Opinion
01 CIV. 904 (DLC)
January 15, 2002
For Plaintiff: Andrea L. Calvaruso, Donovan Yee, LLP, New York, New York.
For Defendants: Steven H. Bazerman, Bazerman Drangel, P.C., New York, New York.
OPINION and ORDER
Plaintiff Elements/Jill Schwartz, Inc. filed this action against defendants Gloriosa Company and Gloria Pacosa (collectively, "Defendants") for willful copyright infringement under the Copyright Act of 1976, 17 U.S.C. § 101, et seq., trade dress infringement and dilution under the Lanham Trademark Act, 15 U.S.C. § 1051, et seq. ("Lanham Act"), unfair competition under both the Lanham Act and the common law of New York, and for dilution under the laws of the State of New York. The case was referred to Magistrate Judge Theodore Katz for settlement discussions. At a meeting before Magistrate Judge Katz held on October 2, 2001, the parties negotiated the substantial part of a settlement, and agreed that Defendants' counsel would draft a written agreement and send it to plaintiff's counsel for response. The draft agreement prepared by Defendants' counsel did not conform in several respects to the oral agreement reached on October 2, and was rejected by plaintiff. The Defendants then indicated an unwillingness to settle on the terms described at the October 2 conference. Plaintiff subsequently filed a motion to enforce the purportedly binding oral agreement reached at the October 2 conference.
In its motion to enforce the oral settlement reached at that conference, the plaintiff contends that the parties had reached full agreement on the principal terms of settlement, and that all that remained at the conclusion of the October 2 conference was for Defendants' counsel to reduce the agreement to a final writing. Plaintiff further argues that the oral settlement satisfies the requirements of New York C.P.L.R. § 2104, an exception to the statute of frauds governing settlement agreements reached "in open court." Defendants argue that no binding oral agreement was ever reached because the parties did not intend to be bound at the October 2 conference. Defendants further contend that, even if an agreement had been reached, it would not be enforceable under C.P.L.R. § 2104.
On December 20, 2001, Magistrate Judge Katz issued a Report and Recommendation ("Report") to this Court recommending that the plaintiff's motion to enforce the oral settlement agreement be denied. In his report, Magistrate Judge Katz set out the governing standard for whether or not the parties reached a binding agreement to settle the lawsuit. Under Winston v. Mediafare Entertainment Corp., 777 F.2d 78 (2d Cir. 1985), a binding settlement may be entered orally, so long as the parties had the intent to be bound at the time of the alleged formation. Id. at 80. The Winston court set out four factors relevant to the determination of whether such intent existed:
(1) whether there has been an express reservation of the right not to be bound in the absence of a writing;
(2) whether there has been partial performance of the contract;
(3) whether all of the terms of the alleged contract have been agreed upon; and
(4) whether the agreement at issue is the type of contract that is usually committed to writing.
Id. at 80. Considering each of these relevant factors, Magistrate Judge Katz determined that the parties did not intend to be bound by the oral agreement reached on October 2. Specifically, he determined that the parties' correspondence following the conference contained suggestions that neither party understood the case to be conclusively settled, that no performance had taken place, that the parties had left unresolved at least one material term of settlement and several definitions, and that settlements of claims are generally required to be in writing or, at a minimum, placed on the record in open court, particularly when the terms of agreement are as complex as they are in this case. See Ciaramella v. Reader's Digest Assoc., 131 F.3d 320, 326 (2d Cir. 1997) (also applying the four-part Winston test). In sum, Magistrate Judge Katz found that all four Winston factors weighed against enforcement. No party has objected to the Report, their time to do so having expired on January 7, 2002.
A reviewing court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). "To accept the report and recommendation of a magistrate, to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record." Nelson v. Smith, 618 F. Supp. 1186, 1189 (S.D.N.Y. 1985); see also Pizarro v. Bartlett, 776 F. Supp. 815, 817 (S.D.N.Y. 1991).
Having reviewed the Report, I find no facial errors in it. Plaintiff's motion to enforce the oral agreement reached at the October 2 conference must fail because an application of the Winston factors to the circumstances of this case indicates that the parties did not intend to be bound by the oral agreement reached at the October 2 conference. Accordingly, it is hereby
ORDERED that the plaintiff's motion to enforce the October 2 oral settlement agreement is denied.
SO ORDERED: