On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, C-16-99.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 5, 2008
Before Judges Fuentes, Grall and Chambers.
Plaintiffs, Rigoberto Gamoneda and Linda Gamoneda, appeal from an order denying their motion to vacate a settlement. Plaintiffs brought this lawsuit to enjoin an encroachment on their property. Without their express authority, their attorney entered into a settlement of the case in 1999, whereby plaintiffs would deed the disputed property to defendant Helen Sheehan in exchange for $1,000, representing one-half of the value of the property. Plaintiffs' attorney advised the court that the case was settled, and the case was then dismissed by the court. The settlement was never consummated, however. No written settlement agreement was made; no releases were exchanged; no deed was executed; and no monies were exchanged. Plaintiffs continue to pay the property taxes on the property. Plaintiffs did not learn of the purported settlement until 2003, when they retained new counsel, after reading in the newspaper that their attorney had been disbarred. They testified that, in the intervening years, their attorney had told them that the case was still pending.
After conducting a plenary hearing, the trial court denied plaintiffs' application to set aside the settlement. We reverse because, under the circumstances here, plaintiffs' attorney had no authority to enter into the settlement on behalf of plaintiffs.
Plaintiffs purchased property on West 36th Street in Bayonne in 1996. Plaintiff Rigoberto Gamoneda testified that when he first did a walk through of the property in 1996, the fire door in the back of the property was operable. According to plaintiffs, when they took possession of the property after the closing in December 1996, they discovered that the back fire door could not be opened due to a pool and deck that defendant had constructed on their property.
Plaintiffs retained Gerald Fitzpatrick, an attorney at the time, who had represented plaintiffs at the closing and in previous legal matters. Over the course of about two years, Fitzpatrick and Edward DePascale, Esq., counsel for defendant, attempted to resolve the dispute. During that time, Fitzpatrick conveyed defendant's first settlement offer in the sum of $900 to plaintiffs, which they refused. After an appraisal*fn1 of the property was obtained by Fitzpatrick, which indicated that the disputed property was worth $2,000, a second settlement offer was made by defendant in the sum of $500, which was also refused by plaintiffs, who indicated that they wanted the pool removed.
Plaintiffs commenced suit in 1999 to compel removal of the encroachment. A case management conference was held on April 29, 1999, and Fitzpatrick and DePascale appeared for their respective clients. At that time, the discussion turned to settlement. According to Fitzpatrick, the judge stated that he would not order defendant, a widow, to move her pool. Following the conference, DePascale sent a letter dated May 3, 1999, to Fitzpatrick stating that he had his client's authority to offer $1,000 to settle the case.
According to Fitzpatrick, he told his clients that they had "better settle this case," that they "had to settle the case" and that "there is nothing else we can do about this, really." He knew plaintiffs were not happy with the offer, but he thought that they had to settle it. At the plenary hearing, the trial judge specifically asked Fitzpatrick the following questions concerning his authority to settle the case:
COURT: Did they [plaintiffs] authorize you to settle the case?
FITZ: It was left in limbo, ...