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MP Assoc. v. Liberty, continued.

2.  Motion to Strike.

	[¶26] We review a motion to strike a stipulated fact for an abuse of
discretion.   See Adelman v. Town of Baldwin, 2000 ME 91, ¶ 6, 750 A.2d
577 (citing McNutt v. Johansen, 477 A.2d 738, 740 (Me. 1984) (reviewing
denial of motion to strike default judgment for abuse of discretion); 
Michaud v. Steckino, 390 A.2d 524, 531 (Me. 1978) (reviewing denial of
motion to strike testimony for abuse of discretion)).    
	[¶27]  Liberty's motion to strike pertains to paragraph 15 of the
factual stipulations that the parties executed in January 1998.  Paragraph 15
provides, in full:
On or about January 1, 1991, Morse, Payson & Noyes
Insurance and MP Associates agreed to settle with Casco on
their guarantees of the Middle Pearl Associates deficiency. 
Under this settlement, Morse, Payson & Noyes Insurance
and MP Associates agreed to pay an additional $452,177
against their guarantee liability of the Middle Pearl Associates
deficiency.  After adjustments between MP Associates and
Morse, Payson & Noyes Insurance, each paid $439,512.99 on
their obligations.
The relevant portion of the Casco settlement agreement referenced above
provides as follows:
	I.  REPRESENTATION, ACKNOWLEDGMENTS and AGREEMENTS.
	The Debtors hereby represent and acknowledge to and
agree with Casco as follows:

	1.1 Existing Indebtedness.  The existing Loans are as
follows:
		. . . .
(b) MPA Loan: $2,500,000 note dated September 9,
1986, with a principal balance as of December 31,
1990 of $533,387.97.  The MPA Loan is guaranteed
by [Morse Insurance], as well as by MP Associates, a
general partnership of which Henry S. Payson, James
J. Kilbride, Daniel G. Hall and Maine XYZ, Inc. are
general partners.  At the request of the MPA
partners, Casco has released its mortgage of the MPA
property, to enable a sale of same, the proceeds of
which were paid to the first mortgagee, there being
no equity to reach the MPA Loan made by Casco.  No
other collateral is held by Casco for the MPA Loan. 
At the request of the Debtors, Casco has agreed to
the exclusion of Henry S. Payson, MP Associates, and
Maine XYZ, Inc. from this Agreement and the other
Loan Documents as Debtors, and the release of such
parties from liability on the Indebtedness, as
hereinafter defined.
(Italics added for emphasis.)  The trial court found that, as written, the
settlement "clearly excludes MP Associates from the settlement." It
concluded, therefore, that "[p]aragraph 15 is clearly a mistaken statement of
the reality of the settlement agreement" and granted Defendants' motion to
strike.  
	[¶28]  In Maine, "[a] stipulation between litigants made under
supervision of the court 'derives effect from the control of the court rather
than from any virtue in the stipulation itself.'"  Rush v. County of Aroostook,
447 A.2d 478, 479 (Me. 1982) (quoting Perley v. Bailey, 89 N.H. 359, 360,
199 A. 570, 571 (1938)).  Nevertheless, "[s]tipulations fairly entered into
are favored" because they "expedite a trial and eliminate the necessity of
much tedious proof." T I Federal Credit Union v. DelBonis, 72 F.3d 921, 928
(1st Cir. 1995) (quoting Burstein v. United States, 232 F.2d 19, 23 (8th Cir.
1956)).  Once crafted, therefore, the parties are not generally free to
extricate themselves from those stipulations at will. Id. (citing Marshall v.
Emersons Ltd., 593 F.2d 565, 569 (4th Cir. 1979)).  See also 73 Am.Jur.2d,
Stipulation § 11 (1974) (stating "[i]t is generally considered that stipulations
which tend to expedite the trial should be enforced unless good cause is
shown to the contrary"). 
 	[¶29] A stipulation should be adhered to unless it becomes apparent
that it may inflict a manifest injustice upon one of the contracting parties or
where it becomes evident that "the agreement was made under a clear
mistake."  T I Federal Credit Union, 72 F.3d at 928 (quoting Brast v.
Winding Gulf Colliery Co., 94 F.2d 179, 180 (4th Cir. 1938)).  See also
United States v. Wingate, 128 F.3d 1157, 1160 (7th Cir. 1997) (holding
"once made, a stipulation is binding unless relief from the stipulation is
necessary to avoid 'manifest error' or the stipulation was entered into
through inadvertence or based on an erroneous view of the facts or law");
Yanovitch v. United States, 985 F. Supp. 17, 19 (D. Mass. 1997) (stating the
First Circuit has indicated, in civil cases, that "[in] our judicial system,
'[s]tipulations fairly entered into are favored,'" and once made, the parties
are "not generally free to extricate themselves from those stipulations").  
	[¶30]  Although a court may relieve a party from an improvident
discovery stipulation or one that might work an injustice, "[t]he stage at
which a party requests relief from a stipulation bears heavily on whether the
court should grant the relief, and a court must determine whether there are
overriding rules or policy considerations that compel granting or denying
such relief."  Kirtley v. Sovereign Life Ins. Co. of California (In re Durability
Inc.), 212 F.3d 551, 555-56 (10th Cir. 2000); see also Carnegie Steel Co. v.
Cambria Iron Co., 185 U.S. 403, 444, 22 S. Ct. 698, 714-15, 46 L.Ed. 968
(1902) (stating, "while the stipulation is undoubtedly admissible in evidence
it ought not to be used as a pitfall, and where the facts subsequently
developed show, with respect to a particular matter, that it was
inadvertently signed, we think that, upon giving notice in sufficient time to
prevent prejudice to the opposite party, counsel may repudiate any fact
inadvertently incorporated therein") (emphasis added)).  For instance, "if a
party waits until trial to withdraw stipulations submitted in the pretrial
order, the recital of facts 'may be modified at the trial only to prevent
manifest injustice.'" Kirtley, 212 F.3d at 556 (citation omitted).  Moreover,
relief may not be granted when it would be partial in nature, leaving the
party against whom it was granted wholly or partially bound and at a
disadvantage because of having changed his position or acted in reliance
upon it.   73 Am.Jur.2d, Stipulation § 13  (citations omitted). 
	[¶31]  In this case, Liberty's repudiation of the facts in paragraph 15
did not occur until July 17, 1998, well beyond the scheduling order
delineated even by the modified consent order-dated February 12,
1998-and beyond the oral argument-held on July 10, 1998.    Because of
the tardiness of Liberty's motion to strike, MP Associates was prejudiced. 
For this reason and because the trial court's relief was only partial in nature,
the court exceeded the bounds of its discretion in allowing Liberty to
withdraw from part of its stipulation without giving MP Associates an
opportunity to provide proof that it made the disputed payment.  Had
Liberty dissented earlier or been more careful examining documents he
possessed for over a year, MP Associates would have had an opportunity to
respond.{7} 
	[¶32]  Liberty's other contentions lack merit and do not warrant
discussion.
 	The entry is:
Judgment affirmed in part and vacated in
part; remand to Superior Court to grant
MP Associates an opportunity to
demonstrate that it made the payment
indicated in paragraph 15 of the
stipulation and for further proceedings
consistent with the opinion herein.

Attorneys for plaintiffs:

U. Charles Remmel II, Esq. (orally)
Kelly, Remmel & Zimmerman
P O Box 597
Portland, ME 04112-0597

Paul F. Macri, Esq. (orally)
William D. Robitzek, Esq.
Berman & Simmons, P.A.
P O Box 961
Lewiston, ME 04243-0961

Attorneys for defendants:

George J. Marcus, Esq. (orally) 
Lee H. Bals, Esq.
Regan M. Hornney, Esq.
Marcus, Clegg & Mistretta, P.A.
100 Middle Street, East Tower
Portland, ME 04101-4102
FOOTNOTES******************************** {1} . David Cook, Richard Cook, and William Webster are not involved in this action. The Cooks have been released by all the parties to this action and William Webster has been adjudged a bankrupt. {2} . Section 295-A of the Maine Partnership Act provides, in pertinent part: 1. Partnership liability. Except as provided in subsection 2, all partners are liable: A. Jointly and severally for everything chargeable to the partnership under section 293 and 294; and B. Jointly for all other debts and obligation of the partnership. Any partner may enter into a separate obligation to perform a partnership contract. 31 M.R.S.A. § 295-A (Supp. 2000). {3} . Section 443 provides: 1. Rights and powers. Except as provided in this chapter or in the partnership agreement, a general partner but not a limited partner of a limited partnership has the rights and powers and is subject to the restrictions of a partner in a partnership without limited partners. 2. Liabilities. Except as provided in this chapter, a general partner of a limited partnership has the liabilities of a partner in a partnership without limited partners to persons other than the partnership and the other partners. Except as provided in this chapter or in the partnership agreement, a general partner of a limited partnership has the liabilities of a partner in a partnership without limited partners to the partnership and to the other partners. 31 M.R.S.A. § 443 (1996). {4} . With respect to the Casco guaranty, Liberty also argues that Morse Insurance's reimbursement claims fail because the guaranty expressly states that such rights are deferred until Casco has been paid in full. Liberty's argument fails here for the same reasons stated in the discussion relating the U.S. Trust guaranty. {5} . 11 M.R.S.A. § 3-1310(2) provides, in relevant part: (2) Unless otherwise agreed and except as provided in subsection (1), if a note . . . is taken for an obligation, the obligation is suspended to the same extent the obligation would be discharged if an amount of money equal to the amount of the instrument were taken and the following rules apply. . . . . (b) In the case of a note, suspension of the obligation continues until dishonor of the note or until it is paid. Payment of the note results in discharge of the obligation to the extent of the payment. (c) Except as provided in paragraph (d), if the . . . note is dishonored and the obligee of the obligation for which the instrument was taken is the person entitled to enforce the instrument, the obligee may enforce either the instrument or the obligation. 11 M.R.S.A. § 3-1310(2)(b) & (c) (1995). {6} . Section 752 provides that: All civil actions shall be commenced within 6 years after the cause of action accrues and not afterwards, except actions on a judgment or decree of any court of record of the United States, or of any state or of a justice of the peace in this State, and except as otherwise specially provided. 14 M.R.S.A. § 752 (1980). {7} . MP Associates claims that the wording of the settlement agreement excluding it from the obligations therein was misinterpreted by Liberty. MP Associates argues that the exclusionary language was intended to exclude MP from that particular settlement agreement, not from paying its guaranty obligations altogether. MP contends that it had already separately paid to Morse Insurance (the other guarantor) its portion of the Casco liability, presumably to have Morse Insurance transfer the funds over to Casco once the settlement terms were reached. It was because of this that MP claims it was excluded from the obligations undertaken in the settlement agreement.

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