ABCO REFRIGERATION SUPPLY CORP v. DESIGNS BY KEISER CORP (1997)

Order, Supreme Court, New York County (Charles Ramos, J.), entered July 22, 1996, which, in an action for goods sold and delivered, denied defendants purchasers' motion to vacate a judgment entered against them in the principal amount of $37,000, or to reduce it to the principal amount of $20,000, unanimously affirmed, with costs.

 The parties entered into a settlement agreement in open court under which plaintiff agreed to accept $20,000 from defendants in full satisfaction of its claim for goods sold and delivered allegedly worth $37,000, provided defendants paid the $20,000 in the installments specified in the agreement.   The agreement further provided that plaintiff could enter judgment for $37,000, less any installments paid, if defendants failed to make any installment payment within 10 days of its due date, and that the agreement was to constitute a general release if all the installments were timely paid.   Defendants failed to make the first installment, whereupon plaintiff entered judgment for $37,000.   Defendants' claim that the default provision is not a liquidated damages clause but an unenforceable $17,000 penalty was properly rejected, where the default payment amount of $37,000 is virtually identical to the original claim, and the parties plainly did not intend that their original contract be entirely supplanted.   Absent fraud, collusion, mistake or accident, strict enforcement of such open court stipulations is favored (Hallock v. State of New York, 64 N.Y.2d 224, 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178).

MEMORANDUM DECISION.