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Weinbach v. Marriott International, Inc.

United States District Court, E.D. Missouri, Eastern Division

March 25, 2019

LANA J. WEINBACH Plaintiff,
v.
MARRIOTT INTERNATIONAL, INC., et al., Defendants.

          MEMORANDUM AND ORDER

          JEAN C. HAMILTON UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendants' Motion to Enforce Settlement, filed on February 27, 2019, (ECF No. 37) and Plaintiffs Cross-Motion to Enforce Settlement, filed on February 28, 2019, (ECF No. 39). The Motions are fully briefed and ready for disposition.

         BACKGROUND

         Plaintiff brought a case for compensation for the wrongful escheat of stock that she held in Starwood Hotels and Resorts World Wide, Inc., ("Starwood") by merger. Starwood is now a wholly owned subsidiary of Marriott International. (ECF No. 1 at ¶ 1).

         Plaintiff is the daughter of Ben and Sarah Weinbach.[1] (ECF No. 1 at ¶ 12). Plaintiffs parents purchased various securities and titled the securities jointly with Plaintiff. Id. at ¶ 14. On or about January 30, 1997, the Weinbachs purchased 1, 000 shares of ITT Corporation stock in certificate form and titled the shares in their names as joint tenants with right of survivorship. Id. at ¶ 15. Plaintiff alleges that Starwood acquired or merged with ITT Corporation and gave 1.543 shares of Starwood stock to the Weinbachs for each share of ITT stock owned. Following the merger the Weinbachs received 1, 543 Starwood shares ("Starwood Shares"). Id. at¶ 18.

         Plaintiff alleges that in 2003, without notice to Plaintiff, Starwood reported the Starwood Shares as abandoned property to the Missouri Treasurer's Office and transferred them via electronic book entry, which dispossessed Plaintiff and her father of the Starwood Shares and dividends therefrom. Id. at ¶¶ 20-21. In 2006, Starwood entered into an agreement transferring certain properties to Host Hotels & Resorts, Inc. (the "Host Shares"). Id. at ¶ 31. Plaintiff alleges that because they owned the Starwood Shares, Plaintiff and her father received 944.6246 Host Shares in connection with the transaction. Id., ¶¶ 32.

         Plaintiff alleges that on July 30, 2009, the Treasurer sold the 1, 543 Starwood Shares for thirty-five thousand two hundred dollars and forty-two cents ($35, 213.42); and on September 10, 2009 the Treasurer sold the 944.6246 Host Shares for eight thousand nine hundred and fifty-nine dollars and ninety cents ($8, 959.90). (ECF No. 1, ¶¶ 37-38). Plaintiff further alleges that in September 2016, Marriott acquired Starwood in a merger. In that transaction Starwood Shareholders received, 0.8 Marriott shares in exchange for each Starwood share owned as well as twenty-one dollars ($21) per share of Starwood. Plaintiff asserts that as a result of the merger, the current value of the Starwood shares and Host shares transferred to the Missouri Treasurer's Office exceed the price at which they were sold. Id., ¶¶ 44-45.

         In 2016, Plaintiff filed a Petition in St. Louis County Circuit Court (No. 16SL-CC01622) which was removed to Federal District Court for the Eastern District of Missouri (4;I6CVOO783) claiming negligence per se and conversion. (ECF No. 37). On October 9, 2018, Plaintiff filed a Complaint in this Court for negligence, conversion, and breach of fiduciary duty based on diversity. On November 16, 2018, Defendants filed a Motion to Stay Proceedings until the Plaintiff paid costs and fees and additionally filed a Motion to Dismiss. (ECF Nos. 12, 16).[2]

         Plaintiff filed a Memorandum indicating that the Parties were negotiating the final terms of a resolution to the action and requested that the Court give the Parties thirty (30) days to finalize a settlement. (ECF No. 34). On January 28, 2019, the Court issued an Order that Counsel shall file within thirty (30) days a stipulation of dismissal, a motion for leave to voluntarily dismiss, or a proposed consent judgement with the Court. On February 27, 2019, and February 28, 2019, the Defendants and Plaintiff respectively filed Motions to Enforce Settlement.

         At issue is the addition of the following paragraph ("The Disputed Paragraph") which states:

Additionally, Ms. Lana Weinbach and her assigns, heirs, agents and attorneys forever relinquishes all claims, ownership, or interest in the disputed stock in question, whether as stock in ITT Corporation, Starwood Hotels and Resorts Worldwide, Inc., Host Hotels & Resorts, Inc., or Marriott International, Inc. and all its predecessors, successors, parents, owners, direct subsidiaries, indirect subsidiaries, affiliates, and their assigns, agents, directors, officers, employees, heirs, personal representatives and shareholders. (ECF No. 38 at ¶ 7).

         I. Defendants' Statement of the Facts and Argument

         In support of their Motion to Enforce, Defendants state that on January 25, 2019, the parties believed that they had reached a settlement and were merely negotiating final terms. Id. at ¶ 5). On February 15, 2019, Defendants sent the Plaintiff a finalized Confidential Settlement & Release form. (ECF No. 38 at ¶ 4; ECF No. 38-1). On February 26, 2019, Plaintiffs counsel returned to Defendants' counsel proposed revisions which had been discussed between counsel and a final Confidential Settlement & Release. (Id. at ¶ 6; Defendants' Exhibit B, February 26, 2019, 1:25 PM Correspondence ECF No. 38-2). The Disputed Paragraph is omitted. Id. Defendant considers the Disputed Paragraph to be a material aspect of the settlement to ensure that all claims and potential claims against Defendants are extinguished in consideration for settlement. Defendant alleges that Plaintiffs counsel then sent a Confidential Release & Settlement to Defendants' counsel which contained a modified version of The Disputed Paragraph:

Additionally, as to the released Marriot parties in this section only, Ms. Lana Weinbach and her assigns, heirs, agents and attorneys forever relinquishes all claims, ownership, or interest in the disputed stock in question, whether as stock in ITT Corporation, Starwood Hotels and Resorts Worldwide, Inc., Host Hotels & Resorts, Inc., or Marriott International, Inc. and all its predecessors, successors, parents, owners, direct subsidiaries, indirect subsidiaries, ...

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