HADDON SAVINGS BANK v. DENNIS C. KELLEY and REGINA T. KELLEY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2867-05T52867-05T5

HADDON SAVINGS BANK,

Plaintiff-Respondent/

Cross-Respondent,

v.

DENNIS C. KELLEY and REGINA T.

KELLEY,

Defendants/Third-Party

Plaintiffs-Appellants,

v.

BOROUGH OF HADDONFIELD,

Third-party Defendant-

Respondent/Cross-Appellant,

and

BOWMAN & COMPANY, FIRST

UNION NATIONAL BANK, CRUSADER

SERVICING CORP., and JEANNE BURNS,

Third-party Defendants.

_______________________________________

 

Submitted January 31, 2007 - Decided February 21, 2007

Before Judges Yannotti and Messano.

On appeal from the Superior Court of New Jersey, Chancery Division, Camden County, Docket No. F-22545-03.

Philip N. Muldoon, Jr., attorney for appellants.

Pluese, Becker, & Saltzman, attorneys for respondent/cross-respondent Haddon Savings Bank (Robert F. Thomas, on the brief).

White and Williams, attorneys for respondent/cross-appellant Borough of Haddonfield (Michael O. Kassak and Nicole L. Strauss, on the brief).

PER CURIAM

Defendants Dennis C. Kelley and Regina T. Kelley (the Kelleys) appeal from an order entered on December 21, 2005, enforcing a settlement in this matter. Third-party defendant Borough of Haddonfield (Borough) cross-appeals from the December 21, 2005, order. For the reasons that follow, we affirm the order and dismiss the Borough's cross-appeal as moot.

We briefly summarize the relevant facts. On December 17, 2003, plaintiff Haddon Savings Bank (the Bank) filed this foreclosure action, alleging that the Kelleys had defaulted under a loan secured by a mortgage on certain property in Haddonfield, New Jersey. On or about June 21, 2004, the Kelleys filed a third-party complaint against the Borough and certain other parties. The Kelleys alleged, among other things, that the Borough had engaged in a "conspiracy" with plaintiff to "deprive" the Kelleys of certain information; failed to record certain tax payments; failed to accurately compute amounts that were due and owing in taxes; and caused them "to pay more than the legal amounts due for various tax lien sale certificates."

The matter was scheduled for trial on August 12, 2005. Counsel for the Bank, the Kelleys, and the Borough advised the judge that they had reached a settlement and placed the terms of their agreement on the record. The parties agreed that Mr. Kelley would pay the Bank $50,000, and the Bank would refinance the Kelleys' existing mortgage by issuing a new loan in the amount of $200,000, at an interest rate of six per cent.

Mr. Kelley agreed to enter into a consent judgment providing that, in the event he were to default under the terms of the mortgage, or failed to pay the property taxes or water and sewer charges due respecting the property, the Bank could present the consent judgment to the court for entry as a final judgment of foreclosure. The parties agreed that the Bank would provide Kelley written notice of any default and he would have a reasonable opportunity to cure. Mr. Kelley additionally agreed that he would redeem any outstanding tax sale certificates. Furthermore, the Borough agreed that, in exchange for a full release, it would contribute $35,000 of the monies due to the Bank under the settlement.

The judge questioned Mr. Kelley on the record concerning the settlement. Mr. Kelley stated that he had authorized his attorney to enter into the agreement. The judge advised Mr. Kelley that he had "an absolute right to a trial" in this matter and, by entering into the agreement, he had waived that right "unconditionally [and] forever." The judge also told Mr. Kelley that the settlement was an enforceable contract. Mr. Kelley indicated that he understood that the agreement could be enforced.

Mr. Kelley told the judge that he had no questions regarding the settlement and he was satisfied with the representation provided by his attorney. He additionally stated that he was voluntarily entering into the settlement. Mr. Kelley indicated that he required thirty days to make the payment required by the agreement. The parties agreed that the monies would be paid within thirty days.

On or about November 17, 2005, the Bank moved to enforce the settlement. In a supporting certification, counsel for the Bank stated that neither the Borough nor Mr. Kelley had paid the amounts due under the agreement. Mr. Kelley had not provided a release to the Borough. Moreover, Mr. Kelley had not redeemed the outstanding tax sale certificates. Counsel asserted that because Mr. Kelley breached the agreement, the judge should enter an order: 1) requiring the Borough to pay the Bank $35,000 within five days; 2) dismissing the third-party complaint against the Borough with prejudice; 3) dismissing the Kelleys' answer with prejudice; and 4) allowing the foreclosure action to continue as uncontested. The Kelleys filed no papers in response to the Bank's motion.

The motion was heard on December 16, 2005, and Mr. Kelley appeared pro se. The judge asked Mr. Kelley whether he agreed to make payment to the Bank on or before September 12, 2005. Mr. Kelley stated, "No I did not." He added that it was his understanding that the settlement would be reduced to writing.

The judge responded, "What was there about [$50,000] by September 12th that you needed in writing? You agreed to it on the record in this courtroom before me." The judge added, "If you tell me that you didn't have or you couldn't get the money, that I understand. But to stand there and tell me that you didn't understand is just not credible . . . ." The judge added:

I don't know what you thought you were going to get in writing or whether you got it in writing or not, but that was precisely the reason that I determined that we should have this spread upon the record, that you should be questioned and you should be asked the questions that you answered. You didn't make the payment. I don't know why and I'm not chastising you because you didn't. This is simply a motion to enforce the settlement that was made. There was nothing exotic or complex about it. And you, in effect, told me that . . . you understood it, that you had no questions about it and that you had authorized your attorney to enter into it on your behalf and you were satisfied with his representation.

There's nothing for me to think about. There's nothing for me [to] give you time. I view it, with due respect, Mr. Kelley, as a delaying tactic. And I understand that as well. But there is just nothing here. Nothing.

On December 21, 2005, the judge entered the order granting the relief sought by the Bank.

In their appeal, the Kelleys argue that the judge erred because he did not enforce the terms agreed to by the parties. In response, the Bank maintains that the judge did not abuse his discretion by entering the order enforcing the settlement. The Borough also argues that the order should be affirmed but asserts in its cross-appeal that if the court decides that the settlement agreement should be "vacated" and the claims are reinstated, the Bank should be required to return the $35,000 paid by the Borough pursuant to the December 21, 2005, order.

"A settlement agreement between parties to a lawsuit is a contract." Nolan ex rel. Nolan v. Lee Ho, 120 N.J. 465, 472 (1990) (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App. Div.), certif. denied, 94 N.J. 600 (1983)). Absent fraud or other compelling circumstances, a court "should honor and enforce" the settlement "as it does other contracts." Columbia Presbyterian Anes. v. Brock, 379 N.J. Super. 11, 16 (App. Div. 2005) (quoting Pascarella, supra, 190 N.J. Super. at 124-25). When interpreting a contract, "our goal is to discover the intention of the parties." Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 (1993). "[W]e consider the contractual terms, the surrounding circumstances, and the purpose of the contract." Ibid. (citing Jacobs v. Great Pac. Century Corp., 104 N.J. 580, 586 (1986); and Nitta v. Yamamoto, 31 N.J. Super. 578, 580 (App. Div. 1954)).

We are satisfied the judge's order enforcing the agreement was in accord with the terms of the agreement, the intention of the parties, and the purpose of the agreement. The record establishes that the parties intended to resolve this dispute by requiring the Bank to refinance the mortgage loan upon payment of $15,000 by the Kelleys, and $35,000 by the Borough. Mr. Kelly agreed to pay the Bank $15,000 within thirty days of August 12, 2005, which was the date the agreement was placed on the record.

Although the agreement did not expressly state the consequences that would flow if Mr. Kelley did not pay the Bank $15,000 within thirty days, the result ordered here was consistent with the essential terms of the settlement, which allowed the Bank to have a final judgment of foreclosure entered against the Kelleys in the event they defaulted under the terms of a refinanced mortgage. There is little difference between Mr. Kelley's failure to pay the initial $15,000 and a failure to make a payment due under a refinanced mortgage loan. The intent of the parties to the agreement was clear. If the Kelleys failed to make any required payment, a final foreclosure judgment would be entered against them. That is precisely what occurred here.

We note that, in the proceedings before the trial judge on the Bank's motion to enforce, Mr. Kelley offered no credible explanation for his failure to pay the $15,000 he had agreed to pay when the settlement was placed on the record. As the judge found, Mr. Kelley's assertion that he thought the agreement would be put in writing was simply not credible. Moreover, Mr. Kelley had been given ample time to cure the default. The motion to enforce was not heard until December 16, 2005, which was more than ninety days after the date by which the monies should have been tendered to the Bank. Mr. Kelley did not tell the judge that he was fully prepared to comply with the settlement.

The Kelleys assert that because the judge ordered the Borough to pay the bank, the judge should have ordered them to do the same, rather than order the foreclosure action to proceed as uncontested. Again, we disagree.

Here, the Borough agreed to pay the Bank $35,000 to settle the claims asserted against it by the Kelleys. Under the terms of the agreement, the Bank was entitled to be paid $35,000. The Bank's agreement with the Kelleys was distinctly different. The Kelleys agreed to pay the Bank $15,000 but, under the agreement, the Bank could obtain a final judgment of foreclosure in the event of a default. Because the Kelleys had not paid the $15,000 in the time required, the Bank had the right to seek the monies due from the Borough and to have the foreclosure action declared to be uncontested.

In view of our decision to affirm the December 21, 2005, order, the issues raised by the Borough in its cross-appeal are moot.

Affirmed on the appeal; the cross-appeal is dismissed.

 

Bowman & Company; First Union National Bank; Crusader Servicing Corp., and Jeanne Burns were named as third-party defendants. The record does not disclose whether these claims were ever resolved.

(continued)

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9

A-2867-05T5

February 21, 2007