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Jobar Realty, Inc. v. Ryan

December 21, 2007


On appeal from the Superior Court of New Jersey, Union County, Law Division, Docket No. L-1645-05.

Per curiam.


Argued November 28, 2007

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

The question presented in this case is whether the trial court's finding that the parties came to a binding and enforceable settlement of plaintiffs Jobar Realty, Inc. and Joseph Ponzio, Jr.'s claims against defendants Robert Ryan and Eleanor Ryan doing business as Robert's Cleaners was error. Because we find that the trial court's finding is supported by sufficient credible evidence and in accordance with the appropriate legal principles, we affirm.

The pertinent facts are as follows. Defendants leased premises from plaintiffs in 1988 to operate a dry cleaning business. They conducted their business on the plaintiffs' property until about 2001. In 2002, plaintiffs retained counsel in order to obtain a "no further action letter" from the New Jersey Department of Environmental Protection so as to be able to sell the property. Certain environmental remediation was required on the property, and plaintiffs incurred approximately $31,000 in remediation costs. Plaintiffs instructed counsel to pursue defendants for the costs of the remediation.

Plaintiffs' initial counsel, Thomas Aljian, therefore, contacted defendants' attorney, Carol Gross. Aljian had the impression from his initial conversations that defendants were uninsured, but at that time, Gross did not know whether there was insurance available and so informed Aljian. Gross and Aljian exchanged correspondence regarding settlement. Aljian demanded $21,000, while Gross counteroffered to settle the matter for $6200 in exchange for a full release and indemnification.

Aljian transferred the case to another lawyer in the office, Steven Tombalakian, in late 2003. In December 2003, Tombalakian wrote to Gross and provided her with documentation in support of plaintiffs' $21,000 settlement demand. The letter was copied to plaintiffs. In response, defendants raised their counteroffer to $14,510 in February 2004. Gross again indicated in the counteroffer letter that the settlement must include a full release and indemnification from plaintiffs. Tombalakian forwarded Gross's letter to Ponzio*fn1 via email. Consultations between Ponzio and Tombalakian continued with Ponzio insisting that Tombalakian not take less than $21,000.

In April 2004, Tombalakian emailed Ponzio to inform him that Gross was going to recommend that the defendants settle for $21,000. Ponzio replied that it was a fair settlement. On May 3, 2004, Tombalakian wrote to Gross to confirm defendants' acceptance of plaintiffs' settlement offer of $21,000 to completely settle the dispute and to request that Gross prepare a formal release. A copy of the letter from Tombalakian was sent to Ponzio. Ponzio replied the next day in an email stating "Great News! Thanks. Please make sure Carol Gross gets this done by May 20."

Later, Tombalakian sent Ponzio a draft of the written settlement documents, which included releases and indemnifications, and asked if Ponzio had any questions. Ponzio never replied. During the hearing, Gross testified that Tombalakian told her that Ponzio had no objection, as he had not replied. Tombalakian agreed that he had sent Ponzio the language and he had never objected to it.

Gross sent a final draft of the settlement agreement to Tombalakian on August 31, 2004. It contained language releasing defendants from any and all claims arising out of the operation of their dry cleaning business and its effect on plaintiffs' property, as well as on any adjacent land. The agreement also provided that plaintiffs indemnify defendants against any related claims. At some point after May 4, 2004, Gross advised Tombalakian that defendants had discovered they had some insurance coverage.

Ponzio never signed the settlement agreement on behalf of plaintiffs. Instead, he obtained new counsel and filed a complaint against defendants in May 2005. Defendants also obtained new counsel and filed their answer, which raised settlement as a defense. Defendants then moved to enforce the settlement agreement.

The trial court ordered a plenary hearing to be held to determine whether there was, in fact, a settlement. That hearing was held on October 13, 2006. At the hearing, plaintiffs' prior counsel Aljian and Tombalakian testified, as did Gross and Ponzio. Gross testified that she and Aljian discussed releases and indemnifications because finality was important to her clients. According to Gross's testimony, there were no negotiations over the release and indemnification terms, only regarding the amount of money to settle. Following the hearing, the trial court rendered a written opinion setting forth its findings of fact and conclusions of law.

The trial judge found that Ponzio had reviewed the February 2004 counteroffer made by Gross and insisted in continuing his $21,000 settlement demand. Ponzio made no comment regarding the provisions of Gross's February 24, 2004, letter which required, in addition to an agreement on the sum to be paid, that there must be a full release and indemnification from plaintiffs. The court also found that Ponzio was informed of the letter sent by Tombalakian to Gross confirming the $21,000 settlement and that Gross would draft the formal releases. The court found that Tombalakian believed that he had discussed with Ponzio that a release and an indemnity were part of the settlement in matters such as this. The trial court also found that Ponzio acknowledged that none of the documents, including his own ...

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