Opinion
M-79747
08-26-2011
MENDEL EPSTEIN and RACHEL EPSTEIN v. THE STATE OF NEW YORK # 2011-015-250 Claim No. 114704 Motion No. M-79747
Synopsis
Motion to vacate post-trial judgment dismissing claim as untimely was granted as defendant waived its defense that the claim was untimely through its conduct in agreeing to settle the case, although it failed to notify the court of the settlement prior to issuing the trial decision. Case information
UID: 2011-015-250 Claimant(s): MENDEL EPSTEIN and RACHEL EPSTEIN Claimant short name: EPSTEIN Footnote (claimant name) : Defendant(s): THE STATE OF NEW YORK Footnote (defendant name) : Third-party claimant(s): Third-party defendant(s): Claim number(s): 114704 Motion number(s): M-79747 Cross-motion number(s): Judge: FRANCIS T. COLLINS Schwartz Goldstone & Campisi, LLP Claimant's attorney: By: Annette G. Hasapidis, Esquire, Of Counsel Honorable Eric T. Schneiderman, Attorney General Defendant's attorney: By: Jyotsna Gorti, Esquire Assistant Attorney General Third-party defendant's attorney: Signature date: August 26, 2011 City: Saratoga Springs Comments: Official citation: Appellate results: See also (multicaptioned case) Decision
Claimants move for an Order vacating the Judgment dismissing the claim and enforcing the parties' settlement agreement.
During the trial conducted on September 16, 2010, defendant moved to dismiss the claim as untimely served. The Court reserved decision on the motion and the parties were directed to submit post-trial briefs, to include argument on the motion, by October 31, 2010. It is undisputed that the parties agreed to forego submission of post-trial briefs in the belief that the case would be settled. Neither counsel for the claimants nor the defendant notified the Court of this fact, however, and, by Decision dated December 9, 2010, the claim was dismissed as untimely served. A Judgment was thereafter entered on January 20, 2011 dismissing the claim.
Dismissal was effective on January 20, 2011 as an order or judgment is effective on the date of entry, not the date it was signed (Foley v Fitzpatrick Container Co., 267 AD2d 637 [1999]).
Defense counsel does not dispute claimants' assertion of an agreement to forego submission of post-trial briefs. Nor does defense counsel dispute that claimants' counsel initiated settlement discussions on September 20, 2010, that after several subsequent telephone contacts and the provision of medical records, defense counsel extended a $25,000.00 settlement offer on January 13, 2011, which claimants' counsel accepted on January 20, 2011, the same date the Judgment dismissing the claim was entered. Nor does defense counsel dispute that upon receipt of the Decision and Judgment, she refused to consummate the settlement and, as a result, the settlement agreement was never reduced to writing.
To be enforceable, a stipulation of settlement must generally conform to the requirements of CPLR 2104 (see Bonnette v Long Is. Coll. Hosp., 3 NY3d 281 [2004]) and Court of Claims Act § 20-a. CPLR 2104 provides that a stipulation of settlement "other than one made between counsel in open court, is not binding upon a party unless it is in writing subscribed by him or his attorney or reduced to the form of an order and entered". Court of Claims Act § 20-a additionally requires approval by the Court and certification for payment by the Comptroller.The oral agreement of the parties to settle the instant matter complied with neither statute. Nevertheless, claimants' counsel contends the defendant should be estopped from asserting noncompliance with CPLR 2104 (and, presumably, Court of Claims Act § 20-a) as a ground to preclude enforcement of the settlement because, in reliance on the parties' agreement, he did not submit a post-trial brief in which timely service of a notice of intention to file a claim would have been established. Citing Harvey Chalmers & Son, Inc. v State of New York (271 App Div 699 [1947], affd 297 NY 690 [1947]) and its progeny, claimants argue that the timely served notice of intention could have been converted to a claim, nunc pro tunc, because it satisfied the pleading requirements for a claim set forth in Court of Claims Act § 11 (b).
Court of Claims Act § 20-a also provides that "[n]o such stipulation shall be executed on behalf of the state without, after consultation with the director of the budget, the approval of the head of the department or agency having supervision of the officer or employee alleged to have caused the injuries and of the attorney general."
Defendant opposes the instant motion on the ground that "case law does not strongly support the enforcement of the settlement by this Court, as the detrimental reliance and prejudice is centered upon the jurisdictional issue" (affirmation of Jyotsna Gorti dated May 10, 2011, ¶ 6).Defense counsel admits, however, that the parties agreed to settle the matter for $25,000 and that "[t]he facts as recited may support detrimental reliance to the extent that claimants would have submitted arguments addressing the jurisdictional issue to the Court."
Defense counsel also inconsistently states that "[a]s detrimental reliance is an equitable remedy it is solely within this court's purview to apply and fashion whatever remedy it deems appropriate . . ." (affirmation of Jyotsna Gorti dated May 10, 2011, par. 6).
The doctrine of equitable estoppel may be invoked to effectuate settlement agreements absent full technical compliance with CPLR 2104 where there is no dispute between the parties as to the terms of the settlement agreement, and a party has been misled or deceived by the agreement to his detriment (see Palmo v Straub, 45 AD3d 1090 [2007]; Lowe v Steinman, 284 AD2d 506 [2001]; Conlon v Concord Pools, 170 AD2d 754 [1991]; Smith v Lefrak Org., 142 AD2d 725 [1988]; Rhulen Agency v Gramercy Brokerage, 106 AD2d 725 [1984]). Invocation of the doctrine against the State or a governmental subdivision, however, is limited to situations where the governmental entity "comports itself wrongfully or negligently, inducing reliance by a party who is entitled to rely and who changes his position to his detriment or prejudice" (Bender v New York City Health & Hosps. Corp., 38 NY2d 662 [1976]; Rivera v State of New York, 5 AD3d 881 [2004]; Fatone v City of Troy, 236 AD2d 676 [1997]). In other words, some "manifest injustice" is necessary to invoke the doctrine against the State or a political subdivision thereof (Allen v Board of Educ. of Union Free School Dist. No. 20, 168 AD2d 403, 404 [1990]). No such circumstances are present here.
Although the oral agreement to forego submission of post-trial briefs in favor of settlement may have been ill conceived, it was not wrongful and does not give rise to the type of exceptional circumstances warranting application of the doctrine against the State. Claimants' counsel knew or should have known by virtue of the defendant's affirmative defense of untimely service of the claim, and its trial motion for dismissal on this basis, that dismissal was likely unless treatment of the notice of intention as a claim was sought, in a post-trial brief, within the 45-day period provided by the Court. Yet, claimants' counsel inexplicably failed to submit a post-trial brief, consummate the settlement expeditiously or, at a minimum, notify the Court of the pending settlement prior to the entry and issuance of the Decision and Judgment dismissing the claim. This is simply not the type of rare circumstance in which invocation of the doctrine is necessary to correct a manifest injustice. Moreover, claimants cite no case in which the requirements for settlement set forth in Court of Claims Act § 20-a, including approval by the Court and certification by the Comptroller, were waived. Under these circumstances, invocation of the estoppel doctrine would be inappropriate (compare Fatone v City of Troy, supra).
In addition, claimants failed to establish detrimental reliance. Claimants' contention that the common law remedy embraced by Chalmers and its progeny permits the conversion of a timely served notice of intention notwithstanding the expiration of the statute of limitations applicable to a like claim by a citizen of the state is simply incorrect. While this was the law at one time (see e.g. Liberty Mut. Ins. Co. v State of New York, 121 AD2d 694 [1986]), in 1993 the Chalmers remedy was codified and, at the same time, restricted to applications "made upon motion before an action asserting a like claim against a citizen of the state would be barred under the provisions of article two of the civil practice law and rules . . ." (Court of Claims Act § 10 [8]). Here, even assuming a post-trial brief could be considered a motion (but see CPLR 2211), the application would have been untimely. The motor vehicle accident that is the subject of this claim occurred on January 19, 2006 and the statute of limitations therefore expired on January 19, 2009 (see CPLR 214 [5]). Any post-trial request for conversion of the notice of intention would therefore have been denied as untimely, the trial having occurred on September 16, 2010, more than one year after the statute of limitations had expired. Thus, while claimants may have relied on the agreement not to submit a post-trial brief, their failure to do so did not detrimentally affect the claimants in the outcome of the case (see Starr v Rogers, 44 AD3d 646 [2007]). Absent detrimental reliance, claimants' invocation of the equitable estoppel doctrine must fail.
A different conclusion is reached with respect to claimants' argument that defendant waived its defense of untimely service of the claim. "Waiver is an intentional relinquishment of a known right and should not be lightly presumed" (Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d 966, 968 [1988]). "Such a waiver must be clear, unmistakable and without ambiguity" (Matter of Civil Serv. Empls. Assn. v Newman, 88 AD2d 685, 686 [1982], affd 61 NY2d 1001 [1984]; see also Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., 7 NY3d 96 [2006]). While the existence of a waiver is generally a question of fact, it may be determined as a matter of law under the proper circumstances (Natale v Ernst, 63 AD3d 1406, 1408 [2010], lv denied 13 NY3d 716 [2010]; Welch v Hauck, 18 AD3d 1096 [2005]). For example, evidence of settlement negotiations, standing alone, is insufficient to constitute waiver of a contractual defense to an action as a matter of law (Gilbert Frank Corp. v Federal Ins. Co., supra; Kaufman v Republic Ins. Co., 35 NY2d 867 [1974]; McGivney v Liberty Mut. Fire Ins. Co., 305 AD2d 559 [2003]). In the case at bar, however, there is no dispute that the settlement discussions had transcended from negotiation to settlement. Thus, unlike the facts in Kaufman v Republic Ins. Co. (35 NY2d at 868), where the Court of Appeals found that the correspondence relied upon was "not the stuff of waiver or estoppel which could lull anyone into a belief that the 'negotiations' had passed from contention into settlement", here there is no disagreement that the parties, in fact, agreed to settle the matter for $25,000, the amount offered by the defendant on January 13, 2011 and accepted by the claimants on January 20, 2011. The defense of untimely service of the claim was raised as an affirmative defense in the defendant's answer and defense counsel moved for dismissal on this basis at trial. The only conclusion which may reasonably be drawn from defendant's subsequent oral agreement to settle the matter is that its defense of untimely service was waived(cf. Fireman's Fund Ins. Co. v Farrell, 57 AD3d 721 [2008] [insurance carrier's participation in a settlement raised a question of fact as to whether it waived its policy defenses]). Under these circumstances, an intentional relinquishment of a known right was established as a matter of law. That being said, the claimants' motion is granted and the Decision and Judgment entered January 20, 2011 are vacated. The Court will issue a trial Decision unless the parties settle the matter in compliance with Court of Claims Act 20-a and notify the Court of same no later than 30 days after the date of entry of this Decision and Order.
Prior to the 1990 amendment adding § 11 (c) to the Court of Claims Act, the failure to comply with either the time limitations found in section 10 or the manner of service requirements found in section 11 was a nonwaivable jurisdictional defect (see e.g. Lurie v State of New York,73 AD2d 1006 [1980]). That is no longer the case. Citing the Governor's Bill Jacket, the Hon. Judith A. Hard noted in Price v State of New York, (2003 WL 21669922, *4 [2003]; 2003 NY Slip Op 51086[U] [Ct Cl 2003]) that the amendment was designed to " 'enhance the fairness of Court of Claims practice' and to make operation of the Court of Claims' time and manner of service requirements the same as that of the 'similar and more commonly encountered' statute of limitations and service requirements in the CPLR" (quoting Governor's Bill Jacket, letter of [then-presiding ] Judge Donald J. Corbett, Jr.). Thus, Court of Claims Act § 11 (c) now provides that "[a]ny objection or defense based upon failure to comply with (i) the time limitations contained in section ten of this act . . . is waived unless raised, with particularity, either by a motion to dismiss made before service of the responsive pleading is required or in the responsive pleading, and if so waived the court shall not dismiss the claim for such failure." Nothing in § 11 (c) precludes application of the common law doctrine of waiver. In the circumstances presented here, the Court finds application of the common law waiver doctrine not only appropriate, but consistent with the underlying purpose of the 1990 amendment to conform Court of Claims practice to that of the CPLR.
August 26, 2011
Saratoga Springs, New York
FRANCIS T. COLLINS
Judge of the Court of Claims
The Court considered the following papers:
1. Notice of motion dated April 7, 2011;
2. Affirmation of Annette G. Hasapidis dated April 7, 2011 with exhibits;
3. Affirmation of Joseph Campisi dated March 31, 2011;
4. Affirmation of Herbert Rodriguez, Jr., dated March 31, 2011;
5. Memorandum of Law of Annette G. Hasapidis dated April 7, 2011;
6. Affirmation of Jyotsna Gorti dated May 10, 2011;
7. Reply affirmation of Annette G. Hasapidis dated May 13, 2011;
8. Memorandum of Law of Annette G. Hasapidis dated May 13, 2011.