Settlement

Can A Verdict Render An Appeal Moot? (NY)

In a noteworthy decision, the Court of Appeals recently held that where a triable issue of fact is litigated and a final verdict reached, that issue of fact is rendered moot on pending appeal.  Meaning, if 1) a party moves for summary judgment on liability, 2) that motion is denied, 3) the movant appeals that decision, and 4) a trial verdict decides liability before the appeal is heard, that verdict becomes the law of the case, and the appeal is rendered moot.  This is a big deal. The recent decision of Bonczar v. American MultiCinema Inc., 38 N.Y.3d 1023, 1025, 188 N.E.3d 1000, reargument denied, 38 N.Y.3d 1170, 195 N.E.3d 526 (2022), presented a plaintiff who sought damages against the defendant for violating Labor Law §240(1) and moved for partial summary judgment on that claim. While the lower court granted plaintiff’s summary judgment motion, the Appellate Division reversed finding issues of fact as to whether a statutory violation occurred.  Subsequently, plaintiff’s Labor Law §240(1) was brought before a jury. At the conclusion, the jury held in favor of the defendant finding that plaintiff’s acts were in fact the sole proximate cause of his injury. The Appellate Division affirmed the jury’s verdict on appeal. Thereafter, plaintiff brought both the order denying his partial summary judgment motion and the order affirming the jury’s verdict before the Court of Appeals. The Court of Appeals held that pursuant to CPLR 5501(a) the denial of plaintiff’s summary judgment motion may be reviewed on appeal only if the nonfinal order necessarily affects the final judgment. In a matter of first impression, the court explained that to determine whether a nonfinal order necessarily affects the final judgment, the question is: “whether the nonfinal order necessarily removes a legal issue from the case so that there is no further opportunity during the litigation to raise the question decided by the prior non-final order.” The court explained that here, when the Appellate Division reversed the plaintiff’s motion for summary judgment, finding issues of fact, that nonfinal order did not remove any issues from the case; rather, it was left undecided. Instead, the parties had the opportunity to litigate those issues at trial, and in fact did so.   Therefore, the Court of Appeals held that the Appellate Division’s order denying plaintiff summary judgment did not necessarily affect the final judgment and thus, the Court of Appeals could not review it now on appeal. The decision is a big deal, because if a trial takes places while a summary judgment appeal is still pending — which can happen — the verdict trumps the appeal, and therefore.  Bonczar significantly reduces the leverage held by the appealing party in the scenario described above.    To that end, we recently attended a CAMP Conference at the 2nd Department, and the presiding judge was pressing the importance of Bonczar, to further incentivize settlement to all parties. Thanks to Gabi Scarmato for her contribution to this post.  For any questions about Bonczar, or how we expect it will be applied in the future, please contact Brian Gibbons.  Read More

New York Appellate Court Emphasizes The Importance Of Timely Settlement Payments

In New York, when an action to recover damages is settled, the settling defendant has twenty-one (21) days after tender of the required documents to pay all sums to the settling plaintiff. CPLR 5003-a. If the settling defendant fails to do so, then the plaintiff is authorized to enter a judgement “for the amount set forth in the release, together with costs and lawful disbursements, and interests,” without further notice to the defendant. CPLR 5003-e. The Appellate Division, Second Department addressed these rules in the recent case of Levine v. American Multi-Cinema, Inc. In that case, plaintiff tripped and fell on property owned by the defendant and the case was settled for $25,000. Two weeks after settling, counsel for defendant informed the Supreme Court that the parties had settled, and a stipulation of discontinuance would soon be filed. Prior to doing so, defense counsel sent plaintiff’s attorney a draft release. The plaintiff’s attorney subsequently returned an executed copy of the release and, citing CPLR 5003-a, requested that defendant send the settlement check within twenty-one (21) days. Twenty-six (26) days later, defense counsel informed plaintiff’s attorney that they would only disburse the settlement proceeds after a Medicare lien had been paid, and a lien payoff letter issued. The insurer then paid the lien in the amount of $1,716.18. Plaintiff moved for leave to enter a judgment with interest, pursuant to CPLR 5003-a. As this motion was pending, a Clerk’s judgment was entered against the defendant for $25,000, plus costs, disbursements, and interest. Defendant subsequently paid the settlement check, minus the lien payment, which was rejected by plaintiff’s counsel. Defendant then cross-moved to vacate the clerk’s judgment and the Supreme Court granted the motion. The Second Department reversed, holding that plaintiff had fulfilled the obligations set forth in CPLR 5003-a when she tendered a duly executed general release and stipulation of discontinuance to defendant’s counsel. Contrary to defendant’s argument, nothing in their general release obligated the plaintiff to provide lien information or a payoff letter as a condition precedent to payment, so the Supreme Court’s decision was incorrect. The Levine case highlights the importance of complying with CPLR 5003 when paying personal injury settlements in New York. The failure to do so can subject defendants and their insurers with additional exposure in the form of costs and interest. The case also highlights the importance of addressing Medicare issues before settlement and the need to include appropriate language in releases if lien or payoff information is required. Thank you to Rebecca Pasternak for her contribution to this post. Please contact Andrew Gibbs with any questions.Read More

NFL TBI Settlement Presages Likely Increase in TBI Claims

In 2019, the National Football League reached a $1 billion settlement concerning brain injury claims, specifically with respect to allegations concerning chronic traumatic encephalopathy (“CTE”). However, the National Football League is not the only entity who has dealt with traumatic brain injury litigation recently. For instance, the U.S. Olympic and Paralympic Committee is currently a named defendant in a federal suit claiming that a NJ man committed suicide in 2020 because of CTE that developed while training to be an Olympic bobsledder due to persistent contact with the head.

Other cases have arisen where an athlete’s suicide was claimed to be linked to CTE. Namely, the case that was credited with raising public attention to the dangers of CTE concerned the claim raised by the family of the former linebacker Junior Seau, in which a confidential settlement was reached in 2018. CTE is believed to oftentimes lead to severe depression and is normally diagnosed by symptoms and history. Many of the current claims alleges that a claimant’s suicide was the result of CTE caused by specific athletic activity.

Currently, there is broad debate between the defense and plaintiff’s bar as to whether CTE is caused by brain trauma. Defense lawyers have argued that such a theory is unreliable, and in any event, athletes assume the risk when they agree to participate in sports training. The plaintiff’s bar argues that there is sufficient scientific evidence to provide causation. Regardless, we should prepare to see even more litigation surrounding traumatic brain injuries in the competitive sports realm soon.

Thanks to Gina Rodrigues for her contribution to this article.  Should you wish to discuss, please feel free to contact Matthew Care.

Read More

The First Department Wants You To Think Twice Before Hitting Send (NY)

Reaching a settlement via email is easier than you think, so be careful. In a recent decision by New York’s First Department, an email reflecting an agreement between attorneys is sufficiently subscribed for purposes of CPLR §2104 even where the attorney does not retype their name above the signature block.

In Philadelphia Insurance Indemnity Company v. Kendall, 197 A.D.3d 75 (1^st Dep’t 2021), an insurer petitioned to enforce a settlement agreement and vacate an arbitration award related to an underinsured motorist claim brought by an employee of the insured. The employee settled a claim with an underinsured third-party and later made a claim under a Supplementary Underinsured Motorist Benefit Provision in their employer’s automobile policy with the insurer. The employee and the insurer proceeded to arbitration where the employee was awarded $975,000. However, despite the arbitration decision being sent the parties’ counsel, neither counsel received the decision and they continued to negotiate a settlement. Consequently, the parties agreed to settle the dispute for $400,000.

After reaching a settlement, the employee’s counsel memorialized the agreement in an email; at the bottom of the email appeared “Sincerely,” followed by counsel’s name and contact information within the signature block. In response, insurer’s counsel replied with an email containing a Release and Trust Agreement to be signed by the employee. Subsequently, the employee’s counsel received the arbitrator’s decision and indicated that they would not proceed with the $400,000 settlement. Instead, they demanded payment of the $975,000 awarded by the arbitrator. Insurer petitioned to enforce the settlement agreement and to vacate the arbitration award. However, the Supreme Court denied the insurer’s petition finding that the employee’s attorney failed to subscribe his email because he did not retype his name to supplement the signature block. The insurer appealed to the Appellate Division.

On appeal, the First Department reversed the Supreme Court’s ruling and held that the settlement agreement was enforceable. Pursuant to CPLR §2104, a stipulation between parties or their attorneys is not binding upon a party unless it is in a writing subscribed by him or his attorney. The First Department explained that the Court of Appeals has not opined on whether emails can satisfy CPLR §2104, and that the issue on appeal was a matter of first impression. The First Department held that the distinction between prepopulated and retyped signatures in emails reflects a needless formality that does not reflect how law is practiced today. Essentially, it is not the signoff that indicates whether the parties intended to reach a settlement via email, but rather the fact that the email was sent. Accordingly, the First Department reversed the Supreme Court’s ruling.

Thanks to Drew Fryhoff for his contribution to this post.  Should you have any questions, please feel free to contact Thomas Bracken.Read More

Settlement Release Deemed Binding (PA)

The Court of Common Pleas of Monroe County recently denied a plaintiff’s attempt to bring legal action against third-parties after previously executing a settlement release.  In Slinger v. Sal-Mart, the court found that the unambiguous language of the settlement release barred any potential claims the plaintiff had against third-parties.

The incident occurred when the plaintiff, a customer at Sal-Mart at the time, was allegedly struck by a truck driven by Robert Hulme.  In his lawsuit, the plaintiff alleged that Sal-Mart was negligent in failing to properly treat the ice on its property which resulted in the accident.  Thereafter, Sal-Mart filed a joinder complaint against Robert Hulme and his wife, Linda Hulme.  However, prior to commencing the lawsuit, the plaintiff executed a release that provided for the discharge of the additional defendants and “their heirs, executors, administrators, agents, and assigns, and all other persons, firms, or corporations liable or, who might be claim to be liable…”  In exchange for the executed release, the plaintiff received a sum of $250,000.00.

In its opinion, the Court stated that, absent fraud, accident, or mutual mistake, a party who executes a release waiving all claims and discharging all parties are precluded from thereafter suing a party who did not contribute towards the release.  The Court noted that the plaintiff claimed a mutual mistake occurred because both parties believed the release only pertained to the settling parties and not to any more potentially liable parties.

However, the Court determined that this contention conflicted with the clear language of the release and the deposition testimony of the parties.  Specifically, the plaintiff previously testified that he read the release and had time to consult an attorney prior to its execution.  As such, the Court concluded that evidence existed that the plaintiff knew what he was signing, was not hurried, and could have easily made inquiries about any questions he had about the release prior to signing.  Additionally, the Court stated that the plaintiff failed to demonstrate by clear, precise, and convincing evidence any facts showing a mutual mistake as to essential facts by the parties that would invalidate the release. Given this, the Court gave the language of the release its plain meaning, viewed the evidence in the light most favorable to the plaintiff, and found that the executed release barred any action brought against the defendants.

Thanks to Zhanna Dubinsky for her contribution to this post.  Please email Georgia Coats with any questions.Read More