Opinion
106196/08.
February 27, 2009.
DECISION AND ORDER
FACTUAL BACKGROUND
Defendants move for summary judgment pursuaant to CPLR 3212, alleging that the same matter was litigated and settled between the same parties in an earlier litigation. Plaintiff cross-moves to preclude and/or strike defendants' answer because of defendants' failure to appear for depositions.
In 2003, plaintiff instituted an action against the same parties, except that the instant action does not name Chelsea Savoy Restaurant Corp. as a defendant, instead naming Cele Ioannou, the corporate defendant's bookkeeper, as a defendant.
Plaintiff and defendant Constantine Joannou are shareholders in the corporate defendant, which operates a restaurant. The 2003 litigation alleged that plaintiff was excluded from the restaurant, in derogation of his rights as a shareholder. In that litigation, plaintiff sought damages for alleged financial mismanagement of the corporation. On April 25, 2007, the matter was settled on the record, and the court fully allocuted and so-ordered a stipulation between the parties.
Pursuant to the terms of the so-ordered stipulation, plaintiff agreed to accept $130,000.00 as a full global settlement of all claims he had against defendants regarding the management and financial affairs of the restaurant, from the beginning of time and going forward. In addition, it was agreed that plaintiff would receive 25% of the profits going forward, but that he would be deemed a 15% shareholder for the purpose of buying him out of his interest in the corporation.
On July 23, 2008, plaintiff signed a release, indicating that in consideration of receiving the sum of $148,113.48, he discharged the corporate defendant and Constantine Ioannou for all causes of action as set forth in the 2003 litigation, reserving the right to contest the use of corporate distributions to satisfy the judgment in that case.
On May 2, 2008, plaintiff filed the instant action, alleging that defendants have failed to provide plaintiff with a proper accounting for the operation of the corporation since March 15, 2001.
DISCUSSION
"The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case [internal quotation marks and citation omitted]." Santiago v Filstein, 35 AD3d 184, 185-186 (1st Dept 2006). The burden then shifts to the motion's opponent to "present evidentiary facts in admissible form sufficient to raise a genuine, triable issue of fact." Mazurek v Metropolitan Museum of Art, 27 AD3d 227, 228 (1st Dept 2006); see Zuckerman v City of New York, 49 NY2d 557, 562 (1980). If there is any doubt as to the existence of a triable fact, the motion for summary judgment must be denied. See Rotuba Extruders v Ceppos, 46 NY2d 223, 231 (1978).
In the instant matter, both sides have provided the transcript of the allocution of the so-ordered stipulation made in open court, as well as the written reduction of that agreement signed by the allocuting judge. As stated above, the agreement between the parties settled all disputes between them with respect to the management and financial operation of the business in question. When plaintiff received the consideration for that agreement, he released defendants for all purposes alleged in that litigation, except to reserve the right to challenge the use of corporate distributions to satisfy that payment.
"Stipulations of settlement are favored by the courts and not lightly cast aside. This is all the more so in the case of 'open court' stipulations . . . where strict enforcement not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and integrity of the litigation process. Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation [citations omitted]."
William E. McClain Realty, Inc. v Rivers, 144 AD2d 216, 217 (3d Dept 1988); see also 64th Street-3rd Avenue Associates v Wall, 257 AD2d 487 (1st Dept 1999); City of New York v. 130/40 Essex Street Development Corp., 302 AD2d 292 (1st Dept 2003). Stipulations that are not unreasonable, not against good morals or sound policy, have been and will be enforced, particularly those that have been "so-ordered" by the court, thereby indicating the parties' willingness to be bound thereby. See Tepper v Tannenbaum, 83 AD2d 541 (1st Dept 1981).
The general rule is that a party is bound by the terms of a stipulation made in open court. See Hallock v. State of New York, 64 NY2d 224 (1984). Once a release based on that stipulation has been signed, it may only be set aside where there is cause sufficient to invalidate a contract, such as duress, undue influence, or lack of mental capacity. Lee v Boro Realty, LLC, 39 AD3d 715, 716 (2d Dept 2007).
Plaintiff has proffered no grounds to invalidate the stipulation or the release, but merely asserts that the instant cause of action is different from the earlier cause of action. However, both lawsuits concern an accounting for profits and operation of the business, and such matter was specifically included in the so-ordered stipulation.
The transcript of the stipulation's allocution unequivocally establishes that plaintiff knowingly and voluntarily consented to its terms. See Yuzary v Yuzary, 223 AD2d 540, 541 (2d Dept 1996). The stipulation of settlement was complete when entered on the record and assented to by the parties, and therefore must be enforced. See Doolittle v. Quiggle, 238 AD2d 949 (4th Dept 1997). Furthermore, plaintiff's signed release, having the same contractual force as a stipulation, precludes him from re-arguing the issues included therein. See Shklovskiy v Khan, 273 AD2d 371, 372 (2d Dept 2000).
Lastly, the individual defendants are named in their personal capacities, but the complaint fails to allege any claims against them individually, and merely asserts causes of action against them in their roles as employees and officers of the corporate defendant. Therefore, the complaint must be dismissed as against them.
CONCLUSION
Based on the foregoing, it is hereby
ORDERED that defendants' motion for summary judgment is granted and the complaint is dismissed with costs and disbursements to defendants as taxed by the Clerk of the Court upon submission of an appropriate bill of costs; and it is further
ORDERED that plaintiff's cross-motion is hereby rendered moot; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly; it is further
ORDERED that within 30 days of entry of this order, defendants shall serve a copy upon plaintiff with notice of entry.