On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4672-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Sabatino and Ashrafi.
This appeal concerns the enforceability of a civil settlement. For the reasons set forth in this opinion, we remand for an evidentiary hearing on the enforceability issue.
In October 2006, plaintiff John Alfano and his wife, plaintiff Kathleen Alfano, filed a personal injury action in the Law Division against defendants, Nicholas T. Mathieu and Concession Supply Company, Inc. ("Concession"). The complaint alleged that Mathieu, an employee of Concession, negligently operated a company van on Freehold Road in Manalapan, causing the van to collide with John Alfano's vehicle and injure him.
Plaintiffs' complaint was filed by an attorney ("plaintiffs' original*fn2 counsel") who had been retained to represent plaintiffs' interests in connection with the motor vehicle accident. Defendants, who were represented by a lawyer assigned by their insurance company, admitted ownership and operation of the company van, as well as the date, place and occurrence of the accident, but denied every other allegation.
After discovery was completed, the action was arbitrated at the courthouse on February 22, 2008, pursuant to Rule 4:21A-1(a)(1), resulting in a $135,000 award to plaintiffs. The award was rejected by defendants, and the matter was listed for trial.
Following the arbitration, the case was conferenced by a Law Division judge. Thereafter, defense counsel and plaintiffs' original counsel engaged in settlement negotiations. Defendants' insurer authorized an offer of $125,000, which was extended to plaintiffs through their counsel.
On November 11, 2008, plaintiffs signed a release, which stated that they agreed to settle the case for $125,000. Plaintiffs' signatures on the release were witnessed by their original counsel. The next day, November 12, defense counsel received a facsimile letter from plaintiffs' original counsel, advising that the case had settled for the sum of $125,000. The apparent settlement was reported to the court.
Soon thereafter, a check conveying the $125,000 in settlement funds was transmitted to plaintiffs' original counsel. However, the check was not endorsed, cashed, or deposited.
Approximately ten months later, in September 2009, defendants filed a motion to deposit the $125,000 in settlement proceeds with the court. Plaintiffs, acting by this point without the assistance of counsel, opposed defendants' motion. Their original counsel did not file any papers with respect to the motion.
On the return day of the application to deposit funds, plaintiffs both appeared in the motion judge's courtroom to present their oral opposition to the application. At the outset of that proceeding, the motion judge had an oath administered to both plaintiffs. The court also arranged to have plaintiffs' original counsel participate by telephone, although he was not sworn as a witness.
Plaintiffs asserted to the motion judge that they had not authorized their original counsel to agree to a settlement, and that they were not aware their case had been settled. In particular, John Alfano testified that he was unhappy with the $125,000 figure because it did not, in his view, ...