Opinion
3 95 CV 499 (JBA)
April 29, 2003
Eric D. Grayson, Greenwich, CT, for plaintiff JOHN L. MACDONALD
David Paul Friedman, Zeldes, Needle Cooper, Bridgeport, CT, for defendant EMANUEL DRAGONE
S. Dave Vatti Shelton, CT for defendant EMANUEL DRAGONE
David Paul Friedman, S. Dave Vatti, for defendant GEORGE DRAGONE
David Paul Friedman for DRAGONE CLASSIC MOTOR CARS
RECOMMENDED RULING ON DEFENDANTS MOTION TO REOPEN CASE AND ENFORCE SETTLEMENT
On March 20, 1995. plaintiff initiated this diversity action against Dragone Classic Motor Cars, Emanuel Dragone and George Dragone ["defendants"] arising out of the sale and restoration of certain classic cars (Dkt. #1); a nine-count amended complaint was filed on June 6, 1996. (Dkt. #44). On January 17, 1996. the parties consented to trial before United States Magistrate Judge Donna F. Martinez. (Dkt. #15). Jury selection was held on June 18, 1996, with trial to commence one week later (Dkt. #65). The case settled at the final pre-trial conference, held on June 21, 1996. (Dkt. #74).
Four weeks later, on July 19, 1996, defendants filed their first Motion to Enforce Settlement and affidavits in support. (Dkts. ##76-78). In turn, on August 2, 1996, plaintiff filed a Motion for Temporary Restraining Order ["TRO"] and brief in support (Dkts. ##80-81), which Magistrate Judge Martinez granted that day. (Dkt. #86). Continued settlement conferences were held on August 6-7, 1996 (Dkts. ##79, 83-84) and on August 7, 1996, the parties agreed to a settlement on the record in open court (Dkt. #85). Defendants Motion to Enforce was therefore denied as moot by Magistrate Judge Martinez that same day. On August 23, 1996, the parties filed their Stipulation of Dismissal (Dkt #87). which was endorsed by United States District Judge Janet Bond Arterton on October 4, 1996, thus closing the case.
The transcript erroneously indicates that the hearing was held before then Chief Judge Peter C. Dorsey, instead of Magistrate Judge Martinez.
On October 29, 1996, defendants filed their second Motion to Reopen the Dismissal. (Dkt. #89). Sixteen days later, on November 14, 1996. plaintiff filed a Cross-Motion to Dismiss and brief in support (Dkts. ##90-91): supplemental briefs were filed on November 21. 1996 and December 3, 1996. (Dkts ##92-93) On May 20, 1997, defendants filed a Motion to Withdraw the Motion to Reopen (Dkt #94). which Magistrate Judge Martinez granted seven days later, with prejudice and denied plaintiff's Cross-Motion as moot. (Dkt #95).
Some five years later, on February 13 2003 defendants filed their third Motion to Reopen the Case and Enforce Settlement, and brief in support (Dkts. ##96-97) — now pending before this Court, as to which plaintiff filed his brief in opposition on March 6, 2003. (Dkt. #98). On March 12t 2003, Judge Arterton referred the pending motion to this Magistrate Judge. (Dkt. #99). Defendants filed their reply five days later. (Dkt. #100). For the reasons set forth below, defendants' Motion to Reopen the Case and Enforce Settlement (Dkt. #96) is granted to the extent set forth below.
Attached to defendants' motion (Dkt. #96) are the following four exhibits: (1) copy of the Transcript of Settlement Hearing Before Magistrate Judge Martinez on August 7, 1996 (Exh. A; see also Dkt. #85); (2) copy of the Release, signed by plaintiff, dated August 8, 1996 (Exh. B); (3) copy of Stipulation of Dismissal, filed August 23. 1996 and endorsed by Judge Arterton on October 4, 1996 (Exh. C; see also Dkt. #87); (4) copy of revised complaint in MacDonald v. Dragone. CV 97-0160703, filed in the Superior Court for Stamford/Norwalk at Stamford, dated November 21, 1997 (Exh. D); and (5) copy of the Consent Order for Relief from the Automatic Stay, in In re Dragone. Case No. 00-51313, filed in United States Bankruptcy Court on May 9, 2001 (Exh. E).
Attached to defendants' brief in support (Dkt. #97) are copies of case law.
Attached is another copy of Stipulation of Dismissal, filed August 23, 1996 and endorsed by Judge Arterton on October 4, 1996.
I. FACTUAL BACKGROUND
As previously indicated, at the pretrial conference before Magistrate Judge Martinez on June 21, 1996, the parties entered into a settlement agreement whereby plaintiff was to and did receive from defendants a check (or $7.500. notarized general releases from defendants, a 1952 Porsche, a 1959 Jaguar and a 1966 Ford Mustang/Shelby, and bills of sale and indemnity, signed by defendants for the Porsche. Jaguar and Ford Mustang, which specified the vehicles were transferred as is. without warranty or representation, except as to title (Dkt. #76, at 2-3 Exh A Dkt #81. Exh A; Dkt. #96, at 1-2; Dkt. #98. at 6). In exchange, plaintiff was to file a Stipulation of Dismissal with prejudice upon delivery of the automobiles, provide defendants with a notarized release provide defendants with indemnity with respect to a 1946 Delahaye and submit an affidavit and deed transferring the Delahaye to defendants because at the time, the title was missing or lost. (Dkt. #76, at 2-3 Exh. A; Dkt. #89, at 1-2; Dkt. #96, at 1-2; Dkt. #98, at 6).Approximately one month later, on July 19. 1996, defendants filed their first Motion to Reopen and Enforce the Settlement because plaintiff did not file the Stipulation of Dismissal and did not deliver to defendants the promised documents. (Dkt. #76, at 5-6). In his brief in support of his Motion for TRO, plaintiff argued that he was justified in failing to complete his duties under the settlement agreement because defendants procured the title to the Delahaye by fraud by trading what was represented as a Shelby Mustang, worth $38,000, when in fact the car was an ordinary Ford Mustang, made to look like a real Shelby. (Dkt. #81;see Dkt. #98, at 6). According to defendants, plaintiff demanded that defendants immediately find and tender to plaintiff an original Grade A Shelby or replace it with $38,000. (Dkt #76, at 4-6). Defendants rejected plaintiff's demand, reminding plaintiff's counsel that plaintiff's classic car expert inspected the cars prior to delivery and the Bill of Sale, as part of the settlement, "specified in no uncertain terms that the three cars were being transferred as is. without warranty or representation." thus, plaintiff is precluded from asserting any new claims against defendant. (Dkt. #76. at 5) (emphasis in original).
As a result of this first unresolved conflict between the parties, plaintiff filed a Motion for TRO, to prevent the sale, transfer, or encumbrance of the Delahaye (Dkts. #80-81), which motion was granted pending the settlement conference on August 7, 1996. (Dkt #86). A two-day settlement conference was held before Magistrate Judge Martinez on August 6-7, 1996 and at the conclusion of the second day. the parties, on the record and in open court, agreed that in addition to plaintiff retaining possession of the three cars and the $7,500 received pursuant to the earlier agreement plaintiff would receive an additional $7,500 in exchange for plaintiff's waiver and release of any and all underlying claims or claims relating to the settlement ["Release"]. (Dkt. #85) In open court, plaintiff's counsel represented:
We are . . . waiving, settling and releasing . . . any claims arising out of the settlement agreement or purported breach of the settlement agreement, any claims arising out of the inspection or possession of those cars, any claims that were raised in the litigation to enforce the settlement agreement, and any of our claims to rescind that settlement agreement.
We . . . waive and settle, release all our Rule 60 options, which would be to unwind this settlement agreement for fraud, neglect, mistake, and anything else raised in Rule 60.
(Dkt. #85, at 3-4). Shortly thereafter, defense counsel clarified:
What has to be absolutely clear is that the plaintiff is releasing and waiving any claim which was asserted in this litigation, or could have been asserted in this litigation, and any claim which occurred up to the present time and based on facts alleged up to the present time, and that includes any claim which could be filed in any other forum, any other court, any other jurisdiction or institution of any kind, based on anything that occurred up until the present time.
I want to make it absolutely clear that . . . we don't want to see . . . an action brought with the attorney general or some other agency based on the very same claims and allegations . . . which either were asserted in this action or in connection with the discussions concerning the enforcement of the settlement agreement, or could have been asserted in connection with that motion, absolutely clear that everything is being waived that has occurred up to the present time, including any claims of mistake, inadvertence, excusable neglect, newly discovered evidence, or fraud.
(Id. at 5). Plaintiff's counsel responded, "I think I made that pretty clear when I said . . . 'All options available under Rule 60.'" (Id.). When Magistrate Judge Martinez inquired, "[s]o you are in agreement with [defense counsel's] statement as to the understanding between the parties," plaintiff's counsel replied, "I think that's correct." (Id. at 5-6).
Defendants made the additional $7,500 payment and plaintiff executed and delivered the Release which included release
from all claims which have or could have been asserted concerning the sufficiency., adequacy or authenticity of the consideration tendered to [plaintiff] as part of the settlement of [this case] as well as any claims that the settlement was procured by mistake, inadvertence, excusable neglect, newly discovered evidence, fraud, or any other reason which otherwise could constitute a basis for [plaintiff] to seek additional relief from [defendants] relating in any manner to [defendants].
(Dkt. #96, Exh. B). Thereafter, on August 23, 1996, the parties filed a Stipulation of Dismissal with prejudice (Dkt. #87), which was endorsed by the Judge Arterton on October 4, 1996. The Stipulation of Dismissal provides:
Pursuant to Rule 41(a) of the Federal Rules of Civil Procedure, plaintiff John L. Macdonald and defendants Dragone Classic Motor Cars, Emanuel Dragone and George Dragone hereby dismiss with prejudice and without costs, by stipulation, the First Amended Complaint filed by plaintiff and the Counterclaims filed by defendants in this action.
(Dkt. #87). Before the stipulation was endorsed, however, on September 18, 1996, Magistrate Judge Martinez held a telephone conference upon request of defendants because plaintiff had found the title to the Delahaye but was refusing to deliver it to defendants because the title was encumbered as a result of a loan transaction in which plaintiff had been involved. (Dkt. #88; Dkt. #89, at 2-3). This refusal triggered defendants' second Motion to Reopen, filed October 29, 1996 (Dkt. #89) and plaintiff's Cross-Motion to Dismiss defendants' Motion to Reopen, filed November 14, 1996 (Dkts. ##90-91). Plaintiff's counsel tendered the original Delahaye title to defendants' counsel on May 20, 1997, thus mooting these two motions (See Dkts. ##94-95).
According to defendants, during this conference, plaintiff's counsel advised the Court and defense counsel that plaintiff would tender the title within 45 days; Magistrate Judge Martinez informed plaintiff that such title had to be delivered immediately. (Dkt. #89, at 2-3).
In 1997, plaintiff, after learning that the Porsche was "not original" commenced an action in state court against defendants for fraud in connection with the August 7, 1996 settlement and Release and for a rescission of the Release. (Dkt. #96, Exh. D: Dkt. #98, at 8). Plaintiff claims that "[i]n order to induce [him] to sign the Release and withdraw the District Court Action, [defendants] represented to [plaintiff] and Judge Martinez that the Porsche was 'all original', in 'excellent condition' and that there was no fiberglass in the bumpers.' Based on these representations upon which [plaintiff] relied, [plaintiff] signed the Release." (Dkt. #98, at 7). After plaintiff'signed the Release, plaintiff's qualified expert inspected the Porsche and found that the Porsche was not all original, causing plaintiff to suffer damages of $45,000. (Id. at 7-8). Plaintiff thereafter filed his complaint in state court. (Id. at 8). The parties met or two occasions with a Superior Court Judge for purposes of pretrial settlement before the case was placed on active jury calendar and set for trial. (Id.).
On October 5, 2000, defendants filed an involuntary petition for relief in United States Bankruptcy Court, which was later converted to a voluntary case under Chapter 11 of the Bankruptcy Code, thus staying plaintiff s state court action. (Dkt. #96, at 5; Dkt. #98, at 8). According to defendants, plaintiff has asserted a claim as an unsecured creditor in each of defendants' Chapter 11 cases and had himself appointed as a member of the Creditors' Committee in each of the cases (Dkt. #96, at 5). On March 14 and 21, 2001, defendants filed in the Bankruptcy Court an Objection to Claim of John L. MacDonald and Motion to Remove John L. MacDonald as a Member of the Creditor's Committee (Id. at 6). On May 9. 2001, then Chief United States Bankruptcy Judge Alan H. W Shiff entered a Consent Order for Relief from the Automatic Stay, allowing defendants and plaintiff "to take whatever actions they deem appropriate in the District Court Action, including moving to reopen that action, to determine the validity of [plaintiff's] claims against [defendants]" (Dkt. #96: Exh E).
Defendants now assert, in their third Motion to Reopen and Enforce the Settlement that the terms of the August 7. 1996 settlement serve as an absolute bar to the claims that plaintiff has asserted against defendants in the state court compiaint and in defendants bankruptcy cases. (Dkt. #96 at 6) Plaintiff contends mat defendants are seeking to obtain relief from this Court that is not obtainable in Bankruptcy Court/where this case belongs, by filing this motion in a "blatant attempt to disrupt the presentation of the Creditors Committee's plan for liquidation." (Dkt. # 98, at 4).*
II. DISCUSSION
A. JURISDICTION
The enforcement of a settlement agreement is "more than just a continuation of or renewal of the dismissed suit, and hence requires its own basis for jurisdiction." Kokkonen v. Guardian Life Ins. Co. of America. 511 U.S. 375. 378 (1994); see also Scelsa v. CUNY. 76 F.3d 37 (2d Cir. 1996). Thus, "[i]n absence of such an independent basis for jurisdiction, a federal court has jurisdiction to enforce a settlement agreement only if the dismissal order specifically reserves such authority or the order incorporates the terms of the agreement." Scelsa, 76 F.3d at 40 (citing Kokkonen. 511 U.S. at 381) Plaintiff correctly asserts, and defendants do not dispute, that in this case, as in Kokkonen and Scelsa the district court did not expressly retain jurisdiction over the settlement agreement, nor did the dismissal order incorporate the terms' of the settlement. However defendants assert that an independent basis for jurisdiction exists as all three defendants have Chapter 11 bankruptcy cases in the United States Bankruptcy Court for the District of Connecticut in Bridgeport, and the Bankruptcy Court in each of those cases has entered an order granting the parties relief from the automatic stay for purposes of having this Court determine the validity of plaintiff's claims against defendants ( Dkt. #97. at 2-3; see Dkt. #96 Exh. E)
Plaintiff relies on this position to the exclusion of all others; specifically, plaintiff does not address the possibility that an independent basis for jurisdiction exists. (See Dkt. # 98). The only reference plaintiff makes to the bankruptcy proceeding is not to acknowledge a basis for jurisdiction, but rather, to claim that the "only reason [defendants] are filing this motion is to attempt to obtain relief in this Court that is not obtainable in the Bankruptcy Court, which is where this case belongs." (Dkt. 98, at 4).
District courts have "original and exclusive jurisdiction over all cases under [T]itle 11," and "[n]otwithstanding any Act of congress that confers exclusive jurisdiction on a court. other then the district courts The district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under [T]itle 11. or arising in or related to cases under [T]itle 11" 28 U.S.C. § 1334(a) (b). The legislative history of 28 U.S.C. § 1334 indicates that "arising under" jurisdiction and "arising in" and "related to" cases under Title 11 should be broadly construed to include any matter under which a claim is made pursuant to Title 11. Bankruptcy Reform Act of 1978, S. REP. No. 989, 95th Cong. Moreover, the term "proceeding" includes issues which may arise after a case is closed, such as the breach of a settlement agreement that resulted in the dismissal and closure of a case. Id Moreover. 28 U S.C. § 1334(b) evidences the intent of Congress to bring all bankruptcy-related litigation within the purview of the district court: thus, this District Court, upon consent from the parties and Judge Shift, has jurisdiction over defendants' pending motion. See 1-3 COLLIER ON BANKRUPTCY ¶ 3.01 (15th ed. 2003). Because jurisdiction exists relating to the bankruptcy action, an independent basis for jurisdiction exists for this Court to reopen this case and enforce the settlement agreement.
Defendants also rely on 28 U S.C. § 157(d) as an additional basis for jurisdiction. This District Court referred this case to the bankruptcy court on September 21, 1984, pursuant to 28 U.S.C. § 157(a). 28 U.S.C. § 157(a) provides: "Each district court may provide that any or all cases under [T]itle 11 and any or all proceedings arising under [T]itle 11 or arising in or related to a case under [T]itle 11 shall be referred to the bankruptcy judges for the district." 28 U.S.C. § 157(d) provides that "[t]he district court may withdraw, in whole or in part, any case or proceeding referred under this section, on its own motion or on timely motion of any party, for cause shown." Defendants submit, and the Court agrees, that this Court now has jurisdiction over plaintiff's pending claims by virtue of the Consent Order signed by the parties and Judge Shift, which allowed defendants and plaintiff "to take whatever actions they deem appropriate in the District Court Action, including moving to reopen that action, to determine the validity of [plaintiff's] claims against [defendants]." (Dkt. #96, Exh. E).
Defendants now seek to withdraw, pursuant to 28 U.S.C. § 157(d), the original reference, which established jurisdiction in the bankruptcy court. See In re Dragone. 3:03 MC 73 (SRU) (Defendants' Motion to Withdraw Reference, Dkt. #1). Plaintiff asserts that defendants have moved to withdraw the reference "so they can attempt to remove [plaintiff] from the Creditors Committee" and defendants' motions are "not based on any meritorious arguments, but [are] a blatant attempt to disrupt the presentation of the Creditors' Committee's plan for liquidation." (Dkt. #98, at 4). The motion to withdraw the reference, however, is not before this Magistrate Judge.
Plaintiff also suggests that "[i]f there were any credence to [defendants'] motions, they would have been brought in 2000, not at the 23" hour." (id. at 4). Defendants, however, assert that two years ago, on March 21, 2001, they filed an objection to plaintiff's claims and a motion to remove him from the Creditors' Committee with the Bankruptcy Court. (Dkt. #100, at 4; Dkt. #96, at 6). Moreover, as defendants properly point out, the Consent Order filed on May 9, 2001 authorizes defendants to take their actions to this Court, without placing a deadline. (Dkt. #100;Dkt. #96. at 6 Exh E)
Plaintiff also asserts that the courts in this Circuit repeatedly have held that "allegations of breach of a settlement agreement did not constitute 'extraordinary circumstances under Rule 60(b) because the complaining party may obtain virtually the same relief by filing a new action in state (court) therefore there is no showing that an extreme and unexpected hardship would occur'" (Dkt. #98, at 4) (citing, inter alia,Stonewall ins. Co. v. National Gypsum Co., 1992 WL 51567 at *5 (S.D.N.Y. Mar. 9, 1992)). Rule 60(b) provides in pertinent part, that the court may relieve a party from a final judgment or order for. among other reasons mistake inadvertence, surprise, fraud, misrepresentation, or "other misconduct of an adverse party However, such motion seeking this relief "shall be made within a reasonable time." and for the reasons applicable to this case e.g., fraud misrepresentation etc. "not more than one year after the judgment order or proceeding was entered or taken FED. R.Civ. P. 60.(b). The dismissal sought to be reopened was endorsed on October 4, 1996. Thus, without even addressing whether "extraordinary circumstances" would exist in this case, Rule 60(b) is inapplicable because the pending motion was not filed until March 2003. See Stonewall Ins., 1992 WL 51567, at *6.
B. ENFORCEMENT OF THE SETTLEMENT AGREEMENT 1. VALIDITY OF THE SETTLEMENT AGREEMENT
In order to reach a valid settlement agreement, the parties must voluntarily enter into the agreement and the parties must mutually assent to the terms and conditions of the agreement. Millqard Corp. v. White Oak Corp., 224 F. Supp.2d 425 432 (D. Conn. 2002) (citation omitted; Brown v. Nationscredit Commercial. 2000 WL 888507 at *2 (D. Conn. June 23, 2000) (citations omitted); see also v. Johnson v. Schmitz, 237 F. Supp.2d 183, 189 (D. Conn. 2002) (multiple citations omitted). However, once reached, a settlement agreement constitutes a contract that is binding and conclusive and the parties are bound to the terms of the contract even if a party has a change of heart between the time of the agreement to the terms of the settlement and the time it is reduced to writing. Pultney Arms LLC v. Shaw Industries. Inc., 2002 WL 31094971. at *2 (D. Conn Sept. 6, 2002). Johnson. 237 F. Supp.2d at 189; Brown, 2000 WL 888507. at *2. Moreover, "[a] district court has the power to enforce summarily, on motion, a settlement agreement reached in a case pending before it."Meetings Expositions. Inc. v. Tandy Corp., 490 F.2d 714, 717 (2d Cir 1974) (multiple citations omitted); see also Pultney Arms, 2002 WL 31094971, at *2. Brown. 2000 WL 888507. at *2; Audubon Parking Assocs. Ltd. P'ship v. Barclay Stubbs, Inc., 225 Conn. 804, 811. 626 A.2d 729. 733 (1993). "Summary enforcement is not only essential to the efficient use of judicial resources but also preserves the integrity of settlement as a meaningful way to resolve legal disputes." Audubon, 225 Conn. at 812. As Judge Newman, writing for the majority of the Second Circuit, noted:
Due regard for the proper use of judicial resources requires that a trial judge proceed with entry of a settlement judgment after affording the parties an opportunity to be heard as to the precise content and wording of the judgment, rather than resume the trial and precipitate an additional lawsuit for breach of a settlement agreement. This authority should normally be exercised whenever settlements are announced in the midst of trial.Janus Films. Inc. v. Milter, 801 F.2d 578, 583 (2d Cir. 1986).
Summary enforcement is appropriate here, where the language used in court and on the record, and in the signed Release, is clear and unambiguous. At the conclusion of a two-day follow-up settlement conference before Magistrate Judge Martinez, the parties agreed on the record and in open court that in addition to plaintiff retaining possession of the three cars and the $7,500 received pursuant to the earlier agreement, plaintiff would receive an additional $7,500 in exchange for plaintiff's waiver and release of any and all underlying claims or claims relating to the settlement. (Dkt. #85). Specifically, plaintiff's counsel stated on the record that he was
waiving, settling and releasing . . . any claims arising out of the settlement agreement or purported breach of the settlement agreement, any claims arising out of the inspection or possession of those cars, any claims that were raised in the litigation to enforce the settlement agreement, and any of our claims to rescind that settlement agreement.
(Dkt. #85. at 3) (emphasis added). Defendants' counsel reiterated that
What has to be absolutely clear is that the plaintiff is releasing and waiving any claim which has been asserted in this litigation, or could have been asserted in this litigation and that includes any claim which could be filed in any other forum [and any claim] either asserted in this action or in connection with the discussions concerning the enforcement of the settlement agreement including any claims of mistake, inadvertence, excusable neglect, newly discovered evidence, or fraud.
(Id. at 5) (emphasis added). Plaintiff agreed on the record and thereafter executed and delivered the Release which included a release as to "any claims that the settlement was procured by mistake, inadvertence, excusable neglect, newly discovered evidence, fraud, or any other reason which otherwise could constitute a basis for [plaintiff] to seek additional relief from [defendants] relating in any manner to [defendants]." (Dkt. #96, Exh. B). This unambiguous language evidences the parties' intent not only to voluntarily enter into the agreement but to be bound by the terms and conditions of both the agreement and the Release.
Plaintiff now claims that "[i]n order to induce [him] to sign the Release and withdraw the District Court Action, [defendants] represented to [plaintiff] and Judge Martinez that the Porsche was 'all original, in 'excellent condition' and that 'there was no fiberglass in the bumpers.' Based on these representations upon which [plaintiff] relied, [plaintiff] signed the Release." (Dkt. #98, at 7). Plaintiff is a self-described "individual whose hobby is collecting, trading and showing antique and classic automobiles." (Dkt. #98, at 5). Therefore, plaintiff, a sophisticated businessman engaged in this specific line of business, cannot be excused for failing to inspect, or to have inspected, the cars he collects, purchases and trades prior to collection, purchase or trade. Moreover, this second settlement agreement, which included transfer of the Porsche, the representation of which is at issue, occurred less than one month after plaintiff learned that he had traded the title for the Delahaye for what was represented as a Shelby Mustang, worth $38,000. when, upon inspection, he learned that the car was an ordinary Ford Mustang, made to look like a real Shelby. (Dkt. #81; see Dkt. #98, at 6). Thus, despite plaintiff's assertions that defendants' claims were made in the presence of Magistrate Judge Martinez, plaintiff's reliance on defendants' representation of the Porsche was not justifiable under the circumstances. Furthermore, plaintiff, prior to his inspection of the car. then executed a clear and unambiguous release, thus contractually binding him to the terms of the agreement. Moreover, the cars being transferred as part of the settlement, were transferred "as is. without warranty or representation." (Dkt. #76, at 5). Plaintiff cannot contend otherwise. The clear and unambiguous language used by the parties reflects their mutual assent; thus, plaintiff's decision to file a complaint in State Court is in direct breach of his contractual obligations to which he is bound by the terms of the settlement agreement and the Release.
2. RELEASE
Plaintiff contends that "[f]raud in procurement of the release was not and cannot be waived," thus plaintiff's filing of a complaint in state court does not violate the terms of the Release. (Dkt. #98, at 8) (emphasis omitted). Defendants, however, assert that the settlement signed by plaintiff, clearly encompasses the release of claims based on fraud in inducing or procuring the settlement, thus binding plaintiff to the terms of the settlement agreement. (Dkt. # 97, at 5). The claims of the parties in this case are strikingly similar to the claims of the parties in Nycal Corp. v. Inoco PLC. 988 F. Supp. 296, 298 (S.D.N.Y. 1997), aff'd mem., 166 F.3d 1021 (2d Cir. 1998). In that case, as here, defendants asserted that the "release contained in the Settlement Agreement preclude[d] [plaintiff's] claim that [he was] fraudulently induced into [the underlying agreement]", while plaintiff responded that the release, which specifically waives any claim, now or in the future, arising out of the agreement "does not extend to claims of fraudulent inducement." Id. The facts of this case, however, are even more compelling than those in Nycal, wherein the Southern District of New York concluded that while the language of the settlement agreement was facially ambiguous, extrinsic evidence of the parties' objective manifestations of intent indicated that the settlement agreement released all claims relating to the underlying agreement including claims for fraudulent inducement Id. at 299-304. In this case, the Release that plaintiff executed and delivered to defendants was unambiguous; the Release included a release
from all claims which have or could have been asserted concerning the sufficiency, adequacy or authenticity of the consideration tendered to [plaintiff] as part of the settlement of [this case] as well as any claims that the settlement was procured by mistake, inadvertence, excusable neglect, newly discovered evidence, fraud, or any other reason which otherwise could constitute a basis for [plaintiff] to seek additional relief from [defendants] relating in any manner to [defendants].
(Dkt. #96, Exh. B) (emphasis added). Moreover, because the release purports to absolve defendants for any alleged misrepresentations relating to the settlement, the timing, in this case after the entry of the stipulation of dismissal, of when plaintiff discovered the alleged fraud is irrelevant because a "release executed even without knowledge of a specific fraud effectively bars a claim or defense based on that fraud."Sotheby's Inc. v. Dumba. 1992 WL 27043, at *7 (S.D.N.Y Jan 31, 1992) (citations omitted).
Therefore, defendants" Motion to Reopen Case and Enforce Settlement (Dkt. #96) is granted and the case is reopened for the limited-purpose of enforcing the settlement agreement entered into on August 7, 1996.
III. CONCLUSION
Accordingly, for the reasons stated above, defendants' Motion to Reopen Case and Enforce Settlement (Dkt. #96) is granted to the extent set forth above.
See 28 U.S.C. § 636(b) (written objections to ruling must be filed within ten days after service of same); FED. R. Civ. P. 6(a), 6(e) 72. Rule 2 of the Local Rules for United States Magistrate Judges, United States District Court for the District of Connecticut;Small v. Secretary, HHS, 892 F.2d 15, 16 (2d Cir 1989) (failure to file timely objection to Magistrate Judge's recommended ruling may preclude further appeal to Second Circuit).