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Impink v. Reynes

November 29, 2007


On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1408-05.



Argued October 17, 2007

Before Judges Parker, R. B. Coleman and Lyons.

The opinion of the court was delivered by LYONS, J.A.D.

Defendants David Reynes, Neil B. Reynes, and Maria Reynes appeal from a provision in a judgment which orders their insurance carrier, Franklin Mutual Insurance Company (FMI), to purchase or cause to be purchased an annuity for the sole use and benefit of the infant-plaintiff Nicholas Impink.

The following factual and procedural history is relevant to our consideration of the issues advanced on appeal. In May 2004, the infant-plaintiff was injured when he was accidentally shot in the eye with a paint ball by David Reynes. As a result of the accident, the infant-plaintiff is now legally blind in his right eye. He has developed cataracts and will require laser surgery in the future to remove them and for the implantation of a lens to improve his vision. In May 2005, the infant-plaintiff, by his parent and natural guardian, Shannon Baldi, and Shannon Baldi individually, filed suit asserting nine causes of action against defendants, including negligence, carelessness, recklessness, assault and battery, failure to supervise, and negligent entrustment.

At the time of the accident, defendants' only insurance to cover the loss was a $300,000 homeowners policy issued by FMI. Following the filing of an answer by defendants, discovery commenced. At the conclusion of discovery, the parties entered into settlement negotiations. Plaintiffs were seeking the full $300,000 policy limit and sought to have that sum paid out through a structured settlement. Defendants' insurance carrier was only willing to offer a structured settlement if plaintiffs agreed to accept $250,000. Eventually, the parties agreed to settle the matter for $300,000 "cash."

Plaintiffs then moved for a hearing to approve the settlement pursuant to R. 4:44-3 and moved for an order directing defendants' insurance carrier to pay the net proceeds from the settlement directly into a structured settlement for the benefit of the infant-plaintiff. Defendants opposed the motion. On December 1, 2006, the motion judge heard oral arguments on the application and entered an order directing FMI to purchase an annuity for the infant-plaintiff and to execute the appropriate documentation. The motion judge, when informed of defendants' intent to appeal, required defendants to place the $300,000 settlement with the court pending the outcome of the appeal. This appeal ensued.

On appeal, defendants argue that the court lacked authority to order FMI to participate in a structured settlement when it was not its desire to do so and that the court cannot "craft a better contractual resolution for the plaintiff than originally bargained for." Plaintiffs argue that the court had inherent power to order defendants to purchase an annuity because it is in the best interest of the infant-plaintiff and because defendants would not be prejudiced by such an action because they would receive a release.

The motion judge concluded, in his written statement of reasons, that the court was not changing the terms of the settlement, but rather directing how and to whom the proceeds are to be paid. The court also concluded that it was in the minor's best interest to have the moneys placed into a structured settlement since the total moneys received through a structured settlement would be greater. Thirdly, the court reasoned that the purpose of the "friendly" proceeding was to make sure that the minor's interests were protected and that the court had the inherent power to approve not just the amount of the settlement, but also the manner in which it is to be paid. Lastly, the court noted that FMI should have no further responsibility once the money is paid and, therefore, would suffer no prejudice by this settlement.

At the outset, we note that "[a] settlement between parties to a lawsuit is a contract like any other contract, which may be freely entered into and which a court, absent a demonstration of fraud or other compelling circumstances, should honor and enforce as it does other contracts." Jennings v. Reed, 381 N.J. Super. 217, 227 (App. Div. 2005) (internal quotations and citations omitted). From the record submitted to us, the contract of settlement agreed upon between the parties was that defendants, through their insurance carrier, would pay $300,000 "cash" to plaintiffs to resolve plaintiffs' lawsuit. In Karl's Sales & Serv., Inc. v. Gimbel Bros., Inc., 249 N.J. Super. 487, 493 (App. Div.), certif. denied, 127 N.J. 548 (1991), we stated that where the terms of a contract are clear and unambiguous there is no room for interpretation or construction and the courts must enforce those terms as written.

Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960); Levison v. Weintraub, 215 N.J.

Super. 273, 276 (App. Div.), certif. denied, 107 N.J. 650 (1987). The court has no right "to rewrite the contract merely because one might conclude that it might well have been functionally desirable ...

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