Opinion
No. 601113/2007.
05-15-2015
LANDAU, P.C., formerly known as MORRIS J. Eisen, P.C., and Morris J. Eisen, individually, as assignee of the assets of Morris J. Eisen, P.C., and as indemnitor of Morris J. Eisen, P.C., Plaintiffs, v. OLIVERI & SCHWARTZ, P.C., Defendant.
Stuart S. Perry Esq., New York, for Plaintiffs. Stephan H. Peskin Esq., Tolmage, Peskin, Harris, & Falick, New York, NY, for Defendant.
Stuart S. Perry Esq., New York, for Plaintiffs.
Stephan H. Peskin Esq., Tolmage, Peskin, Harris, & Falick, New York, NY, for Defendant.
Lucy Billings, J.
This action, seeking attorneys' fees for services to clients referred to defendant law firm, was marked off the status conference calendar June 26, 2013, due to a settlement. Plaintiffs, a law firm and one of its former attorneys, now move to restore the action to the calendar. Defendant cross-moves to enforce a written Post Mediation Agreement executed June 6, 2013, settling this action. C.P.L.R. §§ 2104, 5003–a.
I. THE SETTLEMENT AGREEMENT
Plaintiffs do not dispute that on June 6, 2013, Morton Povman, the attorney for both plaintiffs, signed a Post Mediation Agreement that, after naming the parties to this action,
completely resolved the dispute with prejudice as follows: Defendant shall pay to plaintiff $50,000.00 without any additional interest, inclusive of all costs, disbursements, liens, claims and attorney fees .... All payments shall be made as follows: $25,000 within 21 days of receipt by defendant of all closing papers & $5,000 every sixty days thereafter until fully paid.
That no party to this action shall at anytime hereafter make any claims against the other, institute any lawsuit against the other or make any demands for payment from the other for any alleged reason or causes arising out of the facts and issues of the matter herein. Each party releases the other from any and all claims and/or liability arising from this matter. The settlement shall include a confidentiality agreement.
That this agreement is final and binding upon any and all parties to this matter and is enforceable in any court of law of general jurisdiction.
Aff. of Stuart Perry Ex. E, at 3 (emphasis added). Thus the only contingencies to the complete resolution of this action were defendant's receipt of "closing papers," which were to "include a confidentiality agreement."
Defendant never received, and plaintiffs admit they never forwarded to defendant, any "closing papers." Although the Post Mediation Agreement sets no deadline for defendant's receipt of closing papers, its receipt triggers its obligation to pay the $50,000 over a set timeframe. Thus, if plaintiffs want the payment due under the agreement, they must forward closing papers to defendant.
II. THE AGREEMENT'S ENFORCEABILITY
By making their motion imparting all the terms of the parties' agreement, plaintiffs have shown no interest in keeping the terms confidential. Neither side indicates that the parties failed to agree on confidentiality terms or that any such failure rendered the agreement incomplete, indefinite, ambiguous, or unenforceable. Shah v. Wilco Sys., 81 AD3d 454, 455 (1st Dep't 2011). See Schron v. Troutman Sanders LLP, 20 NY3d 430, 436–37 (2013) ; Cobble Hill Nursing Home v. Henry & Warren Corp., 74 N.Y.2d 475, 483 (1989) ; Long v. O'Neill, 126 AD3d 404, 407–408 (1st Dep't 2015) ; Allen v. Riese Org., Inc., 106 AD3d 514, 516–17 (1st Dep't 2013). Defendant, seeking to enforce the Post Mediation Agreement fully, requests that plaintiffs now tender a confidentiality agreement among the Post Mediation Agreement's contemplated "closing papers," but raises no objection to plaintiffs' disclosure and lays bare the terms and circumstances of the agreement in even greater detail.
Plaintiffs insist that the Post Mediation Agreement is unenforceable because only one and not both of plaintiffs signed the agreement. The signatures by plaintiffs themselves are inconsequential. Their attorney Povman signed on both plaintiffs' behalf. Aff. of Stephan H. Peskin Ex. D ¶ 12. See C.P.L.R. § 2104 ; Toos v. Leggiadro Intl., Inc., 114 AD3d 559, 561 (1st Dep't 2014) ; Blackman v. Hit Factory, 95 AD3d 473, 474 (1st Dep't 2012) ; Shah v. Wilco Sys., 81 AD3d at 455. The agreement does not provide that, to be enforceable, plaintiffs as well as their attorney on their behalf must sign the agreement. Nor does the signed agreement in any way indicate that it was only a "proposed settlement agreement." Katzen v. Twin Pines Fuel Corp., 16 AD3d 133, 134 (1st Dep't 2005).
Plaintiff's current attorney, who did not attend the mediation or witness the execution of the agreement, claims defendant and the mediator knew that the agreement required signature by a person from plaintiff law firm as well as plaintiff Eisen. Yet no one at the mediation or the agreement's execution, not even Povman, let alone the mediator, so attests. Nor does the mediator in any way support plaintiffs' post hoc claim that the action was not settled at the mediation.
The attempt by plaintiffs' attorney now to import another contingency or a precondition into the agreement thus seeks impermissibly to introduce not only extrinsic evidence, but also inadmissible and unreliable evidence, to alter the executed Post Mediation Agreement's unambiguous terms that on their face exhibit the parties' intent and purpose to resolve their dispute completely. Ellington v. EMI Music, Inc., 24 NY3d 239, 244 (2014) ; Schron v. Troutman Sanders LLP, 20 NY3d at 437 ; Long v. O'Neill, 126 AD3d at 407–408 ; PPF Safeguard, LLC v. BCR Safeguard Holding, LLC, 85 AD3d 506, 509 (1st Dep't 2011). Had an experienced attorney such as Povman intended to include a contingency or precondition in the agreement requiring both plaintiffs' signatures or other expressed consent, he was free to do so. Ellington v. EMI Music, Inc., 24 NY3d at 246 ; Schron v. Troutman Sanders LLP, 20 NY3d at 437 ; Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d 269, 275 (2011) ; Long v. O'Neill, 126 AD3d at 408. The court may not interpret the Post Mediation Agreement as implying a contingency, condition, or requirement that a party neglected to include. Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d at 277 ; Slattery Skanska Inc. v. American Home Assur. Co., 67 AD3d 1, 13–14 (1st Dep't 2009).
Perhaps most significantly, Povman never attests that plaintiff law firm did not give him authority to represent the firm at the mediation. He provides no explanation why he signed the Post Mediation Agreement other than as plaintiffs' representative to settle the action on their behalf. If the agreement had required plaintiffs' own signatures, his signature would have been unnecessary.
Only an officer and shareholder of plaintiff law firm affirms, rather than attesting in an affidavit by a party as required, that the firm did not consent to settle this action at or after the mediation. C.P.L.R. § 2106(a) ; Morrison Cohen LLP v. Fink, 81 AD3d 467, 468 (1st Dep't 2011) ; LaRusso v. Katz, 30 AD3d 240, 243 (1st Dep't 2006) ; Yauchler v. Serth, 114 AD3d 1069, 1069 (3d Dep't 2014) ; Law Offs. of Neil D. Frishberg v. Toman, 105 AD3d 712, 713 (2d Dep't 2013). Considering the affirmation by plaintiff law firm's officer and shareholder nonetheless, significantly, she does not deny that Povman was authorized to represent plaintiff firm at the mediation. Since no admissible evidence indicates that she, Povman, or anyone else conveyed to anyone at the mediation that he lacked authority to act on both plaintiffs' behalf, see Katzen v. Twin Pines Fuel Corp., 16 AD3d at 134, his acts at the mediation bind plaintiffs in their dealings with other parties at the mediation. Hallock v. State of New York, 64 N.Y.2d 224, 230 (1984) ; Mehulic v. New York Downtown Hosp., 113 AD3d 567, 568 (1st Dep't 2014) ; Williamson v. Delsener, 59 AD3d 291, 292 (1st Dep't 2009) ; Hawkins v. City of New York, 40 AD3d 327, 327 (1st Dep't 2007). If in fact Povman exceeded his authority on plaintiffs' behalf in agreeing to the $50,000 over 321 days, plaintiff firm's remedy is against Povman, not defendant, to which plaintiffs are bound by their attorney's agreement. Hallock v. State of New York, 64 N.Y.2d at 230 ; Mehulic v. New York Downtown Hosp., 113 AD3d at 568 ; Blackman v. Hit Factory, 95 AD3d at 474 ; Hawkins v. City of New York, 40 AD3d at 327. See Toos v. Leggiadro Intl., Inc., 114 AD3d at 561.
Even Povman's affidavit dated November 5, 2014, offered three months after oral argument and two months after receipt of the transcript and submission of plaintiffs' motion and defendant's cross-motion, does not rescue him or plaintiffs. He now attests:
It was my understanding that all parties were aware that the plaintiff, Landau, P.C., had to approve this purported settlement and sign a Release for the purported settlement to be finalized .... I never stated to anyone at the mediation that I had the consent of Landau, P.C. to settle this action for $50,000 or any other figure because I had the consent to mediate but not to settle.
Aff. of Morton Povman ¶ 5 (Nov. 5, 2014) (emphases added).
Povman's subjective "understanding" of the Post Mediation Agreement's terms and import is irrelevant to its plain terms' unambiguous meaning, particularly when Povman never attests that he or anyone advised anyone else at the mediation "that the plaintiff, Landau, P.C., had to approve" the agreement. Id. See Blackman v. Hit Factory, 95 AD3d at 474 ; PPF Safeguard, LLC v. BCR Safeguard Holding, LLC, 85 AD3d at 508–509 ; Bajraktari Mgt. Corp. v. American Intl. Group, Inc., 81 AD3d 432, 432 (1st Dep't 2011) ; Slattery Skanska Inc. v. American Home Assur. Co., 67 AD3d at 14. The fact that he never advised anyone else at the mediation that he "had the consent of Landau, P.C.," to settle the action also misses the mark. Povman Aff. ¶ 5 (Nov. 5, 2014). The relevant concern again is that he never attests that he or anyone advised anyone else at the mediation that he did not have his client's consent to settle the action. Blackman v. Hit Factory, 95 AD3d at 474 ; Suncoast Capital Corp. v. Global Intellicom, 280 A.D.2d 281, 281 (1st Dep't 2001). See Katzen v. Twin Pines Fuel Corp., 16 AD3d at 134. The absence of his client's consent to settle the action for "any ... figure," as he attests, only raises further questions as to why he was at the mediation as well as why he signed the agreement. In sum, nothing indicates Povman did not present every appearance of authority to settle this action on both plaintiffs' behalf at the mediation.
III. POVMAN'S APPARENT AUTHORITY
If, as plaintiff law firm's officer and shareholder and now Povman attest, he was authorized to represent plaintiff firm at the mediation and mediate, but not settle this action, both plaintiffs' and Povman's acts before and at the mediation still demonstrated to the other participants in the mediation that he was authorized to settle the action and therefore bind both plaintiffs. Hallock v. State of New York, 64 N.Y.2d at 231 ; Mehulic v. New York Downtown Hosp., 113 AD3d at 568 ; Hawkins v. City of New York, 40 AD3d at 327 ; Matter of Silicone Breast Implant Litig., 306 A.D.2d 82, 84 (1st Dep't 2003). See Indosuez Intl. Fin. v. National Reserve Bank, 98 N.Y.2d 238, 245–46 (2002). Both plaintiffs had permitted Povman to represent them, make decisions on their behalf, and consistently act on their behalf throughout this litigation. See Indosuez Intl. Fin. v. National Reserve Bank, 98 N.Y.2d at 246 ; Hallock v. State of New York, 64 N.Y.2d at 228, 231 ; Mehulic v. New York Downtown Hosp., 113 AD3d at 568 ; Matter of Silicone Breast Implant Litig., 306 A.D.2d at 84–85. Neither plaintiff law firm nor Povman did anything before or at the mediation to suggest to defendant that plaintiff firm no longer was entrusting Povman to continue to represent the firm and act on its behalf. Board of Mgrs. of 60 E. 88th St. Condominium Assn. v. Stein, 57 AD3d 381, 381 (1st Dep't 2008) ; Suncoast Capital Corp. v. Global Intellicom, 280 A.D.2d at 281. See Blackman v. Hit Factory, 95 AD3d at 474 ; Williamson v. Delsener, 59 AD3d at 292. Then, at the mediation, Povman signed the Post Mediation Agreement, which plainly set forth that it "completely resolved" this litigation; encompassed all of defendant's remaining obligations; and barred any party's future claim, demand, or litigation against another party for any reason related to this litigation. Perry Aff. Ex. E, at 3. See Indosuez Intl. Fin. v. National Reserve Bank, 98 N.Y.2d at 246 ; Hallock v. State of New York, 64 N.Y.2d at 229 ; Shah v. Wilco Sys., 81 AD3d at 455 ; Matter of Silicone Breast Implant Litig., 306 A.D.2d at 85.
Povman's execution of this final resolution without any reservation was most reasonably understood as demonstrating that he was settling on both plaintiffs' behalf. Board of Mgrs. of 60 E. 88th St. Condominium Assn. v. Stein, 57 AD3d at 381 ; Suncoast Capital Corp. v. Global Intellicom, 280 A.D.2d at 281. Given Eisen's close relationship with his co-plaintiff law firm, his execution of the agreement only reinforced defendant's belief that the firm must have authorized and been agreeable to the same terms as he agreed to. Suncoast Capital Corp. v. Global Intellicom, 280 A.D.2d at 281.
Thus plaintiffs' and their attorney's conduct leading up to and at the mediation all implied to defendant that Povman was authorized by plaintiffs to bind them to the Post Mediation Agreement. Mehulic v. New York Downtown Hosp., 113 AD3d at 568 ; Board of Mgrs. of 60 E. 88th St. Condominium Assn. v. Stein, 57 AD3d at 381 ; Hawkins v. City of New York, 40 AD3d at 327 ; Matter of Silicone Breast Implant Litig., 306 A.D.2d at 85. In these circumstances, it fell to Landau, P.C., or to Povman, or even to Eisen who was present "to reveal any restrictions on the attorney's authority to settle, and absent such disclosure defendant['s] reliance on the appearance of authority was entirely reasonable." Hallock v. State of New York, 64 N.Y.2d at 232. See Board of Mgrs. of 60 E. 88th St. Condominium Assn. v. Stein, 57 AD3d at 381 ; Matter of Silicone Breast Implant Litig., 306 A.D.2d at 85 ; Suncoast Capital Corp. v. Global Intellicom, 280 A.D.2d at 281.
After that reliance, permitting plaintiffs then to vacate the executed settlement only would invite destruction of the mediation and settlement process. Every "settlement would be liable to subsequent rescission by the simple expedient of a litigant's self-serving assertion, joined in by [its] attorney and previously uncommunicated to ... others involved in the settlement that the litigant had limited [its] attorney's authority." Hallock v. State of New York, 64 N.Y.2d at 232.
IV. THE ABSENCE OF ANY BASIS TO VACATE THE AGREEMENT
Moreover, plaintiffs raised no objection to the Post Mediation Agreement until October 24, 2013, over four and a half months after the agreement's execution. See Hallock v. State of New York, 64 N.Y.2d at 229, 232 ; Hawkins v. City of New York, 40 AD3d at 327 ; Matter of Silicone Breast Implant Litig., 306 A.D.2d at 85 ; Suncoast Capital Corp. v. Global Intellicom, 280 A.D.2d at 281. During that period plaintiffs further failed to respond to defendant's written communications offering to make the payments due upon receipt of the requisite documents. Even if this silence does not amount to ratification of an otherwise unenforceable agreement, such inaction does show that the executed and hence enforceable written agreement was not the product of fraud, duress, collusion, or mutual mistake. Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d at 276 ; Hallock v. State of New York, 64 N.Y.2d at 230 ; Allen v. Riese Org., Inc., 106 AD3d at 516 ; Hawkins v. City of New York, 40 AD3d at 327. See Indosuez Intl. Fin. v. National Reserve Bank, 98 N.Y.2d at 246 ; Toos v. Leggiadro Intl., Inc., 114 AD3d at 561.
Although plaintiffs' current attorney attests that one week after the Post Mediation Agreement's execution he advised the mediator that the dispute was not settled, this communication was not to defendant, was by an attorney who was not even present at the mediation or at the execution of the agreement, and is directly contrary to the agreement's plain terms. Plaintiffs' current attorney then provides a multi-layered hearsay account that the mediator also was informed at the end of the mediation that the settlement required the absent plaintiff's consent. No one at the mediation so attests, however, not even Povman, again consistent with the agreement, which plainly does not require additional consent.
Povman simply attests that: "Shortly after said Mediation, Plaintiffs discovered additional information and cases known to defendant relating to this matter that were not considered during the Mediation or in prior case discovery" indicating that defendant owed plaintiffs further referral fees. Perry Aff. Ex. B ¶ 4. This attempt to inject more or different considerations into the previously complete resolution of the parties' dispute not only would alter the Post Mediation Agreement, but also would negate the carefully crafted, all encompassing proscription,
That no party to this action shall at anytime hereafter make any claims against the other, institute any lawsuit against the other or make any demands for payment from the other for any alleged reason or causes arising out of the facts and issues of the matter herein.
Id. Ex. E, at 3. See Schron v. Troutman Sanders LLP, 20 NY3d at 437.
Plaintiffs' current attorney is so bold as to attest further, again without personal knowledge, that defendant lied to plaintiff law firm. Yet plaintiffs do not claim that defendant's lies induced plaintiffs to enter the settlement. Instead plaintiffs admit they were well aware that defendant was misrepresenting or concealing information throughout this action:
Defendants were referred well over 100 cases and denied knowledge of most of them despite that fact that there is clear proof of their acceptance of the referral. Defendants have only made an offer of $50,000 where the value of the stolen fees that plaintiffs are still owed is in excess of $150,000.
Aff. in Opp'n of Stuart Perry ¶ 8.
Thus plaintiffs' former attorney, knowing full well that plaintiffs had referred to defendant, and it had accepted, "well over 100 cases" of which "there is clear proof" and that "the value of the ... fees that plaintiffs are still owed is in excess of $150,000," nevertheless agreed to defendant's offer of $50,000. Id. See Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d at 275–76, 279. If plaintiffs believed they needed truthful or additional information from defendant before agreeing to a settlement, they were free condition it on such information or on defendant's warranty that the information supplied was truthful and complete, but failed to do so. Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d at 275, 279–80 ; DDJ Mgt., LLC v. Rhone Group L.L.C ., 15 NY3d 147, 154 (2010) ; Long v. O'Neill, 126 AD3d at 408 ; Global Mins. & Metals Corp. v. Holme, 35 AD3d 93, 100 (1st Dep't 2006). Even if defendant did misrepresent or conceal information, it almost defies belief that plaintiffs themselves were incapable of determining how many clients plaintiffs referred to defendant, what services they rendered for those clients, and the value of those services and therefore that any reliance plaintiffs placed on their adversary's representations was justified. Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d at 278–79 ; DDJ Mgt., LLC v. Rhone Group L.L.C., 15 NY3d at 154. See Coby Group, Inc. v. Kriss, 63 AD3d 569, 570 (1st Dep't 2009).
The terms that immediately follow the proscription against later claims and demands, "Each party releases the other from any and all claims and/or liability arising from this matter," also bar plaintiffs' current claims. See Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d at 276–77, 280 ; Long v. O'Neill, 126 AD3d at 407–408 ; Allen v. Riese Org., Inc., 106 AD3d at 516–17 ; Coby Group, Inc. v. Kriss, 63 AD3d at 570. Once Povman executed this release on plaintiffs' behalf, plaintiffs may not claim that defendant's misrepresentations or concealment of information misled them regarding the value of the attorneys' fees defendant owed them. Centro Empressarial Cempressa S.A. v. America Movil, S.A.B. de C.V., 17 NY3d at 277–78 ; Long v. O'Neill, 126 AD3d at 408 ; Allen v. Riese Org., Inc., 106 AD3d at 516 ; Edelman v. Emigrant Bank Fine Art Fin., LLC, 89 AD3d 632, 632 (1st Dep't 2011). While plaintiffs' protestations belie any claim of fraudulent inducement into the settlement, using such a claim as a basis to vacate the agreement also contradicts their insistence that the parties did not reach any agreement.
IV. RELIEF
For all the reasons explained above, the Post Mediation Agreement "is a valid settlement agreement, with no basis to invalidate it" demonstrated by plaintiffs. Shah v. Wilco Sys., 81 AD3d at 455. See Long v. O'Neill, 126 AD3d at 407–408 ; Mehulic v. New York Downtown Hosp., 113 AD3d at 568 ; Blackman v. Hit Factory, 95 AD3d at 474 ; Hawkins v. City of New York, 40 AD3d at 327. Therefore the court grants defendant's cross-motion to enforce the Post Mediation Agreement executed June 6, 2013. C.P.L.R. §§ 2104, 5003–a.
As set forth above, the agreement's terms are definite and complete so as to require its specific performance. Cobble Hill Nursing Home v. Henry & Warren Corp., 74 N.Y.2d at 478 ; Marlio v. McLaughlin, 288 A.D.2d 97, 99 (1st Dep't 2001). Therefore, if plaintiffs want the payment due under the agreement, they shall forward a release executed by plaintiffs and a confidentiality agreement and stipulation discontinuing this action executed on plaintiffs' behalf to defendant or its attorney within 30 days after service of this order with notice of entry. C.P.L.R. § 5003–a(a). The executed release shall release defendant from any and all claims and liability arising from the referral of business between the parties. Since plaintiffs expressly agreed with the confidentiality agreement defendant proposed, Peskin Aff. Ex. G, at 2, plaintiffs or their attorney shall execute that agreement unless the parties agree otherwise. Upon receipt of those documents, defendant shall comply with the timeframes for payment prescribed in the agreement.