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Brenner v. Greenberg

November 15, 2010

STEVEN C. BRENNER, PLAINTIFF/COUNTER-DEFENDANT,
v.
STEVEN GREENBERG AND GARY WEBER, DEFENDANTS/COUNTER-PLAINTIFFS.



The opinion of the court was delivered by: Judge Feinerman

MEMORANDUM OPINION AND ORDER

What remains of this lawsuit are Plaintiff Steven Brenner's claims against Defendants Steven Greenberg and Gary Weber for defamation and breach of a July 2007 settlement agreement intended to resolve an earlier dispute, and Greenberg's and Weber's counterclaim for breach of the same agreement. Before the court are three motions: (1) Weber's and Greenberg's joint motion for summary judgment on Brenner's claims; (2) Greenberg's separate motion for summary judgment on Brenner's claims; and (3) Weber's and Greenberg's joint motion for partial summary judgment on their counterclaim. The first motion is granted, the second is denied as moot, and the third is denied.

Background

Unless noted otherwise, the following facts are undisputed. On August 15, 2005, Brenner and Greenberg entered into an agreement regarding the development of 4.5 acres of land in Gold Canyon, Arizona. Greenberg owned the land, and Brenner was to help develop it into four parcels. One parcel was earmarked for a gas station and convenience store. The other three parcels were intended for development as "pads"-meaning land with the infrastructure, such as sewer services, power, and water services, necessary for further development-that ultimately would be sold to others. A handwritten document entitled "Brenner deal" provided that Brenner would receive monthly compensation, the potential for employment at and an equity interest in the gas station upon it completion, and other consideration.

At some point in 2006, Brenner retained architect Manuel Aguirre, the principal of GBMA Architecture LLC, to work on the project. Brenner's goal was to have the gas station built and operating by the end of 2007. At some point in early 2007, Greenberg brought Weber into the project on terms-reflected in two "term sheets" sent to Brenner-that Brenner felt unfairly diluted his interest in the enterprise. On May 2, 2007, Brenner sent an email to Greenberg, copying Weber, to express his view that Greenberg had reneged on the original deal. Weber responded by email on May 7, 2007, stating that the terms of the original deal were "non-binding" and telling Brenner to stop attempting to directly contact Greenberg.

The parties then parted ways and, on July 13, 2007, entered into a Settlement Agreement and General Release ("Agreement"). Paragraph 1 provides that, upon Brenner's certification that he had complied with Paragraph 4, Weber and Greenberg would make "Settlement Payments" to Brenner consisting of a $331,200 check, cancellation of $32,300 in debts owed by Brenner, and finder's fees upon the occurrence of certain property sales.

In Paragraph 4, Brenner acknowledged that "one of [Greenberg's and Weber's] primary reasons for entering into this Agreement is to obtain complete confidentiality regarding their businesses and business affairs"; agreed not to disclose any information regarding his involvement with Greenberg and Weber, their business activities, or the Settlement Agreement; and further agreed "to return to Greenberg any and all communications (and all copies thereof) with Greenberg or [Weber], including specifically, without limitation,. all documents (and all copies thereof) concerning this matter or concerning any matters pertaining to [Greenberg and Weber]," and to "forward to Greenberg all of such e-mail transmissions and documents, and then permanently delete all e-mail transmissions and attachments of any type sent to or received from [Greenberg and Weber]." Paragraph 4 provides that the "prompt return of such communications and documents and the forwarding of such e-mail transmissions, with a certification that all such communications have been returned and all e-mail transmissions have been permanently deleted, is a condition precedent to the making of the Settlement Payments."

Paragraph 2 sets forth Brenner's agreement to release Greenberg and Weber "from any and all claims. based directly or indirectly upon [his] affiliation with [Greenberg and Weber], or any of them," and provides that Brenner "promises and covenants that he. will not file any lawsuit or institute any type of proceeding against [Greenberg and Weber]. based upon any claim covered under the foregoing release." Paragraph 6 provides that the parties would refrain from making "any disparaging remarks" about the others, and that Greenberg and Weber "shall not discuss or disclose any information whatsoever to anyone concerning [Brenner's] business activities" (bold in original). Paragraph 7 states that should Brenner violate Paragraphs 4, 5, or 6, he would forfeit fifty percent of $331,200 payment made by Greenberg and Weber and the cancelled debt would be reinstated.

Following execution of the Settlement Agreement, Brenner signed a notarized certification ("Paragraph 4 Certification") stating: "I, Steven C. Brenner, being duly sworn, state under oath that I have fully complied with the provisions of Paragraph 4 of the Settlement Agreement and General Release by returning all of the requested materials and by permanently deleting all e-mail transmissions and attachments of any type sent to or received from any of the respondents." Greenberg and Weber then tendered $331,200 to Brenner and cancelled his debts.

After Brenner told Aguirre that he was no longer involved with the Gold Canyon project, in need of work, and in dire financial straits, Aguirre offered and Brenner accepted a job with GBMA as an administrator-manager on numerous projects in California and the Midwest. In early August 2007, before Brenner reported for work with GBMA, Weber spoke with Aguirre by telephone and, referencing Brenner's departure from the Gold Canyon project, said that "the project was not where it should have been, that we should have been doing the three pads first, that Steve Brenner had been buttering his own bread[,] and that [Weber] and Greenberg felt misled." Aguirre understood Weber to be stating his opinion that Brenner "had been looking out for his interests and not the interests of the project." Days later, Aguirre withdrew the offer of employment to Brenner, and testified that his conversation with Weber was the "tipping point" in his decision. About a week later, Weber's counsel asked Aguirre to sign a prepared statement denying that Weber had disparaged Brenner, but Aguirre refused.

Brenner filed this action in February 2008. Brenner's initial complaint asserted a defamation claim based on Weber's statement to Aguirre; a claim that Weber's statement breached the non-disparagement provision of Paragraph 6 of the Agreement; and a claim seeking a declaration voiding the Agreement and reinstating the terms of Brenner's original deal with Greenberg. The complaint attached as exhibits: (1) the "Brenner deal" document setting forth Brenner's original arrangement with Greenberg; (2-3) the two subsequent "term sheets" that Brenner believed unfairly diluted his interest in the project; (4) Brenner's May 2, 2007 email to Greenberg; and (5) Weber's May 7, 2007 email response to Brenner. Brenner asserts that he retained those five documents "pursuant to legal advice that he should withhold certain documents for informational purposes in the event of an IRS inquiry." Doc. 116, at 14, ¶ 36.

With respect to his May 2, 2007 email to Greenberg, Brenner testified that he kept it "from more of a litigation point showing what was our [original] agreement and how it changed."

After reviewing the complaint, counsel for Greenberg and Weber served Brenner's counsel with a Rule 11 notice demanding that Brenner withdraw the declaratory judgment claim on the ground that it was prohibited by the Agreement's release and covenant-not-to-sue provisions. Brenner filed an amended complaint deleting that claim, and ultimately filed a fourth amended complaint. Weber and Greenberg answered and counterclaimed, alleging that Brenner breached the covenant-not-to-sue clause in Paragraph 2 ...


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