Summary
using Winston factors with respect to an unsigned draft of a settlement stipulation
Summary of this case from Garra v. Metro-N. Commuter R.R.Opinion
01 Civ. 5349 (FM)
August 22, 2002
MEMORANDUM DECISION
The Memorandum Decision was drafted with the assistance of Nadia Jones, a student at Fordham Law School.
I. Introduction
Plaintiff Francis Winn ("Plaintiff"), Trustee of the International Union of Industrial, Service, Transport and Health Employees Health Fund ("Fund"), instituted this ERISA action in order to recover from Defendant Seaport Manor Corporation ("Defendant") certain required Fund contributions. As in most similar benefit fund cases, the parties spent a period of time reconciling their financial records with the expectation that the case would eventually be settled. In this action, the Plaintiff contends — and the Defendant denies — that the parties actually reached such an enforceable settlement. For the reasons set forth below, it is clear that the Plaintiff is correct. Accordingly, the Plaintiff's motion to enforce the settlement agreement is granted.
II. Relevant Facts
The relevant facts are undisputed. After the Fund concluded its audit of the Defendant's records, the parties' counsel engaged in settlement discussions. (See Affidavit of Jacob Laufer, Esq., sworn to on June 19, 2002 ("Laufer Aff."), ¶ 3; Letter dated Jan. 15, 2002, from Mr. Laufer to the Court, at 1). By early April 2002, both sides had agreed to settle the case in exchange for the Defendant's payment of $46,000 to the Fund. (Laufer Aff. ¶ 3). On April 9, 2002, in accordance with that understanding, the Defendant sent the Plaintiff a first installment of $15,000. (Id. ¶ 4). Thereafter, the settlement was reported to me during a May 13, 2002, telephone conference. During that conference, Jacob Laufer, Esq., the Plaintiff's counsel, expressed confidence that I would receive an executed stipulation within one week.
In furtherance of the parties' settlement, the Defendant's attorney, Aaron C. Schlesinger, Esq., forwarded two draft stipulations to Mr. Laufer. (Id. ¶¶ 5, 8 Exs. A, B). The only apparent difference between the two stipulations drafted by Mr. Schlesinger is that the second one called for the Defendant to pay the $31,000 balance by a date certain. (See id. ¶ 6). Three originals of this second stipulation were sent to Mr. Laufer on May 13, 2002, the date of the telephone conference with the Court. (Id. Ex. B). In his cover letter, Mr. Schlesinger, on behalf of the Defendant, asked that Mr. Laufer "provide the [s]tipulations to the appropriate individuals for execution, have them notarized and forward them back to me so I can provide them to [the Defendant] for execution and notarization. I will then forward the [s]tipulations to the Court for execution. . . ." (Id.).
On May 29, 2002, as requested, Mr. Laufer returned the executed and notarized stipulations to Mr. Schlesinger. (Id. Ex. C). Thereafter, however, the Defendant declined to execute the stipulations. (Id. ¶¶ 9-10). In his letter opposing the Plaintiff's motion, Mr. Schlesinger argues that the settlement was "never consummated" because "an actual settlement agreement was never executed" by his client. (See letter dated July 2, 2002, from Aaron C. Schlesinger, Esq. to the Court).
III. Discussion
In this Circuit, four factors must be considered to determine whether a settlement agreement not executed by both sides should be enforced: "(1) whether there has been an express reservation of the right not to be bound in the absence of a signed 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." Ciaramella v. Reader's Digest Assn., 131 F.3d 320, 323 (2d Cir. 1997) (citing Winston v. Mediafare Entm't Corp., 777 F.2d 78, 80 (2d Cir. 1986)). Here, all four factors compel the conclusion that this case had been settled and that the parties intended to be bound despite the absence of a fully executed writing.
Turning to the first Ciaramella factor, even though Mr. Schlesinger undertook the process of drafting the stipulation, it contains no language which would suggest that the Defendant intended not to be bound until both sides had formally executed the agreement. Indeed, had that been the understanding, the Defendant presumably would not have partially performed the agreement by making a payment in the amount of $15,000. See V'Soske v. Barwick, 404 F.2d 495, 499 (2d Cir. 1968) ("[T]he mere fact that the parties contemplate memorializing their agreement in a formal document does not prevent their informal agreement from taking effect prior to that event.").
The written agreement also contains no suggestion that it is an incomplete memorialization of the parties' understandings. Quite to the contrary, the agreement is a carefully drafted seven-page document which incorporates mutual general releases, describes the consideration (and dates by and manner in which the balance is to be paid), provides for confidentiality, and indicates that a stipulation of dismissal with prejudice shall be filed once the Defendant's remaining payment is received. (See Laufer Aff. Ex. C). The agreement also recites that it "constitutes the entire [a]greement" among the parties. (Id. ¶ 9). Tellingly, in his rather terse submission in opposition to the Plaintiff's motion, Mr. Schlesinger has not suggested any material term of the settlement that remained unresolved or that had not been incorporated into the written agreement he sent to Mr. Laufer. Finally, the agreement in this case is not simply one which parties would ordinarily be expected to reduce to writing. Rather, it was memorialized in a detailed contract drafted by the Defendant's own counsel. See Mone v. Park E. Sports Med. Rehab., P.C., 99 Civ. 4990, 2001 WL 1518263, at *3 (S.D.N.Y. Nov. 29, 2001) (Eaton, Mag. J.) (enforcing unsigned stipulation of settlement drafted by defendant's counsel).
In sum, the Plaintiff has established the existence of an enforceable agreement which the Defendant is required to honor.
IV. Conclusion
For the foregoing reasons, the Clerk of the Court is directed to enter judgment in favor of the Plaintiff and against the Defendant in the amount of $35,000.
SO ORDERED.