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Ressler v. Small


November 8, 2007


On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County, Docket No. C-111-05.

Per curiam.


Argued October 30, 2007

Before Judges Winkelstein and Yannotti.

Plaintiff Paul A. Ressler appeals from an order entered by Judge Neil H. Shuster on December 21, 2006, which enforced a settlement agreement between the parties. For the reasons that follow, we affirm.

On August 11, 2005, plaintiff filed an action against defendant Robert Small in the Chancery Division, and sought the issuance of an order to show cause with temporary restraints. In his complaint, plaintiff asserted various causes of action arising from the parties' partnership agreement, including a claim for breach of contract, breach of fiduciary duty, and misappropriation of partnership property. Plaintiff sought a judgment compelling the parties to arbitrate plaintiff's economic claims in accordance with the agreement; ordering defendant to provide an accounting of all partnership assets; requiring the parties to preserve all partnership documents and electronic data during the court and arbitration proceedings; and enforcing the non-competition clause of the partnership agreement.

Judge Shuster filed an order on August 16, 2005, which recognized that the partnership agreement required the parties to submit all disputes arising under the agreement to binding arbitration. The judge ordered the parties to preserve certain documents and electronic data during the pending of the court and arbitration proceedings. The August 16, 2005 order further required defendant to show cause on October 3, 2005 as to why temporary restraints should not be continued.

On September 26, 2005, the judge entered a consent order, which stated that the parties shall attempt to resolve the dispute through mediation. The action was stayed for sixty days and plaintiff agreed to obtain a stay of the arbitration proceedings that plaintiff had previously commenced. On October 10, 2005, the parties met with a mediator and thereafter continued negotiations; however, the parties were unable to resolve the dispute.

On January 11, 2006, the court conducted a settlement conference with the parties and their attorneys. The parties reached an agreement and the terms were placed on the record. In response to the judge's questions, plaintiff said that he was present when the terms were read into the record; he understood the terms; and he was voluntarily entering into the agreement upon the advice of counsel.

The next day, plaintiff contacted his attorney and said he "made a very big mistake" in settling the case. On January 18, 2006, plaintiff sent an electronic mail message to his attorneys in which he stated that he wanted to rescind the agreement for several reasons, including his "mental state" due to certain personal problems. On February 1, 2006, plaintiff wrote to the judge and explained his personal problems. He stated that the agreement reached on January 11, 2006 required that he sell his share of the partnership and he was not emotionally in a position to make that decision when the settlement was made. Plaintiff asked the court for a meeting so that he could request that the agreement be set aside and the matter proceed to binding arbitration.

With the assistance of counsel, the parties thereafter renegotiated the terms of the settlement and executed a written agreement that plaintiff signed on February 16, 2006. The agreement provided, among other things, that defendant would purchase on November 1, 2006 plaintiff's interest in the accounts of certain clients, who were called the "Transition Clients." In addition, the parties agreed that plaintiff would retain all the revenue of the "Transition Clients" through October 31, 2006. The parties also agreed that within the ninety-day period preceding November 1, 2006, they would confer regarding the transitioning of these clients to defendant.

The parties further agreed that defendant would pay plaintiff twenty-five percent of the revenue from the "Transition Clients" from November 1, 2006, through October 31, 2011; and defendant would assume the outstanding obligation under a certain promissory note. Provision also was made for distribution of accounts receivable that existed as of July 31, 2005. Furthermore, the agreement stated that the:

[p]arties acknowledge that this Agreement sets forth entire agreement between the parties, and that the Settlement, and all previous discussions, negotiations and representations are hereby superseded by this Agreement. Each party acknowledges he is of sound mind, that is Agreement is not being signed under duress or by coercion, that they have sought and obtained the advice of counsel before the signing the Agreement, and that each [p]arty has been afforded a full and complete opportunity to review and evaluate the terms and conditions of the settlement itself and of this Agreement.

Thereafter, defendant paid plaintiff a total of $53,950 to satisfy his obligation under the promissory note, as required by the agreement. However, on September 22, 2006, plaintiff advised defendant that he did not intend to turnover the files for the "Transition Clients."

On November 15, 2006, defendant filed a motion to enforce litigant's rights. In response to that motion, plaintiff filed a certification in which he stated that: the agreement reached on January 11, 2006 was drafted against his wishes; he did not want to appear in court on that date; his plan was to have the case submitted to binding arbitration; he "was under a tremendous amount of stress resulting from personal and business issues"; he never intended to sell his practice; and the settlement was "inappropriate."

Judge Shuster heard the motion on December 19, 2006, and filed a written opinion on December 21, 2006 in which he found that there was no suggestion that the settlement was the result of fraud, coercion, or any "unseemly conduct." The judge also found that plaintiff had not shown that he lacked the mental capacity to make a valid contract. The judge noted that while plaintiff asserted he was under stress when he entered into the settlement on January 11, 2006, plaintiff stated on the record that he understood the agreement and was voluntarily agreeing to the settlement on the advice of counsel.

The judge added that even if there was a question about plaintiff's state of mind at the time he settled the dispute on January 11, 2006, "[p]laintiff had ample time and opportunity to consider the effect of a subsequent agreement." The judge pointed out that in the February agreement, the parties stated that they were of "sound mind" when they entered the settlement. The judge accordingly filed an order on December 21, 2006 enforcing the agreement. The order provided that defendant was entitled to an award of the counsel fees and costs incurred for the enforcement motion. This appeal followed.*fn1

Plaintiff argues that he had encountered several personal and financial issues that weighed heavily on his emotions when he entered the agreement. He asserts that he was under "great pressure" when the agreement was made on January 11, 2006. Plaintiff argues that the original agreement reached in court should be vacated and the matter referred to binding arbitration. We note that plaintiff's contentions are primarily addressed to the January 11, 2006 agreement rather than the February 2006 agreement which supercedes it and was enforced in this matter.

We have carefully considered the record in light of plaintiff's contentions and the applicable law. We are convinced that plaintiff's arguments are entirely without merit. We therefore affirm the order entered on December 21, 2006 enforcing the parties' agreement substantially for the reasons stated by Judge Shuster in his thorough and comprehensive written opinion. R. 2:11-3(e)(1)(A)(E).


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