Opinion
1:18-cv-2144 (VEC) (KHP)
07-12-2019
JENNIFER FIGUEROA, Plaintiff, v. PROSPCT BILLIARDS CORP., individually and d/b/a PROSPECT BILLIARDS CAFE, MICHAEL MARTIN, individually, and ANDRES JIMENEZ, individually, Defendants.
REPORT AND RECOMMENDATION
To: The Honorable Valerie E. Caproni, United States District Judge
From: Katharine H. Parker, United States Magistrate Judge
Plaintiff Jennifer Figueroa filed this action asserting claims of employment discrimination under federal, state and local law, failure to pay appropriate wages and provide appropriate wage notices as required by federal and state law, as well as common law tort claims. The Defendants are her former employer, Prospect Billiards Corp. ("Prospect Billiards"), her former supervisor, Michael Martin, and the owner of Prospect Billiards, Andres Jimenez. Plaintiff alleges that after several mediation sessions, she entered into a settlement agreement with Defendants Jimenez and Prospect Billiards, which is memorialized in a series of emails. Prospect Billiards and Jimenez say that no agreement was formed. Plaintiff's motion to enforce the agreement and to recover attorney's fees expended on the motion (Doc. No. 72) has been assigned to me for report and recommendation. For the reasons set forth below, I recommend that the motion to enforce the settlement agreement be GRANTED and the application for attorney's fees be DENIED.
Plaintiff's claims against Defendant Martin were voluntarily dismissed (Doc. No. 88).
BACKGROUND
The parties attended court-ordered mediation sessions on November 28, 2018 and January 31, 2019. On February 8, 2019, the parties reached agreement on a settlement amount when all parties accepted the mediator's proposal of $60,000 . (Doc. No. 52) The mediator prepared a Memorandum of Understanding ("MOU") as to the agreement that allocated $4,000 to settle Plaintiff's wage claims and the remainder to settle the remaining claims and provided for the settlement to be paid in 12 equal monthly installments beginning 30 days after execution of a formal settlement agreement. The MOU also provided for a full, general release by Plaintiff in favor of Defendants, affiliates, successors, and assigns, and a provision mandating, to the fullest extent permitted by law, the parties to maintain the fact and terms of the parties' agreement as confidential. The MOU also provided for no admission of liability by the Defendants. (Doc. No. 73-1 Exh. B.) Before signing the MOU, Defendant Martin informed Plaintiff that he would need longer than twelve months to pay his portion of the settlement. The parties agreed to speak further on this. (Id.) The mediator reported that an agreement was reached on some but not all issues. (Doc. No. 51) Plaintiff reported that the parties had reached agreement on the amount but not a payment plan. (Doc. No. 52) Defendant Martin reported that no binding agreement was reached. (Id.) Prospect Billiards and Jimenez reported that no binding agreement was reached but that they had extended an offer to resolve the claims against them. (Id.) The Court then ordered the parties to continue discussions to resolve the remaining issues. (Doc. No. 53).
Thereafter, on March 15, 2019, Defendant Martin claimed that he was not able to pay any money toward the settlement due to his financial circumstances, and Prospect Billiards and Jimenez again reported that they had offered to and are willing to pay half or slightly more than half of the amount proposed by the mediator but were unwilling to cover the entire amount and be jointly and severally liable for Defendant Martin's share. (Doc. No. 54) On April 5, 2019, Plaintiff wrote to the Court reporting that she had accepted the offer of Prospect Billiards and Jimenez to pay 50% of the mediator's proposal in installments over a twelve-month period. (Doc. No. 62) Prospect Billiards and Jimenez, however, disputed that there was an agreement and refused to pay the settlement.
The key discussions regarding the alleged settlement between and among Plaintiff, Prospect Billiards and Jimenez took place between March 13, 2019 and April 1, 2019. A detailed chronology of the communications is therefore essential to the determination of whether an enforceable contract to settle the dispute was formed.
The first communication occurred on March 13, 2019 in an email sent by Plaintiff's counsel (Gregory Kirshenbaum) at 11:46 a.m. to Benjamin Sharav, counsel for Prospect Billiards and Jimenez. In the email, Kirshenbaum asked Sharav if he could speak regarding the status of the settlement. (Doc. No. 73-2.) At 12:30 p.m., Sharav, replied "Defendant Jimenez is where he was at the last mediation session and at the last teleconference with the judge ($30k over 12 mos. or $33k over 18.) . . . You can of course, can consider accepting Jimenez's offer and pursuing Martin individually." (Id.) On March 15, 2019, Sharov confirmed to the Court that in fact his clients had made an offer to pay half or slightly more than half of the mediator's proposal. (Doc. No. 54)
The parties did not communicate by email again until March 29, 2019. That day, at 3:33 p.m., Kirschenbaum asked Sharav for "an update from your client" via email. (Doc. No. 73-3.) Sharav replied at 3:54 p.m. that "[c]lient is not going higher" (i.e., that the $30k over 12 mos. or $33k over 18 offer stood). (Id.) At 4:01 p.m., Kirschenbaum asked Sharov whether his clients' "best and final offer is $30,000 over 12 months or $33,000 over 12 months (I believed that we were offered that at the last SDNY mediation?)." (Doc. No. 73-4; Doc. No. 80-1 at 2.) Sharov did not respond to the email.
On April 1, 2019, Defendant Martin's attorney moved to withdraw as counsel on the grounds that Martin could no longer pay him. Kirschenbaum then called Sharov to ask whether his clients' previous offer was still open. Sharov stated he would have to speak with his client. (Doc. No. 80) That same day after the phone call, at 1:43 p.m., Kirschenbaum emailed Sharov stating, "please . . . tell me what your client's [actual] offer is" and again indicated he believed that Prospect Defendants had offered $33,000 over 12 months during the last mediation session. (Doc No. 73-5; Doc. No. 80-1 at 2.) Sharav replied at 3:18 p.m. that he could not reach his client. At 5:17 p.m., Kirschenbaum responded stating that he accepted the offer of $30,000 payable over 12 months. (Doc. No. 73-6; Doc. No. 80-1 at 4.) On April 5, 2019, Sharav called Kirshenbaum to state that his clients did not intend to pay the $30,000. (Doc. No. 62)
Prospect Billiards and Jimenez do not dispute that they made an offer to settle the claims against them for $30,000 payable over twelve months. (Doc. No. 80) Rather, they claim that Plaintiff rejected that offer and that the offer expired. (Id.) They also state that there was no agreement on all essential terms of the agreement. (Id.)
On June 24, 2019, this Court held a conference with the parties to hear argument on the motion. Sharav failed to appear in person but the Court was able to reach him by phone and permitted Sharav to appear by phone. Sharav said on the call that " client is a difficult client" and "now that [Plaintiff] settled with the other defendants . . . he's not prepared to make that offer anymore."
Since Plaintiff settled with Martin after Plaintiff accepted Jimenez's offer, Jimenez's noncompliance with the settlement agreement appears to be motivated at least in part by buyer's remorse.
LEGAL STANDARD
This Court has the power to summarily enforce a settlement agreement reached in a case before it upon a party's motion. United States v. Prevezon Holdings, Ltd., 289 F. Supp. 3d 446, 450 (S.D.N.Y 2018) (citing Meetings & Expositions, Inc. v. Tandy Corp., 490 F.2d 714, 717 (2d Cir. 1974)). The party seeking to enforce a purported settlement agreement has the burden to demonstrate the agreement's validity. Benicorp Ins. Co. v. Nat'l Med. Health Card Sys., Inc., 447 F. Supp. 2d 329, 335 (S.D.N.Y. 2006). Settlement agreements are interpreted according to the general principles of contract law. Id.; Powell v. Omnicom, 497 F.3d 124, 128 (2d Cir. 2007).
The MOU does not mention, nor do the parties address whether New York law or federal common law applies. New York law and federal common law are "materially indistinguishable" regarding formation of settlement agreements, and the Second Circuit has declined to rule on which applies to settlement of federal claims. Powell, 497 F.3d at 129 n.1. The Second Circuit and various district courts "regularly apply New York law in analyzing whether a settlement agreement should be enforced," so the Court applies New York law here. United States v. Prevezon Holdings, Ltd., 289 F. Supp. 446, 451 (S.D.N.Y. 2018) (quoting Silas v. City of N.Y., 536 F.Supp.2d 353, 357 (S.D.N.Y. 2008)). Under New York law, a valid contract requires "an offer, acceptance, consideration, mutual assent and intent to be bound." Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 427 (2d Cir. 2004).
DISCUSSION
I. Formation of the Settlement Agreement
Prospect Defendants deny that a settlement agreement was formed between them and the Plaintiffs. However, the Court concludes that a settlement agreement was formed, requiring Prospect Defendants to pay $30,000 over 12 months.
Neither party disputes that Sharav's March 13, 2019 email at 12:30 p.m., which said "Defendant Jimenez is . . . at . . . $30k over 12 mos. or $33k over 18," constituted a valid offer. (See Doc. No. 73-2.) Kirschenbaum argues that his email on April 1, 2019 at 5:17 p.m. constituted an acceptance of that offer. Prospect Billiards and Jimenez state that the offer was no longer open and that there was no mutual assent to the agreement due to the uncertainty as to the value of the settlement, citing to Kirshenbaum's April 1, 2019 email at 1:43 p.m. email which stated that "I believe your client offered $33,000 over 12 month" and arguing that the email constituted a counter-offer rejecting the earlier offer. (Sharav Decl. at ¶¶ 8-14.)
If an offer specifies no deadline to accept, it must be accepted within a reasonable amount of time. Golubeva v. GC Services Ltd. Partnership, 767 F. Supp. 2d 369, 372-73 (E.D.N.Y. 2010) (citing Restatement (Second) of Contracts §41(1) (1981)). The March 13 offer did not specify a deadline to accept it. The parties' March 15 letter to the Court indicated that the offer was still open as of that date and likewise specified no deadline for acceptance. Sharav indicated that the offer was still open without an acceptance deadline on March 29, 2019, when he said, "client is not going higher." (Doc. No. 73-3; Doc. No. 80-1 at 4.) On April 1, 2019, Plaintiff states she accepted the offer made in Mr. Sharav's email 19 days prior (on March 13, 2019) and re-confirmed on March 29, 2019. (Doc. No. 73-2.; Doc No. 80-1 at 4.) Defendants do not argue that the offer lapsed by virtue of the passage of time, and assuming it was not rejected, Plaintiff accepted it within a reasonable amount of time-- only three days after the re-offer was made. The fact that the offer had already been held open for several months without issue, since January 31, 2019, further supports the conclusion that the offer did not lapse by the passage of time.
The core dispute, however, is whether Plaintiff rejected the offer or made a counter-offer. A rejection terminates an offeree's power of acceptance. Greystone Partnerships Group, Inc. v. Koninklife Luchtvaart Maatschappi N.V., 815 F. Supp. 745, 753 (S.D.N.Y. 1993) (citing Kleinberg v. Ambassador Associates, 103 A.D.2d 347, 480 N.Y.S.2d 210, 211 (1st Dept. 1984), aff'd 64 N.Y.2d 733, 475 N.E.2d 119, 485 N.Y.S.2d 748 (1984). A counter-offer constitutes a rejection of an offer. See L-7 Designs, Inc. v. Old Navy, LLC, 964 F. Supp. 2d 299, 312 (S.D.N.Y. 2013) (citing Jericho Grp. Ltd. v. Midtown Dev., 32 A.D.3d 294, 820 N.Y.S.2d 241, 246-47 (1st Dep't 2006)). A "suggestion, request, or overture" is not a counteroffer. See John's Insulation, Inc. v. Siska Const. Co., Inc., 671 F. Supp 289, 293 (S.D.N.Y. 1987) (holding that a letter stating that a forum selection clause "should really be" in a different state, but "[Defendant] won't dwell on the wording" is not a counter-offer"); see also Restatement (Second) of Contracts §39 cmt. b (1981) ("A mere inquiry regarding the possibility of different terms, a request for a better offer, or a comment upon the terms of the offer, is ordinarily not a counter-offer. Such responses to an offer may be too tentative or indefinite to be offers of any kind.")
Kirschenbaum's email from March 29, 2019 at 4:01 p.m. regarding Defendant Prospect Billiards' and Jimenez's best offer does not definitively state a counter-offer for $33,000. It inquires as to Defendant Jimenez's position rather than stating Plaintiff's position. Due to the indefinite language, it is a "suggestion, request, or an overture." See John's Insulation, Inc., 671 F. Supp at 293. Accordingly, it is not a rejection of the offer in Sharav's 3:54 p.m. email that indicated that the $30,000 offer continued to be open. Similarly, Kirschenbaum's email from April 1, 2019 at 1:43 p.m. that repeated the inquiry does not constitute a rejection of the offer, as it too is not a counter-offer for the same reason stated above. Thus, I conclude that the offer by Prospect Billiards and Jimenez to settle for $30,000 payable over twelve months did not terminate before it was accepted.
The next issue to address is whether the agreement reached addressed all essential terms. For a contract to be valid, there must be mutual assent "on all essential terms," often referred to as a "meeting of the minds." Opals on Ice Lingerie v. Bodylines Inc., 320 F.3d 362, 372 (2d Cir. 2003) (citing Schurr v. Austin Galleries of Illinois, Inc., 719 F.2d 571, 576 (2d Cir. 1983)). Essential terms are those necessary "to lend an agreement sufficient detail to be enforceable by a court." Reyes v. Lincoln Automotive Financial Services, 861 F.3d 51, 58 (2d Cir. 2017) (noting, for example, that price and quantity are essential to a contract for a sale of goods). Courts "look to the basic elements of the offer and acceptance to determine whether there is an objective meeting of the minds sufficient to give rise to a binding and enforceable contract." Ipcon Collections LLC v. Costco Wholesale Corp., 698 F.3d 58, 62 (2d Cir. 2012) (quoting Express Indus. & Terminal Corp. v. N.Y. State Dep't of Transp., 93 N.Y.2d 584, 589); see also Nusbaum v. E-LO Sportswear LLC, 2017 WL 5991787, at *4 (S.D.N.Y. December 1, 2017) (finding that a series of emails demonstrating agreement on essential terms was a meeting of the minds and created a binding contract). Whether there is a meeting of the minds is assessed objectively. See Ipcon, 698 F.3d at 62; Summit Health, Inc. v. APS Healthcare Bethesda, Inc., 993 F. Supp. 2d 379, 397 (S.D.N.Y. 2014), aff'd sub nom. APEX Employee Wellness Servs., Inc. v. APS Healthcare Bethesda, Inc., 725 F. App'x 4 (2d Cir. 2018). A contract that is clear on its face as to the obligations of the parties demonstrates an objective meeting of the minds. See Ipcon, 698 F.3d at 62.; see also Summit Health, 993 F. Supp 2d at 397 (noting that "the subjective intent of the parties is irrelevant, if the contract is unambiguous").
The only material term in dispute is the settlement amount. Prospect Billiards and Jimenez allege that there was uncertainty regarding the amount of the settlement, a material term, because of Mr. Kirschenbaum's request for clarification regarding the offer. See Reyes, 861 F.3d at 58. However, the terms of the March 13, 2019 offer and the April 1, 2019 acceptance are identical as to the amount of the settlement. (Compare Doc. No. 73-2 ("$30k over 12mos.") with Doc No. 73-5 ("$30,000 over 12 months"). Therefore, it is clear that the objective intent of both parties was to settle for $30,000 payable over twelve months. See Ipcon, 698 F.3d at 62; Nusbaum, 2017 WL 5991787, at *4. Plaintiff's subjective intentions regarding his questions to Defendants seeking clarification are irrelevant, as Plaintiff's acceptance indicates his understanding of the terms of the March 13 offer. See Summit Health, Inc, 993 F. Supp. 2d at 399. Prospect Billiards and Jimenez provide no evidence that their understanding of the offer was anything other than $30,000. Therefore, there was a meeting of the minds on this material term. Other essential terms of the agreement had been discussed by the parties at mediation and there appears to be no dispute as to them. They include that Plaintiff will provide a full, general release of claims in favor of Defendants and their affiliates, successors, and assigns, a provision mandating, to the fullest extent permitted by law, the parties to maintain the fact and terms of the parties' agreement as confidential, and that the settlement does not constitute an admission of liability by Defendants. Accordingly, I conclude that Plaintiff reached a settlement agreement with Defendants Prospect Billiards and Jimenez and that the agreement is a valid, enforceable contract.
II. Attorney's Fees
Plaintiff's counsel has requested attorneys' fees and expenses associated with the instant motion. Attorneys' fees are generally not awarded as damages when enforcing a settlement agreement. See Lynch v. Oliver, No. 15-CV-4971 (JMF), 2016 WL 344980, at *4 (S.D.N.Y. Jan. 27, 2016), aff'd sub nom. Merrill Lynch, Pierce, Fenner & Smith Inc. v. Oliver, 681 F. App'x 64 (2d Cir. 2017). However, attorneys' fees may be awarded when the losing party's conduct was in bad faith, vexation, wanton, or for oppressive reasons. Id.; Doe v. Kogut, No. 15-CV-07726 (SN), 2017 WL 1287144, at *11 (S.D.N.Y. Apr. 6, 2017), aff'd, 759 F. App'x 77 (2d Cir. 2019) (citing Center Cadillac, Inc. v. Bank Leumi Trust Co. of N.Y, 878 F. Supp. 626, 628 (S.D.N.Y. 1995)). A party acts in bad faith when they are dishonest, intentionally prolong the resolution of the case, harass the other party, or have any other improper purpose. See Doe, 2017 WL 1287144, at *11. Plaintiff provides no evidence of Defendants' bad faith or of vexatious, wanton, or oppressive behavior; similarly, the Court finds no evidence of such. Although litigation was required to enforce the settlement, there is no evidence that Defendant intended to prolong resolution of the case. Therefore, Plaintiff is not entitled to attorney's fees and costs.
CONCLUSION
For the foregoing reasons, I respectfully recommend that Plaintiff's motion to enforce the settlement agreement be granted and her application for attorney's fees and costs associated with this motion be denied.
NOTICE
The Plaintiff shall have fourteen days from the service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed. R. Civ. P. 6(a) , (d) (adding three additional days only when service is made under Fed. R. Civ. P. 5(b)(2)(C) (mail) , (D) (leaving with the clerk), or (F) (other means consented to by the parties)). Defendants shall have fourteen days from the service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure.
If Defendants file written objections to this Report and Recommendation, the Plaintiff may respond to Defendants' objections within fourteen days after being served with a copy. Fed. R. Civ. P. 72(b)(2). Alternatively, if Plaintiff files written objections, Defendants may respond to such objections within fourteen days after being served with a copy. Fed. R. Civ. P. 72(b)(2); see also Fed. R. Civ. P. 6(a) , (d). Such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Valerie E. Caproni at the United States Courthouse, 500 Pearl Street, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a) , 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Caproni. The failure to file these timely objections will result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a) , 6(d), 72(b); Thomas v. Arn , 474 U.S. 140 (1985). Dated: July 12, 2019
New York, New York
Respectfully submitted,
/s/_________
KATHARINE H. PARKER
United States Magistrate Judge