Opinion
21077/03.
Decided May 22, 2006.
Upon the foregoing papers cited above, Marina Rodriquez (plaintiff), moves for an order, pursuant to CPLR 5003 (a), allowing her to enter judgment against co-defendant New York Paving, Inc. (New York Paving), together with interest, costs and disbursements. Co-defendant New York Paving, cross-moves for summary judgment (1) vacating the stipulation of settlement pursuant to CPLR 2104, (2) directing plaintiff to return any monies received to the respective parties and (3) restoring the action to the trial calendar.
Factual Background
The facts as stated by the parties are as follows: On December 15, 2002, plaintiff was allegedly injured in a trip and fall accident in Brooklyn, New York. Plaintiff alleges that she was making her way across Havemeyer Street nearest the premises of 321 Roebling Street, in Brooklyn, when her foot came into contact with the protruding edge of a rectangular metal grating embedded in the pavement near the curb, causing her to trip and fall. She alleged to have sustained personal injuries as a result of the fall. Thereafter, on June 9, 2003, plaintiff commenced this negligence action against the defendants', the City of New York and Consolidated Edison Company of New York (Consolidated Edison). On or about April 2004, Consolidated Edison instituted a third-party action against New York Paving, the sub-contractor who allegedly performed work in the area two years prior to plaintiff's fall. After New York Paving interposed an answer, plaintiff amended its summons and complaint to include New York Paving as a direct defendant.
On or about December, 2004, after discovery was completed, attorney for plaintiff, Michael Zuller, initiated settlement discussions with adjuster Joseph Hutchinson of Crawford Technical Services, the third-party administrator for New York Paving who was managing the claim for New York Paving. Mr. Zuller also had settlement discussions with John Ferretti, attorney for New York Paving. In July, 2005, Mr. Ferretti, extended an offer of $15,000.00 in order to settle the claim against New York Paving. Thereafter, Mr. Zuller secured a settlement offer of $2,500.00 from co-defendant Consolidated Edison, advised Mr. Ferretti of that information and, thereafter, accepted the $15,000.00 offer made on behalf of New York Paving. On August 29, 2005, Mr. Zuller executed and mailed general releases and stipulations of discontinuance to Mr. Ferretti. After New York Paving failed to honor the settlement agreement, plaintiff moved by way of motion on or about October 27, 2005 to enforce the judgment.
In support of its motion to enter judgment against New York Paving, plaintiff cites to CPLR 5003 (a) which allows a plaintiff to enter judgment against a settling co-defendant after the passage of twenty-one days from submission of closing papers [judgment to include interest, costs and disbursements]. Plaintiff asserts that twenty-one days have elapsed from the time counsel for New York Paving received her closing documents in connection with the settlement, and payment of the offer has not been made. Consequently, plaintiff argues that she should be allowed to enter judgment accordingly. Plaintiff also asserts that having received and deposited co-defendant Consolidated Edison's settlement check, she would be grossly prejudiced if New York Paving is allowed to renege on the settlement agreement. Further, plaintiff argues that New York Paving has failed to allege any grounds for vacating the settlement such as fraud or collusion.
In opposition to plaintiff's motion, and in support of its cross-motion to vacate the settlement, and to restore the action to the trial calendar, New York Paving argues that plaintiff's motion should be denied on the grounds that New York Paving did not consent to the settlement. In addition, New York Paving argues that the settlement is unenforceable because the terms of the CPLR 2104 were not satisfied, in that, the settlement was never reduced to a written agreement, and the terms were never expressed verbally in open court.
In his affirmation in opposition to plaintiff's motion, attorney for New York Paving, John Ferretti, stated that Joseph Hutchinson of Crawford Technical Services authorized him to offer $15,000.00 to settle the claim on behalf of New York Paving. He stated that he communicated the offer to plaintiff's attorney over the telephone, and advised him that there will be no further authority extended. He further stated that he advised him that if the offer of $15,000.00 was not accepted, the case would be tried.
Mr. Ferretti admitted that Mr. Zuller agreed to and accepted the settlement offer. He further admitted that on September 1, 2005, he received general release and stipulation of discontinuance with regards to the $15,000.00 settlement from Mr. Zuller. Mr. Ferretti averred that said documents were forwarded to Crawford Technical Services, who, in turn, forwarded them to New York Paving. According to Mr. Ferretti, he was later advised by Robert Coletti, general counsel for New York Paving, that Crawford Technical Services was to obtain the authority of New York Paving, through him, before any settlement offer is made. As a result, Mr. Ferretti contends that the settlement agreement should be vacated because New York Paving never consented to the settlement.
In support of his contention, New York Paving proffers an affirmation executed by Robert Coletti, general counsel for New York Paving, in which he averred that prior to the date of plaintiff's accident, New York Paving entered into a contract with Crawford Technical Services to adjust its claims. Mr. Coletti averred that based on their agreement, Crawford Technical Services is to obtain the consent of New York Paving with respect to any settlement entered into between New York Paving and any third parties. He noted that Mr. Hutchinson of Crawford Technical Services did not obtain the authority of New York Paving before authorizing the $15,000.00 offer to settle the claim. He further noted that any attempt to do so would have been rejected since their "records indicate that New York Paving did not perform any work at the location that is the subject of this lawsuit, prior to the date of loss."
Analysis
Stipulations of settlements are favored by the courts and are not lightly cast aside ( Hallock v. State of New York, 64 NY2d 224, 230 citing Matter of Galasso, 35 NY2d 319, 321; Schweber v. Berger, 27 AD2d 840). 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 ( Myers v. Bernard, 38 AD2d 619; Matter of Frutiger, 29 NY2d 143, 149-150). Generally, stipulations of settlements must be in writing and subscribed by the parties, reduced to the form of an order, and entered, or made between counsels in open court (see CPLR 2104). However, where there is no dispute between the parties as to the terms of the agreement, the court will refuse to permit the use of this rule against a party who has been misled or deceived by the oral argument to his detriment or who has relied upon it in good faith ( La Marque v. North Shore Univ. Hosp., 120 AD2d 572; Van Ness v. Rite-Aid of New York Inc., 129 AD2d 931).
In the instant case, the terms of the settlement are undisputed. Counsel for New York Paving admitted in his moving papers that he extended an offer of $15,000.00 on behalf of New York Paving to plaintiff's attorney, to settle the claim, to which plaintiff's attorney accepted. In reliance on the offer of settlement, plaintiff's attorney fully executed settlement documents and forwarded said documents to counsel for New York Paving. Moreover, New York Paving received plaintiff's release and stipulation of discontinuance on September 1, 2005 but waited about two months later, after plaintiff filed the instant motion to enter judgment, to object to the settlement.
Under these circumstances, this court finds the behavior of New York Paving outrageous at best. This court holds that New York Paving assented to the settlement and rejects its argument that the settlement should be vacated because plaintiff failed to comply with the terms of CPLR 2104. Further, plaintiff would be greatly prejudiced if the court were to set aside the settlement and restore the action to the trial calendar since plaintiff in reliance on New York's Paving settlement offer, settled her action with Consolidated Edison. "A party may be prevented from invoking CPLR 2104 to avoid an oral out-of-court stipulation if it appears that the stipulation was in fact made and relied on by the adverse party" ( Bates Real Estate v. Marquette Land Co., 93 AD2d 939; Conlon v. Concord Pools Ltd., 170 AD2d 754 citing Smith v. Lefrak Org., 142 AD2d 725). New York Paving is therefore estopped from relying on CPLR 2104 to vacate the parties oral agreement to settlement the action (see Tenwood Associates v. United States Fire Ins. Co., 104 Misc 2d 467; Matter of Dolgin Eident Corp., 31 NY2d 1, 11).
Further, even if the court did not find that New York Paving assented to the settlement, the court would grant plaintiff's motion to enter judgment, since the court finds that New York Paving clothed Crawford Technical Services and attorney John Ferretti with apparent authority to enter into the settlement agreement, and that counsel for plaintiff reasonably believed, and had a right to believe that they were acting within and not exceeding their authority. "A third party with whom the agent deals may rely on an appearance only to the extent that such appearance is reasonable" ( Wen Kroy Realty Co., v. Public Nat. Bank and Trust Co., 260 NY 84, 92-93; Restatement, Agency 2d, sec. 8).
Moreover, the court notes that if a mistake was made with respect to who had the authority to negotiate and to settle the action between plaintiff and New York Paving, the parties who negotiated the settlement on behalf of New York Paving bears the responsibility which does not constitute a basis to vacate the settlement agreement (see Hallock v. State of New York, 64 NY2d 224).
Conclusion
Accordingly, plaintiff's motion allowing her to enter judgment against co-defendant New York Paving in the amount of $15,000.00 is granted, together with interest, costs and disbursements pursuant to CPLR 5003 (a).
Defendant New York Paving's cross-motion to vacate the settlement is denied in its entirety.
The foregoing constitutes the decision, order and judgment of this court.