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Schlameus v. Beihoff


July 21, 2009


On appeal from Superior Court of New Jersey, Law Division, Bergen County, L-423-06.

Per curiam.


Submitted April 22, 2009

Before Judges Payne and Waugh.

Plaintiff, Dorothy Schlameus, appeals from the February 29, 2008 orders of the trial court enforcing the settlement agreement allegedly reached between plaintiff and defendant, Robert Beihoff, and enforcing a lien for legal services rendered in the action in favor of Klein & Radol, L.L.C. She appeals, as well, from an April 11, 2008 order, accompanied by a written memorandum of decision, denying her motion to reconsider and vacate the February 29 orders. On appeal, plaintiff claims that she never gave her consent to the settlement of her claims, and thus the alleged settlement is unenforceable.*fn1 Because the trial court record is insufficient to permit a decision by us on the merits, and because the determinations of the trial judge may have been premised upon a mistaken view of the facts, we vacate the judge's orders and remand for a hearing on whether a settlement occurred.

We glean the following facts from the record on appeal. On February 27, 2004, a motor vehicle accident involving plaintiff and defendant took place. As a consequence, plaintiff, an eighty-two-year-old woman, allegedly sustained injuries consisting of fractures of the fourth and fifth ribs, disk herniations at L1-2, L3-4 and L4-5, and a fractured tooth. She claims to have been rendered wheelchair-bound as the result of the accident. At the time the accident occurred, plaintiff was subject to the recovery threshold provided by the limitation on lawsuit option of the Automobile Insurance Cost Reduction Act. See N.J.S.A. 39:6A-8(a).

On January 13, 2006, suit was filed on plaintiff's behalf by the firm of Klein & Radol. She was represented by Henry Klein. A mandatory non-binding arbitration of plaintiff's claims took place on April 7, 2007, resulting in a finding that plaintiff did not meet the limitation on lawsuit threshold. A demand for trial de novo was filed on plaintiff's behalf on April 18, 2007.

On July 2, 2007, a settlement conference occurred in the matter, and at that time, defendant's carrier, Allstate Insurance Company, offered $10,000 to settle the case. Plaintiff rejected the settlement offer.

Following several adjournments, the matter was scheduled for trial on December 17, 2007. Prior to the trial date, by letter dated December 7, 2007, plaintiff was advised by Klein that the witness fees of her expert chiropractor and dentist would have to be paid by plaintiff prior to trial. Klein admits that, on the day of trial, he informed plaintiff for the first time that, in order to present the radiological studies that constituted the proof of her injuries, it would be necessary, additionally, to retain and call a radiologist as a witness.*fn2

After weighing the cost of the three experts against the still-pending $10,000 settlement offer and plaintiff's likely recovery, Klein advised settlement. Plaintiff rejected that advice and requested a conference with the trial judge.

The judge complied with plaintiff's request, conducting a conference of an unspecified nature with plaintiff and her attorney. Thereafter, plaintiff claims that she again rejected the settlement offer and demanded that the matter proceed to trial. She alleges that, at that point, Klein wheeled her from the courthouse and placed her in a cab. She asserts additionally that Klein then returned to the courtroom and announced to the trial judge and defense counsel that plaintiff has agreed to the settlement. In contrast, Klein alleges that plaintiff gave her agreement to the settlement, albeit reluctantly, and that he advised her that paperwork to consummate the settlement would be forwarded to her shortly. He does not directly refute the timetable offered by plaintiff, stating in that regard only that "I advised defense counsel and the Court that the case was settled prior to leaving the Court house."

On December 18, 2007, Klein forwarded the settlement papers to plaintiff. Plaintiff alleges that upon receipt, she called Klein and requested that the settlement be vacated as unauthorized. Contending that the settlement was valid, Klein refused to act. Plaintiff thereupon consulted with other attorneys, and on January 20, 2008, terminated her representation by Klein.

By motions returnable on February 29, 2008, defendant sought enforcement of the settlement, and Klein sought to assert an attorney's lien against the settlement proceeds. No response was provided by plaintiff, who at the time was unrepresented, and orders granting the motions were entered by the trial judge. In giving his reason for granting the motion to enforce the settlement, the judge stated: "Settled - 12/17/07 in amount of $10,000 - on record." That the settlement was placed on the record, an otherwise nearly dispositive circumstance, is doubtful. At very least, no such record has been located or provided on appeal by any party.

Following the retention of present counsel, a motion to reconsider and vacate the February 29 orders was filed. In an order dated April 17, 2008, the motion was denied. In his written opinion, the judge concluded:

The court notes that the "settlement of a lawsuit has three aspects: the initial agreement, which is a contract between the parties; the order of the court dismissing the suit, which is subject to the court rule controlling the relief from an order or judgment, R. 4:50-1; and the delivery of a release, a document with independent legal significance." Wolfkoff v. Villance, 288 N.J. Super. 282, 286 (App. Div. 1996) quoting Aponte v. Willard, 229 N.J. Super. 490, 493 (App. Div. 1989). In this case there is dispute between the parties over whether the first aspect, the initial agreement, was ever met. However, the February 29, 2008 Order enforcing the settlement notes that the settlement was entered into on the record. Further, the court notes that a pretrial settlement conference was held in which plaintiff agreed to the offer. While the court is uncomfortable with the fact that Mr. Klein waited until the day of the trial to inform plaintiff that a radiologist was necessary, the court does not find that this behavior rises to the level of "compelling circumstances" warranting the vacation of the settlement. Plaintiff clearly regrets the settlement agreement that she entered into, but case law states that settlement agreements must be enforced as other contracts are. See Jennings [v. Reed], 381 N.J. Super. [217], 277 (App. Div. 2005).

Following our careful review of the record in this matter, we vacate the judge's orders enforcing settlement and denying reconsideration, remanding the case for a testimonial hearing as to what occurred on December 17, 2007.*fn3 In this regard, we note that the judge's decisions in February and April were premised primarily on the conclusion that the settlement had been placed on the record. However, the present record suggests that such was not the case. At very least, an unresolved factual issue exists on that point that requires resolution if it is to form the basis for the judge's ruling. We recognize that the fact that plaintiff left the courthouse on the scheduled trial date after allegedly insisting that trial take place provides circumstantial evidence that she had, in fact, agreed to the settlement. Nonetheless, the possibility remains that the judge had adjourned the trial or, for other reasons, it had been postponed. Other explanations for plaintiff's departure may exist, as well.

We also note that, in the absence of a radiological expert - a person who appears from the record on appeal not even to have been identified or retained - plaintiff's claims, with the exception of the chipped tooth, could not have been successfully tried. In the event that the judge finds a settlement to have been reached, we urge the judge to consider whether Klein's tacit admission to plaintiff of a lack of trial preparation sufficient to present a prima facie case constituted "pressure or unseemly conduct in settlement negotiations," Honeywell v. Bubb, 130 N.J. Super. 130, 136 (App. Div. 1974), sufficient to avoid the settlement pursuant to Rule 4:50-1(c) or (f).

Reversed and remanded for further proceedings in light of this opinion.

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