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WEA Texas Bayonne, L.P. v. Courier Systems


August 4, 2009


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5348-07.

The opinion of the court was delivered by: Per Curium


Submitted April 28, 2009

Before Judges Collester and Graves.

Defendant, Courier Systems, Inc. (Courier), leased approximately 141,678 square feet of warehouse space from Plaintiff, WEA Texas Bayonne, L.P. (WEA). In July of 2007, WEA learned that one of Courier's employees had caused structural damage to the warehouse building. Under the lease, Courier was responsible for repairing structural damage caused by its "employees, agents, contractors or invitees."

WEA claims it made several requests for Courier to fix the damage, but it failed to do so. WEA notified Courier that it would inspect the premises on October 23, 2007, to ascertain the extent of damage to the building. On that date, WEA states that its employer and a structural engineer arrived for the inspection, but Courier refused to allow the inspection and threatened to have them forcibly removed.

Plaintiff filed a complaint on October 30, 2007, in Hudson County Superior Court seeking to determine the scope and extent of the damage to the wall and the effect it had on the structural integrity of the building. The complaint sought a declaratory judgment of WEA's right to enter and inspect the premises and for the right to repair the premises and collect the cost of repairs from Courier. WEA also sought payment of attorney fees and engineer fees that it had incurred. Finally, the complaint sought payment of past-due utilities and late fees that were related to a pump house on the premises.

After the complaint was filed, Courier repaired the damaged wall and allowed WEA representatives access to the premises for inspection. The matter then entered mandatory mediation pursuant to Rule 1:40-1. On April 11, 2008, the attorney assigned to the mediation, Agnes I. Rymer, filed a "completion of mediation" form with the court indicating that the matter had been resolved.

According to the certification of WEA's counsel, as consideration for the negotiated settlement,

WEA would receive $2,500 in satisfaction of $9,955.33 we sought to recover in the original complaint, as well as the clarification of the existing lease terms related to the obligations of the defendant to pay for the smoke detection and alarm systems, and in exchange Courier Systems received a reduction in its lease obligations of approximately $7,455.33, and a release from all future responsibility for any unusual repairs or extraordinary maintenance of the sprinkler alarm system.

Richard Murad, Courier's president, certified that there was discussion at the mediation hearing about reforming the language of the lease regarding the pump house, sprinkler system, and the fire alarm system. Murad added that it was his understanding at the close of mediation that a settlement would be reached only upon his approval of the language of the reformed lease. He certified that he did not agree to pay some $10,000 for the sprinkler and alarm systems over the life of the lease.

WEA's attorney sent a proposed form of settlement agreement to defendant's counsel on April 9, 2008. The following day, Courier's counsel responded with an e-mail inquiring if WEA would modify the settlement to include an option for Courier to extend or shorten the lease by one year. WEA had rejected the option proposal during mediation and did so again on April 18. On April 16, WEA's counsel sent Courier a revised form of settlement agreement. According to WEA's counsel, the revised form accurately represented the agreement reached in mediation. Subsequent e-mails were exchanged on the issue of responsibility for the ADT alarm system on the premises.

By e-mail dated April 30, defendant's counsel advised that Courier was "unwilling to execute the agreement in that form," and made a counterproposal which WEA rejected. Courier then informed WEA it would not honor the agreement as written, and WEA filed a motion to enforce the settlement.

The trial judge granted the motion with regard to the payment of $2,500 to WEA by Courier, but denied it with regard to the ADT alarm system issue. WEA filed a motion for reconsideration which was also denied. The judge stated in the order denying reconsideration that "[t]he court declines to enforce any terms of the settlement beyond those claimed in the Complaint." WEA appealed that portion of the order.

WEA argues that the settlement should be enforced because New Jersey's public policy favors the settlement of litigation and that any dispute must be addressed at a plenary hearing with the agreement enforced absent a showing of fraud or other compelling circumstance. We agree.

We have emphasized that trial judges cannot resolve material factual disputes upon conflicting affidavits and certifications. Harrington v. Harrington, 281 N.J. Super. 39, 47 (App. Div.), certif. denied, 142 N.J. 455 (1995). In this case, WEA claims that an agreement was reached by the parties in arbitration while Courier takes the contrary position. Because a decision in this matter rests on a factual question, a plenary hearing is required.

Moreover, a settlement should be enforced either in its entirety or not at all. It should not be enforced piecemeal, even if it contains terms not contained in the pleadings of the parties. An agreement to settle a lawsuit is a contract which like all contracts may be freely entered into and which a court should honor and enforce as it does any other contracts absent a demonstration of "fraud or other compelling circumstances." Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App. Div.), certif. denied, 94 N.J. 600 (1983).

Accordingly, we reverse and remand the matter to the trial court for a plenary hearing to determine whether an enforceable settlement was reached by the parties.

Reversed and remanded. We do not reserve jurisdiction.


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