March 4, 2005

Brooklyn Hgts. Med. v State-Wide Ins. Co. (2005 NY Slip Op 50283(U))


The main issue in this case was whether the defendant, State-Wide Insurance Co., was legally bound by an alleged settlement agreement reached with the plaintiff, Brooklyn Heights Medical, to pay first-party No-Fault benefits for healthcare services rendered to the plaintiff's assignor. The court considered the facts surrounding the negotiation and communication of the settlement agreement, including the exchange of unsigned documents, and whether the defendant's failure to sign and submit payment constituted rejection of the settlement offer. The court held that the defendant was not legally bound by the settlement agreement as neither the plaintiff nor plaintiff's counsel signed the stipulation at issue. The court also denied both the defendant's motion to vacate the judgment against it and enforce the settlement, as well as the plaintiff's cross-motion for sanctions and costs, finding that neither party acted in bad faith. Therefore, the motion and cross-motion were both denied.

Reported in New York Official Reports at Brooklyn Hgts. Med. v State-Wide Ins. Co. (2005 NY Slip Op 50283(U))

Brooklyn Hgts. Med. v State-Wide Ins. Co. (2005 NY Slip Op 50283(U)) [*1]
Brooklyn Hgts. Med. v State-Wide Ins. Co.
2005 NY Slip Op 50283(U)
Decided on March 4, 2005
Civil Court Of The City Of New York, Kings County
Bluth, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on March 4, 2005

Civil Court of the City of New York, Kings County

Brooklyn Heights Medical a/a/o Elene Barrow, Plaintiff(s)/Petitioner(s),


State-Wide Insurance Co., Defendant(s)/Respondent(s).


Arlene P. Bluth, J.

Upon the foregoing cited papers, defendant moves to vacate and set aside a judgment entered against it on August 12, 2004, to enforce an alleged settlement and discontinuance agreement, and for sanctions. Plaintiff cross-moves for sanctions and costs. For the following reasons, defendant’s motion and plaintiff’s cross-motion are denied. [*2]

The pertinent facts on this motion and cross-motion are as follows: On April 8, 2003, plaintiff Brooklyn Heights Medical, P.C. sued to recover first-party No-Fault benefits in the amount of $4,199.05 plus statutory interest, costs, and attorneys’ fees for healthcare services allegedly rendered to plaintiff’s assignor, Elene Barrow. On May 24, 2004, this Court, in an Order by the Hon. Sylvia Hinds-Radix after oral argument, awarded summary judgment to plaintiff in the amount of $4,199.05 “as set forth in the summons and complaint.” Thereafter, the parties negotiated a settlement of the case for $3,000, apparently to facilitate swifter payment to plaintiff than by execution of the judgment, albeit of a lesser sum. On June 9, 2004, plaintiff’s counsel faxed to defendant’s counsel a typed, unsigned stipulation of settlement and discontinuance. The first page stated: “Please sign for confirmation and fax back to our office ASAP.” The stipulation of discontinuance also provided that if full payment was not made within 30 days, the stipulation would become null and void.

Defendant’s counsel telephoned plaintiff’s counsel requesting that signed stipulations be forwarded. Plaintiff’s counsel informed him that the firm’s policy was to require that the opposing party sign the documents first. On July 8, 2004, plaintiff’s counsel faxed a letter to

defendant’s counsel stating that, although 30 days had passed with no payment on the settlement forthcoming, defendant’s counsel would be given an additional seven days to submit payment and return the signed documents. Otherwise, the letter warned, the settlement would be deemed null and void. Defendant’s counsel did not submit payment or sign the stipulation. Defendant’s counsel claims he faxed a letter to plaintiff’s counsel on July 19, 2004 demanding a signed stipulation; however, the fax report appended to defendant’s exhibit indicates a failed transmission.

Defendant’s attempt to escape the judgment against it by breathing life into an unconsummated settlement has no legal support. The CPLR is clear that “[a]n agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered.” CPLR § 2104. Neither plaintiff nor plaintiff’s counsel ever “subscribed” i.e., signed the stipulation at issue. Therefore, plaintiff is not bound by the settlement.

Plaintiff was free to attach any conditions it wished to its settlement offer. Likewise, defendant was free to reject the offer based on objections to any of plaintiff’s terms. By failing to sign the stipulation and forward payment thereunder, defendant effectively rejected plaintiff’s offer, and allowed it to lapse on its terms.[FN1] The case law cited by defendant is inapposite. Although detrimental reliance on an oral stipulation may preclude the application of CPLR [*3]

§ 2104, that exception does not apply on these facts. See La Marque v. North Shore Univ. Hosp., 120 AD2d 572, 573 [2nd Dept 1986].

Accordingly, defendant’s motion to vacate the judgment against it and enforce the settlement is denied. Because the Court does not find that either party acted in bad faith, defendant’s motion for sanctions and plaintiff’s cross-motion for sanctions and costs are both denied.

This is the Decision and Order of the Court.



Judge, Civil Court

ASN by__________ on __________


Footnote 1: The Court notes that if defendant’s counsel would have in fact signed and returned the stipulation, it would have been binding on plaintiff even without signature by plaintiff or its counsel. See Stefaniw v. Cerrone, 130 AD2d 483 [2nd Dept 1987].