Court Opinion

ID: 4643434
Source: CourtListenerOpinion
Date Created: 2020-12-16 15:08:41.394935+00
Date Added: 2024-06-11T08:00:39.621880
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1353-19T2

HORIZON BLUE CROSS
BLUE SHIELD OF NEW JERSEY,

          Plaintiff-Respondent,

v.

SPEECH & LANGUAGE CENTER,
LLC, and CHRYSSOULA
MARINOS-ARSENIS,

     Defendants-Appellants.
________________________________

                   Argued November 17, 2020 – Decided December 16, 2020

                   Before Judges Fisher and Gilson.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Somerset County, Docket No. L-0281-15.

                   Michael Confusione argued the cause for appellants
                   (Hegge & Confusione, LLC, attorneys; Michael
                   Confusione, of counsel and on the briefs).

                   Patricia A. Lee argued the cause for respondent
                   (Connell Foley LLP, attorneys; Patricia A. Lee, of
                   counsel and on the brief; Jaimee A. Glinn, on the brief).
PER CURIAM

      Defendants appeal an order that compelled them to execute a settlement

agreement. Because we agree with the trial judge that defendants freely and

voluntarily entered into the agreement and then failed to execute it, we affirm.

      The record reveals that defendant Chryssoula Marinos-Arsenis is a

licensed speech-language pathologist and owner of defendant Speech &

Language Center, LLC, which provides speech-related therapy to patients.

Plaintiff Horizon Blue Cross Blue Shield filed suit against defendants in 2014,

alleging a "scheme to submit false and fraudulent insurance claims," and seeking

a significant amount of damages on claims based on the New Jersey Insurance

Fraud Prevention Act, N.J.S.A. 17:33A-1 to -34, as well as fraud, negligent

misrepresentation, breach of contract, and unjust enrichment.

      After years of litigation, the parties earnestly engaged in settlement

negotiations the month prior to their September 2019 trial date. In a proceeding

in open court on August 30, 2019, the parties advised the trial judge that they

had settled the case, that the material terms of their agreement were contained

in a term sheet referred to throughout the proceeding, 1 and that the parties would

1
   That document was not marked as an exhibit, an oversight defendants have
attempted to take advantage of. See n. 3, below.
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thereafter draft and sign a formal agreement based on the term sheet. The judge

placed defendant Arsenis under oath and questioned her about her willingness

to settle:

              THE COURT: Okay. Ma'am, you've heard . . . both
              counsel put on the record that you've reached an
              amicable resolution of this matter, is that true?

              MS. ARSENIS: Yes.

              THE COURT: And you understand the terms of that
              settlement are memorialized in the agreement [2] that
              was referenced by counsel, correct?

              MS. ARSENIS: Yes.

              THE COURT: You've had a chance to see that?

              MS. ARSENIS: Yes.

              THE COURT: Okay. You've had a chance to go over
              it [the term sheet] with your counsel, correct?

              THE WITNESS: Yes.

              THE COURT: And that includes [defense counsel]
              who's seated with you today?

              MS. ARSENIS: Yes.

              THE COURT: And your son, who is not an attorney of
              record, but he is an attorney, and he's seated next to you
              at counsel table, correct?

2
    Referring to the term sheet.
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                                          3
MS. ARSENIS: Yes.

THE COURT: Okay. Do you understand the terms?

MS. ARSENIS: Yes.

THE COURT: Have you voluntarily agreed to them?

MS. ARSENIS: Yes.

THE COURT: You understand that it resolves this
matter in full, correct?

MS. ARSENIS: Yes.

THE COURT: And that, of course, you had the
opportunity to have a trial in this matter heard by a jury,
you do you understand that?

MS. ARSENIS: Yes.

THE COURT: You could have done better than what
you've done in that agreement, or you could have done
worse, do you understand that?

MS. ARSENIS: Yes.

THE COURT: With a jury it's always a possibility,
correct?

MS. ARSENIS: Yes.

THE COURT: By settling the matter, you understand
you're waiving your right to a jury trial and accepting
those settlement terms as an amicable resolution of the
matter, do you understand that?

MS. ARSENIS: Yes.

                                                              A-1353-19T2
                            4
      Despite confirming under oath that the parties had reached a settlement

that would be memorialized in a formal agreement consisting of all the

provisions contained in the term sheet, defendants later refused to execute the

more formal settlement agreement, causing plaintiff to move in the trial court

for relief. As revealed by the motion papers, defendants' recalcitrance was based

on the inclusion of a clause that would ostensibly govern the parties' agreement

if defendant Arsenis filed a bankruptcy petition.         The formal settlement

agreement that defendants refused to sign declared that "[i]n the event"

defendant Arsenis filed a bankruptcy petition prior to the full payment of her

obligation to plaintiff, she agreed "not to contest the non-dischargeability of any

remaining settlement payment obligation." This identical phrase appears in the

term sheet. The bankruptcy clause in the unsigned settlement agreement also

expressed that defendant Arsenis

            agrees and intends that the judgment debt will be a non-
            dischargeable debt, pursuant to 11 U.S.C. § 523(a)(2)
            in the event of a bankruptcy, or in any similar
            proceeding.

The term sheet contains an identical provision.

      The trial judge granted plaintiff's motion for reasons discussed in a written

opinion, and defendants appeal.      Defendants contend that the judge erred

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                                        5
because: (1) defendant Arsenis "agreed to settle plaintiff's claims to avoid

further legal expense and stop the bleeding – not to acknowledge 'fraud' as the

Final Settlement Agreement provides"; (2) "[t]he record does not show that the

actual party, [defendant] Arsenis, agreed to a reference [in the settlement

agreement] to fraud"; and (3) the judge "should have struck the offending non-

dischargeability terms as unenforceable and void." We reject these arguments

and affirm.

      In explaining our disposition, we should start with an understanding of

what plaintiff was after when moving in the trial court. Plaintiff entitled its

motion as one seeking to "enforce" a settlement.        While that label is not

inaccurate, it is capable of being misunderstood. What plaintiff sought, despite

the motion's moniker, was simply to have defendants do what they promised to

do: sign an agreement that was faithful to the term sheet. The motion did not

seek, and this appeal does not require us to decide, whether the settlement

agreement should or will be "enforced" if the bankruptcy clause should be

triggered in the future.

      In a solemn proceeding at which both parties were represented by counsel,

defendant Arsenis took the oath and swore to a superior court judge that she

freely and voluntarily entered into a settlement that obligated her execution of a

                                                                          A-1353-19T2
                                        6
written agreement that included the provisions in the term sheet, including the

bankruptcy provision. There's no dispute about that. And there's no dispute that

the drafted settlement agreement adhered to the term sheet.         As for those

provisions that provoked defendants' failure to sign, the settlement agreement

contains – word for word – what was contained in the term sheet. So, there was

no legitimate impediment to the entry of an order compelling execution of the

settlement agreement; defendants' first and second arguments are, therefore,

without sufficient merit to warrant further discussion in a written opinion. R.

2:11-3(e)(2).3

      We do not reach defendants' third argument because our courts "do not

render advisory opinions or function in the abstract." Crescent Park Tenants

Ass'n v. Realty Equities Corp., 58 N.J. 98, 107 (1971). Defendant Arsenis's

agreement about the debt's non-dischargeability has no significance until she

files a bankruptcy petition. If, at that time – should it ever occur – the parties

3
  We make note of two other aspects of these arguments falling within the first
two points. First, defendants contend that plaintiff did not demonstrate that the
term sheet included in the appendix is the same term sheet referred to during the
August 30, 2019 proceeding. We find this contention frivolous, particularly
when defendants never filed an opposing certification in the trial court claiming
there was some other term sheet. Second, defendants argue that, in resolving
the controversy, the judge should have conducted an evidentiary hearing. There
was, however, no genuine dispute about what defendants agreed to sign, so this
argument is also without merit.
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                                        7
dispute whether the debt is dischargeable, a bankruptcy court will have to

consider whether federal policies and legal principles preclude the enforcement

of what defendant Arsenis "agree[d] and intend[ed]" in executing the settlement

agreement about dischargeability. This appeal does not require that we opine

on this interesting but unripe issue. 4

      To summarize, the only real issue in controversy is whether plaintiff was

entitled to an order compelling defendants to sign what they had agreed to sign.

We hold that plaintiff is entitled to that relief without deciding whether the

settlement agreement's non-dischargeability provisions may ultimately be

enforced by a bankruptcy court should defendant Arsenis ever file a bankruptcy

petition.

4
  Mindful of the limitations imposed by Rule 1:36-3, we note only for historical
purposes, and not for precedential purposes, that the Court of Appeals for the
Third Circuit considered the issue nearly thirty years ago but neither reached a
consensus nor published their opinions. Judge Cowen wrote an opinion, in which
Chief Judge Sloviter joined, that affirmed a bankruptcy court determination that
a party could not consent, in an earlier action in another court, to the non-
dischargeability of a debt or judgment, while Judge Weis disagreed for reasons
expressed in his dissent. Cheripka v. Republic Ins. Co., 1991 U.S. App. LEXIS
30343 (3d Cir. 1991). Thereafter, a majority of the Third Circuit's active judges
voted to rehear the matter in banc and, in doing so, vacated the three-judge
panel's opinions and its judgment. Cheripka v. Republic Ins. Co., 1992 U.S.
App. LEXIS 898 (3d Cir. 1992). Later, because the court's twelve judges were
"equally divided" on the question, the bankruptcy court order was affirmed.
Cheripka v. Republic Life Ins. Co., 1992 U.S. App. LEXIS 38449 (3d Cir. 1992).
The court seems not to have taken up the issue since.
                                                                         A-1353-19T2
                                          8
The order under review is affirmed.

                                      A-1353-19T2
                                9