IN THE MATTER OF THE ESTATE OF MARY A. CHIAPPA

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0881-03T2

IN THE MATTER OF

THE ESTATE OF MARY

A. CHIAPPA, deceased.

____________________________________

 

Argued: March 7, 2005 - Decided:

Before Judges A. A. Rodr guez and Hoens.

On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Morris County, P-0501-96.

Donald Chiappe, Executor of the Estate of Mary A. Chiappa, appellant pro se.

Gregg D. Trautmann argued the cause for respondent James K. Pryor (Trautmann, Veres & Luther, attorneys; Mr. Trautmann, on the brief).

PER CURIAM

Donald Chiappe, the Executor of the Estate of his late mother, Mary A. Chiappa (decedent), appeals from the amended judgment of the Chancery Division, Probate Part, enforcing a settlement agreement between the Estate and James K. Pryor, the guardian appointed by the court for Chiappa during a period of incompetence prior to her death. The Estate sued Pryor alleging misappropriation and mismanagement of the decedent's assets during the period of guardianship. Chiappe denies that he authorized his attorney to negotiate a settlement or that he approved the terms of such a settlement. We reverse and remand concluding that resolution of the issue requires an evidentiary hearing.

These are the salient facts. Pryor served as guardian over Chiappa's person and property from August 22, 1996 until her death on April 9, 2001. After her death, the Morris County Surrogate admitted to probate her last Will and Testament and issued Letters Testamentary to Chiappe. Chiappe, in his capacity as executor, filed a verified complaint to compel Pryor to do an accounting. Nino A. Coviello, Esq., of the firm of Saiber, Schlesinger, Satz & Goldstein represented the Estate in this action. The complaint alleged that Pryor failed to pay property taxes and utility bills on at least three of the decedent's properties. This resulted in power being discontinued to one such property. Additionally, it was alleged that Pryor permitted certain hazard insurance policies on decedent's Florida properties to lapse. The court entered an order to show cause to compel an accounting by Pryor.

Pryor presented an informal accounting. The Estate submitted exceptions noting specific deficiencies. Particularly, the Estate alleged that Pryor had failed to account for $500,000. This amount included $52,000 in missing social security checks and $100,000 in bank checks.

Pryor's deposition was scheduled for October 30, 2002. However, it did not occur because Jeffrey Soos, Esq., from the Saiber firm, engaged in settlement negotiations instead. Soos and Pryor's attorney reached an agreement. The settlement was memorialized by the court reporter attending the deposition. According to the settlement, Pryor agreed to pay the Estate $100,000 on or before December 31, 2002, and an additional $25,000 to be paid in monthly installments over a three-year period at a four percent interest rate. The agreement required that the $25,000 be secured by a second mortgage on Pryor's home; Pryor also agreed to waive any commissions to which he was entitled for serving as guardian and to release the Estate from any claim for a refund of money owed him pursuant to his $15,000 loan to the Estate. Both parties agreed to pay for their own counsel fees. The transcript indicates that Pryor acknowledged his agreement with the settlement.

It is undisputed that Chiappe was not present during the negotiations and was not present when the terms of the purported agreement were recited for the court reporter. He was in an adjoining room while Soos and Pryor's attorney negotiated. The core issue in this appeal is whether Chiappe agreed to the terms of the settlement.

After the settlement negotiations, Coviello forwarded a written settlement agreement to Chiappe for signature. Chiappe responded by letter indicating concerns with the wording of the agreement. He did not approve of the interest rate being applied or the method by which Pryor would pay the additional $25,000. Furthermore, Chiappe did not agree that each party should pay for its own attorney's fees and specific accounting costs.

In a second letter dated April 15, 2003, Chiappe reiterated to Coviello the same concerns reflected in his previous letter. Additionally, Chiappe requested that Coviello investigate the lapse of Pryor's $500,000 bond, which the probate court had ordered. Based on these reasons and those previously expressed, Chiappe rejected the settlement agreement, but indicated that he would accept payment of $346,454.11.

In a third letter dated June 10, 2003, Chiappe expressed his frustration regarding Coviello's persistence that Chiappe had in fact agreed to the settlement agreement. Finally, in a letter dated July 2, 2003, Chiappe notified Coviello that he wished to object to the form Order presented to the court on Pryor's motion to enforce settlement. Additionally, Chiappe requested that Coviello inform the probate court that he had not agreed to the settlement.

On July 21, 2003, the judge signed an order approving the First and Final Account of Guardian and Incorporating Settlement Agreement. According to the order, the judge recognized that Chiappe refused to sign the Settlement Agreement and found "that the Settlement Agreement is nonetheless binding upon him and the Estate and the same is made part of this judgment."

Chiappe filed pro se an Executor's Sworn Objection and Motion to Vacate. Coviello, on behalf of Saiber Schlesinger, Satz & Goldstein, moved for leave to withdraw as counsel. Coviello argued that Chiappe had failed to fulfill his obligation to pay attorney's fees and that Chiappe had made the firm's representation of him unreasonably difficult. Chiappe responded by filing supplemental objections to Coviello's withdrawal motion.

The judge heard Coviello's motion for leave to withdraw. Chiappe appeared at argument and objected to the withdrawal motion, indicating that the reasons for his objection were contained in the papers he had previously filed. Additionally, Chiappe objected during argument to the settlement agreement and the judge's approval thereof, indicating that his arguments were contained in the papers he had previously filed. The judge reserved decision and indicated that he would read Chiappe's submissions. The judge filed an amended judgment rendering essentially the same decision as the July 21, 2003 judgment.

Chiappe appeals contending that, "the trial court, in concert with Pryor's Attorney and Appellant's own Attorney, enforced the settlement agreement against his will and over his objections." Specifically, Chiappe argues that he was never authorized his attorney to settle the case on the terms incorporated into the settlement agreement, and he never made aware of the terms to which Soos agreed.

It is well-settled law in New Jersey that courts must treat a settlement agreement between litigants and the existence thereof as a contract. Nolan v. Lee Ho, 120 N.J. 465, 472 (1990). Accordingly, New Jersey courts will apply general principles of agency to an attorney's authority and power to settle cases on behalf of a client. See United States Plywood Corp. v. Neidlinger, 41 N.J. 66, 74 (1963) (applying the agency doctrine of apparent authority to an attorney's power to settle on behalf of a client).

When a litigant sends his or her attorney to a meeting to discuss settlement negotiations, a presumption arises indicating that such attorney possesses the requisite authority to approve such a settlement. United States Plywood Corp. supra, 41 N.J. at 73-74; Seacoast Realty Co. v. West Long Branch Borough, 14 N.J. Tax 197, 204-05 (Tx. Ct. 1994). However, where a client has not specifically authorized the attorney to settle a case, the client must provide consent to the settlement. Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475 (App. Div. 1997). We have held that

[n]egotiations of an attorney are not binding on the client unless the client has expressly authorized the settlement or the client's voluntary act has placed the attorney in a situation wherein a person of ordinary prudence would be justified in presuming that the attorney had authority to enter into a settlement, not just negotiations, on behalf of the client.

[Ibid.]

Where a party to an alleged settlement agreement opposes a motion to enforce such settlement, the trial court should hold a hearing to determine the facts "unless the available competent evidence, considered in a light most favorable to the non-moving party, is insufficient to permit the judge, as a rational fact finder, to resolve the disputed factual issues in favor of the non-moving party." Id. at 474-75. Thus, the moving party has the burden to establish that the parties in fact had entered into a contract of settlement. Id. at 475.

Here, Chiappe alleged by way of sworn objections that he "never agreed to the alleged settlement agreement, either orally or in writing." Additionally, Chiappe listed various specific objections that he had requested Coviello to address regarding the settlement agreement. Although Chiappe admits that he was in an adjacent room while Soos conducted negotiations with Pryor's attorney, such admission does not prove that he was necessarily apprised of the terms of the proposed settlement, nor that he approved of them. In light of this, the judge should not have enforced the settlement without first determining, through a fact-finding hearing, whether: (1) Chiappe authorized Soos to enter into a settlement on October 30, 2002; or (2) Chiappe approved the terms of the settlement.

The August 22, 2003 Amended Judgment is reversed. The matter is remanded to the Chancery Division, Probate Part for an evidentiary hearing. We do not retain jurisdiction.

 

Donald Chiappe spells his surname differently than his mother.

(continued)

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A-0881-03T2

October 26, 2005