Court Opinion

ID: 9960840
Source: CourtListenerOpinion
Date Created: 2024-04-17 14:09:29.576458+00
Date Added: 2024-06-11T08:19:55.261660
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NOT FOR PUBLICATION WITHOUT THE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-0960-23

MARIO NAPOLITANO and
TONI-LYNN NAPOLITANO,

          Plaintiffs-Appellants,

v.

EUROPEAN CONSTRUCTION
PROFESSIONALS, LLC, and
CARLOS LOPES,

          Defendants-Respondents,

and

ALEN FELD and THE CITY OF
BAYONNE, and its Component
Departments, Offices, and Agencies,1

    Defendants.
_______________________________

                   Submitted April 9, 2024 – Decided April 17, 2024

                   Before Judges Mayer and Enright.

1
    Defendants Alen Feld and the City of Bayonne are not parties on the
interlocutory appeal.
            On appeal from an interlocutory order of the Superior
            Court of New Jersey, Law Division, Hudson County,
            Docket No. L-1180-18.

            Skolnick Legal Group, PC, attorneys for appellants
            (Thomas Blair Gardner and Martin Phillip Skolnick, of
            counsel and on the briefs).

            Burns Horn, LLC, attorneys for respondents (Robert F.
            Horn, on the brief).

PER CURIAM

      By leave granted, plaintiffs Mario and Toni-Lynn Napolitano 2 appeal from

a September 14, 2023 order granting a motion to enforce a settlement filed on

behalf of defendants European Construction Professionals, LLC (European) and

Carlos Lopes. Plaintiffs also appeal from an October 20, 2023 order denying

their motion for reconsideration. We reverse and remand.

      Plaintiffs own property in Bayonne. On February 20, 2014, plaintiffs

entered into a written contract with European to build a home on their vacant

property.   Lopes was European's representative and dealt with plaintiffs

regarding the construction of the new home. European started construction in

2
  Toni-Lynn Napolitano is deceased. As did the trial court and counsel, we refer
to the parties filing the appeal as plaintiffs.

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June 2014, and demanded payment from plaintiffs to proceed with the

construction.

        In July 2014, plaintiffs noticed construction on their new home slowed.

They also observed significant time periods with no work done. Despite the

slowed progress of the construction, European and Lopes demanded payment

from plaintiffs. By the fall of 2014, plaintiffs realized their new home would

not be constructed by the completion date stated in the written contract.

        In 2015, the construction project failed several municipal inspections,

including electrical, mechanical, and plumbing.       During this time period,

European and Lopes continued to demand payment from plaintiffs. Plaintiffs

made the demanded payments, anticipating completion of their new home in the

near future.

        When plaintiffs realized their home would not be timely completed, they

retained counsel to address various construction defects and delays. The home

continued to fail municipal inspections. In April 2015, the City of Bayonne

issued a notice of violation and order to terminate construction on the home.

The notice directed European to abate all violations and deficiencies by May 1,

2015.     While European corrected certain deficiencies, other defects and

deficiencies remained unresolved.

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      Because European and Lopes failed to correct the defects and deficiencies,

plaintiffs filed a complaint against European, Lopes, and other defendants. In

their multi-count complaint, plaintiffs alleged breach of contract, breach of

warranty, fraudulent misrepresentation, unjust enrichment, negligence, and

various statutory violations. European and Lopes filed an answer.

      The parties exchanged discovery and eventually agreed to participate in

mediation. The parties attended mediation on November 11, 2022, but failed to

reach an agreement on that date. There were no other in-person mediation

sessions after November 11, 2022. On December 8, 2022, the mediator sent the

following letter to counsel for the parties:

            Based upon my phone conversations with each of you
            yesterday, we have reached an agreement.

            European and [Lopes] . . . [are] agreeable to paying Mr.
            Napolitano in full and final settlement of all claims
            arising out of the project [in] the amount of $840,000.

            The above amount will be paid as follows:

            1. $159,500 [u]pon Napolitano's filing of a
               [s]tipulation of [d]ismissal with [p]rejudice and
               [w]ithout [c]osts[;] [and]

            2. $680,500 [f]or the purchase of Mr. Napolitano's
               home[,] . . . memorialized in a standard form of
               [r]eal [e]state [c]ontract.

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3. The [r]eal [e]state [c]ontract will provide for a [ten
   percent] deposit ($68,000) to be held in trust until
   settlement or closing of title.

4. Said [r]eal [e]state [c]ontract shall provide that
   Napolitano will take back a $300,000 mortgage, at
   [six percent] interest. Monthly payments will be
   made based upon a [thirty]-year amortization
   schedule, but the entire unpaid principal and any
   accrued and unpaid interest will be payable in full
   five years after the date of mortgage execution.

5. . . .Mr. Napolitano will . . . convey clear title to the
property, the property must be free of all tenants[,] and
the property must be in the condition it is [as of
December 8, 2022], ordinary wear and tear excepted.

      ....

I believe the above sets forth the basic parameters of
the settlement. Unless you want me involved, I will
leave it to you . . . to prepare the [s]ettlement
[a]greement and associated [r]eal [e]state [c]ontract.

Kindly signify your respective . . . agreement that the
above is an accurate summary of the settlement reached
by either signing and returning this letter to me or
giving the acknowledgment via return e-mail.

In what is a fine example of "never give up hope," I
thank you both for your professional courtesies. It was
a pleasure working with you.

My final invoice will follow in a day or two.

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      Contrary to the provisions in the mediator's December 8 letter, neither

party returned a signed copy of the letter. Nor did the parties email the mediator

acknowledging a settlement.

      On December 13, 2022, plaintiffs' counsel emailed the mediator, stating,

"[Mr. Napolitano] is just confirming a few things on his end. I will get back to

you shortly." Later that same day, the mediator replied, "[Defendants' counsel]

is doing likewise. [European] is going to need a larger mortgage than the amount

proposed in my letter. Since it balloons at [five] years, this should not be a

serious issue. Please let me know."

      A month later, plaintiffs' counsel emailed defendants' attorney, stating "I

thought we were finalizing the settlement but then you stopped responding.

What happened?" Later that day, defendants' counsel replied he underwent

surgery and "need[ed] to finalize the release." Despite this email exchange

between counsel, the parties never executed a formal written settlement

agreement or real estate contract consistent with the mediator's December 8,

2022 letter. Nor was any release circulated.

      In August 2023, defendants filed a motion to enforce a settlement. During

the September 14, 2023 motion argument, defense counsel explained the parties

were "struggling . . . to get the [settlement] details finalized[.]" On the other

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hand, plaintiffs' counsel argued, "[T]here [was] no settlement. There [was] . . .

an outline of terms that need to be resolved . . . . [T]here [was] no real estate

contract. . . . There [was] no mortgage . . . ."

      In a September 14, 2023 order, the judge granted defendants' motion to

enforce the settlement. In her written decision, the judge found:

             [I]t is evident that [defendants have] met [their] burden
             and shown that there was a "meeting of the minds" as a
             result of the mediation . . . , which was memorialized in
             the letter of December 8, 2022. Therein, [the mediator]
             confirm[ed] that the parties ha[d] agreed to settle for
             $840,000 and set[] forth . . . the "parameters" of the
             agreement. Said terms are plain and unambiguous and
             constitute the material terms of the agreement. The
             unfortunate fact that the parties have not been able to
             "flesh out" the release terms does not merit the undoing
             of this settlement, especially as there is no showing of
             any fraud or other compelling circumstances in this
             motion record.

      Plaintiffs moved for reconsideration of the September 14, 2023 order. The

judge denied reconsideration in an October 20, 2023 order.                  In denying

reconsideration, the judge found:

             Plaintiff[s] ha[ve] failed to set forth a justifiable reason
             for this [c]ourt to reconsider the September 14 [o]rder.
             In [that] [o]rder, the [c]ourt held that, although the
             settlement agreement was not signed by both parties, a
             "meeting of the minds" occurred and [was]
             memorialized in the . . . letter dated December 8, 2022.
             Upon reconsideration, [p]laintiff[s] argue[] that the
             [December 8, 2022] letter was not signed, confirmed,

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            or acknowledged by either party per the [mediator's]
            request . . . . The [c]ourt does not find this argument
            persuasive. In Pascarella v. Bruck, the Appellate
            Division held that an agreement to settle a lawsuit,
            where voluntarily entered, is binding upon the parties
            even in the absence of a writing. 190 N.J. Super. 118,
            124 (App. Div. 1983); Lahue v. Pio Costa, 263 N.J.
            Super. 575, 596 (App. Div. 1993). . . . Here,
            [p]laintiff[s'] argument fails because precedent does not
            require that the settlement be in writing and signed for
            a "meeting of the minds" to occur.

      Plaintiffs moved for leave to appeal the September 14, 2023 and October

20, 2023 orders. In a November 30, 2023 order, we granted leave to appeal from

those orders.

      On appeal, plaintiffs argue the judge "erred in concluding that an unsigned

proposal sent to the parties by a mediator after a failed mediation could bind the

parties as an enforceable settlement agreement."       We agree that the judge

mistakenly found the unsigned proposal submitted by the mediator to be a valid

and enforceable settlement.

      Our "review of a motion to enforce settlement is de novo" and we

"consider[] whether the 'available competent evidence, considered in a light

most favorable to the non-moving party, is insufficient to permit the judge . . .

to resolve the disputed factual issues in favor of the non-moving party.'" Gold

Tree Spa, Inc. v. PD Nail Corp., 475 N.J. Super. 240, 245 (App. Div. 2023)

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(omission in original) (quoting Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475

(App. Div. 1997)). The party seeking to enforce the settlement has the burden

of proving a valid settlement was reached. Amatuzzo, 305 N.J. Super. at 475.

      Ordinarily, "[w]here the parties agree upon the essential terms of a

settlement, so that the mechanics can be 'fleshed out' in a writing to be thereafter

executed, the settlement will be enforced notwithstanding the fact that the

writing does not materialize because a party later reneges."         Harrington v.

Harrington, 281 N.J. Super. 39, 46 (App. Div. 1995) (alteration in original)

(quoting Lahue v. Pio Costa, 263 N.J. Super. 575, 596 (App. Div. 1993)).

However, "a settlement that is reached at mediation but not reduced to a signed

written agreement will not be enforceable." Gold Tree Spa, 475 N.J. Super. at

245 (quoting Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J.

242, 263 (2013)).      This "broad, bright-line rule" governs all mediation

agreements, "whether mediation is court-ordered or voluntary."          Ibid. The

decisions in Willingboro and Gold Tree Spa are clear and unequivocal in holding

a settlement by way of a mediation is achieved only when the parties agree in

writing.

      Although the parties dispute whether there were further telephonic

discussions with the mediator after November 11, 2022, there is no dispute the

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parties never signed the December 8, 2022 letter or submitted an email

acknowledging and accepting the terms contained in that letter. Therefore,

consistent with well-settled case law, the document could not, and did not,

constitute an enforceable settlement.

      Defendants' merits brief asserts plaintiffs lack standing on appeal because

they failed to disclose the death of one of the named parties.        However,

defendants did not seek leave to file a cross-appeal. Moreover, defendants failed

to present this issue to the trial court. Thus, we decline to address defendants'

standing argument.

      To the extent we have not addressed any remaining arguments, those

arguments lack sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

      Reversed and remanded. We do not retain jurisdiction.

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