JIMENEZ v. CORONA (2018)

Papers Numbered NYSCEF docs. 32–38 & 50

The parties have filed a motion and cross-motion to compel the terms of a general release and requiring its execution.

The parties proceeded to a mediation where they thought that they had settled the action and their dispute stemming from a vehicular accident at a toll plaza in New Jersey on July 6, 2015. Based on plaintiffs' residence in Queens County, New York, an action was commenced in this Court, followed by mediation. At the mediation proceeding, the parties did not agree whether or not the purported settlement would extinguish the rights of plaintiff's insurer to proceed against defendant in a future subrogation action for no fault first-party benefits. Instead, the parties turn to the Court to compel a settlement and the terms of a general release favorable to their positions.

The Appellate Division has held that whether or not an insurer can proceed with a post-settlement subrogation claim turns on the exact terms of the settlement and the release. Compare Group Health, Inc. v. Mid–Hudson Cablevision, Inc., 58 AD3d 1029, 1031 (3rd Dept. 2009) (“[I]nasmuch as it is undisputed here that defendants, the third-party tortfeasors, had knowledge of plaintiff's subrogation rights, the settlement has no effect on plaintiff's right to recover against them, and Supreme Court erred in dismissing the complaint.”) with Progressive Ins. Co. v. Sheri Torah, Inc., 44 AD3d 837, 838 (2nd Dept. 2007) (“Progressive's plight here appears to have resulted from its own failure to participate in, or object to, the duly-noticed infant compromise hearing and to ‘insist on the resolution of its subrogation claim against the tortfeasor for APIP payments as part of a global settlement of the personal injury claims’ ”).

With respect to the case at bar, the Court's function is to interpret the subject agreement—not the making of its terms by talismanic fashion. It is not for this Court to divine the minds of the counsel at the mediation proceeding or to make a new contract under the guise of interpreting the writing. See, Nomura Home Equity Loan, Inc., Series 2006–FM2, by HSBC Bank USA, Nat'l Ass'n v. Nomura Credit & Capital, Inc., 30 NY3d 572 (2017) (“Courts may not, through their interpretation of a contract, add or excise terms or distort the meaning of any particular words or phrases, thereby creating a new contract under the guise of interpreting the parties' own agreements.”); ––– AD3d ––––, 2018 WL 1179570, at *2 (2nd Dept. Mar. 7, 2018) (“ ‘[a] court should not, under the guise of contract interpretation, imply a term which the parties themselves failed to insert or otherwise rewrite the contract’ ”; citing cases); Leibowitz v. The County. Tr. Co., 19 AD2d 843 (2nd Dept. 1963).

It is clear that, in this case, there was no meeting of the minds as to whether or not a subrogation action was a material term of the subject mediation proceeding and, thus, survived settlement of the present dispute. That the parties thought they had reached an accord at mediation does not change the result reached here. As noted above, given that the parties did not agree, either in writing or at mediation, whether the purported settlement would extinguish the rights of plaintiff's insurer to proceed against defendant, in a future subrogation action for no fault first-party benefits, this case must proceed to trial. The parties may not turn to the Court to compel a settlement and the terms of a general release favorable to their positions.

In sum, the Court refuses to indulge the parties by inventing an essential term of a settlement and, thus, refuses to recognize the purported settlement reached at mediation. Both the motion and the cross motion, accordingly, are denied. The Court finds that a trial of the underlying personal injury action must be held in this case. A fact-finder's decision on the issue of liability will determine whether or not the plaintiff's insurer may then proceed against the defendant in a future subrogation action for no fault first-party benefits.

The parties shall appear at the Trial Scheduling Part at the courthouse located at 88–11 Sutphin Boulevard, Jamaica, New York 11435, on March 13, 2018, at 9:30 A.M., as already scheduled, for the trial of the action.

The foregoing constitutes the decision, order, and opinion of the Court.

Salvatore J. Modica, J.