CLARIDGE HOUSE ONE CONDOMINIUM ASSOCIATION, INC. v. BEACH PLUM PROPERTIES, L.L.C., et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6978-03T26978-03T2

CLARIDGE HOUSE ONE

CONDOMINIUM ASSOCIATION, INC.,

Plaintiff-Respondent,

v.

BEACH PLUM PROPERTIES, L.L.C., MARK

WEBER AND SYLVIA SWIMMER,

Defendants-Appellants,

_____________________________________

BEACH PLUM PROPERTIES, L.L.C.,

MARK WEBER AND SYLVIA SWIMMER,

Plaintiffs-Appellants,

v.

CLARIDGE HOUSE ONE CONDOMINIUM

ASSOCIATION, INC., GERALDINE SILVERMAN,

STEVEN COHEN, CHARLES SMITH, GLORIA

FLEISHMAN, GREGORY SHCHUCHINSKY,

RICHARD JOFFE, RICHARD I. SIMON,

MANDELBAUM, SALSBURG, GOLD, LAZRIS,

DISCENZA & STEINBERG, P.C.,

Defendants-Respondents.

 
________________________________________________________________

Argued January 24, 2006 - Decided February 8, 2006

Before Judges Coburn, Lisa and S.L. Reisner.

On appeal from the Superior Court of New Jersey, Essex County, Chancery Division, C-389-01.

On appeal from the Superior Court of New Jersey, Essex County, Law Division, L-10640-02.

Mark Weber argued the cause pro se for appellants (Mr. Weber and Sylvia Swimmer, of counsel and on the brief).

David Lustbader argued the cause for respondents Claridge House One Condominium Association., Inc. and Richard Joffe on L-10640-02 (Mr. Lustbader, on the brief).

Philip D. Neuer argued the cause for respondent Claridge House One Condominium Association, Inc. on C-389-01 and L-10640-02 (Mr. Neuer, of counsel and on the brief; Paul J. Modarelli, on the brief).

Respondents Geraldine Silverman, Steven Cohen, Charles Smith, Gloria Fleishman, Gregory Shchuchinsky, Richard I. Simon, Mandelbaum, Salsburg, Gold, Lazris, Discenza & Steinberg, P.C. did not file briefs.

PER CURIAM

Appellants, Beach Plum Properties, L.L.C., Mark Weber and Sylvia Swimmer, appeal from an "ORDER ENFORCING SETTLEMENT." The trial judge held that the parties reached a binding agreement to resolve the litigation at a court-ordered mediation on November 14, 2003. The judge rejected appellants' contention that no agreement was reached on November 14, 2003, but that an enforceable agreement was reached on March 6, 2004, as memorialized in a memorandum dated March 8, 2004. Based upon our review of the record and in light of the arguments presented and the applicable law, we affirm.

The dispute here involves the number of condominium units appellants are permitted to own in the Claridge House One in Verona, a 275-unit condominium building, under the by-laws of the Condominium Association (Association).

On December 13, 1999, the Association amended its by-laws to provide that an individual or entity could own no more than one unit for investment purposes, in addition to a unit personally occupied as a residence. At that time, appellants owned multiple units. There was no dispute that the units owned by appellants prior to the amendment were "grandfathered" and not affected by the amendment. Appellants then sold some units and purchased, or took steps to purchase, at least one additional unit. Appellants, Sylvia Swimmer and Mark Weber, are husband and wife and are both attorneys. They did not personally reside at Claridge House One. All units they owned were for investment purposes.

On November 28, 2001, the Association filed a verified complaint and order to show cause in the Chancery Division seeking to enjoin appellants from acquiring Unit #1000, which appellants had taken steps to acquire, or any other units other than those appellants already owned. The Association contended that should appellants be permitted to purchase one or more additional units they would be in violation of the by-laws as amended. Although temporary restraints were entered, they were vacated several months later.

On November 8, 2002, appellants filed a complaint in the Law Division against the Association and its board members for damages, alleging harassment, interference with a business relationship, discrimination and illegal and improper restraint on alienation, and other claims. Appellants contended, among other things, that because of the improper activities of the Association and its board members, appellants lost the opportunity to purchase Unit #1000. On March 7, 2003, the Law Division and Chancery Division actions were consolidated in the Law Division.

On May 6, 2003, the court issued a mediation referral order. Harold I. Braff, Esquire was designated as the mediator. After several adjournments, the mediation session was conducted on November 14, 2003. Eight individuals participated, which included Braff as the mediator, Weber and Swimmer appearing pro se and for their corporate entity, and five attorneys who were either named as parties or were representing the Association.

At the conclusion of a five-hour session, a one-page type-written memorandum was prepared setting forth terms of settlement, which included provisions for the number of units appellants could own and for a cash payment of $18,000 to be made to appellants. The final provision in the memorandum stated that "all of the above is subject to ratification" by the Association's Board of Directors then scheduled to occur on or before December 15, 2003, and "the execution and delivery of a formal Settlement Agreement which shall embody the above terms." (Emphasis added.) Swimmer signed the memorandum. The memorandum also provided that the litigation would be dismissed with prejudice and that the parties would execute and deliver general releases.

The parties exchanged drafts of settlement agreements, but encountered disagreements regarding language and terms. On February 4, 2004, appellants moved to extend the time for discovery. On February 26, 2004, the Association cross-moved to enforce the settlement it claimed was reached at the mediation. On Saturday, March 6, 2004, Phillip Neuer, Esquire, one of the attorneys representing the Association, met with Swimmer and Weber. Neuer memorialized the discussion in a memorandum dated March 8, 2004, which he agreed to transmit to the Association Board for consideration at its meeting (which he would not be available to attend) on Monday, March 8, 2004. The introductory paragraph to the memorandum stated:

I wish to have the amicable discussions which we conducted last Saturday presented to the Board this evening and, unfortunately, I will not be able to attend the meeting. Accordingly, I am submitting this memorandum to you, without prejudice, for your confirmation that I have correctly captured all of the discussions and agreements which you are prepared to enter into with Claridge. As stated above, this memorandum and any of your responses are totally without prejudice.

[Emphasis added.]

The terms proposed by appellants, as outlined in the memorandum, were different than those contained in the memorandum dated November 14, 2003.

The matter came before the court on April 16, 2004 for consideration of the pending motions by appellants to extend discovery and by the Association to enforce the November 14, 2003 settlement. Appellants contended there was not a final settlement reached at the mediation session. They contended the memorandum prepared at that time merely set forth the framework of a potential settlement, and, by its terms, there would be no actual settlement until the terms were ratified by the Association's Board of Directors and a formal settlement agreement was executed by all parties. Judge Rothschild determined that a plenary hearing would be required to resolve the dispute, which would be scheduled at a later date.

While awaiting the scheduling of a plenary hearing, on April 19, 2004, appellants moved to enforce a purported settlement agreement of March 6, 2004, as memorialized in Neuer's March 8, 2004 memorandum. Each side filed certifications in support of their respective positions.

On June 11, 2004, Judge Rothschild conducted the plenary hearing. By agreement of all parties, all of the participants in the mediation session, all being attorneys, were permitted to make representations as officers of the court in lieu of sworn testimony. The participants were not required to bring to the hearing attorneys to "represent" them or to pose questions. It was agreed by everyone that the participants could relate to the court relevant factual information in narrative form, and that each would be subject to "cross-examination" by the other participants. The hearing proceeded in that manner. All parties consented to the procedure, and no party has asserted on appeal any impropriety or irregularity.

The judge heard from the participants in the mediation their versions of the events. The judge was particularly interested to hear directly from Braff, a disinterested participant and an experienced and highly respected mediator. With the consent of all parties, from the bench and in the presence of all parties, the judge called Braff on the telephone. A speaker phone was not utilized. The words spoken by the judge to Braff were recorded and transcribed. The judge then repeated or paraphrased the responses given to him by Braff, and those words were likewise recorded and transcribed. Like the other participants, because Braff is an attorney, his unsworn representations as an officer of the court were accepted in lieu of sworn testimony. As stated, all parties consented to the procedure in the trial court, and no party takes exception to the procedure on appeal.

Braff stated that throughout much of the mediation session, appellants took the position that any settlement terms were not final, but only constituted a framework for a settlement. However, towards the end of the session, after further discussions, about one-half hour before Braff left, Swimmer and Weber conferred privately and then "spoke at that point as if there were an agreement." They came back in "to confirm and lay out the terms" and Braff "believe[d] that there was an agreement at that point." The judge then related Braff's concluding comment that "everyone thanked [him] for reaching an agreement."

During the course of the plenary hearing, there was some dispute regarding interpretation of a provision in the November 14, 2003 memorandum. The judge was prepared to hear "testimony" in order to resolve the issue, but the Association acquiesced in the interpretation urged by appellants, thus obviating the need for a judicial determination.

At the conclusion of the hearing on June 11, 2004, the judge concluded that the parties reached an agreement on November 14, 2003 that was complete as to all material terms. He ordered enforcement of the agreement. In light of that determination, he denied appellants' motion to extend discovery. With respect to the March 8, 2004 memorandum, the judge rejected appellants' contention that it embodied a settlement. The judge noted that on its face the memorandum was clearly "without prejudice." Further, by its terms, it did nothing more than set forth a list of provisions that appellants were proposing as an alternative resolution of the dispute. Not all parties to the dispute were present or represented during the March 6, 2004 meeting. The proposals listed in the memorandum were merely that, proposals, which would be presented to the Association's Board for consideration.

The order enforcing settlement was entered on July 21, 2004. After appellants filed their notice of appeal, Judge Rothschild filed a written amplification of the reasons for his decision. See R. 2:5-1(b). The judge outlined the testimony given by all of the participants in the arbitration and that of the arbitrator. He then stated that "after hearing testimony from the attorneys who were present at the negotiations, as well as from Mr. Braff, I was compelled to make a finding of fact. That finding was that I believe Mr. Braff when he said there was an agreement." The judge then set forth the reasons for his finding:

1. Mr. Braff is neutral.

2. He is an extremely distinguished and respected attorney.

3. What he said was generally consistent with that of the other witnesses; he agreed with Ms. Swimmer and Mr. Weber that, one half hour before the first agreement was revealed, Ms. Swimmer said that the timing was not propitious to reach a binding agreement, but he agreed with defendants that a half hour later, Ms. Swimmer and Mr. Weber said there was an agreement.

4. He spoke unequivocally and without hesitation on this issue.

5. His conduct supports the proposition that he believed that there was a settlement because he probably would not have left the meeting -- or would not have left the meeting without making arrangements to continue the process -- if he did not believe there was a settlement.

6. The parties' conduct after November 14, 2003 was consistent with their belief that there was a settlement, in that they exchanged drafts. See, for example, the November 18 Stipulation of Settlement drafted by Ms. Swimmer and sent to Mr. Neuer, the principal lawyer for the Claridge House; the December 10 e-mail from Mr. Neuer to Ms. Swimmer and Mr. Weber; and the December 11 response from Ms. Swimmer. It is true that there were attempts to structure an alternative arrangement (see, for example, the March 2004 document discussed in footnote 1 above, as well as a similar January 13, 2004 proposal), but these were the type of alternatives which creative litigators and real estate attorneys discuss, even when they have a settlement in place. (This differs, of course, from a situation in which plaintiff claims to have reached a $20,000 settlement with defendants, and it is subsequently discovered that plaintiff and defendant were negotiating between $10,000 and $15,000 months later.)

7. Mr. Lustbader's notes, which were made simultaneously with the final negotiations, appear to support the position that there was a settlement (although they are not dispositive, in and of themselves).

[Footnote omitted.]

"Findings by the trial judge are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 484 (1974). We will reverse only when the trial judge's factual findings and legal conclusions are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Ibid. (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)).

Appellants argue that the judge erred in enforcing the settlement because the November 14, 2003 memorandum contained two conditions precedent, ratification by the Association's Board and execution of a formal settlement agreement, which were never met. Judge Rothschild rejected this contention, and so do we.

Absent fraud or other "compelling" circumstances, a court should enforce a settlement agreement, as it would other contracts. Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983). That the agreement was oral, instead of written, is of no consequence. Id. at 124. "Where the parties agree upon the essential terms of a settlement, so that the mechanics can be 'fleshed out' in a writing to be thereafter executed, the settlement will be enforced notwithstanding the fact the writing does not materialize because a party later reneges." Lahue v. Pio Costa, 263 N.J. Super. 575, 596 (App. Div.), certif. denied, 134 N.J. 477 (1993).

Although a formal settlement agreement was never entered, the parties exchanged drafts and disputed proposed language, which rendered that anticipated step in the process futile. However, Swimmer admitted she signed the November 14, 2003 memorandum, which provided for a formal settlement agreement "which shall embody the above terms." Thus, the terms were agreed upon, and the anticipated formal settlement agreement was presumably intended to express those terms in more comprehensive and detailed language. But the essential terms were already resolved. By exchanging proposed settlement agreements, appellants acknowledged their understanding that the case was settled and that the efforts to draft an acceptable settlement agreement were nothing more than a recasting of the terms agreed upon.

We find no legal significance to the absence of a formal resolution adopted by the Association's Board to ratify the terms of the agreement. The agreement was approved at the mediation session by the authorized representatives of the Association. Those representatives have represented to the court that the Board approved of the terms. There is no legal requirement for adoption of a formal resolution. There is no evidence to refute the representation that the Association Board accepted the terms. In any event, by moving to enforce the settlement, the Association unequivocally evidenced its approval of the settlement terms.

We reject appellants' argument that Judge Rothschild impermissibly acted as a mediator, modifying the terms set forth in the November 14, 2003 memorandum, rather than acting as a factfinder to determine whether the parties had reached final agreement of the terms on a settlement on November 14, 2003. The judge did not change the terms. He acknowledged a concession by the Association favorable to appellants in the interpretation of a provision. We find no error in this regard.

Finally, we find no error in the judge's rejection of appellants' attempt to enforce a purported agreement of March 6, 2004, as set forth in Neuer's March 8, 2004 memorandum. The memorandum, on its face, was nothing more than a list of proposals by appellants that Neuer received and agreed to pass on to the Association's Board "without prejudice." There is no evidence that the Association ever accepted the proposal. On the contrary, counsel has represented that the Association Board flatly rejected the proposal. This is, of course, corroborated by the Association's ongoing efforts after March 8, 2004, to enforce the November 14, 2003 settlement.

The judge's factual findings are well supported by adequate, substantial and credible evidence in the record as a whole, and the judge correctly applied the applicable principles of law to those findings. We affirm substantially for the reasons set forth by Judge Rothschild in his September 9, 2004 written statement of reasons amplifying his oral decision of June 11, 2004.

 
Affirmed.

It is not clear on the record before us whether Weber also signed the memorandum. Whether he did or not would not alter our decision.

(continued)

(continued)

15

A-6978-03T2

February 8, 2006