Opinion
DOCKET NO. A-0090-14T4
04-01-2016
LUTVI SAKA, Plaintiff-Appellant, v. LUCIANO'S ITALIAN RISTORANTE & LOUNGE, HENRY KOZALKA, MICHAEL MERLIS and JOSEPH MASTRELLA, Defendants-Respondents.
Gregg S. Sodini argued the cause for appellant. Respondents have not filed a brief.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fisher and Rothstadt. On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. DC-3342-13. Gregg S. Sodini argued the cause for appellant. Respondents have not filed a brief. PER CURIAM
Plaintiff Lutvi Saka appeals from the Law Division's July 21, 2014 order denying his motion to enforce a settlement he reached with defendants Luciano's Italian Ristorante and Lounge (Luciano's), Henry Kozalka, Michael Merlis, and Joseph Mastrella. The court denied the motion because it found defendants tendered payment of the full settlement amount which plaintiff wrongfully refused to accept. On appeal, plaintiff contends that the court improperly denied "enforcement of the settlement reached between the parties" by failing to enforce the default provision of the parties' agreement.
We have considered plaintiff's argument in light of our review of the record and applicable law. We affirm.
"On a disputed motion to enforce a settlement," a trial court must apply the same standards "as on a motion for summary judgment." Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 474-75 (App. Div. 1997). In reviewing the grant or denial of summary judgment, we apply the same standard that governs the trial court, Townsend v. Pierre, 221 N.J. 36, 59 (2015), which requires denial of summary judgment when "the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
The salient facts, drawn from the competent evidential materials, and viewed "in the light most favorable to [defendants], the non-moving part[ies]," Lippman v. Ethicon, Inc., 222 N.J. 362, 367 (2015) (citing Brill, supra, 142 N.J. at 523, 540), were substantially undisputed and can be summarized as follows.
In March 2013, plaintiff filed a complaint seeking damages arising out of his alleged entitlement to payment for his ownership interest in Luciano's. According to the complaint, the three individual defendants promised plaintiff an ownership interest in the business "in exchange for bringing his expertise in the restaurant business to Luciano's and working [there]." As things evidently did not work out, the parties, according to the complaint, agreed that plaintiff would be paid $22,500 for his interest in the business. He received $10,000 towards that amount, with the understanding that the balance would be paid by March 1, 2012. The payment, however, was not made by any defendant.
The case came before the court for trial on September 18, 2013. According to plaintiff's counsel, the parties settled the matter through counsel by reaching an agreement that defendants would pay plaintiff $5,000 in full settlement of his claims, with payment to be made in the amount of $3,000 by October 13, 2013, and $2,000 by January 15, 2014. The failure to make a payment within thirty days of the due date and after seven days' notice to defendants' counsel would result in the entry of a judgment against all defendants in the amount of $11,800 plus attorney's fees and costs (default amount). However, the terms of the settlement were neither placed on the record nor incorporated into a writing on that date. Rather, counsel merely informed the court the matter was settled.
Between October 18, 2013, and approximately March 13, 2014, the parties' counsel and defendants themselves exchanged various communications regarding the payments owed. On October 18, 2013, plaintiff's counsel transmitted a proposed draft of a stipulation of settlement and release to defendants' attorney. The proposed agreement reflected the agreed upon $5,000 settlement amount with an initial payment of $3,000 due that very day and a final payment of $2000 due by January 15, 2014. In his cover letter, plaintiff's counsel noted the first payment was already due and suggested that it be sent to him to hold in escrow pending execution of the written agreement. He also provided that the payment should be sent to his office's new address. He concluded by telling defendants' attorney, "if we do not timely receive the first installment, we will move to enforce the settlement and enter judgment for the [default amount]." He suggested defendants' attorney should "get [his] clients to pay the first installment as soon as possible so that none of this will be necessary."
Having not received a response, plaintiff's counsel sent another letter, representing a formal notice of default, to defendants' attorney on October 25, 2013. On November 13, 2013, plaintiff's counsel received directly from defendants a copy of the proposed stipulation and release signed by each defendant. Their signatures, however, were not acknowledged or witnessed by either their attorney or a notary. Plaintiff then signed the agreement, as acknowledged by his counsel, who returned a fully executed copy to defendants' attorney on November 20, 2013, stating plaintiff's position that the first installment was not timely paid and, therefore, he was entitled to entry of judgment for the default amount under the agreement. Plaintiff's counsel also stated, "in order to avoid [plaintiff's] application for the default amount, your clients must offer something in addition to what would have been due if your clients had made timely payment."
In a follow-up correspondence on November 22, plaintiff's counsel referenced a telephone conversation he had with defendants' attorney in which he recommended that $5,000 be paid in full by the close of business that day, and a subsequent telephone message from defendants' attorney interpreted by plaintiff's counsel as suggesting he should "chase down" defendants directly to obtain payment. In closing, plaintiff's counsel again suggested that defendants should offer something more than what should have been paid in order to avoid an application for entry of a judgment in the default amount.
Evidently, no further contact occurred between the parties until January 2014, when one defendant directly informed plaintiff's counsel that defendants had the entire $5,000 payment to send to him. Counsel refused to accept the payment, noting that direct communication was not appropriate while defendants remained represented by counsel and, in any event, the $5,000 payment was not acceptable. Despite that conversation, on January 27, defendants sent a $5,000 check, dated December 17, 2013, to plaintiff's counsel by certified mail return receipt requested. The post office attempted delivery three times before returning the item marked "unclaimed."
After another a lull in communications, on March 12, 2013, plaintiff's counsel communicated by fax with defendants' attorney upon receiving a message that he had $5,000 to tender payment in full. In a detailed letter sent in response, plaintiff's counsel rejected the offer of payment and again suggested that, in order to avoid an application for the default amount, defendants were obligated to "offer something substantially more tha[n] what would have been due if [they] had made timely payments." Counsel did not receive a response to his letter.
On June 16, 2014, plaintiff filed a motion to enforce the settlement, seeking payment of the default amount. The motion was supported by his attorney's certification, which explained the history of his attempts to secure the signed settlement agreement and release as well as payment of the amount owed. Plaintiff filed his certification confirming that defendants never paid him pursuant to their agreement.
In response to the motion, defendant's attorney filed a cross-motion seeking an order denying plaintiff's motion. Defendants' counsel filed a certification in support of the cross-motion in which he explained defendants' attempt to pay the settlement amount and the reason for the settlement amount not having been paid in accordance with the settlement agreement. According to defense counsel, he rejected the agreement's provision that provided notice would be sent to him, not his clients, if a payment was not timely made. He indicated that he told plaintiff's counsel that the provision needed to be changed to having notice sent to his clients. He challenged the effectiveness of his clients signing the agreement without his participation and explained that they ultimately decided to pay the full settlement amount because they "wanted closure of this matter." He also pointed out that plaintiff's counsel acknowledged the agreement could not be effective on the date plaintiff's counsel sent a draft, and that he had difficulty contacting plaintiff's counsel whose office he understood to be in a different location.
Plaintiff's counsel filed a certification in response to the cross-motion. Therein, he stated that the notice provision now being disputed was requested by defendants' counsel and he never received any objection to it from defendants' attorney. He noted that the agreement was signed by all of the parties, remained unchanged, and was sent to him by defendants. He also confirmed rejecting the $5,000 payment because, as it had been sent in December or January, it was too late under the parties' agreement.
After considering the parties' written submissions and the arguments of counsel, the court determined there was no dispute that the parties settled the amount for $5,000, the check had been tendered for that amount, and it was rejected. Under these circumstances, the court directed the payment of the $5,000 to be made and denied plaintiff's motion. The court entered a conforming order on the same date.
Defendants made the payment and this appeal followed.
We begin our review by acknowledging "New Jersey's strong public policy in favor of the settlement of litigation," Gere v. Louis, 209 N.J. 486, 500 (2012), and the enforcement of settlement agreements like any other contract. Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983). In furtherance of the strong policy of enforcing settlements, "our courts strain to give effect to the terms of a settlement wherever possible." Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) (citation and internal quotation marks omitted). Therefore, an agreement to settle a lawsuit will be honored and enforced in the absence of fraud or other compelling circumstances. Nolan v. Lee Ho, 120 N.J. 465, 472 (1990). However, unless there is "an agreement to the essential terms" by the parties, there is no settlement in the first instance." Mosley v. Femina Fashions, Inc., 356 N.J. Super. 118, 126 (App. Div. 2002), certif. denied, 176 N.J. 279 (2003); see also Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992) (holding that if the parties agree on the essential terms and to be bound by those terms, an enforceable contract has been created).
Applying this public policy, we conclude the motion judge correctly employed the summary judgment standard and enforced the indisputably agreed upon essential term of the parties' settlement agreement — the settlement amount. We concur with his implicit finding that the timeliness of the payment, when considered in the context of the agreement's execution date and in light of the default provision, was an immaterial issue of fact.
First, there was clearly a dispute as to the default provisions until the parties executed the written agreement. Second, as the agreement was not fully executed until November 20, 2013, it could not have gone into effect any earlier than that date. See Morton v. 4 Orchard Land Trust, 180 N.J. 118, 129-30 (2004) ("A written contract is formed when there is a 'meeting of the minds' between the parties evidenced by a written offer and an unconditional, written acceptance." (citing Johnson & Johnson v. Charmley Drug Co., 11 N.J. 526, 538-39, (1953)). Third, as written, the first payment was due approximately thirty days after the parties appeared in court. As a result, applying the agreement's effective date, the first payment was not due until December 20, 2013. Fourth, the agreement contained a provision for a default notice to be given after a payment had not been made for thirty days. After December 20, a notice of default was not sent until defendants made attempts to tender the full payment of the settlement amount. Even if notice had been sent on or about January 20, 2014, defendants had already attempted to contact plaintiff's counsel to arrange for payment, which was refused. Finally, the immateriality of the payment's timeliness was highlighted by plaintiff's failure to seek enforcement of the default payment before June 2014.
We observe that the agreement could have provided a different effective date, which would have been enforceable. See, e.g., Chance v. McCann, 405 N.J. Super. 547, 553 (App. Div. 2009) (addressing an agreement not signed until July 20, 1998, but having an effective date of January 1, 1994). --------
Therefore, to the extent that there was a delay in the initial payment, the court properly determined it was of no moment and was ameliorated by the full payment, which unfortunately lost its way for a brief period of time due to a variety of immaterial reasons. In doing so, the court correctly found there was no factual dispute that prevented the matter from being settled in furtherance of public policy and the essential provision of the parties' agreement with plaintiff accepting the settlement amount.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION