[204 NJSuper Page 302] Defendant John D. Westhoff, Jr., his counsel David Rudenstein and Michael Ferrara, counsel for plaintiff, appeared in court on September 6, 1984 for the purpose of putting the terms of a settlement on the record. The terms as placed upon
the record were deemed to be in full settlement of this matter (pending in Superior Court of New Jersey under the above caption) as well as a related action pending in the United States District Court for the Southern District of New York designated as No. 82 Civil 1619-83.
The terms of the proposed settlement were as follows:
1) Defendant John D. Westhoff agreed to pay $55,000 in full settlement of all civil actions pending against him by plaintiff, Kerr Steamship (Kerr);
2) The sums due to plaintiff were to be paid from the proceeds of sale of defendant's residence. A tenancy in common interest with defendant's parents was owned by defendant and his wife as joint tenants. The home in West Berlin, New Jersey was to be listed for sale with a local real estate broker no later than September 10, 1985;
3) Should the $55,000 be paid on or before September 10, 1985, no interest on the said amount would be assessed; however, "in the event the home is not sold by September 10, 1985, interest at the rate of fourteen per cent (14%) begins to accrue and the full amount of principal and interest is due on or before September 10, 1987 . . . whether or not the home is sold";
4) Defendant with his wife and parents as owners of the residence were to execute a mortgage and note or bond payable to Kerr and the bonding company, Federal Insurance, Co. (FIC). The documents would incorporate the aforementioned payment and interest requirements and upon recordation would secure plaintiff as a priority creditor, secondary to Westhoff's first mortgage and certain unspecified but minor lienholders;
5) A title search was anticipated to reveal the existence, if any, of other lienholders whose claims would reduce the value of equity in the property. If title were to reveal a value in the property insufficient to secure the settlement, thus materially affecting the agreement, a modification of the settlement would be sought by the parties;
6) Kerr and FIC were to be named as loss payees on the existing homeowner's insurance policy held by Westhoff in the amount of $55,000. Defendant and his counsel indicated that the proposed terms had been fully explained and were completely understood.
In particular this court was sensitive to the rights and obligations of the absent and unrepresented joint owners of the real estate and undertook to clarify and verify defendant's authority to encumber their interests in said property. The following verbatim colloquy not under oath from the transcript of September 6, 1984 will demonstrate the depth and nature of the inquiry:
Mr. Ferrara: The proceeds, in the event there is closing on the home, the proceeds are due to Kerr and Federal even if Mr. Westhoff's share isn't sufficient to pay the money. In other words, he has the obligation at the closing to get the money from his wife or parents or from wherever else. It is not contingent on him getting enough out of his share to pay the amount of money.
Mr. Rudenstein: That's understood.
The Court: Gentlemen, may I pose this question? Has any thought been given to what occurs if his wife and/or his parents refuse to either list the property or execute the documentation that's been set forth to be executed by them?
Mr. Rudenstein: Your Honor, Mr. Westhoff in some forethought has obviously spoken with his wife and his family and he is and I through him am in the position to represent to the Court that they have given him the authority and have okayed this.
The Court: Mr. Westhoff, --
Mr. Westhoff: Yes, Your Honor.
The Court: -- you have heard the counsel for Kerr Steamship provide me with the terms of settlement in this case, have you not?
Mr. Westhoff: Yes, I have.
The Court: You have heard your attorney amplify the terms of settlement, have you not?
Mr. Westhoff: Yes, I have.
The Court: Is there anything you did not understand from the comments of either attorney?
Mr. Westhoff: No, there is not.
The Court: Sir, what was your last type of ...