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William Davis and Mamie Davis v. Valero Refining Company New Jersey

October 14, 2011

WILLIAM DAVIS AND MAMIE DAVIS, PLAINTIFF-RESPONDENT, AND JOHN GRAYBEAL, PLAINTIFF,
v.
VALERO REFINING COMPANY NEW JERSEY, EDWARD BAUER, WILLIAM R. DURHAM, III AND JOHN BUCHANAN, DEFENDANTS, AND
J.J. WHITE, INC., DEFENDANT-APPELLANT, AND MARTIN CHESNEY AND WORKPLACE COMPLIANCE SOLUTIONS, LLC, AND MED-TEX SERVICES, INC., DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-1555-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted September 6, 2011

Before Judges Payne and Messano.

Defendant J.J. White, Inc. (White) appeals from the October 1, 2010 order of the Law Division enforcing a settlement previously reached between the parties and dismissing all claims and cross-claims in the litigation. White also appeals from an order entered the same day denying its cross-motion to extend discovery. We have considered the arguments raised in light of the record and applicable legal standards. We affirm.

Plaintiffs William Davis and John Graybeal, who were employed by White as boilermakers, filed suit alleging injuries caused by a fire and explosion at the Valero Refinery in Paulsboro.*fn1 Valero contracted with White to provide maintenance services at the facility.

White, in turn, contracted with defendants Workplace Compliance Solutions, LLC, whose principal and lone employee was defendant Martin Chesney (collectively, WCS), and Med-Tex Services, Inc. (Med-Tex), to provide safety services at the facility. WCS and Med-Tex were contractually obligated to defend and indemnify White and Valero against any and all claims for injuries suffered by any person arising from the work they performed. WCS and Med-Tex were also obligated to provide comprehensive general liability insurance.

Med-Tex secured a policy through Aspen Specialty Insurance Company (Aspen), but, among its cross-claims, White alleged MedTex breached its contract by failing to secure the proper coverage naming White as an additional insured on a primary basis. White made a similar cross-claim against WCS, which had secured insurance through American Safety Casualty Insurance Company (American Safety). White initiated a separate declaratory judgment action in federal district court when Aspen and American Safety refused its request for defense and indemnification.

The parties mediated the dispute before a retired judge of the Superior Court on August 5 and 6, 2010. A settlement offer was made to plaintiffs in the amount of $1.6 million dollars. It is undisputed that pursuant to the settlement offer, all claims and cross-claims would be dismissed, although White was free to pursue its declaratory judgment action in federal court against American Safety.

We glean the following from the certifications filed in conjunction with the motion practice that followed, and the oral argument before the Law Division.*fn2 On September 10, WCS moved to enforce the settlement, the terms of which had changed since the mediation. In his certification, WCS's counsel, Michael J. Notartomas, confirmed that plaintiffs were offered $1.6 million at the mediation to settle their claims, and that White's carrier, American Contractor's Insurance Group (American Contractor's), agreed to fund the settlement and seek reimbursement from American Safety through prosecution of the declaratory judgment action in federal court, where all parties would stipulate that the settlement amount was reasonable.

Attached to counsel's certification were copies of several emails. The first, from Valero's counsel to plaintiffs' counsel dated August 10, "confirm[ed]" an earlier conversation "settling all claims of all plaintiffs v. all defendants for a combined payment of $1,650,000." The second, dated the same day and sent four minutes later from American Contractor's adjuster, Susie McGee to Valero's counsel and copied to White's counsel, confirmed her approval of "the additional $50,000." McGee further noted, "we now have settlement. I appreciate everyone sticking with me during the negotiations." The balance of McGee's email confirmed the continued vitality of "the dec[laratory judgment] action."

On August 27, White's counsel, Peter S. Cuddihy, sent an email to all involved.*fn3 He advised that White would dismiss its cross-claims against Med-Tex, but not against WCS. Cuddihy intended to contact the court and advise that the case was not settled.

Notartomas quickly responded by email, claiming Cuddihy "specifically advised that [his] cross claims would be resolved by way of the settlement and [Cuddihy was] proceeding solely with the dec action." Cuddihy responded:

[White] has decided that it would be unwise to dismiss the contractual cross-claims . . . for failure to ...


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