Adwoa Gyabaah, Respondent,v.Rivlab Transportation Corp., Appellant, et al., Defendant, Jeffrey A. Aronsky, P.C. Nonparty-Respondent.

Brief

N.Y.December 5, 2013

NEW YORK OFFICE 30 Broad Street The 44th Floor New York, New York 10004 (212) 406-9710 Fax (646) 370-3303 Via Overnight Mail Court of Appeals State of New York 20 Eagle Street Albany, NY 12207-1095 LAW OFFICES OF KRAL CLERKIN REDMOND RYAN PERRY & VAN ETTEN, LLP Elizabeth Gelfand Kastner Associate ekastner@kcrrpv.com September 3, 2013 Att.: Andrew W. Klein, Chief Clerk and Legal Counsel to the Court New York State Court of Appeals Dear Mr. Klein, Re: Gyabaah v. Rivlab APL- 2013-00099 Index #307081/10 PLEASE REPLY TO: LONG ISLAND OFFICE 538 Broadhollow Road, Suite 200 Melville,NewYork 11747 (631) 414-7930 Fax (631) 777-4504 We write this letter on behalf of the defendant-appellant, Rivlab Transportation Corp., pursuant to letter directive of this Court dated August 27, 2013 in the above-noted matter. As discussed below, the Decision and Order of the Appellate Division, First Department, dated and entered on January 10, 2013, should be reversed and the conclusions set forth in the dissenting opinion should be adopted and incorporated as the law of the case. As the dissenting opinion properly enumerated that Gyabaah's witnessed execution of the General Release and Hold Harmless Agreement constituted sufficient evidentiary proof of her acceptance of the offer of the settlement and that delivery of the settlement documents was neither a prerequisite term of the agreement nor an obligatory mandate to rendering the agreement valid, binding and legally enforceable. All Prior Arguments and Facts raised by Defendant-Appellant are Incorporated In accordance with the requirements of Rule 500.11 (f), all of the arguments raised by the defendant-appellant, Rivlab, to the Appellate Division, First Department in Rivlab's Brief-in Chief and Reply Brief, as well as the Record on Appeal to the Appellate Division, First Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 Department and the factual recitations are incorporated and referenced herein as if enumerated and in the interest of brevity. Preliminary Statement The gravamen of the issue presented before this Honorable Court rests with the vacatur of a General Release and settlement agreement that was entered into between the plaintiff- respondent, Adwoa Gyabaah and the defendant-appellant, Rivlab Transportation Corp., in resolution of a personal injury action that was commenced by Gyabaah against this defendant- appellant in 2010 and following discussions had between her then counsel, Jeffrey Aronsky, Esq. and Mr. Scott Tilley, a claims specialist with the National Casualty Company, Rivlab's insurer. It is the position of the defendant-appellant that the lower courts erred in granting Gyabaah's request to vacate the settlement agreement and General Release notwithstanding her failure to present any admissible evidentiary proof satisfying the legal prerequisites warranting such relief and notwithstanding the fact that the motion court found that a valid, legally executed settlement had been entered into. In light of such error that has left Rivlab an aggrieved party, the lower court decision violates strong New York State policy favoring the resolution of disputes and is in direct conflict with existing case law that states that delivery of the settlement documents is not a prerequisite for enforceability and acceptance transpired upon 'the execution of the documents. Background On October 1, 2010, Mr. Tilley verbally offered to settle this action for the limits of the full liability insurance policy. This offer was followed up with written correspondence from Mr. Tilley. Mr. Tilley then retained the services of Kral, Clerkin, Redmond, Ryan, Perry and Van Etten, LLP to assist in obtaining the properly executed settlement documents including the affidavits of"no excess coverage." On October 5, 2010 Gyabaah met with her then attorney, Mr. Jeffrey Aronsky and Brian Schachter, Esq. of Esquire Settlement Services to discuss the details of the settlement offer, the finality of executing the General release and different structure proposals of the settlement proceeds constituting the full liability insurance policy limits of one million dollars. Following this discussion, Gyabaah executed the General Release and Mr. Aronsky advised he would hold it pending receipt of an affidavit of No Excess Insurance coverage and while Gyabaah decided if she wanted a lump sum payment or struc~ed payment. On October 12, 2010, Mr. Aronsky returned to the home and Gyabaah executed a Hold Harmless Agreement that stated, in relevant part, "Complete Understanding: Releasor hereby declares that the terms of this Release have been completely read and are fully understood and voluntarily accepted for the purpose of making a full and final settlement of any and all claims, disputed or otherwise, on account of injuries and/or damages related to Claims set forth herein, and for the express purpose of precluding Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 forever any further additional claims against the Release arising out of the aforesaid incident, accident or occurrence. . .. " Thereafter, Mr. Aronsky received the Affidavits of No Excess Coverage and was awaiting a decision by Gyabaah regarding the manner in which she wished to be paid. Contemporaneously, and after discussions Gyabaah purportedly had with unidentified people, she retained the services of another attorney who represented that the matter could be settled or resolved for a greater sum of money. Gyabaah's new coi.msel advised Mr. Aronsky that they had been substituted, that Gyabaah no longer wished to settle the matter and that he should not forward the settlement documents to defense counsel, defendant or defendant's insurance carrier. As a result of these actions motion and appellate practice have followed. Question Presented 1. Is it proper for a settlement agreement to be vacated after a General Release and Hold Harmless Agreement were executed by a plaintiff, but the documents had not been delivered to defense counsel or the defendant's insurance carrier pending plaintiffs decision as to whether she desired a structured or lump sum payment of the settlement monies after plaintiff changed her mind and new counsel suggested that the matter could be settled for a greater sum when the terms of settlement were contained within these documents and did not require that the documents be exchanged in order to be enforceable; and, in the absence of any proof or findings by the motion court or Appellate Division that the settlement documents had been executed under duress, fraud, mistake or accident and in violation of the strong public policy in New York State favoring resolution of disputes? This Appellate Division, First Department answered this question in the affirmative and defendant-appellant contends that this ruling was erroneous. Arguments Settlement Agreements Will Not Be Set Aside Lightly The Supreme Court, Bronx County opined that plaintiff-respondent executed a valid release and that a valid, legally executed settlement had been effectuated. The motion court further opined that the release should not be set aside unless plaintiff demonstrated duress, illegality, fraud or mutual mistake. In re Jacker, 105 A.D.3d 1048, 963 N.Y.S.2d 397 (2nd Dept. 2013); Willgerodt ex rel. Majority People's Fund for the 21st Century, Inc. v. Hohri, 953 F. Supp. 557, 560 (S.D.N.Y. 1997) aff'd 159 F.3d 1347 (2d Cir. 1998) and Rivera v. State, 115 A.D.2d 431, 496 N.Y.S.2d 230, 231 (1st Dept. 1985). The motion court found "Plaintiff executed a valid release. However, after speaking to her new attorneys, she felt that the new attorneys could get her more money so she decided to get out of the release." Looking to the public policy of litigants entitled to having their day in court, notwithstanding Gyabaah' s failure to meet her burden of proof, the release was vacated "in the interests of justice." All parties immediately took appeals to the Appellate Division, First Department. Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 The law is well settled that a release may not be treated lightly. Indeed, this Honorable Court referred to a release as, "a jural act of high significance without which the settlement of disputes would be rendered all but impossible. It should never be converted into a starting point for renewed litigation except under circumstances and under rules which would render any other result a grave injustice." Mangini v. McClurg, 24 N.Y.2d 556 (1969). See also, Allen v. Riese Organization, Inc.,- N.Y.S.2d -, 2013 WL 2096632 (1st Dept. 2013). New York State has a strong public policy encouraging the resolution of disputes and the courts favor stipulations of settlement. Hallock v. State, 64 N.Y.2d 224, 485 N.Y.S.2d 510 (1984). Where counsel represents the party seeking to vacate the stipulation it is even more important that the courts not readily vacate a settlement agreement. Kelley v. Chavez, 33 A.D.3d 590, 591, 821 N.Y.S.2d 466 (2nd Dept. 2006) and Town of Clarkstown v. M.R.O. Pump & Tank, Inc., 287 A.D.2d 497, 731 N.Y.S.2d 231 (2n Dept. 2001). Significantly, the courts have also held that they "will not set aside a stipulation [of settlement] on the ground of unconscionability simply because, in hindsight, a party decides that the agreement was improvident." Town of Clarkstown, supra at 498. Critically, the Appellate Division, Second Department held "a change of heart is insufficient." Sontag v. Sontag, 114 A.D.2d 892, 893 (2n Dept. 1985). Additionally, the courts will not set aside a settlement agreement because a plaintiff opines that, upon reevaluation, the claim is worth a greater sum. Muller v. City ofNew York, 113 A.D.2d 877 (2nd Dept. 1985). Stated differently, a party's hindsight regrets regarding a settlement offer is no basis for relief. Metroeb Rlty. Corp. v. Fuller, 32 Misc.3d 941, 928 N.Y.S.2d 814 (N.Y.C. Civ. Ct. 2011) Indeed, the Appellate Term for the 2nd, 11th and 13th Judicial Districts addressed this matter in Baldwin Acupuncture, P.C. v. Allstate Insurance Co., 32 Misc. 3d. 137 (A), 2011 WL 3590842 936 N.Y.S.2d 57 (N.Y.Sup. App. Term 2011). Citing to the holdings of Appellate Court decisions and the Court of Appeals, the court opined, "Stipulations of settlement are favored by the courts and not lightly cast aside (see Hallock v. State of New York,_64 N.Y.2d 224, 230 [1984]~ Matter of Galasso,_35 N.Y.2d 319, 321 [1974]; Racanelli Constr. Co., Inc. v. Tadco Constr. Corp., 50 A.D.3d 875 [2008] ). Pursuant to CPLR 2104, when a stipulation is reduced to writing and signed by a party or its attorney, it is binding upon that party. Furthermore, strict enforcement of a stipulation of settlement not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and the integrity of the litigation process (see Hallock v. State of New York, 64 N.Y.2d at 230~ Racanelli Constr. Co., Inc. v. Tadco Constr. Corp.,_50 A.D . .3d at 876). 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 (see Hallock v. State ofNew York, 64 N.Y.2d at 230~ Matter of Frutiger, 29 N.Y.2d 143, 149-150 [1971]; Racanelli Constr. Co., Inc. v. Tadco Constr. Corp., 50 AD3d at 876; Nigro v. Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 Nigro, 44 A.D.3d 831 [2007]; Davidson v. Metropolitan Tr. Auth., 44 A.D.3d 819 [2007] )." Delivery of the Settlement Documents Was Not a Term of the Agreement nor Necessary for the Settlement Agreement to be Binding as the Settlement was Entered into with Authority and Executed Freely The Appellate Division, First Department affirmed the lower court decision, however, the majority opined that it was error for the motion court to vacate the release in the interests of justice. Rather, the First Department ruled contract law should be applied and, as the General Release and Hold Harmless Agreement were not forwarded to the defendant, defense counsel or the defendant's insurance carrier, the First Department determined there was no acceptance of the offer. The dissent disagreed and opined that upon execution of the General Release and the Hold Harmless Agreement, Gyabaah had entered into a legally binding and enforceable settlement contract and that delivery of the documents was neither a prerequisite nor did the absence of such delivery void the settlement agreement. Delivery of the documents was not a part of the terms of the settlement agreed upon between the parties nor was it an obligatory prerequisite. The agreement is valid inasmuch as it was properly drafted and executed. Scheck v. Francis, 26 N.Y.2d 466,468-70 (1970) and Jordan Panel Sys. Corp. v. Turner Construction, Co., 45 A.D.3d 165, 166, 841 N.Y.S.2d 561 (1st Dept. 2007). Indeed, settlement agreements may even be deemed valid and binding if further documentation is necessary, as in the manner of payment, or even if some of the documents are not signed. Kowalchuck v. Stroup, 61 A.D.3d 118, 122, 873 N.Y.S.2d 43 (1st Dept. 2008) The pivotal basis for determining the existence of a binding agreement rests with the writing establishing the contractual relationship bearing the signature of the party to be charged and the unsigned documents (the correspondence) refer to the same transaction. Aquavella v. Viola, 79 A.D.3d 1590, 914 N.Y.S.2d 498 (4th Dept. 2010) aff'd. 17 N.Y. 3d 741, 929 N.Y.S.2d 66 (2011). Furthermore, " [a] binding contract . . . may be made without a physical delivery of the instrument evidencing the contract" (Birch v McNall, 19 A.D.2d 850, 850 [1963]; see Bohlen Indus. ofN. Am. v Flint Oil & Gas, 106 A.D.2d 909, 910 [1984]). Indeed, "'[a]ny evidence that shows that the parties to a written instrument intend that the same should be operative and binding upon them is sufficient in an action to enforce its provisions'" Birch v McNall, supra at 850. Shklovskiy v. Khan, 273 A.D.2d 371, 709 N.Y.S.2d 208 (2nd Dept. 2000) and Morgan Servs., Inc. v. Abrams, 21 A.D.3d 1284, 801 N.Y.S.2d 457 (4th Dept. 2005). In Florimon v. Xianglin Xu, 97 A.D.3d 532, 948 N.Y.S.2d 113 (2nd Dept. 2012), the Appellate Division, Second Department addressed this very issue and held that it was not necessary for the stipulation of settlement to be delivered in order for it to be deemed enforceable. Yet notwithstanding this clearly stated principle, the Appellate Division, First Department, herein rendered a decision and order that is in direct conflict with the Florimon holding. Indeed, the holding in the case at bar even contradicts the Appellate Division, First Department's own decision in Shah v. Wilco Systems, Inc., 81 A.D.3d 454, 916 N.Y.S.2d 82 (1st Dept. 2011), wherein it was held, that although the exchange of general releases had not yet Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 transpired nor the execution of a confidentiality agreement, these factors alone did not render the agreement invalid. "[P]laintiffs signature equates with the execution of the agreement and at the moment of that signature and assent by the defendants, those defendants assumed a binding obligation to tender the check. Plaintiffs unilateral decision with regard to acceptance or encashment of the settlement check does not modify the clear and binding terms of the written agreement." Calavano v. New York City Health & Hosps. Corp., 246 A.D.2d 317, 667 N.Y.S.2d 351 (1st Dept. 1998). Significantly, the Appellate Division, Third Department held, "A party is bound by his or her signature on a release containing language that is clear and unambiguous, unless cause exists sufficient to invalidate a contract such as duress, illegality, fraud or mutual mistake." Lodhi v. Stewart's Shops, Corp., 52 A.D.3d 1084, 1085, 861 N.Y.S.2d 160 (3rd Dept. 2008) Herein, it cannot be refuted that Gyabaah's signature appears on the General Release and Hold Harmless Agreement. It is also irrefutable that there was not one iota of evidentiary proof supporting Gyabaah's inferences of duress that she endeavored to claim as a means and avenue to escape the binding effect of the valid and legally enforceable settlement agreement. Moreover, "where the language in a release is clear and free from ambiguity, effect must be given to the intent of the parties as reflected in the writing alone, without resort to extrinsic evidence." In re Jacker, supra at 1048. More recently, in Porcelli v. Gelco Corp., -A.D.3d-,- N.Y.S.2d -, 2013 WL 3812103 (2nd Dept. 2013) the Appellate Division, Second Department considered the question ofwhether an e- mail message satisfied the criteria of CPLR 2104 such that it constituted a binding and enforceable stipulation of settlement. After considering the evidence and the arguments both in favor and against the conclusion that a binding and enforceable settlement agreement had been entered into, the Appellate Division, Second Department providently concluded that an agreement was in point in fact entered into. The Court therein opined that the email message enumerated the material terms of the agreement and, in particular, plaintiffs' counsel's acceptance of the offer of settlement in exchange for a release in favor of the defendants. The Appellate Division, Second Department further noted that, "A party will be bound by the acts of its agent in settlement negotiations and an agreement will be binding where the agent has either actual or apparent authority." Id. See Hallock, supra. Significantly, the Appellate Division, Second Department emphasized that, "Courts have long recognized that traditional correspondence can qualify as an enforceable stipulation of settlement under CPLR 2104." Id. See also Wronka V. GEM Community Mgt., 49 A.D.3d 869, 854 N.Y.S.2d 474 (2nd Dept.); Davidson, supra; Palmo v. Straub, 45 A.D.3d 1090, 845 N.Y.S.2d 549 (3rd Dept. 2007); Roberts v. Stracick, 13 A.D.3d 1208, 787 N.Y.S.2d 591 (4th Dept. 2004); and Gaglia v. Nash, 8 A.D.3d 992, 778 N.Y.S.2d 595 (4th Dept. 2004) The Porcelli Court further held, "It is, of course, axiomatic that a letter can be considered 'subscribed' since letters are usually signed at the end by the author thereof." I d. Herein, it is beyond cavil that a binding and enforceable agreement of settlement was entered into between Mr. Aronsky acting on behalf of Gyabaah and Mr. Tilley acting on behalf of the insurer for the defendant, Rivlab Transportation, Corp. The terms of settlement were then Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 set forth in written correspondence subscribed to by Thaddeus J. Rozanski, Esq., acting as counsel on behalf of Rivlab Transportation Corp. Confirmation of the settlement negotiations entered into between Mr. Aronsky and Mr. Tilley were enumerated by these gentlemen in their respective Affidavits submitted to the trial court. Notwithstanding the plethora of evidentiary proof unequivocally establishing the existence of a valid, legally executed, binding and fully enforceable settlement agreement entered into between the parties to this litigation, the General Release and settlement agreement were deemed vacated in contradiction to existing case law and the strong public policies ofNew York State. The Potential Consequences of the Decision and Order In finding in favor of the plaintiff-respondent the court below opened a Pandora's box that threatens to undermine the smooth workings of the New York State justice system. Preliminarily, the decision has subliminally and directly empowered plaintiffs with a means and avenue for delaying, if not infinitely suspending, the resolutions of disputes by permitting them to withhold the exchange of executed settlement documents while they second guess if the settlement offer is enough. Moreover, the decision gives credence to the notion that a simple change of mind in the hopes of a greater sum of money is sufficient grounds for violating New York's strong and long standing public policy encouraging parties to resolve their disputes. The decision also encourages and invites plaintiffs to negotiate settlements in bad faith while they "counsel shop" for someone who convinces them that they can "get more" thus undermining the relationship between attorneys and clients. In stark contrast, the decision leaves defendants vulnerable to the whims and fancies of plaintiffs who have accepted a settlement offer and have taken steps and measures to execute documents affirming this fact. Defendants are now left with little confidence to believe that a matter has been resolved or to rely upon the trustworthiness of plaintiffs or their counsel that the settlement will reach its ultimate conclusion and the matter will be deemed closed and final. The lower court has left the future of civil litigation in limbo and opened the door for the expeditious resolution of disputes through mediation or settlement negotiations to become impotent and obsolete. Potentially, the motion and trial courts will become overwhelmed by the plethora of litigation because defendants will be unwilling to risk engaging in settlement negotiations due to their unreliability and plaintiffs will be confronted with the harsh reality that their causes of action may linger through the court system far longer as they await their day in court. Potentially, court calendars themselves will be saturated to the point of inefficiency as the justice system teeters under the sheer volume of matters awaiting and insisting on trials as the only sure way of knowing when a matter may potentially be at an end. This, in tum, will overwhelm the appellate court system as aggrieved parties seek review of verdicts and trial rulings. Furthermore, trust and professional working relationships between opposing counsel, whose appearances in matters are often repetitive and recurring, will disintegrate with this decision if plaintiffs come to believe that this decision has obliterated the concept that execution of a General Release and a Hold Harmless Agreement does indeed deem a matter fully and finally settled. Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 Accordingly, the significance of this decision elevates its import from a matter between the parties to one that potentially affects current and future litigants throughout New York State. In the case sub judice, it is not disputed that Rivlab's insurance carrier made a settlement offer in the amount of the liability insurance policy limits of $1 million. It is also not disputed that Gyabaah executed the General Release of her own free will, and more than one week later executed the Hold Harmless Agreement with a full and complete understanding that her execution of these documents was binding and final. Yet, in the absence of the submission of any admissible evidentiary proof establishing any legal bases for vacating the release and settlement agreement, the lower courts nevertheless overlooked the legal criteria for vacatur and rendered determinations that conflict with existing case law and strong New York State policies regarding and favoring the resolution of disputes. It is beyond cavil that the terms and intent of the parties to this settlement agreement were clearly established within the framework of the General Release and the Hold Harmless Agreement as well as the totality of telephonic and written communications exchanged between the parties. All of the documents and communications confirm and bolster the irrefutable fact that a valid, legally binding and enforceable settlement agreement was entered into between Adwoa Gyabaah and Rivlab Transportation Corporation. Simply put, Gyabaah's execution of the General Release and Hold Harmless Agreement irreversibly established her acceptance of the offer of settlement; a fact that is not only self- evident, but confirmed by her prior counsel, Mr. Aronsky, Mr. Schacter who witnessed her acceptance. Gyabaah, herself, admitted to the existence of the agreement, but sought to be relieved from it based upon her alleged conversations with anonymous persons and her new counsel by claiming that she felt pressured. Critically, these unsubstantiated claims were dismissed as unsupportable and unfounded by the proffered evidence as neither the motion nor appellate court found any basis to believe that Gyabaah's execution of the settlement documents transpired under duress. Furthermore, inasmuch as Gyabaah failed to satisfy the requisites for vacatur of the valid, legally executed settlement agreement premised upon an argument of duress, that was the sole legal basis for vacating the release, she then endeavored to retract this argument to propound that there was no agreement at all and therefore, even contract law should not be applied herein. The facts are simple. There was an offer and there was an acceptance. And as such it is respectfully contended that the settlement agreement should be upheld. Rivlab should not be limited to the Rule 500.11 alternative procedure Rivlab respectfully requests that in the event that this Honorable Court is not inclined to agree with the defendant-appellant on the strength of this letter brief, that Rivlab be afforded a full opportunity to brief the issues in this case unconstrained by the alternative procedure Rule 500.11. Kral Clerkin Redmond Ryan Perry & Van Etten, LLP September 3, 2013 Conclusion It is respectfully submitted that for the reasons set forth above, the order of Appellate Division, First Department dated January 10, 2013 should be reversed insofar as it affirmed the order of the Supreme Court, Bronx County dated March 11, 2011 and entered with the Clerk of the Court on March 14, 2011, that vacated the General Release and voided the settlement contract that was entered into between plaintiff-respondent and defendant-appellant not withstanding the motion court's own finding that a valid executed settlement agreement was entered into and the dissenting opinion should be adopted and incorporated to become law of the case. The dissenting opinion, after careful review of the facts and record, properly summed up the motivations of plaintiff-respondent, " ... there was a binding settlement ... which plaintiff sought to avoid simply because she changed her mind after she was told that she could get more money." Furthermore, the dissenting opinion properly opined, in accordance with prevailing case law and New York's strong public policy favoring the resolution of disputes, " ... once plaintiff signed the release and the hold harmless agreement, she was bound by the settlement terms, pursuant to CPLR 2104, without the need for delivery or filing of the settlement documents." As there was no term contained in the General Release or the Hold Harmless Agreement requiring that plaintiff must physically deliver these documents to Rivlab, its counsel or insurance carrier in order to enforce them, the execution of the documents equivocates to acceptance of the offer and created a binding and legally enforceable settlement contract and, as such, should be reinstated and enforced accordingly. Defendant-appellant, Rivlab Transportation Corp., respectfully requests that this Honorable Court reverse the lower court order and reinstate the settlement agreement and General Release consistent with applicable law and public policy. Thank you for your courtesy. Respectfully submitted,