Building Serv. 32B-J Pens. v. Vanderveer Estates

Decision Date27 September 2001
Docket NumberNo. 00 CIV. 0364(RWS).,00 CIV. 0364(RWS).
Citation169 F.Supp.2d 241
PartiesBUILDING SERVICE 32B-J PENSION FUND, et al., Plaintiffs, v. VANDERVEER ESTATES HOLDING, LLC., Defendant.
CourtU.S. District Court — Southern District of New York

Raab, Sturm & Goldman, New York (Ira A. Sturm, of Counsel), for Plaintiffs.

Jasinski and Paranac, Newark, NJ (David M. Walsh, of Counsel), for Defendant.

OPINION

SWEET, District Judge.

Defendant Vanderveer Estates Holding, LLC ("Vanderveer") has moved to enforce a settlement agreement with plaintiffs Building Service 32B-J Health Fund, Building Service 32B-J Pension Fund, and Building Service 32B-J Annuity Fund (the "Funds"). For the reasons set forth below, the motion is granted, and this action will be dismissed upon the conditions set forth below.

Prior Proceedings

Vanderveer and the Funds have litigated their differences since January 17, 2000, and Vanderveer and Building Services 32B-J (the "Union") have been in litigation since 1998. In the course of the proceedings, it has been concluded that the Union's arbitration award against Vanderveer was enforceable, Bevona v. Vanderveer Estates Holding, LLC, No. 98 Civ. 8689 (S.D.N.Y. Feb. 11, 1999), aff'd, 173 F.3d 843 (2nd Cir.1999) (table), that Vanderveer, although not subject to a preliminary injunction, would be ordered to file a $75,000 bond, Building Service 32B-J Pension Fund v. Vanderveer Estates Holding, LLC, 115 F.Supp.2d 459 (S.D.N.Y.2000), and that the Funds would be granted summary judgment, Building Service 32B-J Health Funds v. Vanderveer Estates Holding, LLC, 121 F.Supp.2d 750 (S.D.N.Y.2000), reconsidered, 127 F. Supp.2d 490 (S.D.N.Y.2001). By these proceedings the liability of Vanderveer to the Funds was established.

The instant motion to enforce a settlement was marked submitted on August 1, 2001.

Facts

The parties to this litigation and the Union, through their representatives, met on January 11, 2001 to seek a resolution of all outstanding issues. Conversations took place thereafter, and a further meeting was held on March 8. After discussing a payout schedule for Vanderveer's obligations to the Fund and certain staffing issues, it was decided that the payments by Vanderveer would extend over four years, with the first payment to be made within ten days of signing a written agreement. Around the same date, Michael Konig, a principal of Vanderveer, was advised that the terms discussed would be reduced to writing by Ira Sturm, attorney for the Funds. A week later, Sturm orally informed Konig that he was finalizing the written agreement and that it would be forwarded shortly. On March 26, 2001, Sturm forwarded a settlement agreement to Konig in the form attached as Appendix A (the "Agreement"). Paragraph 13 of the Agreement stated, "This Agreement is contingent on the approval of the Trustees of the Fringe Benefit Funds to settle the Funds' claims in the manner provided for herein."

On April 5, 2001, Sturm, apparently acting also as counsel for the Union, forwarded a memo to Vanderveer concerning a severance pay issue and retroactive wage increase implementation. He indicated that a District Chairman of the Union had updated him on these "two issues that were not included in the written proposal that I made but that were discussed in our meeting." The memorandum then discussed the Union's understanding of the severance package issue and clarified that the contractual wage increases were to go into effect retroactive to April 21, 2000 for applicable employees.

On April 12, 2001, counsel for Vanderveer called to determine the status of the settlement. No response was received that day. A notice of appeal was filed to protect Vanderveer's right in connection with the judgment which had been entered against it. Shortly thereafter, counsel for Vanderveer was informed by Vanderveer that the matter was settled, and Vanderveer did not file Forms C & D in connection with its appeal.

On April 26, 2001, the press reported a number of arrests in connection with an organized crime scheme. One of those arrested was Abraham Wieder, described in the Agreement as "the principal of the Employer" who was replaced by Konig. Another was Ismet Kukaj, a business agent of the Union. The same day, a letter on the firm letterhead of the Funds' counsel withdrew the offer of settlement on behalf of the Union.

On June 14 the Court of Appeals issued its mandate dismissing the appeal for failure to file Forms C & D. On June 22, 2001 the instant motion was brought.

On July 2 the Union filed a grievance against Vanderveer relating to a reduction in force.

An Agreement Was Reached Between the Funds and Vanderveer

Both parties in this litigation recognize Ciaramella v. Reader's Digest Association, Inc., 131 F.3d 320 (2nd Cir. 1997) as setting forth the legal standard with respect to the enforcement of settlement agreements. In that case, the Second Circuit applied a four-part test to determine whether a settlement agreement was in fact made, recognizing that whether a binding agreement exists depends on the parties' intent to be bound. Id. at 322 (citing Winston v. Mediafare Entertainment Corp., 777 F.2d 78, 80-81 (2d Cir. 1985)). The four factors include: (1) whether there is any express reservation of the right not to be bound absent a signed writing; (2) whether there has been partial performance of the settlement contract; (3) whether there has been agreement on all the terms of the alleged settlement contract; and (4) whether the agreement is of a type usually committed to writing. Ciaramella, 131 F.3d at 323; Winston, 777 F.2d at 80 (citing R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir.1984)). None of these factors is dispositive. Id.

1. Express Reservation

In determining whether there was an express reservation of the right not to be bound absent a written agreement, courts look to both the agreement itself and to the parties' surrounding communications. In both Winston and Ciaramella, the Second Circuit found numerous indications within the agreement that the parties in that case did not intend to bind themselves until a settlement had been signed. See Winston, 777 F.2d at 81-82; Ciaramella, 131 F.3d at 324-25. For instance, in Ciaramella the court called attention to a clause which stated that the agreement "shall not become effective ... until it is signed." 131 F.3d at 324. The court also found as persuasive evidence the presence of a merger clause which provided that the agreement constituted "the complete understanding between the parties" and that "[n]o other promises or agreements shall be binding unless in writing and signed by the parties." Id. Here, no such provisions exist to indicate that the parties intended to be bound only upon formal execution. Nor do any subsequent communications indicate the parties' intent to condition the enforceability of the settlement upon a signed written agreement.

Plaintiffs argue that paragraph 13 of the Agreement, making the Agreement "contingent upon the approval of the Trustees of the Fringe Benefit Funds," indicates the presence of such intent. This argument is rejected. While paragraph 13 may provide evidence of the Funds' desire to condition settlement on approval by its Trustees, it does not require the board's signature or provide any other indication that the Funds did not wish to be bound until the document was fully executed. Further, any such conditions that may have existed were presumed to have been met on the basis of Sturm's actions following the oral agreement on March 8. On or around that date, Sturm informed Konig that he would reduce the Agreement to writing and forward it to Konig for his signature. It was agreed that the signature date would serve as a trigger date for Vanderveer to make its first payment. Approximately one week later, Sturm advised Konig at a meeting that he was finalizing the Agreement and would forward it shortly thereafter. Thus, the behavior of both parties revealed a clear intention to enforce the March 8 agreement, with the writing serving to memorialize that Agreement.1

Absent any evidence of an intent not to be bound by the oral agreement, the first factor weighs in favor of enforcing the contract.

2. Partial Performance

The second factor to be considered is whether a party has partially performed "and that performance has been accepted by the party disclaiming the existence of an agreement." Ciaramella, 131 F.3d at 325 (citing R.G. Group, 751 F.2d at 75). Here, there was no partial performance of the terms of the Agreement. On the other hand, there was partial performance of the Agreement to the extent that Vanderveer, in reliance on the Agreement, failed to perfect its appeal to the Second Circuit. See Alvarez v. City of New York, 146 F.Supp.2d 327, 336 (S.D.N.Y.2001) (finding reliance on the apparent settlement as evidence of partial performance). From March 8 through late April, the Funds gave every indication that a binding settlement had been reached in the March 8 meeting. On this basis, Konig informed Vanderveer's attorney that the matter had been settled and the appeal would not have to be perfected. It was not until April 26 — the day it was reported that a former principal of Vanderveer and a Union agent had been accused of wrongdoing — that Sturm informed Konig that he sought to withdraw from the settlement. But even at that point, as indicated in his letter of April 26, 2001, Sturm was acting exclusively on behalf of the Union. The Funds gave no indication that they wished to resume active litigation.

Because of these competing facts, this factor does not weigh for or against enforcing the Agreement.

3. Terms Remaining to be Negotiated

The Funds claim that the memorandum from Sturm to Konig on April 5, 2001, discussing two additional items that were not included in the March 26 draft, demonstrates that there remained additional material terms to be negotiated in the settlement. This claim is without merit.

T...

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