Manpoint Assoc., LLC v Leggett
Annotate this CaseDecided on October 2, 2017
Civil Court of the City of New York, Kings County
Manpoint Associates, LLC, Petitioner,
against
James Leggett, d/b/a JAMES FABRICS AND EXTRAS, Respondent.
57109/2017
Attorney for Petitioner:
Andrew D. Cassidy Esq. from Cornicello, Tendler & Baumel-Cornicello LLC
Attorney for Respondent:
Ellery Ireland Esq. from The Law Office of Ellery Ireland
Mary V. Rosado, J.
The court has considered the following listed submissions of the parties, pursuant to CPLR 2219(a):
Title/Number
Respondent's Motion to Vacate dated August 4, 2017; Respondent's Affirmation in Support dated August 3, 2017; Respondent's Affidavit in Support and Supporting Exhibits A-E; 1-3
Petitioner's Affirmation in Opposition dated August 11, 2017 and Supporting Exhibits A-D 4
Respondent's Reply Affirmation dated August 30, 2017 5
Upon the foregoing papers, the Decision and Order of the Court is as follows:
In this commercial nonpayment action, Respondent James Leggett, d/b/a James' Fabrics and Extras (hereinafter "Respondent"), moves to vacate the stipulation of settlement entered into by the parties on May 10, 2017 and restore this matter to the court's calendar. Respondent alleges that the stipulation should be vacated because he entered into the stipulation relying on a misrepresentation made by Petitioner's counsel during settlement negotiations.
Background
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Petitioner Manpoint Associates, LLC (hereinafter "Petitioner") commenced this non-payment proceeding alleging that Respondent failed to pay for rent, water and sewer charges for a store located at 608 Flatbush Avenue in Brooklyn County. On May 10, 2017, counsel for both Petitioner and for Respondent executed a two-page stipulation which provided the following:
1) Petitioner agreed to accept and Respondent agreed to tender $7,000.00 in full settlement of all claims between the parties to date. This balance included the water bill dated February 28, 2017 in the amount of $192.38. This balance does not include water charges accrued after said bill, which are anticipated to be billed by Department of Environmental Protection ("DEP") on or about June 15, 2017.2) Respondent tendered in court: cashier's check No.[redacted] for $1,800.00 and cashier's check #[redacted] for $1,800.00, totaling $3,600.00.3) After tender pursuant to paragraph "2" above, the remaining balance was $3,400.004) Respondent consented to the entry of final judgment of possession in the amount of $3,400.00. The warrant of eviction was to issue forthwith and its execution stayed for payment pursuant to the below terms.5) Respondent agreed to tender $1,200.00 on or before June 10, 2017; $1,200.00 on or before July 10, 2017 and $1,000.00 on or before August 10, 2017. Said payments were in addition to current rent and utility payments which are to be paid by the 10th of each of the above listed months. All sums received first were applied to outstanding current rent, with the remainder, if any, applied to the arrears balance. 6) Upon default in payment pursuant to the above terms, warrant of eviction to execute upon service of a Marshal's Notice. Petitioner reserved the right to seek legal fees associated with Respondent's default.7) This agreement was in full satisfaction of all claims between the parties to date, including, without limitation, respondent's counterclaim.8) No Default was deemed de minimis. All provisions herein are material and the proceeding was discontinued as to "ABC Corp" and "XYZ Inc."Parties' Contentions
Respondent alleges that during settlement negotiations, his rent checks for December 2016, January 2017, February 2017, March 2017 and April 2017 were at issue. Petitioner acknowledged that he had already cashed the March 2017 and April 2017 checks prior to the settlement negotiations. Respondent states that the December 2016 and January 2017 checks were not cashed prior to the settlement negotiations of May 10, 2017, so those checks were handed over in court and those checks were referenced in paragraph two of the stipulation. Respondent further alleges that on May 10, 2017, Petitioner's counsel represented that Petitioner did not, and would not, cash the February 2017 check. Respondent further claims that, as the parties were executing the stipulation, Petitioner's counsel confirmed that, if Respondent were to find out that the February 2017 check was previously cashed, that he should contact his office and they would modify the stipulation. Although the stipulation is very detailed, this provision was not placed in the stipulation. The day after the stipulation was executed, Respondent went to the bank to stop payment and learned that Petitioner previously cashed the February check. Respondent alleges that the stipulation should be vacated based on Petitioner's deliberate misrepresentation that the February check had not been cashed at the execution of the stipulation.
Petitioner opposes the motion and argues that, although their original claim was for $10,363.11, they waived a large portion of that amount to settle by stipulation for $7,000.00. They also claim that the February 2017 check was credited to Respondent on February 10, 2017. The credit was reflected on the tenant's ledger, and the credit was incorporated in the balance [*2]before the negotiations began. As such, Petitioner argues that there is no cause to revise the stipulation. Petitioner claims that the subject stipulation was negotiated freely and extensively by counsel, was reduced to writing and was clear and unambiguous.
In reply, Respondent alleges that the vacatur of this stipulation is not based on his mistake, but instead Petitioner's counsel's misrepresentations in court which were perhaps the result of Petitioner's counsel unfamiliarity with his client's ledger. Respondent argues that the ledger was not incorporated into the stipulation and that he did not have time to "pour [sic] over the details of the ledger" when pressed by the court either to reach a settlement or to proceed to trial. Instead, he claims he "tried to arrive at a figure on which all parties could agree" (see Respondent's Reply Affirmation ¶ 7).
Furthermore, Respondent provided the electronic communications exchanged between himself and Petitioner's counsel following execution of the stipulation. He claims that the emails show that, although Petitioner relied on the ledger to explain the status of the February check as cashed and credited on February 10, 2017, this occurred only after consultation with his client, and does not reflect the misrepresentation which was offered in court.
Law
It is well settled that stipulations of settlement "are favored by the courts and not lightly cast aside" (Hallock v State of New York, 64 NY2d 224, 230 [1984]). Where an agreement is clear and unambiguous on its face, the intent of the parties must be gleaned from the four corners of the instrument, and not from extrinsic evidence" (Hanau v Cohen, 121 AD3d 940, 941 [App Div 2d Dept 2014]). "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" (id.; see also Matter of Frutiger, 29 NY2d 143, 150 [1971]; see also Pieter v Polin, 148 AD3d 1191[App Div 2d Dept 2017]).
"It is the party seeking to set aside the stipulation of settlement who has the burden of showing that the agreement was the result of fraud, duress, or overreaching, or that its terms were unconscionable" (Sweeney v Sweeney, 71 AD3d 989, 992 [2d Dept. 2010]). "The elements of a cause of action sounding in fraud are a material misrepresentation of an existing fact, made with knowledge of the falsity, an intent to induce reliance thereon, justifiable reliance upon the misrepresentation, and damages" (Introna v Huntington Leaning Ctrs., Inc., 78 AD3d 896, 898 [2d Dept 2010]).
A stipulation may also be vacated in the case of a unilateral mistake where enforcement of the stipulation "would be unconscionable, the mistake is material and made despite the exercise of ordinary care by the party in error, the innocent party had no knowledge of the error, and it is possible to place the parties in status quo" (see Mazzola v CNA Ins Co, 145 Misc 2d 896, 900-901 [Civ Ct Qns Co 1989]). However, where a mistake of fact is caused by carelessness of the party seeking to vacate a stipulation, and there has been no fraud on the part of the other party, such a mistake will not constitute a basis to set aside a stipulation of settlement (see Waterside 1 LLC v Christian, 13 Misc 3d 138[A][App Term 2nd Dept 2006]).
Discussion
Applying the law to the facts of this case, the Court finds that the motion to vacate or to set aside the stipulation is denied.
From the outset, counsel for both sides attempt to introduce several electronic communications to bolster their arguments concerning the February 2017 check, which the court cannot consider.
The executed stipulation was lengthy and addressed specifically what amount of money would be owed, the checks that were tendered in court, the balance after that tender, and the schedule for payment of the balance. The stipulation further addressed the consequences of default, and Respondent's counterclaim.
However, there is no mention of the February 2017 check in the stipulation. There is no indication that there should a recalculation or modification if the Respondent discovered that the February check was previously cashed. Further, there is also no indication that Petitioner agreed that, if they came into possession of the check later that they would refrain from cashing it.
After viewing the affidavits and affirmations of the parties, this court finds that there has been no misrepresentation, fraud or collusion. It appears at best that the parties misunderstood and/or were mistaken at the time of settlement regarding the amount "credited" and how the February 2017 check was reflected in the ledger. Even if the court was to consider this "mistake" as the basis to vacate the stipulation, it would fail. Respondent had several opportunities to ascertain the status of the February 2017 check prior to the negotiation and execution of the stipulation and yet Respondent failed to act with due diligence. Therefore, he cannot avoid the consequences of that failure by seeking to have the stipulation vacated.
Conclusion
In accordance with the foregoing, Respondent's motion to vacate the stipulation is denied.
This constitutes the Decision and Order of the Court.
Dated: October 2, 2017
Kings, New York
____________________
Mary V. Rosado, J.C.C.
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