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Fritze, LLC v. Kominsky


October 21, 2009


On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. DC-2956-06.

Per curiam.


Submitted September 30, 2009

Before Judges Gilroy and Simonelli.

Defendant Elliott Kominsky appeals from the February 4, 2009 order granting plaintiff Fritze, LLC's, motion seeking to enforce a settlement. We affirm.

Plaintiff, a home improvement contractor, engages in the sale and installation of heating and cooling systems. In March 2003, plaintiff entered into a verbal agreement with defendant for the replacement of an air conditioning and heating system in defendant's home for the sum of $17,344. After defendant paid approximately one-half of the sales price and plaintiff completed the work, a dispute arose between the parties.

On May 19, 2006, plaintiff filed a complaint in the Special Civil Part, seeking the balance owed of $8,876, plus interest. Defendant counterclaimed, asserting that plaintiff violated the Consumer Fraud Act*fn1 by failing to: reduce the agreement to writing; obtain the necessary construction permits from the local municipality; and obtain a certificate of occupancy after completion of the work. Defendant also claimed that plaintiff performed the work in a negligent fashion.

Prior to the September 25, 2006 trial date, counsel for both parties sent separate letters to the trial court on September 21 and 22, 2006, advising that the matter had settled. However, the settlement was not placed upon the record, and the parties failed to file a stipulation of settlement or a stipulation of dismissal.

On September 29, 2006, plaintiff's counsel prepared and forwarded to defendant's counsel a proposed stipulation of settlement, under which terms defendant would pay plaintiff $8,876, by placing those funds in escrow with his attorney until such time as: 1) plaintiff filed all applications necessary to obtain the proper construction permits for the work; 2) plaintiff completed the work to the satisfaction of the municipal inspectors; and 3) the municipality issued a certificate of occupancy approving the work. The stipulation further provided that on final approval by the municipality, defendant would authorize his counsel to release the escrow funds to plaintiff.

On October 6, 2006, defendant's counsel requested that the stipulation be revised "to mention the 90-day time limit for obtaining the certificate of occupancy." Three days later, defendant's counsel requested that the stipulation be further revised to include a provision requiring plaintiff to provide defendant with a warranty on the "4th unit." On October 12, 2006, plaintiff's counsel revised the proposed stipulation and forwarded it to defendant's counsel. As to the time-limit provisions for the completion of plaintiff's obligations, the document provided:

The municipality requires that a survey be submitted with the application and the application therefore cannot be submitted until such time as defendant provides a copy of the survey to plaintiff. Once that has been accomplished, plaintiff will forthwith submit the application and will complete all required work within ninety days of receiving this survey.

The parties never signed the stipulation. Although they were in agreement that the construction permits and certificate of occupancy be obtained within a ninety-day timeframe, they remained in disagreement as to when the ninety-day period would commence. While defendant insisted they be obtained within ninety days from the date of settlement, plaintiff insisted that they be obtained within ninety days from when defendant provided him a copy of the survey. On October 24, 2006, defendant provided plaintiff with a copy of the survey.

On December 5, 2006, plaintiff's counsel inquired of defendant's counsel whether defendant had placed the settlement funds into escrow. On December 6, 2006, defendant's counsel advised that his client insisted the final certificate of occupancy be issued by the end of December 2006; and that, although defendant had not deposited the settlement funds into escrow, he would pay the amount due on issuance of the certificate of occupancy.

During the next four to five weeks, counsel exchanged correspondence primarily pertaining to defendant's obligation to arrange for a final inspection to obtain the certificate of occupancy. On January 12, 2007, plaintiff's counsel sent defendant's counsel copies of documents plaintiff had submitted to the municipality for the necessary permits. The cover letter transmitting the documents provided in part:

According to my client, once these documents were submitted, the town would have provided your client with a permit number. At the very least, the documents faxed to you should be sufficient information for your client to contact the building inspector in his town to get a permit number and arrange for an inspection.

On January 18, 2007, defendant's counsel replied that his client had contacted the municipality as agreed, but that the construction permit fee of $846 remained unpaid.

On February 7, 2007, plaintiff's counsel advised defendant's counsel that plaintiff would pay the required construction fee if counsel would provide "assurances... that the $8,876.00 has been placed in escrow with your office." In reply, defendant's counsel advised plaintiff's counsel by letter that:

I have reviewed your various correspondence with my client and he is unwilling to change his position. He indicates that he is prepared to pay as we agreed in the event that your client provides certificates of completion. However, due to the delays in this matter, specifically your client's request for a survey which had already been provided to [him], [defendant] is not willing to escrow funds. It is his position that your client was obligated to obtain the permits before the work was begun and to provide a certificate of completion as proof that the job was properly complet[ed], which would entitle [him] to payment. Since he would not have had to escrow the monies under the original contract, he is unwilling to do so now. [(emphasis added).]

On March 16, 2007, plaintiff's counsel advised that plaintiff had paid the required fee to the municipality and that his client had the permits. Plaintiff's counsel requested that the settlement funds be deposited in escrow and defendant arrange for the final inspection.

Over the next sixteen months, counsel continued to exchange correspondence, with plaintiff demanding that defendant place the settlement funds in escrow and arrange for the final inspection of the work. Defendant continued his refusal to place the funds in escrow, advising that he would pay the monies on issuance of the final certificate of occupancy by the municipality. However, defendant never arranged for the final inspection.

On December 16, 2008, plaintiff filed a motion to enforce settlement. Defendant opposed, arguing that the parties had never agreed upon the time for completion of the settlement. On February 4, 2009, the court, without conducting a plenary hearing, entered an order, supported by a statement of reasons, granting the motion. In so ruling, the court stated:

... The parties were able to agree on terms such as the amount to be put into escrow by defendant and that plaintiff would obtain the permits and perform any work required by the town to obtain a certificate of occupancy. The plaintiff acted as if the matter was settled and performed completing all that was required up to this point under the settlement. The defendant argues that the settlement was not complete because the parties did not agree on the timeline for the completion of the project. Defendant multiple times did request that a specific deadline of 90 days be included in the stipulation agreement. For example, there were communications on October 6, 2006[,] and October 9, 2006[,] that requested the insertion of this completion date. When plaintiff did include a reference to a 90[-]day time period in the stipulation agreement, defendant objected because the 90 days would be extended to begin after plaintiff obtained a copy of a survey. Finally, defendant informed plaintiff on December 6, 2006[,] that the permits must be issued by the end of December 2006[,] in order for the parties to come to agreement, to which plaintiff did not agree. The timeframe for the completion of the work was not raised by defendant until after both parties had indicated to the court that the case had been settled. Defendant has not established, therefore[,] that the timeframe for completion of the work was part of the settlement.

Here[,] I conclude the parties had agreed on [the] essential... terms of the settlement and both manifested an intention to be bound by those terms by notifying the court that the case was settled. They, thus, have created an enforceable contract.

Where one minor issue has not been agreed to by the parties such [as] a time for completion of the agreed upon work, particularly when one of the parties has already performed its responsibilities under the settlement, the court places a reasonable [timeframe] for completion of the settlement contract. The defendant has not demonstrated that the settlement was not completed within a reasonable time. Any delays in obtaining the certificate of occupancy appear[] to be due to conduct of defendant. I conclude that plaintiff has so far performed its obligations under the settlement contract and defendant should be compelled to comply with his obligation under the settlement by placing in escrow the balance of the contract in the amount of $8,876 within 20 days. Accordingly, plaintiff's motion to enforce the settlement is [granted]. [(internal citations omitted).]

On appeal, defendant argues that the trial court erred in determining that the parties had entered into a settlement agreement resolving the action. Defendant contends that the time for issuance of the construction permits and the final certificate of occupancy was a material term of the settlement and was not agreed upon by the parties. Defendant also asserts that the court erred by not conducting a plenary hearing to resolve the factual dispute of whether the parties had agreed upon all the essential terms of the settlement.

We will not disturb the factual findings and legal conclusions of a trial court unless they are "'so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974) (citation omitted). Consequently, "the appellate court should exercise its original fact finding jurisdiction sparingly and in none but a clear case where there is no doubt about the matter." Ibid. However, the same level of deference is not required when we are reviewing a legal conclusion. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

A settlement of a legal claim between parties is a contract like any other contract, Nolan v. Lee Ho, 120 N.J. 465, 472 (1990), 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." Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983). That the agreement was oral, instead of written, is of no consequence. Id. at 124. "Where the parties agree upon the essential terms of a settlement, so that the mechanics can be 'fleshed out' in a writing to be thereafter executed, the settlement will be enforced notwithstanding the fact the writing does not materialize because a party later reneges." Lahue v. Pio Costa, 263 N.J. Super. 575, 596 (App. Div.), certif. denied, 134 N.J. 477 (1993).

We have considered defendant's arguments in light of the record and applicable law, and affirm substantially for the reasons expressed by Judge Kumpf in his statement of reasons attached to the February 4, 2009 order enforcing settlement. Nevertheless, we add the following comment.

Defendant argues that parties never entered into a settlement agreement because they failed to agree on the date by which plaintiff was required to apply for the necessary construction permits and obtain the final certificate of occupancy. Defendant argues that the trial court erred in deciding the motion to enforce the settlement without conducting a plenary hearing to determine whether the parties had agreed upon all the essential terms of a contract of settlement. We disagree.

The burden of proving that the parties had entered into a settlement agreement is upon the party seeking to enforce the settlement. Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475 (App. Div. 1997). "On a disputed motion to enforce a settlement, as on a motion for summary judgment, a hearing is to be held to establish the facts unless the available competent evidence, considered in a light most favorable to the non-moving party, is insufficient to permit the judge, as a rationale factfinder, to resolve the disputed factual issues in favor of the non-moving party." Id. at 474-75. However, not every factual dispute on a motion requires a plenary hearing; a plenary hearing is only necessary to resolve a genuine issue of a material fact. Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004); Harrington v. Harrington, 281 N.J. Super. 39, 47 (App. Div.), certif. denied, 42 N.J. 455 (1995); Adler v. Adler, 229 N.J. Super. 496, 500 (App. Div. 1988). Here, contrary to Amatuzzo, we are satisfied there are no material issues of fact requiring a plenary hearing. 305 N.J. Super. at 474.

The trial judge correctly determined, from review of the extensive record of correspondence and telefaxed communications between counsel over a twenty-two month period, that the parties agreed to a settlement immediately prior to the scheduled trial date. The parties settled, with plaintiff wanting to be paid for the materials rendered and services performed, and defendant wanting assurance the work had been performed in accordance with municipal codes and he received all warranties pertaining to the equipment installed in his home. Accordingly, we agree with plaintiff that "[t]he mechanics of completing the process, such as the placing of the escrow, the timing of any remedial work that might be required, and the timing of obtaining the municipal approvals were all ancillary to the agreement[,] and therefore did not trigger the need for a plenary hearing." That the end date by which plaintiff was to obtain all necessary approvals was not an essential term of the agreement is evidenced by defendant's counsel's letter of February 21, 2007, wherein he stated that his client was "prepared to pay as we agreed in the event that your client provides certificates of completion."


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