On appeal from the Superior Court of New Jersey, Law Division, Warren County, Docket No. L-77-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges A. A. Rodriguez, Sabatino, and Ashrafi.
Plaintiff Colonial Surety Company appeals from the Law Division's order dated November 12, 2010, denying plaintiff's motion to restore the case to the active trial list after the case had been marked as settled. For the reasons expressed in this opinion, we reverse the November 12, 2010 order and remand for further proceedings.
Although the parties' submissions on appeal devote considerable attention to litigation activities and court orders predating the settlement discussions, we focus our attention on the critical question of whether the court erred in treating the case as conclusively settled. The following facts and circumstances are most pertinent to our analysis.
Defendant Jason D. Cooper was initially employed by plaintiff as a bond salesman from March 2003 through June 2006. Plaintiff rehired defendant in April 2007, and he continued to work at the company until he resigned in December 2008. Defendant's services were allegedly subject to a written employment agreement, which contained restrictions against him competing with the company or using the company's proprietary and confidential information after his departure.
In February 2009, plaintiff filed a complaint against defendant in the Law Division, alleging that he had engaged in wrongful competition, misused proprietary and confidential information, and improperly retained over $13,000 in overpayments for unearned bonuses. Defendant filed an answer admitting that he now works for one of plaintiff's competitors, but denying liability on any of plaintiff's claims. Defendant did not file a counterclaim.
The case proceeded through discovery and motion practice. In May 2010, the trial court denied plaintiff's applications to strike defendant's answer with prejudice for discovery violations and for partial summary judgment on the overpayment issue.
In August 2010 the parties, through their counsel, conducted settlement negotiations. On August 12, defense counsel sent plaintiff's attorney a letter offering to pay $7,000 to settle the case. Plaintiff's attorney responded with a letter dated August 17, indicating plaintiff would accept a higher figure, $10,000, in settlement. The letter did not mention that plaintiff would seek a release from defendant, who had asserted no counterclaim.
The following day, August 18, defense counsel wrote plaintiff's attorney a letter stating that his client would agree to settle the case for $10,000. The letter further stated that defense counsel would prepare a release for plaintiff to sign. Defense counsel also stated that he "assume[d]" that plaintiff's attorney, who had recently filed a motion to reconsider the court's May 2010 orders, would notify the trial court of his withdrawal of that motion.
Consistent with the lawyers' communications up to that point, on August 19, defense counsel sent plaintiff's attorney a release for plaintiff to sign. Upon receipt of that correspondence, plaintiff's attorney injected a new term into the yet-to-be-consummated settlement: a reciprocal release from defendant. In a letter to defense counsel dated August 23, plaintiff's attorney declared, apparently for the first time, that "Colonial [plaintiff] will require a release as well. The case will be dismissed upon receipt of the release [from defendant] and the $10,000." Plaintiff's attorney further noted that he would "advise the [c]court of the settlement and request an adjournment of the motion [for reconsideration] pending the exchange of the closing documents, etc."
The next day, August 24, plaintiff's attorney sent defense counsel a blank release for defendant's signature. Concurrently, plaintiff's attorney wrote the trial court a short letter, which stated:
My client, Colonial Surety Company, has reached a settlement with Defendant Cooper. Accordingly, please adjourn the Motion that is on your list for August 27, 2010 ...