Rodgers v Piscopo

[*1] Rodgers v Piscopo 2006 NY Slip Op 50062(U) [10 Misc 3d 1073(A)] Decided on January 19, 2006 Supreme Court, Westchester County Smith, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 19, 2006
Supreme Court, Westchester County

IRENE PISCOPO RODGERS, Plaintiff,

against

RITA PISCOPO, Defendant.



14105/03



Pryor Cashman Sherman & Flynn LLP

Attys. For Pltf.

410 Park Avenue

New York, New York 10022

Mazur, Carp & Rubin, P.C.

Attys. For Deft.

1250 Broadway, 38th Fl.

New York, New York 10001

Mary H. Smith, J.

This action is one of three long-standing litigations commenced in Westchester Supreme and Surrogate Courts involving these parties, who are sisters. All of these disputes originate out of the parties' financing of their ownership in the Skytop Motel.[FN1] On December 10, 2004, a CAMP conference was attended by the parties and their respective four attorneys. After much negotiation before retired Justice Paella, a global Settlement Agreement relating to all three of the actions was executed by all four attorneys. Plaintiff alleges that she since has complied with the terms of this Agreement by signing all of the required settlement documents, which are being held in escrow by defendants' counsel, and has delivered all of the required documents, but that defendant, in bad faith, has refused to comply with the Settlement Agreement and sign the settlement documents. Plaintiff seeks, pursuant to CPLR 2104, an Order compelling defendant to comply with this arms-length Settlement Agreement by executing the Stipulations of Discontinuance and Receipts and Releases relating to the pending actions and delivering to plaintiff a bank check in the sum of $200,000. Moreover, in view of defendant's failure to timely have [*2]complied with her payment obligation, plaintiff seeks statutory interest on said sum.

Defendant vigorously opposes the motion, arguing that the intention of the parties at the time of signing the Settlement Agreement and the parties' conduct thereafter "demonstrate that the Stipulation was a mere road-map' to settlement lacking material terms," and that it was intended merely to "set forth the main principles of the settlement" but was not a finished, fully enforceable agreement. According to defendant, "numerous material details were left for further negotiation and agreement." Defendant argues that at the time of the CAMP conference, the administrations of both the Estate of Helen Piscopo (the parties' mother) and the Trust were continuing, with no final accounting having been rendered for either. She thus contends that, while she had agreed in principle to a global settlement, it was on condition that she would execute a Release and Receipt regarding the Estate only after she had reviewed and accepted estate records documenting plaintiff's administration of the Estate, which was to be supplied by plaintiff's counsel, and that her rights with respect to the Trust were to be preserved until her counsel had examined the Bank's accounting, which had yet to be furnished, and all steps to terminate the Trust were accomplished. Defendant argues that while plaintiff's counsel specifically had "represented at the conference that there was nothing unusual or objectionable in the records of the Estate and that they were pro forma," plaintiff and her attorneys allegedly knew at that time "and concealed" from defendant material information that plaintiff had breached her fiduciary duty to the Estate by paying out of the Estate her own personal attorneys' fees incurred in defense of her own interests. According to defendant, her position that the Settlement Agreement lacks material terms and is not in and of itself enforceable is supported by the fact that paragraph 3 thereof provides: "Subject to providing the documents called for in Paragraph 5 below," certain releases would be exchanged. Paragraph 5 provides that plaintiff's counsel "shall provide copies of brokerage statements and bank statements of the Estate of Helen Piscopo to date" to defendant's counsel. According to defendant, plaintiff did not fully provide the records required by Paragraph 5 until late May or early June, 2005. Moreover, defendant states that the parties have been negotiating the language of the required releases for months, as well as the language in several other documents, the need for which did not become apparent until the parties continued their negotiations after the CAMP conference.

Defendant insists that she has "long wished to complete settlement of the three litigations and exchange releases," at which point she will promptly pay plaintiff $200,000 and file the Stipulations of Discontinuance. However, she argues that her rights with respect to plaintiff's breach of her fiduciary [*3]duty must be preserved and that there are unresolved issues relating to the Trust which must be resolved before a Release and Receipt can be executed. Thus she presently is willing to comply only with paragraphs 1, 2, 3(1), 4 and 6 of the Settlement Agreement. She objects to any Order requiring her to execute an otherwise unidentified "Receipt and Release" and to pay the $200,000 prior to the release of the escrowed funds.

By way of reply, plaintiff argues that the Settlement Agreement reached at the CAMP conference is binding, that defendant had succeeded in whittling plaintiff's claim from $500,000 to $200,000, that plaintiff detrimentally had relied upon the Agreement by performing thereunder and that there is no legal or factual basis to give defendant a second bite at the proverbial apple through her instant claim of fraud. Indeed, to "cherry pick" the Settlement Agreement and accept only the provisions favorable to defendant, leaving other matters open for further litigation, plaintiff contends, would be "wholly inequitable" to plaintiff and would void the consideration for which she negotiated to settle the pending litigations.

Plaintiff's counsel further expressly denies that he had concealed any facts or withheld any information from defendant, and notes that defendant had received prior to the conference copies of all financial records of the Estate dating back to October 20, 1998, and that, after extensively reviewing these records, she had not raised any issues or filed any objections. Further, contrary to defendant's claim that plaintiff failed to timely provide the required supplemental records, plaintiff has submitted a letter demonstrating that, by letter dated January 26, 2005, six weeks after the CAMP Agreement was signed, plaintiff turned over to defendant the required supplemental documents. Notably, plaintiff observes that defendant, in the ensuing months, had not proffered any objections to the supplemental documents. Plaintiff strenuously urges this Court to not insert into the Settlement Agreement a condition and reservation of rights beneficial to defendant, particularly where the parties, following negotiations, deliberately had chosen not to incorporate into the Settlement the relief requested by defendant. Initially, this Court notes that the Settlement Agreement

in issue, whether or not considered to have been an agreement made on the record in open Court,[FN2] nevertheless is enforceable under CPLR 2104, which provides as follows: An agreement between parties or their attorneys[*4]

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.

The stipulation at bar clearly meets the foregoing statutory criteria.

Moreover, settlement agreements are considered contracts and are governed by the same principles of interpretation and enforceability. See State v. Warren Bros. Co., Inc., 190 AD2d 728 (2nd Dept. 1990); Nishamn v. DeMarco, 76 AD2d 360, 366 (2nd Dept. 1980), app. dsmd 53 NY2d 642 (1981). Where, as here, a party seeks to enforce the contract, the Court has the primary obligation to effect the parties' true intent "as opposed to giving weight to provisions of the agreement which may not have been material and which may be seized upon by a party to obtain relief to which he may not be legitimately entitled." Furgang v. Epstein, 106 AD2d 609 (2nd Dept. 1984). Where the terms of the agreement are unambiguous, the meaning must be gleaned from the plain meaning of the words used by the parties and the parties' reasonable expectations. See In re Matco-Norca, Inc., 22 AD3d 495 (2nd Dept. 2005). Further, this Court acknowledges that stipulations of settlement which end litigation are judicially favored and should not be lightly cast aside. See Cooper v. Hempstead general Hosp., 2 AD3d 566 (2nd Dept. 2003), lv. to app. den. 2 NY3d 823 (2004); Matter of Byrne v. Nassau County Brd. of Elections, 307 AD2d 1053 (2nd Dept. 2003). "Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation." Maury v. Maury, 7 AD3d 585, 586 (2nd Dept. 2004), citing Hallock v. State of New York, 64 NY2d 224, 230.

After this Court's careful reading of the record at bar, application of the applicable principles of law and consideration of the parties' respective arguments, the Court grants plaintiff's motion. Within twenty (20) days after service of this Order with notice of entry, defendant shall comply with the Settlement Agreement and execute general mutual releases, including receipt and releases for the Estate of Helen Piscopo and Trust Under Will of Justin Piscopo, which will trigger the Bank's filing of a Satisfaction and release the escrowed monies. During this same 20-day time frame, defendant shall pay plaintiff $200,000 by bank check, together with statutory interest from November 21, 2005. Thereafter, the Stipulations of Discontinuance shall all be filed. If the parties are unable to reach agreement on the language to be used in the various necessary releases, they shall appear before the undersigned at 9:30 a.m. on February 16, 2006, to work out the details. [*5]

The parties' clear intent in executing the Settlement Agreement was to globally resolve three litigations which have been pending for years. That this was the parties' overriding intent is most clearly evidenced by the fact that, notwithstanding that the litigations had become unduly protracted, the parties were able to resolve all of the matters with a Settlement Agreement just 7 brief paragraphs long a model in brevity. While defendant now alleges fraud and breach of fiduciary duty as a basis for setting aside at least portion of this Settlement Agreement, the Court observes that defendant fails to directly aver that, at the time of the CAMP conference, she had no knowledge and was completely unaware that plaintiff had used Estate funds to pay what defendant characterizes as plaintiff's personal attorney's fees.[FN3] It is also notable that defendant never sought permission from this Court to respond to plaintiff's attorney's express statements in his replying affidavit contradicting defendant's position that not only was defendant advised both prior to and at the CAMP conference that plaintiff's personal legal expenses were not paid out of the Estate funds, but that such was "a hotly debated issue" at the CAMP conference. Absent such averment by defendant, the inescapable conclusion is that defendant's breach of fiduciary duty claim was fully discussed by the parties at the CAMP conference, as plaintiff contends, and that defendant nevertheless voluntarily chose to enter into the Settlement Agreement without any specific reservation of her rights with respect thereto; defendant has thus waived her right to further litigate this issue. See Romero v. Martinez, 280 AD2d 58, 64 (1st Dept. 2001).

While defendant attempts to convince this Court that the parties had intended to read into paragraph 5 of the stipulation that plaintiff's providing copies of the specified documents also meant that those documents were subject to defendant's review and approval, such argument is belied by the very words set forth in said paragraph. Patently, if the parties had intended the meaning defendant ascribes, the parties very simply could have provided therein for same but they clearly did not. The plain meaning of the parties' words in paragraph 5 must be interpreted as requiring nothing more than that plaintiff had to furnish defendant with copies of the enumerated documents, "to the extent not already provided."

Dated: January 19, 2006

White Plains, New York

______________________________________

MARY H. SMITH J.S.C. Footnotes

Footnote 1:Prior to 1992, the parties owned the Skytop Motel as tenants in common. This property was purchased with a loan from the parties' father in the sum of $315,705.98. The loan note was secured by a recorded mortgage. After their father's death, an Agreement Settling Account relating to their father's estate was executed by the sisters in 1992, at which time the executors abandoned the Skytop Note as worthless. At that same time, however, the sisters executed a Side Agreement wherein plaintiff transferred her interest in the Skytop Motel to defendant. This Side Agreement contains an acknowledgment by defendant that the sum of $167,408.87 is owed to plaintiff, who agreed to forego collection thereof until such time as the Skytop Motel is sold or refinanced. The Skytop Motel came under a sales contract in October, 2002, at which time the title company discovered the outstanding mortgage. Defendant had requested that the Bank issue a Satisfaction of Mortgage, to which plaintiff objected; the Bank ultimately refused to execute the Satisfaction. Defendant closed on the sale of the Motel, but the Bank escrowed more than $1.1 million pending resolution of the mortgage issue. Defendant thereupon commenced a proceeding in the Surrogate Court, in September, 2003, seeking to compel the Bank to comply with the Agreement Settling Account by delivering a Satisfaction of Mortgage. Plaintiff then commenced this action in Supreme Court, in September, 2003, seeking to recover under the parties' Side Agreement. On October 21, 2004, the title company commenced an interpleader action to settle claims to the escrowed funds.

Footnote 2:The record at bar does not make clear whether the Settlement Agreement was placed on the record. See ITS Funding, Inc. v. A & M Const. of Orange County, Inc., 293 AD2d 653 (2nd Dept. 2003).

Footnote 3:The Court notes that the issue of the propriety of any such payments is a separate issue from the issue of what defendant knew when, and plaintiff specifically defends as proper herein her having made such payments.