In re Seminole Walls & Ceilings Corp.

Seminole Walls & Ceilings Corporation (Seminole) (defendant) filed for bankruptcy under Chapter 7 of Title 11 of the United States Code. PITA Corporation (PITA) was a subsidiary of Seminole that had purchased a collection of photographs from Joseph Jasgur (plaintiff). During the bankruptcy proceedings, Jasgur disputed that the photographs were owned by PITA. Seminole’s bankruptcy trustee entered into a settlement agreement with Jasgur in January 2005 to settle the dispute. The agreement was amended by Jasgur and the trustee in March 2005. Jasgur was over 85 years old when the agreement was signed, had a mini-stroke around the time of signing the agreement, and was subsequently diagnosed with serious medical conditions. Jasgur was also declared mentally incompetent on August 10, 2005. However, Jasgur was represented by competent counsel who negotiated the settlement agreement. The agreement was heavily negotiated, and the attorneys for both parties believed that Jasgur supported the agreement. Jasgur’s acquaintance, Tom Endre, assisted Jasgur during the period when the agreements were signed. Endre testified that Jasgur understood he was signing a legal compromise. Additionally, Jasgur signed the agreement and the amendment in front of notaries. Neither the notaries nor Endre expressed any concern that Jasgur appeared confused or was acting oddly. Jasgur asserted that the settlement agreement and amendment were not enforceable because he was mentally incompetent at the time of entering into the agreement and amendment.