JO ANN SICA PAPPALARDO, ETC. VS. PEE WEE PREP, INC. VS. GARY NORGAARD, FISCAL AGENT (L-0899-14, HUDSON COUNTY AND STATEWIDE)
A-3065-15T3
| N.J. Super. Ct. App. Div. | Jun 2, 2017Background
- Underlying corporate litigation settled on the record during jury selection on November 5, 2015; parties placed a written settlement agreement on the record and testified under oath that they understood and accepted its terms.
- Settlement obligated defendants (Neil and Teresa Pappalardo) to deliver a $50,000 promissory note payable at $650/month with 1% interest; payments were to be made by bank check or money order and were due the first of each month.
- Paragraph 20 of the agreement provided that failure to cure any default within five days would constitute a default under all terms and permitted plaintiff’s counsel to seek entry of judgment on affidavit proving the default.
- Parties later could not agree on the final form of the promissory note; defendants contend a signed note was required for the obligation to be enforceable.
- The fiscal agent filed a motion to enforce and, after the January 1, 2016 payment passed, sought entry of judgment for $50,000; defendants asserted they had tendered a payment (check) and disputed timing/form.
- The motion judge enforced the settlement as an enforceable contract, found defendants breached by failing to make a proper, timely payment on January 1, 2016, and permitted the fiscal agent to obtain default judgment; the Appellate Division affirmed.
Issues
| Issue | Plaintiff's Argument (Pappalardo) | Defendant's Argument (Norgaard/fiscal agent) | Held |
|---|---|---|---|
| Whether the on-the-record settlement is enforceable absent a signed promissory note | The written settlement as placed on the record is binding; essential terms agreed, so enforceable | Enforcement appropriate; parties agreed to essential terms on record | Enforceable: parties agreed essential terms on record; a later unsigned note did not defeat enforcement |
| Whether defendants breached by failing to make the January 1 payment | Defendants tendered payment (check) and/or parties contemplated grace; no default | Payment due Jan 1 in form of bank check/money order; tender was late/incorrect form | Breach: payment was not timely and not in required form; default provision applied |
| Whether the court impermissibly altered settlement terms by permitting judgment without the signed note | Settlement required a promissory note; court improperly accelerated/changed terms | Court enforced the contract as written and allowed judgment under default clause | No alteration: court enforced the agreed terms and relied on the default/acceleration provision |
| Whether the fiscal agent (non-signatory beneficiary) could obtain judgment | Fiscal agent, as intended beneficiary, may enforce settlement for fees owed | Fiscal agent entitled to judgment under agreement/default clause despite not signing | Fiscal agent permitted to obtain judgment based on parties’ agreement and default clause |
Key Cases Cited
- Amatuzzo v. Kozmiuk, 305 N.J. Super. 469 (App. Div. 1997) (motion to enforce settlement uses summary judgment standards)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995) (summary judgment standard articulated)
- Nolan v. Lee Ho, 120 N.J. 465 (1990) (settlement agreements enforced like contracts absent fraud)
- Mosley v. Femina Fashions, Inc., 356 N.J. Super. 118 (App. Div. 2002) (no settlement where parties have not agreed on essential terms)
- Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 421 N.J. Super. 445 (App. Div. 2011) (agreements addressing principal terms will be enforced)
- Lahue v. Pio Costa, 263 N.J. Super. 575 (App. Div. 1993) (settlement enforced where mechanics can be "fleshed out" later)
- Brundage v. Estate of Carambio, 195 N.J. 575 (2008) (courts strive to give effect to settlement terms)