concerned here directly with a
contract suit governed by Illinois law but with a motion to
reopen a federal judgment under Rule 60(b). While state law
on contracts is very instructive--that is why we have
discussed it--"[t]he grounds and the procedure for setting
aside a federal judgment are entirely a matter of federal
law, on which state law may be disregarded." 11 Wright &
Miller, supra, 2353, at 147-48; see also Johnson Chemical
Co. v. Condado Center, Inc., 453 F.2d 1044, 1046 (1st Cir.
1972). Even if Illinois did regard a contract in accord as
subject to a penalty defense, it is debatable whether the
district court would have been forced to use the same
standard in deciding whether to reopen.
In all events, there is no showing that enforcement of
the judgments involves a penalty. This case does not involve
in isolation the collection of $6 million for failure to pay
a $125,000 debt. Any judgment about disproportion would
depend on the reasonable magnitude of all of the claims
settled by the May 19 settlement and all of the benefits
-16-
-16-
received by Xerox-VKM. The settlement covered four lawsuits,
three projects, and a substantial number of claims and
counterclaims. Xerox-VKM may well receive less than it was
originally entitled to even if it collects the $6 million in
judgments and keeps or collects everything else that it was
given or promised under the settlement.
Even if the penalty defense were available, it was
Sterman's burden to make a colorable showing of overall
disproportion through affidavits before the district court
needed even consider taking the claim seriously. His jumble
of assertions and conclusions does not even begin to make
such a showing. Xerox-VKM appears to assert that even
collection of the full judgment will not make them whole but
this is beside the point. What they bargained for in the
settlement included the right not to have to prove the actual
amount of their claims. Instead, Sterman now has them
arguing about the matter.
This discussion also disposes of Sterman's related claim
that he ought to receive "credit" against the judgments for
the value of assets transferred on May 19. At first glance,
this might seem to be a straightforward suggestion that the
defendant suffered a judgment, paid part of it, and should
naturally be held to owe only the unpaid balance. When one
understands what Sterman is actually saying, his claim is
-17-
-17-
seen to depend on the same kind of false comparison as his
penalty argument.
Nothing in the settlement agreement suggests that the
amounts specified in the consent judgments are to be reduced
by the assets transferred on the same day as the agreement
was signed and well before the judgments were even entered.
So far as we know, the transfers may themselves may be
nothing more than the clearing of title to assets already
held by Xerox-VKM as security. And while such security if
realized would probably reduce liability, Sterman has (as
noted) provided us with nothing to suggest that Xerox-VKM has
or ever will collect as much as they might have done if the
Sterman entities had compliedwith their original commitments.
3. This disposes of the arguments made by Sterman in
his February motion, but he also seeks to brief in this court
additional arguments made in his October motion.
Pertinently, he claims that parol agreements, both before and
after the May 19 agreement, made Sterman's payment of the
$125,000 contingent on his ability to resell the Brush bonds
and provided that the July 19 closing date would be extended
upon Sterman's request. For reasons already set forth, we
think that these claims have arguably been preserved.
At the oral argument on the October motion, Judge Zobel
brushed aside the Sterman's claim that Xerox-VKM had from the
outset orally agreed to such a linkage or a right of Sterman
-18-
-18-
to extend at will. Her ruling was understandable: the May
19 agreement was a complex, lawyer-crafted, written document
and it made no mention of any such linkage or right; on the
contrary, it said that time was of the essence, adding only
that the parties could agree to extend the closing date.
Under parol evidence rules, followed in Illinois as
elsewhere, evidence of an alleged "prior or contemporaneous
agreement[]" is inadmissible if "it would have been normal
for the parties to incorporate [such an agreement] in the
written instrument . . . ." Roth v. Meeker, 389 N.E.2d
1248, 1256 (Ill. App. Ct.. 1979). In this case, the parol
evidence rule applies with full force. Once again, it does
not matter whether Illinois law governs the decision under
Rule 60(b) whether to reopen the judgments, for it is at
least instructive by analogy.
But the parol evidence rule generally governs only prior
or contemporaneous agreements. Thus:
[I]t does not bar evidence of subsequent
negotiations to show modification of the contract.
Even a completely integrated agreement can
therefore be modified or rescinded orally, subject,
of course, to the doctrine of consideration and the
statute of frauds. In a few states, legislation
requires a writing for the modification or
rescission of a written instrument.
A. Farnsworth, Contracts 7.6, at 492 (1990) (footnotes
omitted); accord A.W. Wendell & Sons, Inc. v. Oazi, 626
N.E.2d 280, 287 (Ill. 1994) ("Under Illinois law, parties to
-19-
-19-
a written contract may alter or modify its terms by a
subsequent oral agreement . . . .").
Xerox-VKM has not troubled to address Sterman's
modification claim (except by asserting that the claim has
been waived). Still, "[t]he court need not hold a hearing on
a motion for relief from judgment if the motion is clearly
without substance . . . ." 11 Wright & Miller, supra,
2865, at 227. We think that there is more than enough in the
record to make clear that Sterman's claim is without merit
and that no evidentiary hearing was needed to establish this
point (it was the subject of oral argument).
A close reading of Sterman's affidavits--one from him
and another from his broker--show that neither provides any
basis for believing that the parties reached an agreement,
after the original May 19 document was signed, purporting to
extend the closing date or to condition the closing on
Sterman's resale of the Brush bonds. Further, between May 19
and the scheduled closing date, Xerox-VKM twice wrote to
Sterman to reconfirm his remaining obligations; neither
letter evidenced any flexibility on the date and one
explicitly reminded Sterman that he would be in default if he
failed to fulfill his obligations by July 19.
Finally, on July 19 Sterman himself faxed a letter to a
Xerox-VKM representative requesting an extension of the
closing date. He made no claim that Xerox-VKM had agreed to
-20-
-20-
extend the closing date or that he had any unilateral right
to an extension. Far from granting an extension, Xerox-VKM
wrote to Sterman the next day informing him that he had
defaulted on his payment obligation, that the judgments
against him could now be executed, and that his opportunity
to purchase the Brush bonds had now expired. Three days
later Sterman again sought an extension, and Xerox-VKM
immediately refused.
In sum, despite references in his brief to a supposed
post-May 19 modification in the settlement agreement, there
is no substantial basis for such a claim, and it is
contradicted by Sterman's own correspondence. Under these
circumstances, we think that there is no reason to take the
claim seriously.
Xerox-VKM's motion to supplement the record by inclusion
of a previously omitted exhibit page is granted. The
judgment is affirmed.
-21-
-21-