Opinion
25623/08.
4-28-2010
AMERICAN EXPRESS TRAVEL RELATED SERVICES, INC., Plaintiff, v. JORGE VASSALL AKA JORGE ARTHURO VASSALL., Defendant.
Mitchell N. Kay, 7 Penn Plaza, New York, NY 10001, Plaintiff. Jorge Vassall (pro se), 12 Clinton Street, Staten Island, NY 10304, Defendant.
After a hearing, the court denies defendant's third order to show cause to vacate the parties second stipulation of settlement dated July 29, 2009, for the reasons as is set forth below:
Previously, the parties herein entered into 2 (two) stipulations of settlement. The first dated January 5, 2009, and the second dated July 29, 2009.
The court notes that the first in court stipulation of January 5, 2009, was the product of voluntary negotiations between the parties that resolved defendant's initial default. The defendant defaulted and subsequently moved by way of an order to show cause, and restored this action to the court's calendar. On the return date, the parties voluntarily resolved defendant's order to show cause through entering the first "so ordered" stipulation of settlement. This in court stipulation was reviewed by the court and approved by the court on the record.
Pursuant to the terms of the first stipulation, the defendant agreed to pay the sum of $11,351.02 by paying monthly installments of $100.00 through February 20, 2009, and then $200.00 on the 20th of each succeeding month until the balance was paid off in full.
Thereafter, the defendant defaulted on the first stipulation of settlement. On June 25, 2009, plaintiff in pursuant with the terms of the January 5, 2009, stipulation of settlement entered a judgment for the unpaid balance.
Subsequent to the entry of the judgment, the defendant filed an order to show cause returnable for July 29, 2009. On the return date, the parties herein again voluntarily agreed for the second time to vacate the judgment and to recall the income execution. The parties entered into the second stipulation of settlement dated July 29, 2009.
Pursuant to the terms of the second stipulation of settlement, the defendant agreed to pay to the plaintiff the sum of $9,951.02 at the monthly rate of $200.00 starting with August 15, 2009 and then thereafter on the 15th of each successive month until paid off in full. The defendant made 3 (three) payments through October 2009 and pursuant to the stipulation a judgment was entered on December 16, 2009, in the sum of $10,805.12.
The defendant now has again defaulted for a third time, and moves once again for the third time by way of an order to show cause to vacate the second stipulation of settlement. The court denies defendant's application in its entirety.
It is the well settled policy of all the courts of the State of New York to encourage agreements of compromise and settlement. A stipulation of settlement will not be set aside absent a showing of such good cause as would invalidate a contract. Simply put, "[s]tipulations of settlement are favored by the courts and [are] not lightly cast aside (see, Matter of Galasso 35 NY2d 319, 321 [1974]; Graham v New York City Housing Authority 260 AD2d 541 [App Div 2nd Dept, 1999]; Kearns v Johnson, 238 AD2d 121 [App Div, 1st Dept, 1997]; Batson v Batson, 277 AD2d 750, 751-752 [App Div, 3rd Dept, 2000]; Hoffman v Warshaw, 287 AD2d 119, 121 [App Div, 1st Dept, 2001]; In Re Alexander, 824 AD3d 1359 [App Div 4th Dept, 2006].)
This is all the more so in the case of " open court " stipulations (see, Matter of Dolgin Eldert Corp., 31 NY2d 1, 10, [1972]; Tocker v City of New York, 22 AD3d 311, [App Div, 1st Dept, 2005].)
There is strong public policy considerations behind not permitting stipulations of settlements to be cast aside lightly. CPLR § 2104, stresses that the strict enforcement of court ordered stipulations not only serves the interest of efficient dispute resolution, but it 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 the course of litigation (see, Matter of Frutiger, 29 NY2d 143, 149-150 [1971]; Diarassouba v Urban, 71 AD3d 51,55 [App Div, 2nd Dept, 2009]; I n Re Bryer, 2010 WL 1541306 [App Div, First Dept];Arthur Management Co., v Zuck, 19 Misc 3d 260, 263 [Civ Ct, NY County, 2008].)
To permit final settlements of disputes, entered into voluntarily in open court and clearly understood by all the parties thereto, to be vacated except upon a showing of good cause therefor, such as fraud, collusion, mistake, accident, or some other ground of the same nature, would open the door to possible abuse and make litigation interminable. (See, Hallock v New York, 64 NY2d 224, 230 [1984]; McCoy v Feinman, 99 NY2d 295 [2002]; Whipple Bros. Inc., v Andrew, 37 AD2d 677 [App Div, 3rd Dept, 1971]; Racanelli Construction Co., Inc., v Tadco Construction Corp., 50 AD3d 875, 876 [App Div, 2nd Dept, 2008]; Rabinovich v Womak, 57 AD3d 866 [App Div 2nd Dept 2008].)
The point being is that a contemporaneous mental reservation, or a subsequent change of mind as to the adequacy of a bargain which has been made, is wholly insufficient in law or equity to destroy a contract of compromise and settlement formally entered into by persons who at the time apparently believe that they have received the best result obtainable on their claim. Where a party is fully aware of what they are agreeing to, it would be an improper exercise of the court's discretion to vacate a stipulation of settlement merely because of a change of mind (see, Thompson Medical Co., v Benjamin Pharmaceuticals, Inc., 4 AD2d 504, 505 [App Div, 1st Dept, 1957].)
Moreover, there is no authority or statute that will permit a court to set aside an agreement of settlement because of a change of circumstances arising subsequent to the entry into the agreement of settlement, other than the nonperformance of the agreement by the other party.
Here, the defendant has not alleged fraud, collusion, mistake or accident in the voluntary negotiations of both in court stipulations of settlement; nor can we conclude as a matter of law that such a showing was made. The court carefully reviewed both the first and second voluntary agreements on the record and was satisfied that the defendant truly wanted them.
The defendant argues again for the third time that his subsequent financial inability from the time that he entered the second stipulation is again preventing him once again from honoring the second stipulation of July 29, 2009. Defendant in his affidavit in support of his third order to show cause state, "My house was in foreclosure," the identical excuse stated by defendant in his previous affidavits to the court. Sadly, financial inability by itself, is an insufficient basis to vacate the second stipulation.
The court reiterates that prior to "so ordering" both the first and second stipulations, the court carefully reviewed and approved them both on the record. Both the first and second stipulations were fairly drafted and voluntarily entered into by the parties. The defendant genuinely believed that the stipulations was in his best interest. The stipulations on review by the court for the third time, on defendant's third order to show cause, again appears to be fair and reasonable. It would be an improper exercise of this court's discretion to modify or vacate the second stipulation of settlement merely due to defendant's unilateral unforseen change in his financial circumstances which was not caused by the plaintiff. At this stage, any modification by this court to the second stipulation would only serve to unfairly prejudice the plaintiff.
Accordingly, the court denies defendant's motion to modify the second stipulation, and the previous judgment less all actual payments stands.
The foregoing constitutes the Decision and Order of the Court.