Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Component Hardware Group, Inc. v. Trine Rolled Moulding Corp.

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY


September 1, 2006

COMPONENT HARDWARE GROUP, INC., PLAINTIFF/COUNTERCLAIM DEFENDANT,
v.
TRINE ROLLED MOULDING CORP., DEFENDANT/COUNTERCLAIMANT.
TRINE ROLLED MOULDING CORP., THIRD-PARTY PLAINTIFF,
v.
THOMAS E. CARR AND RICHARD BOHACIK, THIRD-PARTY DEFENDANTS.

The opinion of the court was delivered by: Cooper, District Judge

MEMORANDUM OPINION

This matter comes before the Court on motion of third-party defendants, Thomas E. Carr and Richard Bohacik, to enforce a settlement agreement and for an award of counsel fees and costs of the motion. The Court decides the motion on the pleadings, briefs and evidence submitted by the parties, without oral argument pursuant to Fed. R. Civ. P. 78.*fn1 The Court will grant the part of the motion seeking to enforce the settlement agreement, but deny the part seeking an award of counsel fees and costs.

BACKGROUND

A. Procedural History

This commercial litigation was commenced in state court by plaintiff, Component Hardware Group, Inc. ("Component") against defendant, Trine Rolled Moulding Corp. ("Trine"), and was removed to this Court by Trine on February 14, 2005. The procedural history in this Court, as relevant here, is as follows.

On February 25, 2005, Trine filed an answer, counterclaim and third-party complaint ("Answer"). The third-party defendants are named and described as Thomas E. Carr ("Carr"), the current President and Chief Operating Officer of plaintiff Component, and Richard Bohacik ("Bohacik"), a former principal of Component who is listed as the inventor of a specified patent assigned to Component.*fn2 Trine's Answer asserted, by way of counterclaim and third-party complaint, claims against the named parties as follows:

CountClaimParties Named IBreach of requirements contractComponent IITheft of trade secretsComponent IIIBreach of fiduciary dutyComponent IVBreach of covenant of good faithComponent VInterference with prospective economic advantageComponent VIInjurious falsehood and slanderComponent/Carr VIITrade libelComponent/Carr VIIIConversionComponent IXCommon law unfair competitionComponent XViolation of NJ Unfair Competition ActComponent XIViolation of Lanham ActComponent XIIUnjust enrichmentComponent XIIIConstructive trustComponent XIVBreach of implied covenant of confidentialityComponent XVDeclaration of inventorship or unenforceability of the '975 patent.Component/Bohacik

Component and Trine immediately cross-moved for preliminary injunctive relief against each other on all issues in dispute between them except the patent dispute, which they agreed to defer. The Court permitted limited expedited discovery, and conducted a ten-day evidentiary hearing over the period April to June, 2005. On June 27, 2005, the Court issued a lengthy opinion and an order on the cross-motions for injunctive relief, making certain preliminary findings and denying any injunction. (Dkt. entries 38, 39.)

Meanwhile, on April 18, 2005, Component (counterclaim defendant) and Carr and Bohacik (third-party defendants) filed an answer to Trine's counterclaim and third-party complaint. (Dkt. entry 21.) In that pleading the third-party defendants asserted denials and defenses, but no counterclaims or crossclaims. (Id.)

In August, 2005, the Magistrate Judge entered an order staying discovery in the case and referring it to mediation. (Dkt. entry 45.) Also in August, 2005, separate counsel for the third-party defendants entered an appearance, thus separating the representation of Component from that of the third-party defendants. (Dkt. entry 46.)

On October 25, 2005, while the stay of discovery was still in effect, Trine moved for summary judgment on (1) all claims in Component's complaint, and (2) liability against Component on Counts I, III, IV, V, VI and VII of Trine's counterclaim. (Dkt. entry 52.) Although third-party defendant Carr was named in Counts VI and VII of that pleading, Trine's motion for summary judgment was not directed to Carr. On October 31, 2005, the Magistrate Judge entered an Order of Designation for Mediation, continuing the stay of proceedings and specifically directing that Trine's motion for summary judgment be held in abeyance pending mediation. (Dkt. entry 55.)

On December 1, 2005, counsel for Trine advised the Magistrate Judge by letter that the mediation had concluded without settlement. In that letter, Trine requested that the Court set a schedule for responsive briefing on its motion for summary judgment, and a schedule for discovery. Component's counsel responded with a December 13, 2005 letter requesting, inter alia, a schedule of at least one year to conduct and complete discovery before any summary judgment motions would be appropriate. (Dkt. entry 58.)

Counsel for all parties participated with the Magistrate Judge in a lengthy teleconference on the record on December 16, 2005. (Dkt. entry 60.) The focus of that conference was the differing positions of all the parties concerning the scope and timetable for conducting discovery, and the discovery issues posed by the then-pending Trine motion for summary judgment against Component. Counsel for the third-party defendants stated that although Trine's pending summary judgment motion did not seek relief against them, the issues presented in that motion implicated them and would affect the course of the litigation as to them, so they would require discovery and an opportunity to respond to that motion as well as Component. Those statements are quoted in the margin.*fn3

At the close of the December 16, 2005 conference, the Magistrate Judge directed counsel for Component and counsel for the third-party defendants to submit letters by the following Wednesday, December 21, 2005, describing the discovery, and discovery schedule, they would each expect to need to respond to the issues raised by Trine's summary judgment motion. (Id. at 25-30.)

On December 21, 2005, counsel for third-party defendants telephoned the chambers of the Magistrate Judge to report that Trine and the third-party defendants had reached a settlement. At the request of the law clerk who received that call, counsel for the third-party defendants sent a confirming e-mail on the same date, addressed to the chambers of the Magistrate Judge, with e-mail copies to counsel for both Trine and Component, stating as follows:

[A]s you requested, this will confirm my telephone call to you that Trine and Third-Party defendants Messrs Carr and Bohacik have agreed to exchange mutual releases of all claims and Trine has agreed to dismiss its claims asserted against Messrs Carr and Bohacik in this action with prejudice. Consequently, Messrs Carr and Bohacik will not be submitting a letter today regarding Trine's motion for partial summary judgment. It is expected that the stipulation of dismissal can be executed over the next few days and will be filed as soon as possible. If we run into any problems in this regard, I will be back in touch.

(Dkt. entry 64-5.)*fn4

On that same date, December 21, 2005, counsel for Component submitted a six-page letter to the Magistrate Judge, as it had been directed to do during the teleconference on December 16, 2005. That letter provided a detailed listing of areas of discovery, described as discovery "Component must have before it can properly respond to Trine's summary judgment motion, and/or before Component can make its own cross-motion for summary judgment in an efficient and effective manner." (Dkt. entry 64-19.) Attached to that letter was a 17-page "First Request for Production of Documents" from Component, described in the letter as "an inchoate document demand totally without prejudice and with a full reservation of rights to add or subtract, so that Your Honor can further see what documents and information Component requires to response [sic] to Trine's summary judgment motion." The letter concluded, "It is quite clear to us that this motion is premature, and that discovery should be advanced at least for a period of time constituting several months before any summary judgment motions are warranted." (Id.)

On December 27, 2005, a substitution of counsel was filed on behalf of Component. (Dkt. entry 59.) By that substitution, Component introduced into the litigation a different law firm and attorney of record, previously not involved in the case.

Component's new counsel, on January 16, 2006, sent a six-page letter to the Magistrate Judge. (Dkt. entry 64-20.) A copy of that letter was directed to counsel for Trine but not to counsel for third-party defendants who, on December 21, 2005 had advised the Court of their settlement with Trine. That letter again provided a detailed listing of areas of discovery, described as "on behalf of plaintiff Component ... in response to Your Honor's request that we identify for the Court what discovery is needed to respond to the motion for partial summary judgment of ... Trine. That motion not only seeks the dismissal of all of Component's affirmative claims, but also seeks judgment on six of Trine's fifteen counterclaims...." (Id.) That letter concluded, "We estimate that fact discovery will likely take approximately six months to complete; we will require another two months for expert discovery." (Id.)

On January 26, 2006, the Magistrate Judge conducted another teleconference pertaining to setting up a discovery schedule. (Dkt. entries 61, 63.) As of that date, no discovery scheduling order had as yet been entered in the case since its inception because (1) the case was originally before the District Judge for months of injunctive proceedings; (2) it had then been stayed for several more months for mediation; and (3) the filing of the summary judgment motion by Trine had occasioned the unresolved discussions on discovery with the Magistrate Judge described above. As a result of the January 26, 2006 conference, the Magistrate Judge entered the first of a series of discovery scheduling orders on January 31, 2006. (Dkt. entry 62.)

Counsel for third-party defendants entered their appearance in the January 26, 2006 teleconference, and advised the Magistrate Judge that a dispute had arisen with Trine as to the settlement of the third-party claims. (Dkt. entry 63 at 5-18.) The Magistrate Judge, in issuing the Scheduling Order of January 31, 2006, included a direction that if the parties could not resolve that dispute, third-party defendants should file a formal motion to enforce the settlement. (Dkt. entry 62, ¶¶ 2,3.)

On February 10, 2006, counsel for the third-party defendants filed the present motion against Trine, seeking enforcement of the settlement agreement and an award of fees and costs of the motion. (Dkt. entry 64.) After the motion was filed, this District Judge conferred with the parties by teleconference on March 6, 2006. (Dkt. entry 70.) Neither party requested oral argument or an evidentiary hearing on this motion. The motion has been fully briefed, with submission of certifications by both parties, which the Court has carefully reviewed in rendering its decision.*fn5

B. Communications Between the Parties to the Alleged Settlement

Here we summarize the record before the Court describing all communications between counsel for defendant/third-party plaintiff (Trine) and counsel for the third-party defendants (Messrs. Carr and Bohacik), pertaining to a settlement between those parties. Those communications took place between December 16, 2005 and the date of the filing of this motion, February 10, 2006. The attorneys who conducted those communications were Messrs. Brendan Judge and Mitchell W. Taraschi for Trine, and Ms. Celeste M. Butera for third-party defendants. The documented record of those communications is not in dispute.

On Friday, December 16, 2005, after the teleconference of that date with the Magistrate Judge, Mr. Judge contacted Ms. Butera by telephone and proposed that Trine and the third-party defendants enter into a settlement in which those parties would release and dismiss, with prejudice, any claims each had or could assert against the other. (Dkt. entry 64-2, ¶ 1.) On Tuesday, December 20, 2005, Mr. Judge placed the proposal in writing, in an e-mail to Ms. Butera stating:

As I confirmed yesterday afternoon, Trine proposes that it exchange mutual releases with individual defendants Thomas Carr and Richard Bohacik.

Trine will not release any claim against Component whether asserted or unasserted. The releases would provide that they have no preclusive effect upon and shall not be deemed to constitute a waiver of any claim that Trine and Component have against each other. Trine would contemporaneously execute a Stipulation of Dismissal with Prejudice of all claims asserted against defendants Carr and Bohacik.

As I stated in my voicemail message, Trine expects an answer to this proposal today.

(Dkt. entry 64-3.)

Ms. Butera replied to Trine's counsel by telephone that same day. (Dkt. entry 64-2, ¶ 3.) The next day was Wednesday, December 21, 2005, the deadline set by the Magistrate Judge for submission of discovery plans by each party. On that day Ms. Butera received an e-mail from Mr. Taraschi on behalf of Trine, stating as follows:

Per your discussions with [Mr. Judge], attached is the Settlement Agreement and Mutual Release to be executed by Mr. Carr and Mr. Bohacik. Please do not hesitate to contact me should you have any questions or comments.

(Dkt. entry 64-4.)

Attached to that e-mail was a seven-page typed document entitled "Settlement Agreement and Mutual Release." (Id.) The first section, headed Recitals, included the following paragraph ["Whereas Clause"]:

WHEREAS, in order to avoid the cost and uncertainty of further litigation and trial, Trine and Messrs. Carr and Bohacik desire to compromise and settle any claims among Trine, Carr and Bohacik, each without admitting any liability, and to adjust and settle their rights and obligations in connection with the Action.

(Dkt. entry 64-4.)

The key provisions, in the Terms section that followed, were expressed as follows:

2. Dismissal of the Third-party Complaint against Carr and Bohacik. As soon as practicable after the execution of this Agreement, Trine shall file with the Court, a stipulation of dismissal with prejudice, of the claims asserted in the Third-party Complaint as to Third-party defendants Carr and Bohacik only.

3. Trine, by this Agreement, hereby reserves all rights and remedies as against CHG,*fn6 each of its past, present and future directors, officers (with the exception of Messrs. Carr and Bohacik acting in their individual capacity), shareholders, owners, partners, joint venturers, principals, trustees, creditors, attorneys, Wolf Block Brach, Eichler,*fn7 representatives, employees, managers, parents, subsidiaries, divisions, subdivisions, departments, affiliates, predecessors, successors, assigns and assignees, or any agent acting or purporting to act for it or on its behalf.

The parties hereto agree and acknowledge that Trine does not release any claim against CHG whether asserted or unasserted. This Agreement has no preclusive effect upon and shall not be deemed to constitute a waiver of any claim that Trine and CHG have against each other.

(Id.) The succeeding paragraphs contained mutual release language and standard provisions, of which the headings are listed in the margin.*fn8

That same day, Wednesday, December 21, 2005, Ms. Butera telephoned the chambers of the Magistrate Judge to inform the Court that the third-party defendants had reached a settlement with Trine. At the request of the Court, Ms. Butera sent a confirming e-mail to the Court, with copies to counsel to Trine and Component, stating:

[T]his will confirm my telephone call to you that Trine and Third-Party defendants Messrs Carr and Bohacik have agreed to exchange mutual releases of all claims and Trine has agreed to dismiss its claims asserted against Messrs Carr and Bohacik in this action with prejudice. Consequently, Messrs Carr and Bohacik will not be submitting a letter today regarding Trine's motion for partial summary judgment. It is expected that the stipulation of dismissal can be executed over the next few days and will be filed as soon as possible. If we run into any problems in this regard, I will be back in touch. Thank you and Happy Holidays.

(Dkt. entry 64-5.)

Mr. Taraschi and Ms. Butera exchanged several e-mails with proposed revisions to the written Settlement Agreement document during the period from December 21, 2005 through January 13, 2006. We will refer to the first version of the written Settlement Agreement document, exchanged by the parties on December 21, 2006, as the "First Draft". See n. 8 supra and accompanying text. We will refer to the last version they exchanged, on January 13, 2006, as the "Last Draft." (Dkt. entry 64-11.)

Between the First Draft and the Last Draft, counsel for the parties readily made several changes to the document, as described in the margin.*fn9

Mr. Taraschi and Ms. Butera also engaged in some discussion of paragraph 3 of the Terms section during that period, as reflected in their e-mails. (See dkt. entries 64-4, 64-6 through 64-11.) The edited text of that paragraph in the Last Draft, to which they both expressed assent as described below, reads as follows:

3. The parties hereto agree and acknowledge that Trine, by this Agreement, hereby reserves all rights and remedies as against CHG, each of its past, present and future directors, officers (with the exception of Messrs. Carr and Bohacik), acting in their individual capacity), shareholders, owners, partners, joint venturers, principals, trustees, creditors, attorneys, including Wolf Block Brach, Eichler, representatives, employees, managers, parents, subsidiaries, divisions, subdivisions, departments, affiliates, predecessors, successors, assigns and assignees, or any agent acting or purporting to act for it or on its behalf.

The parties hereto agree and acknowledge that Trine does not release any claim against CHG whether asserted or unasserted. The parties hereto agree and acknowledge that CHG is not a party to this Agreement and therefore is not releasing any claims it may have against Trine by this Agreement. This Agreement has no preclusive effect upon and shall not be deemed or construed to constitute a waiver or release of any claim that Trine and CHG have against each other.

(Dkt. entries 64-11, -12.)

On January 13, 2006, Mr. Taraschi sent the Last Draft to Ms. Butera with the following e-mail:

[A]ttached is a tracked version of the proposed Settlement Agreement. Please pay particular attention to paragraph 3. I believe it now addresses all of your concerns. If this meets with your approval, I will send a final version to you for execution.

(Dkt. entry 64-11.)

Ms. Butera replied, also on January 13, 2006, as follows:

This is acceptable and you can send me the execution version, except in the execution version that you send please add, in the signature lines for my clients, that they are signing "individually," or "in their individual capacity". Also, I think a paragraph should be added that each side is bearing their own attorneys' fees. Thanks for your work on this and bringing this to a conclusion. Please do not hesitate to contact me with any comments or questions.

(Dkt. entry 64-12.)

Ms. Butera followed up by telephone calls to Mr. Taraschi on Monday, January 16 and the morning of Tuesday, January 17, 2006. The substance of what they recall from their January 17, 2006 conversation is stated in their respective certifications.*fn10

It will be recalled that Component, which was not a party to the settlement between Trine and Messrs. Carr and Bohacik, engaged substitute counsel as of December 27, 2005, and that the new counsel directed a letter to the Magistrate Judge dated January 16, 2006, regarding the discovery schedule that the Magistrate Judge was attempting to define in light of Trine's then-pending motion for partial summary judgment. As mentioned above, that letter outlined various areas of contemplated discovery and concluded, "We estimate that fact discovery will likely take approximately six months to complete; we will require another two months for expert discovery." (Dkt. entry 64-20.)

Counsel for Trine received Component's January 16 letter on Tuesday, January 17, 2006. That evening at 5:41 p.m., Mr. Judge (representing Trine) sent an e-mail letter to Ms. Butera, counsel for third-party defendants. The text of that letter is quoted verbatim in the margin.*fn11 Ms. Butera responded to Mr. Judge and his colleague Mr. Taraschi, by e-mail dated January 19, 2006.*fn12

An additional round of communications between them failed to resolve the issue now presented in this motion. (See dkt. entries 64-15, -16.) The Magistrate Judge addressed the issue with the parties during the conference on January 26, 2006. (Dkt. entry 63 at 5-18.) When it was not resolved at that conference, the Court directed the filing of this motion. (Dkt. entry 62.)

DISCUSSION

A federal district court has inherent authority to enforce a settlement agreement entered into between litigants while the litigation is pending before it. See, e.g., Shoels v. Klebold, 375 F.3d 1054, 1060 (10th Cir. 2004); Bandera v. City of Quincy, 344 F.3d 47, 51 (1st Cir. 2003); Carr v. Runyan, 89 F.3d 327, 331 (7th Cir. 1996); accord, Omega Eng'g, Inc. v. Omega, S.A., 432 F.3d 437 (2d Cir. 2005) (affirming grant of motion to enforce settlement agreement reached during pending litigation); Saudi Basic Indus. Corp. v. Exxon Corp., 364 F.3d 106 (3d Cir. 2004) (remanding for evidentiary hearing on motion to enforce settlement in pending action).*fn13 "There is a strong judicial policy in favor of parties voluntarily settling lawsuits.... [S]uch agreements are specifically enforceable and broadly interpreted." Pennwalt Corp. v. Plough, Inc., 676 F.2d 77, 80 (3d Cir. 1982) (listing cases).

State contract law governs the formation, construction and enforcement of settlement agreements in federal court. See Carr, 89 F.3d at 331; Excelsior Ins. Co. v. Pennsbury Pain Ctr., 975 F.Supp. 342, 348-49 (D.N.J. 1996); see also Yuen v. Bank of China, 151 Fed.Appx. 106, 107 (3d Cir. 2005) (affirming choice of law analysis by district court sitting in New Jersey, and applying New York contract law to decide motion to enforce alleged settlement agreement). The parties to this motion have presented no choice of law issue, and we agree that the law of the forum applies. Accordingly, we will decide the motion based upon New Jersey contract law principles.

New Jersey law holds that "a settlement agreement is a form of contract." Mortellite v. Novartis Crop Protection, ___ F.3d ___ (3d Cir. 2006). Also, it "may be freely entered into and . . . a court, absent a demonstration of 'fraud or other compelling circumstances', should honor and enforce [the contract] as it does other contracts." Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div. 1983) (quoting Honeywell v. Bubb, 130 N.J. Super. 130, 136 (App. Div. 1974)). "[S]ettlement of litigation ranks high in our public policy." Pascarella, 190 N.J. Super. at 125 (quoting Jannarone v. W.T. Co., 65 N.J. Super. 472, 476 (App. Div. 1961)). See Bistricer v. Bistricer, 23l N.J. Super. 143, 151 (Ch. Div. 1987) ("The policy of our court system is to encourage settlements and the court should 'strain' to uphold such settlements.").

Traditional contract law rules provide that a contract arises from the manifest intentions of the parties to engage in an offer and acceptance of sufficiently definite essential terms. Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992). "New Jersey law specifies that parties may orally, by informal memorandum, or both, agree upon all essential terms of a contract and effectively bind themselves thereon, if that is their intention, even though they contemplate the later execution of a formal document to memorialize their undertaking." U.S. v. Lighthman, 988 F.Supp. 448, 459 (D.N.J. 1997) (quoting Comerata v. Chaumont, Inc., 52 N.J. Super. 299, 305 (App. Div. 1958)).

"An agreement to settle a lawsuit, voluntarily entered into, is binding upon the parties, whether or not made in the presence of the court, and even in the absence of a writing." Green v. John H. Lewis & Co., 436 F.2d 389, 390 (3d Cir. 1970) (listing cases). Where a settlement agreement is asserted, the law provides that if the parties have manifested agreement upon the essential terms of the agreement, leaving the details to be "fleshed out" in a writing thereafter, "the settlement will be enforced notwithstanding the fact the writing does not materialize because a party later reneges." Lahue v. Pio Costa, 263 N.J. Super. 575, 596 (App. Div. 1993). In that context, "[a] contracting party is bound by the apparent intention he or she outwardly manifests to the other party. It is immaterial that he or she has a different, secret intention from that outwardly manifested." Brawer v. Brawer, 329 N.J. Super. 273, 283 (App. Div. 2000) (quoting Hagrish v. Olson, 254 N.J. Super. 133, 138 (App. Div. 1992)); see also Leitner v. Braen, 51 N.J. Super. 31, 38 (App. Div. 1958) ("The phrase, 'meeting of the minds', can properly mean only the agreement reached by the parties as expressed, i.e., their manifested intention, not one secret or undisclosed, which may be wholly at variance with the former.").

To be enforceable, a contract must also be accompanied by consideration. Friedman v. Tappan Dev. Corp., 22 N.J. 523, 533 (1956). Where the parties make mutual promises to do some future act, "the consideration of the promise of one party is a promise on the part of the other." Id.

The party seeking to enforce an alleged settlement agreement has the burden of proving the existence of the agreement under contract law. Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475 (App. Div. 1997). Where, as here, there is no signed written agreement and the parties dispute whether they manifested a mutual intent to be bound, the Court must rely upon the credible evidence such as the contemporaneous documents and conduct of the parties, together with reasonable inferences to be drawn from that evidence. See Berg Agency v. Sleepworld-Willingboro, Inc., 136 N.J. Super. 369, 373-74 (App. Div. 1975). Applying these principles, we find that the movants, third-party defendants Carr and Bohacik, have met their burden of proving that they entered into an enforceable settlement agreement with Trine.*fn14 Trine expressed a clear, unequivocal offer of settlement in Mr. Judge's written proposal on December 20, 2005:

Trine proposes that it exchange written mutual releases with individual defendants Thomas Carr and Richard Bohacik.

Trine will not release any claim against Component whether asserted or unasserted. The releases would provide that they have no preclusive effect upon and shall not be deemed to constitute a waiver of any claim that Trine and Component have against each other. Trine would contemporaneously execute a Stipulation of Dismissal with Prejudice of all claims asserted against defendants Carr and Bohacik.

(Dkt. entry 64-3.)

Ms. Butera spoke by telephone with Mr. Judge that same day.*fn15 The next day, December 21, 2005, was the deadline for all parties to convey their discovery plans to the Magistrate Judge. Counsel for Messrs. Carr and Bohacik instead informed the Court of their settlement with Trine. On that date Ms. Butera confirmed in writing to the Court, with copies to all counsel, that the parties had agreed to a settlement on these terms:

Trine and Third-Party defendants Messrs Carr and Bohacik have agreed to exchange mutual releases of all claims and Trine has agreed to dismiss its claims asserted against Messrs Carr and Bohacik in this action with prejudice.

(Dkt. entry 64-5.)

We find that those two written communications on December 20 and 21, 2005 respectively, one by each side to the settlement, contained all of the necessary elements of a binding contract: offer, acceptance, consideration, and terms sufficiently definite to constitute an enforceable agreement. By those written communications, the parties clearly manifested an intention to be bound. The terms of the agreement, as described in those two mutually consistent communications, are sufficiently definite that the performance of each party can be ascertained with reasonable certainty, even in the absence of a formal executed document memorializing the settlement.

The conduct of both parties after that date was entirely consistent with the formation of that agreement. Trine made no objection to Ms. Butera's announcement of settlement to the Court on December 21, 2005. In fact, earlier that day it had already drafted and forwarded to her the first draft of the written document that would contain the mutual releases. (Dkt. entry 64-4.) At no time, until Trine received Component's letter to the Court of January 16, 2006, did Trine indicate to Ms. Butera or to the Court that there was not a settlement agreement with her clients. Then Trine made its decision to dispute such settlement within just a few hours after receiving that letter from Component on January 17, 2006.

When Trine did first dispute the settlement on January 17, 2006, its letter to Ms. Butera expressly stated that the catalyst for taking that position was the letter from Component regarding discovery. (Dkt. entry 64-13.) Never before had Trine indicated to Ms. Butera that it had merely been "attempting to negotiate a settlement between Trine and your clients." (Id.)

The conduct of Trine's counsel leading up to that point had been entirely consistent with a recognition by both parties that they had reached a binding settlement agreement and were in the process of memorializing and refining it in a written document. Looking at all of the changes that were made in the successive drafts, and the accompanying e-mails between counsel, none conflicted with the essential terms as expressed by both parties in writing as of December 20 and 21, 2005. In fact, the only additional term of any substance was to the effect that Mr. Rella, Jr., the president of Trine, was protected by and bound by the settlement in his individual capacity. (See n.9 supra and accompanying text.) All of the rest of the drafting was reflective of an uneventful process of reducing to formal legal language the terms previously agreed upon. We find that up to the very moment of Trine's announcement that it was withdrawing from the process, both parties had repeatedly and consistently expressed an intention to be bound to the terms of the settlement, both by their written words and by their conduct.*fn16

Trine argues in the alternative that it was justified in withdrawing because of alleged bad faith on the part of Mr. Carr (acting as president of Component), when Component issued its discovery plan letter of January 16, 2006. We find that argument singularly unpersuasive. Component and Trine had remained locked in litigation against each other despite the settlement between Trine and the third-party defendants. Both sides to the settlement took great pains to make that clear to each other in the drafting of their settlement document.

Component -- both under its former counsel and its new counsel -- had consistently stated to the Court and to Trine that it would need extensive discovery over a period of many months, whether to respond to (or file) a motion for summary judgment or to complete the litigation. That position did not change before or after Trine proposed settlement to the third-party defendants. Nor did any communication from Trine to the third-party defendants state or suggest that the settlement between those parties was contingent upon an anticipated change in the discovery posture of Component in the ongoing litigation. "A contracting party is bound by the apparent intention he or she outwardly manifests to the other party. It is immaterial that he or she has a different, secret intention from that outwardly manifested." Brawer, 329 N.J. Super. at 283 (quoting Hagrish, 254 N.J. Super. at 138). The fact that the parties included standard language in the Whereas Clause of the written settlement agreement drafts (regarding avoiding the cost and uncertainty of further litigation among the settling parties) did not, in our view, suffice to impose a contractual condition precedent upon the third-party defendants as to some unspecified anticipated change in Component's discovery posture. Nor did the failure of Component to change its discovery posture amount to any breach of their duty of good faith and fair dealing by Messrs. Carr and Bohacik. See, e.g., Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 420-21 (1997).

We further find that the exchange of written drafts between the parties, culminating in the Last Draft, clearly manifested mutual intent to be bound by the detailed language expressed in that draft. As to the last two items, suggested by Ms. Butera and still outstanding when Trine announced its intention to withdraw, we find that those were already implicit in the language the parties had agreed to in the Last Draft. Specifically, no money was changing hands in the settlement, and the settlement was entered into by Messrs. Carr and Bohacik individually.

We hold that the additional agreed points, as set forth in the Last Draft, became part of the settlement agreement between the parties. In the exchange of drafts and accompanying e-mail communications, the parties did in fact "flesh out" those agreed details. Those points must therefore, in fairness and in equity, be enforced as if the contents of the Last Draft had been signed by Trine (and its President, Mr. Rella) and by Messrs. Carr and Bohacik.

The reasons expressed by Trine for its failure to execute a written memorialization of the settlement agreement are not sufficient to avoid its obligations. No fraud or other compelling circumstance has been demonstrated by Trine such as to require the agreement to be set aside. Pascarella, 190 N.J. Super. at 124-25. The fact that Trine ultimately concluded that the settlement of its third-party claims would not "streamline" the litigation as it had hoped, which we may credit as sincere, does not provide a basis to avoid the contractual obligation that Trine assumed in agreeing to settle with the third-party defendants.*fn17

"[S]ettlement agreements, if valid and not against public policy, are voluntary surrenders of the right to have one's day in court." Bandera, 344 F.3d at 52 (staying judgment on jury verdict obtained after district court denied motion to enforce alleged pre-trial settlement agreement and remanding case for determination of whether a valid settlement agreement was established between the parties prior to trial). "[T]he proposition that a case is not settled until the last 'i' is dotted and the last 't' is crossed on a written settlement agreement carries the germ of much mischief." Bistricer, 231 N.J. Super. at 151-52. This Court does not need to strain to reach its conclusion, on the undisputed record here. We hold that there is a valid settlement agreement between the parties to this motion, which must be enforced according to the terms upon which the parties have manifested mutual assent.

We will deny the motion insofar as it seeks counsel fees and costs to the movants. "It is well settled that the inherent power of the court to sanction misconduct by the attorneys or parties before the court should be invoked only in extraordinary circumstances to remedy abuse of the judicial process." Lightman, 988 F.Supp. at 466. "The Third Circuit has admonished district courts to exercise with due care their inherent power to sanction.... As in any contract case, fees to enforce are not normally awarded where the contract ... is silent on the subject." Id. at 467 (enforcing settlement agreement but denying counsel fees even where court found manipulative and bad faith conduct by reneging side). We conclude that the appropriate judicial action in the circumstances is to enforce the bargain Trine made for itself in this settlement. The parties will bear their own fees and expenses of the motion.

CONCLUSION

The Court for the reasons stated will grant the part of the motion of third-party defendants, Messrs. Carr and Bohacik, seeking to enforce their settlement agreement with Trine. The part of the motion as to the request for counsel fees and expenses will be denied. The Court will issue an appropriate order.

MARY L. COOPER United States District Judge


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.