Ronnie: Good points. I'm afraid I don't have the answers, but I have my beliefs. I have to assume that we were willing to live with our construction of the agreement, even if we believed it was coersed, until Federal demanded $27 mil in reimbursement based upon their interpretation of the agreement and demanded arbitration. In law, mere acquiesence to force or coersion does not necessarily negate failure of consideration.
I would also believe that "tentative acknowledgment and accrual" is evidence, but will not be binding on the court or jury as a "matter of law." Our claims of coersion also go to the consideration for the agreement at the time of the agreement. Ericy settled in March 2003. The coersion was from 1993 - 2000. I would also believe that our payments during the period of time the case was abated were minimal when compared with the period beginning in 1999 when the abatement was lifted and our fear of hugh legal expense began to occur.
Regarding statutes of limitations, these can be difficult issues. The court has to determine when limitations began to run. It does not necesarrily begin to run on the date of the act. It can begin to run on the date of damage or other theories. Also, in some instances, such as revolving debt or agreements requiring monthly payments, limitations only runs against those payments outside the limitations period. (Ex. you are making monthly payments on a revolving debt or note and then stop paying for 6 years before they sue you. A court, in that instance, could rule that limitations has run on all the accrued debt more than four years prior to the filing of the lawsuit) While I am not certain about Pa., Texas has a four year statute on contracts. My guess is that the $5 mil was paid within the last four years.
Finally, in Federal Court, Federal will have to state their defenses in their answer. We will then have more of a clue about limitations, etc.
JMHO
Greg
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