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Edison ALVAREZ, Plaintiffs, v. Ivan C. CRUZ, Star Energy Transportation Inc., Carlos A. Guerra, and Cuenca Cronel Trucking, Defendants.
Defendants Ivan Cruz and Star Energy Transportation, Inc. (hereafter “Defendants”) move this Court for an Order pursuant to CPLR 2104, to enforce the parties’ purported settlement agreement. For the reasons set forth below, the motion is denied.
This personal injury action arises out of a motor vehicle accident that occurred on May 12, 2016 in Queens County. When the collision occurred, plaintiff was driving a dump truck and defendant Cruz was driving an oil truck while employed by defendant Star Energy Transportation. The summons and complaint were filed on September 10, 2018. The action against defendants Carlos A. Guerra and Cuenca Cronel Trucking was discontinued pursuant to a stipulation of discontinuance e-filed on October 3, 2018. On November 11, 2018, issue was joined with the filing of the Cruz/Star Defendants’ answer.
At one of the defendants’ depositions on February 13, 2020, the parties discussed settlement and plaintiff conveyed a settlement demand of $125,000.00; in response, defendants increased their offer to $35,000.00, which plaintiff rejected via email, stating, “look at the bills below I am dealing with. There is no way 35k can work,” featuring a charge from the Local 282 for “$232.99,” among other charges (Exh. C). By email dated May 7, 2020, attorney David Matthew Kittrel for plaintiff lowered his demand to $115,000.00 (Exh. D). Then, by email dated June 17, 2020, attorney David Matthew Kittrel inquired whether defendants could “go to $92,000.00 to settle” (Exh. E). By email dated June 29, 2020, Claims Team Supervisor Jim Bookmyer, for defendants, inquired whether Mr. Kittrel had spoken to the plaintiff about “possible settlement at $50,000.00,” to which Mr. Kittrel replied on July 16, 2020, “[s]till investigating a potential lien. I will respond back” (Exh. G). On July 27, 2020, Mr. Bookmyer followed up via email about the $50,000.000 offer (Exh. H). On August 14, 2020, Claims Supervisor Kori Trotter for defendants followed up again via email about the $50,000.00 offer (Exh. I). On August 19, 2020, Mr. Kittrel replied to Ms. Trotter's email and wrote, “Upon review and client discussion, we will accept the $50,000 to settle this matter” (Exh. I).
On August 19, 2020, a paralegal from defense counsel's office emailed Mr. Kittrel a proposed general release and stipulation of discontinuance (Exh. B). On August 26, 2020, Mr. Kittrel stated in an email: “Unfortunately, we cannot accept at this time. Our client's union informed us yesterday that their final health lien of $232.66 was in error and that the current lien is $27.212.75. We request settlement in the amount of $77.212.75.” (Exh. K).
Defendants move to enforce the parties’ purported settlement agreement. Defendants contend that the attorneys had the authority to act on behalf of their clients and the email communications represent an offer and acceptance. Plaintiff opposes the motion, contending that the email communications are not the legal equivalent of a stipulation of settlement because plaintiff's counsel did not “sign” the agreement as required by CPLR 2104. Plaintiff further contends that even if the email correspondence were considered a stipulation, the stipulation would be void under the doctrine of mutual mistake.
CPLR 2104 states, in part, that “[a]n agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered.” Settlement agreements “are judicially favored, will not lightly be set aside,” and will be enforced with rigor and without a searching examination into their substance” (Forcelli v. Gelco Corp., 109 A.D.3d 244, 972 N.Y.S.2d 570 [2d Dept. 2013]). To enforce a settlement, the Court must be satisfied that the agreement is “clear, final and the product of mutual accord” and in writing (Id., CPRL 2104). “In addition, since settlement agreements are subject to the principles of contract law, for an enforceable agreement to exist, all material terms must be set forth” in that writing, “and there must be a manifestation of mutual assent” (Forcelli, 109 A.D.3d at 248, 972 N.Y.S.2d 570).
Correspondence between counsels “can qualify as an enforceable stipulation of settlement under CPLR 2104,” so long as that correspondence “set[s] forth the material terms of the stipulation” and is properly “subscribed” and thus capable of enforcement (Id. at 249, 972 N.Y.S.2d 570.) Once “an attorney hits ‘send’ with the intent of relaying a settlement offer or acceptance, and their email account is identified in some way as their own,” the parties’ counsels’ emails create a binding settlement agreement (Philadelphia Insurance Indemnity Company v. Kendall, 197 A.D.3d 75, 80, 151 N.Y.S.3d 392 [1st Dept. 2021]). “[I]t is unnecessary for [the party or their agent] to type their own signature” (Id.).
Here, the August 14, 2020 and August 19, 2020 exchange of emails between plaintiff's counsel and the Claims Supervisors for defendants contained the material terms of a settlement between the parties and qualified as a subscribed writing with the meaning of CPLR 2104.
However, for the reasons set forth below, the agreement between the parties must be distinguished from the agreement at issue in Philadelphia Insurance Indemnity Company v. Kendall, and must be vacated on the grounds of mutual mistake given the $27,000.00 difference between the lien asserted by the Fund at the time of settlement, and the actual amount of the lien.
At the outset, the Court notes that plaintiff's counsel raised the issue of liens during settlement negotiations and sought to verify the Trust's lien amount on multiple occasions. By letter dated August 24, 2020, Mario Bulding, a Fund Administrator, confirmed that the amount of the lien was $236.99 (Exh. D). However, on August 26, 2020, Mr. Bulding sent a further letter, stating that plaintiff's counsel should “disregard [the] letter of August 24, 2020” because “an updated lien report was not run,” and that the true and correct amount of the lien was $27,212.75 (Exh. E). Enclosed with the August 26, 2020 letter, Mr. Bulding included an itemized list of subrogation claims associated with the lien.
“To void a contract for mistake,” the party invoking the doctrine must demonstrate that the mistake is “mutual, substantial and must exist at the time the parties enter into the contract” (260/261 Madison Equities Corp. v. 260 Operating, Inc., 281 A.D.2d 237, 722 N.Y.S.2d 19 ; Thor Properties, LLC v. Chetrit Group LLC, 91 A.D.3d 476, 936 N.Y.S.2d 196 [1st Dept. 2012]). “The idea is that the agreement as expressed, in some material respect, does not represent the ‘meeting of the minds’ of the parties” (Matter of Gould v. Board of Educ. Of Sewanhaka Cent. High School District, 81 N.Y.2d 446, 453, 599 N.Y.S.2d 787, 616 N.E.2d 142  (internal citations omitted)). Here, plaintiff demonstrated that the settlement agreement was the product of a mutual mistake based on the parties’ incorrect belief, as reflected in the emails evincing that the parties’ negotiations assumed the Fund's lien was $232.66. The terms of the parties’ settlement agreement, drafted by defendant after the emails by plaintiff accepting the $50,000.00 offer, reflect this error.
Plaintiff demonstrated that the difference between the two lien amounts, exceeding a factor of one hundred, was a sufficiently substantial error that prevented a meeting of the minds as to the $50,000.00 settlement (see Mayo v. NYU Langone Medical Center, 2018 N.Y. Slip Op. 33391(U), 2018 WL 6790246 [N.Y. Sup. Ct. 2018]; M. v. New York City Health and Hospitals Corp., 303 A.D.2d 725, 756 N.Y.S.2d 875 [2d Dept. 2003]). Moreover, under these circumstances, enforcement of the stipulation would be unjust (see Mahon v. New York City Health and Hospitals Corp., 303 A.D.2d 725, 756 N.Y.S.2d 875 [2d Dept. 2003]), as the lien amount is over half of the proposed settlement amount.
Accordingly, the Court hereby denies defendants Ivan Cruz and Star Energy Transportation, Inc.’s motion in its entirety.
This constitutes the Decision and Order of this Court.
Bianka Perez, J.
Response sent, thank you
Docket No: Index No. 30374/2018E
Decided: November 17, 2021
Court: Supreme Court, Bronx County, New York.
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