ALLSTATE NEW JERSEY INSURANCE COMPANY v. CENTER CITY FAMILY PRACTICE INC.

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-1897-18T4

ALLSTATE NEW JERSEY INSURANCE
COMPANY, ALLSTATE INDEMNITY
COMPANY, ALLSTATE NEW JERSEY
PROPERTY AND CASUALTY
INSURANCE COMPANY, ALLSTATE
INSURANCE COMPANY, ENCOMPASS
INSURANCE COMPANY OF NEW
JERSEY, ENCOMPASS INDEMNITY
AND ENCOMPASS PROPERTY
AND CASUALTY OF NEW JERSEY,

          Plaintiffs-Appellants,

v.

CENTER CITY FAMILY PRACTICE,
INC., STEVEN J. GIAMPORCARO,
M.D., CHRIS R. GIAMPORCARO,
M.D., BETTY HENDRICKSON,
PAMELA KLENK, LPN, AGNES
THOMPSON, LPN, and BONN DAVIS,
LPN,

     Defendants-Respondents.
__________________________________

                    Argued December 2, 2019 – Decided December 18, 2019

                    Before Judges Fasciale and Mitterhoff.
            On appeal from the Superior Court of New Jersey, Law
            Division, Ocean County, Docket No. L-0939-14.

            Todd J. Schwartz argued the cause for appellants
            (Pringle Quinn Anzano, PC, attorneys; Douglas
            Michael Alba, of counsel and on the briefs; Todd J.
            Schwartz, on the briefs).

            Frank P. Brennan argued the cause for respondents
            (Flynn & Associates, PC, attorneys; Frank P. Brennan,
            on the brief).

PER CURIAM

      Plaintiffs appeal a November 30, 2018 order enforcing a settlement

agreement reached between the parties in the underlying action. Judge Arnold

B. Goldman conducted an August 20, 2018 settlement conference, entered the

November 30, 2018 order, and clarified his oral reasons in writing on January

31, 2019. We affirm substantially for the reasons expressed by the judge.

      The underlying case involved allegations that defendants committed fraud

by claiming licensed practical nurses performed physical therapy at Center City

Family Practice. The parties placed their settlement agreement on the record.

Both parties initially moved to enforce the settlement agreement. Plaintiffs then

withdrew their motion.      The judge—who participated in the settlement

discussions—found the settlement agreement enforceable.




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      On appeal, plaintiffs argue:

            POINT I
            THE TRIAL [JUDGE] ERRED IN ENFORCING A
            PURPORTED SETTLEMENT BETWEEN THE
            PARTIES BECAUSE THERE WAS NO MEETING
            OF THE MINDS.

            POINT II
            THE TRIAL [JUDGE] ERRED IN ENFORCING A
            PURPORTED SETTLEMENT BETWEEN THE
            PARTIES     BECAUSE    THE     ALLEGED
            SETTLEMENT WAS PROCURED BY FRAUD.

            POINT III
            THE TRIAL [JUDGE] ERRED IN ENFORCING A
            PURPORTED SETTLEMENT BETWEEN THE
            PARTIES WHERE THE TRIAL [JUDGE] ADDED
            TERMS TO THE ALLEGED SETTLEMENT WHICH
            WERE NOT AGREED TO BY THE PARTIES.

      In rendering his decision, the judge made findings of fact. This court

reviews a judge's factual findings for an abuse of discretion. Cumberland Farms,

Inc. v. N.J. Dep't of Envtl. Prot.,  447 N.J. Super. 423, 437 (App. Div. 2016).

"The general rule is that findings by the trial [judge] are binding on appeal when

supported by adequate, substantial, credible evidence. Deference is especially

appropriate when the evidence is largely testimonial and involves questions of

creditability." Ibid. (quoting Seidman v. Clifton Sav. Bank, S.L.A.,  205 N.J.
 150, 169 (2011) (citation omitted)). This court "should not disturb the factual

findings and legal conclusions of the trial judge unless [we are] convinced that

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they are so manifestly unsupported by or inconsistent with the competent,

relevant and reasonably credible evidence as to offend the interests of justice."

Id. at 437-38 (alteration in original) (citation omitted).

      In addition, the judge made legal determinations. We review issues of law

de novo. Id. at 438 (citing State v. Parker,  212 N.J. 269, 278 (2012)). "The

interpretation and construction of a contract is a matter of law for the trial

[judge], [and is] subject to de novo review on appeal." Ibid. (citing Fastenberg

v. Prudential Ins. Co. of Am.,  309 N.J. Super. 415, 420 (App. Div. 1998)).

      We reject plaintiffs' contention that the parties did not reach a meeting of

the minds. "A settlement agreement between parties to a lawsuit is a contract."

Nolan v. Lee Ho,  120 N.J. 465, 472 (1990). "Since the settlement of litigation

ranks high in our public policy, settlement agreements will be honored absent a

demonstration of fraud or other compelling circumstances." Cumberland Farms,

 447 N.J. at 438 (internal quotation marks and citations omitted). A contract is

formed when there is a meeting of the minds between the parties. Id. at 439; see

also Morton v. 4 Orchard Land Tr.,  180 N.J. 118, 129-30 (2004). There is only

an enforceable contract when the parties agree on the essential terms and agree

to be bound by those terms. Weichert Co. Realtors v. Ryan,  128 N.J. 427, 435

(1992). "Where the parties agree upon the essential terms of a settlement, so


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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. 1993) (citation omitted).

      The judge found that the material terms of the contract were placed on the

record at the August 20, 2018 conference: "[$]75,000 in cash, and then it's three-

quarters of the property . . . . not to exceed . . . . $400,000," and that the property

be free of all liens. When the judge clarified that the total amount of money

would not exceed $400,000, plaintiffs' counsel stated "[t]hat's correct."

Defendants' attorney confirmed "that's the total sum of our agreement." The

judge verified that the agreement included no liens on the property, to which

plaintiffs' attorney said "[t]hat is the deal[.]" These are the essential terms of

the settlement.

      Plaintiffs contend that even if the parties reached an agreement,

defendants committed fraud in the inducement. In general, fraud is a defense to

enforcing a settlement agreement, Honeywell v. Bubb,  130 N.J. Super. 130, 136

(App. Div. 1974), but fraud must be established by clear and convincing

evidence. Jennings v. Reed,  381 N.J. Super. 217, 227 (App. Div. 2005); Smith

v. Fireworks by Girone, Inc.,  380 N.J. Super. 273, 291 (App. Div. 2005). A


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party seeking rescission of the contract rather than damages must establish

equitable fraud. Nolan,  120 N.J. at 472. To prove equitable fraud "a plaintiff

must demonstrate a material misrepresentation made with intent that it be relied

on, coupled with actual detrimental reliance." Ibid. (citing Jewish Ctr. of Sussex

Cty. v. Whale,  86 N.J. 619, 625 (1981)).

      If there is no affirmative misrepresentation, silence may constitute fraud

when there is a duty to disclose a material fact. N.J. Econ. Dev. Auth. v. Pavonia

Rest., Inc.,  319 N.J. Super. 435, 446 (App. Div. 1998). Whether a duty exists is

a question of law. United Jersey Bank v. Kensey,  306 N.J. Super. 540, 551

(App. Div. 1997).      Parties have no duty to disclose "unless a fiduciary

relationship exists between them . . . the transaction itself is fiduciary in nature,

or . . . one party expressly reposes a trust and confidence in the other." N.J.

Econ. Dev. Auth.,  319 N.J. Super. at 446 (internal quotation marks and citation

omitted). None of these conditions exist here.

      To support their fraud contention, plaintiffs argue defendants failed to

disclose before their agreement that defendants listed the property for $220,000,

and that defendants had a tax appeal pending. Plaintiffs also maintain that after

the parties placed their agreement on the record, defendants lowered the sale

price of the property to $175,000. The judge found that these contentions failed


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to establish fraud, especially given the high standard of clear and convincing

evidence required to show that defendants fraudulently induced plaintiffs to

settle the case and enter into the agreement.

      Finally, plaintiffs contend that the judge erred by adding a carrying costs

term to the settlement agreement.       "So long as the basic essentials are

sufficiently definite, any gap left by the parties should not frustrate their

intention to be bound." Hagrish v. Olson,  254 N.J. Super. 133, 138 (App. Div.

1992) (citation omitted). We have stated that "when a contract is found to have

emanated from an agreement on essential material terms, a [judge] will also fill

the gaps created by the parties' silence by adding terms that accomplish a result

that was necessarily involved in the parties' contractual undertaking."       Kas

Oriental Rugs, Inc. v. Ellman,  394 N.J. Super. 278, 287 (App. Div. 2007); see

also Palisades Props., Inc., v. Brunetti,  44 N.J. 117, 130 (1965). Judges can fill

the gaps in an agreement to achieve a "fair and just" result. Massar v. Massar,

 279 N.J. Super. 89, 94 (App. Div. 1995). The judge here filled the gaps of the

agreement after finding the essentials terms of the agreement.

      The parties unambiguously agreed that plaintiffs would receive three-

quarters of the property plus $75,000 in cash. The judge stated: "[plaintiffs]

agreed to accept three-quarters of the property plus $75,000. Three-quarters of


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the property includes the benefits and the detriments." The judge filled in the

carrying-cost gap, concluding that the costs are to be allocated "as per the

ownership percentage of . . . the building."

      We have no reason to disturb the judge's factual findings, which the record

supports. The judge did not abuse his discretion by adding the carrying cost

term. We see no legal errors by the judge enforcing the settlement agreement,

which the parties entered into after four and one-half years of litigation.

      Affirmed.




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