Court Opinion

ID: 4649045
Source: CourtListenerOpinion
Date Created: 2021-01-05 15:09:25.686555+00
Date Added: 2024-06-11T08:01:20.846484
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NOT FOR PUBLICATION WITHOUT THE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-0687-19T1

GLENTINA KUPOLATI,

          Plaintiff-Respondent,

v.

VILLAGE OF TIMBER
CREEK ASSOCIATION,

     Defendant-Appellant.
________________________

                   Argued November 12, 2020 – Decided January 5, 2021

                   Before Judges Ostrer and Accurso.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Camden County, Docket No. L-1927-16.

                   Gerald Kaplan argued the cause for appellant
                   (Methfessel & Werbel, attorneys; Gerald Kaplan and
                   David Incle, Jr., on the briefs).

                   Marc F. Greenfield argued the cause for respondent
                   (Spear, Greenfield, Richman, Weitz & Taggart, P.C.,
                   attorneys; Marc F. Greenfield and Jeremy M. Weitz, on
                   the brief).

PER CURIAM
      Defendant Village of Timber Creek Association appeals from the trial

court's order granting plaintiff Glentina Kupolati's motion to enforce the

Association's agreement to settle her personal-injury lawsuit. 1 The Association

also appeals from the court's award of interest. We affirm.

                                        I.

      On a motion to enforce a settlement, we review the documentary record

in a light most favorable to the non-moving party, just as we would on a motion

for summary judgment. See Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 474–

75 (App. Div. 1997). With that standard in mind, these are the facts.

      Plaintiff resided at the Village of Timber Creek condominium when she

slipped and fell on a sidewalk near her home. On the day her suit against the

Association was to go to trial, the parties' counsel met to settle the matter.

Counsel orally agreed that Kupolati would receive $180,000; in return, Kupolati

would sign a general release, waiving any claims against the Association. 2

1
  We recognize that plaintiff signs her name "Gleatina" Kupolati. Elsewhere in
the record, her name is listed as "Gleantina" Kupolati. For convenience, we use
the name that appears in her original complaint.
2
  Evidently, counsel did not spread the settlement terms on the record in open
court. But "the practice of spreading the terms of [an] agreement upon the
record, although a familiar practice, is not a procedure requisite to enforcement."
Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App. Div. 1983).
                                                                           A-0687-19T1
                                        2
      However, defense counsel's subsequently-prepared settlement documents

went further. The general release covered the Association's insurer (as well as

its various affiliated and related entities), in addition to the Association,

releasing them from most claims, including Medicare liens under the Medicare

Secondary Payer Act, 42 U.S.C. § 1395y(b)(2). Defense counsel also insisted

that plaintiff's physician certify that plaintiff's slip-and-fall injuries would not

require any additional treatment or monitoring.

      Plaintiff's counsel amended the proposed release, striking the provisions

that generally released the insurer.3 However, plaintiff did accept a paragraph

holding the insurer harmless against "any and all liens, known or unknown, or

claims that may be asserted against the settlement proceeds." She also signed

the defense-prepared settlement agreement; in so doing, she agreed that the

$180,000 settlement payment would cover the insurer's portion of amounts

payable to Medicare, then and in the future, and that "the responsibility to

reimburse Medicare for its payments [was] solely the responsibility of the

3
   Defendant argues that the proposed release covered only the slip-and-fall
incident. The release states that plaintiff releases claims "now existing or which
may accrue, including any and all claims asserted or which could have been
asserted in any lawsuit, on account of and in any manner arising out of or related
to an event . . . occurring on or about 3/20/2015 at Village of Timber Creek
(hereinafter, 'the Occurrence')" (emphasis omitted).
                                                                            A-0687-19T1
                                         3
Releasor" — that is, plaintiff. Furthermore, plaintiff's counsel stated in a letter

that his office would satisfy any Medicare liens (and certain other liens) before

distributing the settlement funds.

      Although plaintiff did not provide a physician's certification, she

eventually provided a physician's letter stating that she was doing well under her

pain-management regimen, and that no additional treatment or surgery was

indicated.

      But the parties remained at odds over the general release (as pertained to

the insurer) and the physician certification. Plaintiff moved to enforce the

settlement without the two disputed items; defendant cross-moved to enforce a

settlement with them. After finding that the parties did not agree upon either

disputed item, the court granted plaintiff's motion.       The court found that

defendant failed to establish that either a general release of a non-party insurer,

or a physician's certification regarding future treatment, was standard practice.

The court noted that holding an insurer harmless for Medicare claims was

standard practice, but it pointed out that plaintiff had already done so.

      The court also ordered defendant to pay interest, at the post-judgment rate

of three-and-a-half percent, on the $180,000 settlement amount. Asked when

the interest would start running, the court ordered that it commence thirty days

                                                                            A-0687-19T1
                                        4
after plaintiff signed the amended releases. Before choosing the thirty-day

period, the court inquired whether, under the Unfair Claims Settlement Practices

Act, a payment would have been due within fourteen or thirty days; plaintiff's

counsel stated he would accept interest commencing after thirty days.

      Defendant's appeal followed.

                                         II.

                                         A.

      We understand defendant to present two alternative arguments in

challenging the order to enforce: (1) the trial court should have held an

evidentiary hearing, because there was a genuine factual issue regarding the

settlement's terms; or (2) the trial court should have, without an evidentiary

hearing, enforced defendant's version of the settlement, which included terms

allegedly consistent with standard industry practice.

      We review de novo the trial court's decision that there existed no genuine

issue of material fact, as we do in reviewing a summary-judgment order. Henry

v. N.J. Dep't of Hum. Servs., 204 N.J. 320, 330 (2010) (stating that "the appellate

court should first decide whether there was a genuine issue of material fact"). If

no genuine dispute exists, then we must decide whether the trial court correctly

ruled that the parties contracted to settle upon the plaintiff's alleged terms. Ibid.

                                                                             A-0687-19T1
                                         5
(stating that, absent a genuine issue of material fact, the appellate court must

"then decide whether the trial court's ruling on the law was correct"). Our de

novo review extends to legal issues of contract formation. See NAACP v.

Foulke Mgmt. Corp., 421 N.J. Super. 404, 430 (App. Div. 2011).

      "A settlement agreement between parties to a lawsuit is a contract," Nolan

ex rel Nolan v. Lee Ho, 120 N.J. 465, 472 (1990), and is "governed by [the

general] principles of contract law," Globe Motor Co. v. Igdalev, 225 N.J. 469,

482 (2016) (alteration in original) (quoting Brundage, 195 N.J. at 600–601).

      Because our system highly values dispute-settlement contracts, Quinn v.

Quinn, 225 N.J. 34, 44 (2016), we "strain to give effect to the terms of a

settlement wherever possible," Brundage v. Estate of Carambio, 195 N.J. 575,

601 (2008) (quoting Div. of Rate Couns. v. N.J. Bd. of Pub. Utils., 206 N.J.

Super. 523 (App. Div. 1985)). A court will enforce a settlement agreement,

which "usually involves the payment of money by one party in consideration for

the dismissal of a lawsuit by the other party," Thompson v. City of Atlantic City,

190 N.J. 359, 379 (2007), if "the agreement addresses the principal terms

required to resolve the dispute," Willingboro Mall, Ltd. v. 240/242 Franklin

Ave., L.L.C., 421 N.J. Super. 445, 453 (App. Div. 2011), aff'd, 215 N.J. 242

(2013).   A principal, or "essential," term, is one "which is essential to a

                                                                          A-0687-19T1
                                        6
determination of [the parties'] rights and duties." Restatement (Second) of

Conts. § 204 (Am. Law Inst. 1981).

      If "the parties do not agree to one or more essential terms . . . courts

generally hold that the agreement is unenforceable." Weichert Co. Realtors v.

Ryan, 128 N.J. 427, 435 (1992). Nonetheless, a court will enforce an oral

agreement that includes essential terms even if the "writing does not materialize

because a party later reneges." Lahue v. Pio Costa, 263 N.J. Super. 575, 596

(App. Div. 1993).

      Plaintiff bore the initial burden to establish both the agreement to settle,

and defendant's breach. Globe Motor Co., 225 N.J. at 482. She satisfied her

burden through the certification of her counsel, who (evidently) negotiated the

settlement.4 Counsel certified that the parties orally agreed that defendant would

pay plaintiff $180,000, and that plaintiff would generally release defendant in

return. He also certified that the parties never agreed to generally release the

insurer, or to provide a physician certification; in fact, they did not even discuss

the certification in conference. Counsel also identified the several documents

4
  Plaintiff's counsel does not explicitly state that he personally negotiated the
settlement with defense counsel. However, even if one of plaintiff's counsel's
associates negotiated it and reported the events to plaintiff's counsel, defendant
does not raise a hearsay objection. Nor does defendant dispute the terms of the
oral agreement.
                                                                            A-0687-19T1
                                         7
he did provide to defendant, and stated that defendant withheld payment of the

settlement amount.

      At that point, defendant, as the non-moving party, bore the burden to

marshal competent evidence to demonstrate a genuine dispute of material fact.

Globe Motor Co., 225 N.J. at 479–80; see R. 1:6–6. However, defense counsel,

in his responding certification, did not deny plaintiff's version of the settlement

conference. Defense counsel observed that plaintiff alleged that defendant had

included "supposedly unilateral terms not previously agreed to by the parties."

But defense counsel never denied that those terms were, indeed, unilateral. In

particular, he did not claim that, in the settlement conference, he had demanded

that plaintiff generally release the insurer and provide a physician's certification,

let alone that plaintiff agreed to those demands. Defense counsel referred the

court to his letter brief, but that, too, failed to recite what transpired in the

settlement conference. In any event, a party may not present facts "which are

neither of record, judicially noticeable, nor stipulated, by way of statements of

counsel made in supporting briefs." Pressler & Verniero, Current N.J. Court

Rules, cmt. on R. 1:6–6 (2021).

      Therefore, we conclude that there was no genuine dispute that the parties

agreed to essential and enforceable terms of a settlement agreement , but did not

                                                                             A-0687-19T1
                                         8
expressly agree that plaintiff would provide either a general release of the

insurer or a physician certification.

      Nor are we persuaded that, even if the parties did not expressly agree to

the release and the certification, those elements were essential, including them

is standard practice in settling personal injury suits, and they were implied.5

"[U]nder general contract law terms may be implied in a contract . . . because

they are necessarily involved in the contractual relationship so that the parties

must have intended them and have only failed to specifically express them

because of sheer inadvertence or because the term was too obvious to need

expression."   Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 130 (1965).

Specifically, a court may supplement an agreement with terms common to an

industry "if each party knows or has reason to know of the usage and neither

party knows or has reason to know that the other party has an intention

inconsistent with the usage." Restatement (Second) of Conts. § 221 (Am. Law

Inst. 1981).   But if "the parties to a bargain sufficiently defined to be a

contract have not agreed with respect to a term which is essential to a

determination of their rights and duties, a term which is reasonable in the

5
  Defendant also presents authority that agreements to indemnify another party
for Medicare claims are valid and enforceable. But the issue before the court
was the formation, not the validity, of such an agreement.
                                                                         A-0687-19T1
                                        9
circumstances is supplied by the court." Pacifico v. Pacifico, 190 N.J. 258, 266

(2007) (quoting Restatement (Second) of Conts. § 204 (Am. Law Inst. 1981)).

Such a term may be "based upon customs in the industry." See Kas Oriental

Rugs, Inc. v. Ellman, 394 N.J. Super. 278, 285 (App. Div. 2007); see also Kearny

PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 221 (1979).

      However, defendant failed to present any competent evidence that

generally releasing a tortfeasor's insurer was a common and customary practice

in settling personal-injury suits. Nor did defendant present competent evidence

that its demand for the physician's certification was consistent with industry

customs. Absent such evidence, there was no industry-usage basis to supply

such terms, and the trial court did not err in refusing to do so. Furthermore, the

general release and the physician's certification fall short of essential terms —

that is, terms without which the court could not enforce the settlement

agreement. In other words, the agreement contained no gap that the court needed

to fill with a release and certification.

      In sum, the trial court did not err in granting plaintiff's motion to enforce

the settlement agreement (as plaintiff's counsel described that agreement).

                                                                           A-0687-19T1
                                            10
                                        B.

      Finally, we reject defendant's challenge to the trial court's award of "post-

judgment" interest, which began to accrue thirty days after plaintiff executed the

acceptable settlement documents. In particular, defendant contends that the

court misplaced reliance on the Unfair Claim Practices Settlement Act, which

played no role in the case.

      We recognize that the court awarded interest that began accruing in

January 2019, eight months before the court entered the order enforcing the

settlement. Thus, the court actually awarded pre-judgment interest. Cf. Pressler

& Verniero, Current N.J. Court Rules, cmt. 1.2.2 on R. 4:42–11 (2021) (stating

that "[p]ost-judgment interest runs when the judgment is entered"). But the

court's reference to the post-judgment rate is of no consequence, because, as the

trial judge correctly noted, "post-judgment or pre-judgment are essentially the

same." See Rule 4:42–11(b) (stating that, in tort actions, "[p]rejudgment interest

shall be calculated in the same amount and manner provided for by paragraph

(a) of this rule").

      Although plaintiff's underlying claim was for tort damages, the court

awarded interest on her breach-of-contract claim — that is, her claim that

defendant breached the settlement agreement. Equitable principles, not Rule

                                                                           A-0687-19T1
                                       11
4:42–11, govern a court's decision to award pre-judgment interest on a contract

claim. Cnty of Essex v. First Union Nat'l Bank, 186 N.J. 46, 61 (2006). The

decision to award interest, and the rate awarded, both lie within the trial court's

"sound discretion." Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 390

(2009). The interest award is designed to compensate the plaintiff for the lost

use of the money.      Ibid.   "Unless the allowance of prejudgment interest

'represents a manifest denial of justice, an appellate court should not interfere.'"

Ibid. (quoting Cnty. of Essex, 186 N.J. at 61).

      And we discern no basis to do so here. Plaintiff was entitled to the

payment of $180,000 based on the settlement agreement that counsel reached.

Defendant retained use of the money in breach of the agreement. 6 The trial court

reasonably exercised its discretion in utilizing the post-judgment interest rate,

and in deciding to start interest running thirty days after plaintiff signed the

documents.    Evidently, the court referred to the Unfair Claims Settlement

Practice Act only because the court believed it supplied an analogous standard

6
  We note that even after the court entered its order, defendant persisted in its
non-payment. At oral argument on appeal, defense counsel admitted that
defendant had not yet paid plaintiff, although defendant failed to secure a stay
pending appeal, or to post a supersedeas bond, or to deposit the amount due with
the court. See R. 2:9–5(a).
                                                                            A-0687-19T1
                                        12
for the prompt payment of a claim.7 The court did not indicate that the Act

governed. Therefore, we shall not disturb the trial court's interest award.

      Affirmed.

7
  Because the court referred to the Act for that limited purpose, we need not
examine in detail the time periods for insurance-claim payments under the Act.
See N.J.A.C. 11:2–17.7.
                                                                          A-0687-19T1
                                      13