Opinion
DOCKET NO. A-6098-12T1
01-29-2015
CRISTOBAL J. POLANCO, Plaintiff-Appellant, v. OFFICER DARRYL DABNEY, OFFICER GEORGE ADAMS, OFFICER JEFFREY BRAASCH, OFFICER WILLIAM LOGAN (incorrectly impleaded as Officer Logan Williams), OFFICER FRANK INGARGIOLA, "DEUCE" K-9 OFFICER, CITY OF ATLANTIC CITY and its agents, jointly, severally, and in the alternative, and 40/40 CLUB, Defendants-Respondents. JACQUES POLANCO, Plaintiff-Appellant, v. OFFICER DARRYL DABNEY, OFFICER GEORGE ADAMS, OFFICER ALEXUS SMITH, OFFICER TRACEY, and CITY OF ATLANTIC CITY, Defendants-Respondents.
Cristobal J. Polanco and Jacques Polanco, appellants, pro se. Riley and Riley, attorneys for respondents (Michael E. Riley, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Waugh, Maven, and Carroll. On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-1986-09. Cristobal J. Polanco and Jacques Polanco, appellants, pro se. Riley and Riley, attorneys for respondents (Michael E. Riley, on the brief). PER CURIAM
Plaintiffs Cristobal J. Polanco and Jacques Polanco appeal from a May 31, 2013 Law Division order that granted their motion for reconsideration, but left undisturbed a March 27, 2013 order enforcing a settlement of the litigation. Plaintiffs contend that they did not authorize their attorneys to accept $25,000 each to settle their claims for injuries resulting from an altercation with defendant Atlantic City police officers. We reverse both orders and remand for a hearing as to whether an enforceable agreement was entered into.
Because plaintiffs share a common surname, at times during this opinion we refer to them by their first names for purposes of clarity and ease of reference. In doing so we intend no disrespect.
I.
The underlying dispute involves a 2007 altercation outside an Atlantic City nightclub during which plaintiffs contend they were assaulted by several members of the Atlantic City Police Department, who were also named as defendants. Plaintiffs filed separate actions seeking damages for their personal injuries, which were thereafter consolidated for trial.
Trial commenced with jury selection on December 4, 2012. Plaintiffs testified on December 5, 2012. Before court concluded for the day, settlement negotiations ensued between counsel for the respective parties. At some point, Jacques's attorney, James Wolfe, Esquire, approached the bench and advised the trial judge that $25,000 would resolve the matter. All counsel then entered chambers, where the settlement discussions continued. Agreement was then reached that defendants' counsel, Michael E. Riley, Esquire, would seek authorization from Atlantic City to resolve both matters for $50,000, in which event they would be deemed settled. Riley obtained authority for the settlement early the following morning, and notified the court and plaintiffs' counsel that the matter, which had been adjourned until December 10, was resolved. Consequently, on December 6, 2012, the court entered an order dismissing the case as settled, and discharged the jury.
Plaintiffs promptly objected to the settlement on the basis that they had not authorized it. On December 6, after the jury had already been discharged and the case dismissed, Cristobal's attorney, Dan Smith, Esquire, advised court staff that there was a problem with the reported settlement. Additionally, by fax correspondence the same day, Wolfe informed the court that "both plaintiffs assert that they never agreed to the settlement of $25,000 each," and sought advice from the court on how to proceed. The trial judge responded to all counsel on December 7, that "the [c]omplaints have been dismissed and the case marked 'settled.' I assume that if any action is to be taken, an appropriate [m]otion will be filed with supporting Certifications."
On December 28, 2012, Cristobal sent a letter to Smith, on which Wolfe was copied. In his letter, Cristobal stated:
Pursuant to our conversation last week and the communication between my brother, Jacques Polanco, and James Wolfe, it is our understanding that you and Mr. Wolfe will file a timely motion to rescind the settlement on our behalf. Please contact us as soon as possible so we can sign the certification which is required with the motion. If there are any problems in getting this done please do not hesitate to contact us as soon as possible to avoid any further delay.
No motion to vacate the dismissal was filed, and when plaintiffs refused to sign the settlement documents, defendants filed a motion to enforce the settlement, returnable on March 22, 2013. In support of the motion, Riley certified to his discussion with Smith that Cristobal would settle his case for $25,000, and Wolfe's representation to the court that Jacques would also settle for $25,000. Further, Riley averred that during the subsequent conference in chambers, "[i]t was clear . . . that a total settlement of $50,000.00 ($25,000.00 for each plaintiff) would completely resolve this matter."
Defendants' motion went unopposed and on March 27, 2013, the court entered an order enforcing the settlement. In an accompanying written statement of reasons the judge concluded:
In the absence of any suggestion to the contrary, this [c]ourt assumes for purposes of this opinion that plaintiffs' counsel had their clients' authority to settle the litigation in exchange for the payment of money agreed to by both attorneys. The agreement is a contract, and will be honored "absent a determination of fraud or other compelling circumstances." Plaintiffs' counsel [have] not provided this [c]ourt with any evidence of . . . fraud, mutual mistake or other compelling circumstances in which to deny enforcement of the settlement agreement. Further, this [c]ourt will not inquire into the adequacy of the consideration underlying a compromise settlement fairly and deliberately made. Lastly, the fact that a settlement agreement has not been memorialized in writing makes it no less a contract where the parties concluded agreement by which they intend to be bound [sic].
Plaintiffs filed a pro se motion for reconsideration, returnable on May 3, 2013, asserting that they never authorized their respective attorneys to settle for $25,000, and faulting counsel for failing to oppose the motion to enforce the settlement and not moving to vacate it. In a supporting certification, Cristobal, himself a licensed attorney, stated:
10. We all broke for lunch [on December 5] and again Mr. Smith and Mr. Wolfe decided to go get lunch on their own. It appeared that Mr. Wolfe had convinced Mr. Smith to settle as he then approached me with the explanation that there was an offer of $25,000.00 and we should take it. . . . He again stressed the fact that there was an offer of $25,000.00 and I told him that I am not accepting it.
11. We then went in the [courtroom] to finish my testimony which consisted of showing videos of that night. However, before I started Mr. Wolfe approached the bench ex-parte and whispered something to the judge. It appears that what he said echoed in the [courtroom] as the microphone was on. Immediately after his statement the judge called a conference in chamber[s] with all attorneys. Mr. Smith and Mr. Wolfe then brought my brother and I into the hall and told us that [d]efendant offered $25,000.00 [each] and will try to get it. I was confused as to why we were having this conversation as I had just told Mr. Smith that $25,000.00 would not settle it. It was never communicated to us that our attorneys made the demand for $25,000.00 or that if [d]efendant was able to get it the case was settled. Also at no point did we say that we agreed to the amount as it was expressed to them on several occasions that similar cases would settle for $100,000.00 and more.
12. The trial was adjourned and we were told to return on Monday as Mr. Smith had to schedule an expert deposition the next day.
. . . .
14. On Thursday, December 6, 2012, my brother called me and told me that he got a message from Mr. Wolfe that the case settled for $25,000.00 each. I truly did not understand what he was saying as I knew he
would not have accepted only $25,000.00 and I never agreed to it. So, I immediately texted my attorney inquiring what was going on as we are not accepting $25,000.00 as settlement.
Jacques also submitted a supporting Certification essentially echoing Cristobal's representations. Notably, Jacques stated:
9. As we entered the courtroom after lunch [Wolfe] walked up to the bench and whispered to the [j]udge that we agreed to settle. The attorneys were called into chambers to conference the case after the comment made by Mr. Wolfe. After the conference Mr. Wolfe and Mr. Smith took my brother and I outside the courtroom and told us that defense counsel has offered $25,000.00 and will try to get it. This was the first time hearing of the $25,000.00. I advised Mr. Wolfe that I never agreed to a settlement and he apologized for not speaking to me about his course to settle the case. I also questioned what was whispered to the judge and Mr. Wolfe advised me that because the jury was not present when he made the statement to the judge that the information was off-record. At no time did I give my attorney authorization to settle the case. I clearly stated to [Wolfe] that the only way I would consider entertaining a settlement was if we were offered six figures. Based on that conversation it was my understanding that the case will proceed and the case was not settled.
Defendants opposed plaintiffs' motion for reconsideration. Also, Wolfe and Smith submitted Certifications detailing their recollection of the settlement discussions. Wolfe certified:
4. The testimony of Cristobal Polanco was taken on the morning [of] December 6, 201[2]. After [that] testimony [], there was discussion regarding the effectiveness of his testimony. Nevertheless, that afternoon, the judge called counsel into his chambers and recommended that the case be resolved for $25,000.00 for each plaintiff. Defense counsel stated that he did not know whether he could get that amount of money but before he would try . . . he wanted to be sure that it would be accepted by plaintiffs. Discussions [were] had with the plaintiffs and specifically with my client, Jacques Polanco. After explaining the pros and cons of the settlement and the risks of trial, Mr. Polanco agreed to that amount. It was also my understanding that his brother also agreed to that amount. The settlement was communicated to the [c]ourt with the clear understanding that defense counsel would advise by the next morning if he could resolve the cases for that amount.
5. The [c]ourt explained to the jury that the trial would commence on that Monday due to a medical deposition scheduled for that afternoon. However, it was explained to all counsel that if the case settled the next morning, the jury would be discharged.
6. Further discussions [were] held with my client and his brothers as we left the [courthouse]. The above settlement discussions were repeated to my client and his brother. There is no question in my mind that when we left the court, the plaintiffs were aware that if defense counsel got the above authority, the case was settled.
7. The very next morning when defense counsel communicated that he had the authority for the settlement, I did text Jacques Polanco and advised him that the case was settled in accordance with our
discussions. Mr. Polanco called me and advised me for the first time that he did not accept the settlement. I then immediately communicated his position by letter to the court.In his certification, Smith added:
5. The terms of settlement [were heard] in open [c]ourt by all including Mr. Cristobal J. Polanco who commented that the police officers heard it.
6. On December 5, 2012, after [c]ourt, Mr. Wolfe spoke with all the Polancos regarding settlement. . . . [A]t no time did Cristobal J. Polanco instruct me to not accept or approve the settlement.
7. In fact, Mr. Polanco said "that's okay, Dan. "
On May 31, 2013, the court granted reconsideration but, upon reviewing the merits, left the March 27, 2013 order undisturbed. In his written decision, the judge reasoned:
There is no doubt but that Messrs. Smith and Wolfe had the apparent authority as attorneys to bind their clients to the proposed settlement agreement. Furthermore, the parties were present in the courtroom when Mr. Wolfe approached the bench after lunch on December 5, 2012[,] and indicated on the record that the matter could be resolved in exchange for the payment of $50,000.00. From the perspective of counsel for the City, even if the court were to accept the position articulated by the Polancos, that is that they did not authorize their lawyers to convey a demand to settle for $50,000.00 to the defendant, Mr. Riley reasonabl[y] believed that they had the authority of the plaintiffs to
settle in exchange for the $50,000.00 payment.This appeal ensued, in which plaintiffs continue to maintain that they never authorized their attorneys to settle their respective cases for $25,000.
II.
"'Settlement of litigation ranks high in our public policy.'" Nolan v. Lee Ho, 120 N.J. 465, 472 (1990) (quoting Jannarone v. W.T. Co., 65 N.J. Super. 472, 476 (App. Div.), certif. denied, 35 N.J. 61 (1961)). Settlement agreements should be honored in the absence of evidence of fraud or some other compelling circumstances. Ibid. (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983 )).
A disputed motion to enforce a settlement agreement is governed by the same standard as a motion for summary judgment. Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 474-75 (App. Div. 1997) (requiring that a hearing be held "unless the available competent evidence, considered in a light most favorable to the non-moving party, is insufficient to permit the judge, as a rational factfinder, to resolve the disputed factual issues in favor of the non-moving party" (citing Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995))). In reviewing such a decision, we apply the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.) (citing Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402, (App. Div. 1988), certif. denied, 115 N.J. 59 (1989)), certif. denied, 154 N.J. 608 (1989). A party moving to enforce a settlement bears the burden of demonstrating that one exists in the first place. Amatuzzo, supra, 305 N.J. Super. at 475.
In resolving the issue whether parties to a dispute reached a settlement of the claim when they are represented by counsel, we are informed by the principles enunciated in Amatuzzo:
The general rule is that unless an attorney is specifically authorized by the client to settle a case, the consent of the client is necessary. Negotiations of an attorney are not binding on the client unless the client has expressly authorized the settlement or the client's voluntary act has placed the attorney in a situation wherein a person of ordinary prudence would be justified in presuming that the attorney had authority to enter into a settlement, not just negotiations, on behalf of the client.
Thus, in private litigation, where the client by words or conduct communicated to the adverse attorney, engenders a reasonable belief that the attorney possesses authority to conclude a settlement, the settlement may be enforced. However, the attorney's words or acts alone are insufficient to cloak the attorney with apparent authority.
[Id. at 475-76 (citations omitted).]
Based on our review of the record, we are satisfied that plaintiffs' certifications are sufficient to raise a material and substantial issue as to whether they granted their attorneys actual authority to settle their respective cases for $25,000. See id. at 476. Plenary hearings are required when there are "contested issues of material fact on the basis of conflicting affidavits." Conforti v. Guliadis, 128 N.J. 318, 322-23 (1992). We conclude that there are sufficiently competing certifications, which require the judge to conduct a plenary hearing and make the requisite findings of fact and conclusions of law. See R. 1:7-4; Conforti, supra, 128 N.J. at 322.
Reversed and remanded. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION