Complex Business Litigation with Jury Trial – Jury Verdict in Favor of Hotel Founder, Property Valued over $8.7 Million
Type of Action: Breach of Contract, Business and Marital Contracts
Name of Case: Paul Simpson v. Mary Simpson
Court and County with Case: Durham County
Verdict or Settlement: Jury Verdict.
Amount in Controversy: Real Estate holdings in North Carolina, Virginia and West Virginia valued in excess of $8.7 Million
Date of Verdict: November 28, 2001.
Presiding Judge: Donald W. Overby
If not settled, Highest Offer (plaintiff’s verdict): No offers made by defendant, ex-wife.
Lead Trial Counsel for Plaintiff : Philip A. Mullins, IV of Thomas, Ferguson & Mullins, LLP, 919-682-5648, fax 919-688-7251
Case Summary: This case involves a complex business litigation with breach of contract, fraudulent inducement and domestic relations aspects. The case concerned substantial real estate assets in North Carolina and Virginia. Paul Simpson, the Plaintiff, sought to set aside contracts entered into during his marriages to the defendant, Mary Simpson. If successful, Plaintiff demanded an equitable distribution of all marital assets in accordance with North Carolina family laws. The property was acquired during this couple’s two marriages from 1973 until 1996. The defendant refused to offer anything, claiming that the Plaintiff got all he deserved according to her payment of funds per their 1985 Separation Agreement. In October, 2001, defense counsel informed the Court that the defense estimated the value of the marital assets of the first marriage to be $6.5 million.
The Plaintiff sought to set aside a 1985 Separation Agreement under which the couple’s income producing properties were distributed inequitably with the majority of those assets being distributed in 1985 to the Defendant, Mary Simpson. Paul Simpson claimed that Mary Simpson induced him to execute the Separation Agreement by constructive fraud, undue influence, and duress. After they executed the Separation Agreement and resulting deeds in 1985, the Simpsons resumed their marriage in late 1985 and purchased other income producing properties including a $2.2 million dollar property in Virginia in 1986. Plaintiff argued that alone was sufficient evidence that they abandoned the Separation Agreement. Even though they later separated in mid-1988 and were divorced on January 8, 1991, shortly thereafter the Simpsons decided to remarry and did so on 12/31/91.
During their second marriage, they bought additional property and Paul Simpson signed as “Lessor” on a lease of one of the properties that Mary Simpson claimed was her separate property under the provisions of the 1985 Separation Agreement. In February, 1996, the Simpsons again separated and were divorced for the second time on April 6, 1998. Defendant alleged that the Separation Agreement was a complete bar to all of Plaintiff’s claims for equitable distribution of the assets from their first marriage. Early in the case, the trial court bifurcated the case to allow a jury to determine a number of issues. The issues submitted to the jury fell into four categories:(i) whether the Separation Agreement was binding given the claims of impropriety surrounding its execution; (ii) whether the separation provisions were integrated with the property settlement provisions; (iii) whether Paul Simpson ratified the Separation Agreement; and (iv) whether Paul and Mary Simpson abandoned the Separation Agreement. Initially, the Defendant asserted a statute of limitations bar. However, the trial court found that the Defendant was equitably estopped from asserting that bar due to her conduct.
At mandatory mediation in September, 2001, there were no settlement offers from the defendant. Throughout the case, the Defendant refused to discuss settlement in that she believed there was no way for Plaintiff to win all the issues that were eventually submitted to the jury. This case was assigned to a Special Judge, Donald W. Overby. After empanelling a jury on November 5, 2001, the case was tried to completion on November 28, 2001. The Plaintiff won all 8 issues submitted to the jury. Throughout both trials, defense counsel asserted that it would be nearly impossible for a jury to decide so many issues in Plaintiff’s favor given the complicated fact pattern and business valuations involved. Plaintiff’s counsel believed these very difficult obstacles could be overcome with adequate witness preparation and proper planning of all evidence in the trial.
The keys to success were selecting an intelligent jury, having the main witness testify as to all the complicated facts and explain the parties’ subsequent actions. Throughout his testimony, Paul Simpson referred to an illustrative exhibit (color timeline) that covered the dates of marriage/separation/divorce and their purchases of marital assets during the 25-year period from 1973 to 1998. The jury was able to understand Paul Simpson and they liked him. The exhibit helped them to follow the complicated fact situation and to see that there was a relationship of trust between Paul and Mary Simpson after the 1985 Separation Agreement once the Simpsons resumed their marriage in 1986-1988. There was strong documentary evidence that contradicted Defendant’s deposition testimony and seriously undermined her defenses. Judge Overby ruled that Plaintiff’s counsel could use that evidence to impeach the defendant or her witnesses. The defendant chose not to testify or put on any witnesses. Plaintiff’s counsel believes that, given the documentary evidence and Mary Simpson’s own inconsistencies in her sworn affidavits and pleadings, defendant’s election to not testify may have been the wisest tactic. The jury deliberated for over a day before returning its verdict. With the favorable verdict, the case was allowed to proceed to equitable distribution where North Carolina law allows that all the marital assets from both marriages will be divided equally.
Other Useful Information: Plaintiff retained an expert to prepare informative graphics that “uncomplicated” a complex fact situation. After returning their verdict, several members of the jury informed Plaintiff’s counsel that without the exhibit they would have been lost in this case. Jeff Darnell, Wilson Litho, Inc., Courtroom Graphics Division, (919) 469-8711