Opinion
125/06.
Decided on February 27, 2008.
Attorneys for plaintiff: Jay A. Press, PC.
Attorney for defendant: Herbert A. Smith, Jr., Esq.
The Plaintiff commenced this action for breach of contract on January 3, 2006. Issue was joined on or about February 6, 2006. On February 21, 2007 the Plaintiff filed an Notice of Trial. On August 15, 2007 the parties, by counsel, appeared for an arbitration pursuant to the Rules of the Chief Judge, 22 N.Y.C.R.R. Part 28.
Following the arbitration hearing, the Arbitrator issued an Arbitration Case Report stating, "After 1 hour trial, I got them to settle for $500 to be paid to Plaintiff on or before 8/29/07." This report was signed and dated by the Arbitration Commissioner and forwarded to the Clerk of the Court on August 17, 2007. The report was filed with the Clerk of the Court on the same date.
The Plaintiff acknowledges that "the parties agreed to settle this matter in the amount of $500.00 to be paid to the plaintiff on or before August 29, 2007." ( Press Affirmation 1/21/08, ¶ 4) The Plaintiff alleges that the Defendant has failed to make payment in accordance with the settlement and that the settlement remains unpaid. The Plaintiff asks the court to either set aside or enforce the settlement agreement. The Defendant has not opposed this motion.
The court is confronted with three (3) questions in determining this motion. The first is whether or not the parties agreement, as memorialized in the Arbitration Case Report, qualifies as a stipulation of settlement; the second question is whether the Plaintiff's motion may be entertained, or must the Plaintiff proceed by plenary action; the third question is whether or not the purported settlement agreement should be set aside. The court shall answer these questions seriatim.
CPLR § 2104 provides:
An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.
The statute clearly provides for two (2) types of stipulations of settlement which will be binding on the parties. The first are settlements either subscribed by the parties or their attorneys, or reduced to the form of an order. The second are agreements between counsel in open court. The purported settlement herein is clearly not the former, and may be the latter.
In Kleinmann v. Bach, 239 AD2d 861, 657 NYS2d 525 (3rd Dept. 1997) the court upheld the validity of a stipulation entered into by the parties at an arbitration hearing, but before the formal commencement of that proceeding, noting "the stipulation was pronounced by the parties' attorneys while the parties were present before the arbitrator and was immediately transcribed by a stenographer. In addition, and most significantly, plaintiff specifically consented on the record to the terms of the stipulation." In the matter before this court, the Arbitration Case Report clearly reflects that the parties and their counsel were present before the Arbitrator. Moreover, while there is no indication that the Plaintiff herein consented on the record, the Plaintiff confirms that the parties consented to the settlement; and, the Defendant has not opposed this representation. The fact that the settlement agreement herein was not transcribed by a stenographer is not an impediment to this court finding that a proper settlement occurred.
In in Neiman v. Springer, 89 AD2d 922, 453 NYS2d 771 (2nd Dept. 1982) the court held that "the determinative factor is not whether the stipulation is stenographically recorded, but, rather, whether the stipulation is entered during formal court proceedings." In affirming the confirmation of the arbitrator's award, based upon the parties' settlement agreement, the court found that "the arbitrators' conclusion that the proceedings before them were the equivalent of proceedings in open court cannot be deemed irrational."
To the same effect is Buckingham Manufacturing Company, Inc. v. Frank J. Koch, Inc., 194 AD2d 886, 599 NYS2d 155 (3rd Dept. 1993) lv. den. 82 NY2d 658, 604 NYS2d 556 (1993), which is most similar to the matter sub judice. Following an arbitration hearing attended by counsel for both parties an Arbitration Case Report was filed containing the terms of a settlement negotiated by counsel and approved by their clients. In affirming the entry of a judgment based upon that stipulation the court held, "[t]he parties' failure to rigidly adhere to the technical requirements of CPLR 2104 for stipulation of settlement, under these circumstances, does not prevent giving binding effect to the stipulation (citation omitted)." See also: Central New York Regional Market Authority v. John B. Pike, Inc., 120 AD2d 958, 503 NYS2d 462 (4th Dept.1986) lv. den. 69 NY2d 602, 512 NYS2d 1025 (1986)
Based upon the foregoing, the court finds that the stipulation entered into by the parties at the arbitration and memorialized in the Arbitration Case Report may be given binding effect.
The second question, regarding the procedural mechanism to be utilized by the Plaintiff, was specifically addressed by the Court of Appeals in Teitelbaum Holdings, Ltd. v. Gold, 48 NY2d 51, 421 NYS2d 556 (1979), wherein the court held:
A settlement agreement entered into by parties to a lawsuit does not terminate the action unless there has been an express stipulation of discontinuance or actual entry of judgment in accordance with the terms of the settlement. Absent such termination, the court retains its supervisory power over the action and may lend aid to a party who had moved for enforcement of the settlement.
See also: Malvin v. Schwartz, 48 NY2d 693, 422 NYS2d 58 (1979); Berrian v. McCombs, 280 AD2d 442, 720 NYS2d 513 (2nd Dept. 2001) There being neither a stipulation of discontinuance nor a judgment filed in the matter before this court, the court finds that the stipulation herein is enforceable by motion or by plenary action.
The final question is whether or not the Plaintiff is entitled to have the stipulation set aside. It is well established that "[s]tipulations of settlement are favored by the courts and not lightly cast aside (citation omitted)." Hallock v. State of New York, 64 NY2d 224, 485 NYS2d (1984); See also: Nigro v. Nigro, 44 AD3d 831, 843 NYS2d 664 (2nd Dept. 2007); Balkin v. Balkin, 43 AD3d 967, 842 NYS2d 523 (2nd Dept. 2007) Like any other contract, a stipulation of settlement can only be invalidated on such grounds as fraud, collusion, mistake, accident or overreaching. See: Sontag v. Sontag, 114 AD2d 892, 495 NYS2d 65 (2nd Dept. 1985); Cunha v. Shapiro, 42 AD3d 95, 837 NYS2d 160 (2nd Dept. 2007); Shuler v. Dupree, 14 AD3d 548, 789 NYS2d 197 (2nd Dept. 2005) The Plaintiff does not allege that any of these conditions exist in this matter.
Based upon the foregoing, that branch of the Plaintiff's motion which seeks an order vacating the parties' stipulation of settlement is denied. That branch of the Plaintiff's motion which seeks an order enforcing the stipulation of settlement is granted; and, the Plaintiff is entitled to the entry of a judgment in the stipulated sum of $500.00 against the Defendant, C.M.C. Collision Inc.
This constitutes the decision and order of this court.