Varbero v. Belesis

Background

Antony Varbero sued Anastasios P. Belesis, Tabitha Belesis, the 2008 Anastasios Belesis Irrevocable Trust US Dated Sept. 2008, Tomtab LLC, Crown Enterprises, LLC, and Lugano Ventures, LLC. The complaint sought payment of debts allegedly owed in connection with Varbero’s legal representation of Belesis beginning in January 2015. The court had previously granted the defendants’ motion to dismiss in part while allowing claims for breach of contract, aiding and abetting breach of contract, and fraudulent conveyance to continue.

In October 2020, the parties informed the court that they had reached a settlement. The court stayed the case until June 15, 2021, but later reopened it after Varbero reported that Belesis had not made the required payments. Varbero then moved to enforce the written Settlement Agreement, which Varbero signed on October 30, 2020, and Belesis signed on November 3, 2020.

Settlement Terms and Default

The agreement required Belesis to pay Varbero a principal settlement amount of $925,000 in installments: two $100,000 payments followed by five additional installments totaling $725,000, with the final installment due by June 15, 2021. After timely payment of the entire amount, Varbero was required to authorize a release of claims against all defendants, followed by a stipulation dismissing the action with prejudice.

The agreement provided that if an installment remained unpaid for five days after notice of default, Varbero could obtain a final default judgment against Belesis for $1,050,000, less any settlement payments already made, plus interest at 9% per year. It also provided for reasonable attorney’s fees and costs to the prevailing party in proceedings arising from or related to the settlement.

Varbero alleged that Belesis had made no payments. Varbero sent notice of default by email on November 9, 2020, and by email and letter on November 15, 2020.

Belesis’s Arguments

Belesis did not claim that the settlement resulted from fraud, collusion, mistake, or accident. He did not dispute signing the agreement, Varbero’s interpretation of its terms, the absence of ambiguity, the failure to make payments, or the default notices.

Belesis instead argued that enforcement would be unjust because he could owe the same debt to multiple parties. He also argued that the promissory notes underlying the lawsuit lacked the required consideration under New York law. These arguments were based on his contention that the debts were owed to Joseph Mure Jr. & Associates for legal services, rather than to Varbero.

Court’s Analysis

The court treated the motion to enforce the settlement as a contract-enforcement matter. It explained that a settlement is enforceable under general contract principles unless there is a reason to invalidate it, such as fraud, collusion, mistake, or accident. Belesis did not establish any such reason.

The court rejected Belesis’s consideration argument. Consideration is something exchanged to support a contract, such as a bargained-for benefit or legal detriment. The court held that Varbero’s release of his claims was the consideration supporting Belesis’s promise to pay. The validity or enforceability of the underlying promissory notes, and the ultimate merits of Varbero’s claims, were not necessary to determine whether the settlement was enforceable.

The court also rejected Belesis’s argument that he might owe money to a third party. The agreement represented that the claims being released belonged to the parties and not to another person or entity. Whether Belesis owed money to a third party under the underlying instruments did not affect Varbero’s ability to release his own claims in exchange for payment.

Ruling and Effect

The court held that Varbero had established a valid and enforceable settlement agreement and that Belesis had defaulted. It ruled that Varbero was entitled to a judgment against Belesis for the principal amount, interest, and attorney’s fees contemplated by the agreement.

The court GRANTED Varbero’s motion to enforce the Settlement Agreement against Belesis. It directed Varbero to file a proposed judgment stating the principal sum and interest owed by Belesis. It allowed Varbero to move for attorney’s fees by March 31, 2021, and allowed Belesis to respond by April 2, 2021. The order did not resolve claims against the other defendants, which remained pending. The court also adjourned the trial date by one week, from April 19 to April 26, 2021.