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Transportation Insurance Co. v. American Harvest Baking Company, Inc.

United States District Court, D. New Jersey

May 15, 2018

TRANSPORTATION INSURANCE COMPANY, Plaintiff,
v.
AMERICAN HARVEST BAKING COMPANY, INC., Defendants.

          EVAN YABLONSKY SAMUEL J. THOMAS BRESSLER AMERY & ROSS PC On behalf of Plaintiff

          GARY PAUL LIGHTMAN GLENN A. MANOCHI LIGHTMAN & MANOCHI On behalf of Defendants

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         Currently before the Court is the motion of Plaintiff to enforce a settlement agreement entered between the parties on July 12, 2016.[1] The settlement agreement provided that Defendant agreed to pay Plaintiff $98, 982.05 in installment payments, beginning on July 20, 2016 and ending on January 20, 2018. The first twelve payments were $1, 000 each, the next six payments were $1, 500 each, and the final payment was $77, 982.05. (Docket No. 62-3.)

         Defendant failed to make the final payment. On January 24, 2018, Plaintiff emailed Defendant a Notice of Default. Plaintiff's Notice of Default stated that Defendant did not make the required last payment, and if Defendant failed to issue payment no later than February 2, 2018, Plaintiff would “proceed accordingly and without further notice.” (Docket No. 62-4.) Plaintiff relates that after weeks of delay from Defendant and its failure to respond to Plaintiff's last offer to resolve Defendant's clear breach of the parties' agreement, Plaintiff had no choice but to file the instant motion to enforce the settlement agreement. (See Docket No. 64.) Plaintiff seeks an order enforcing the terms of the settlement agreement and the entry of a final judgment in its favor in the amount of $77, 982.05.[2]

         1. The Parties' Arguments

         Defendant has opposed Plaintiff's motion. Defendant does not refute that it failed to make the last installment payment to Plaintiff as it agreed to under the settlement agreement, but it argues that Plaintiff's motion is procedurally improper. Defendant argues that under the settlement agreement, Plaintiff's only remedy for Defendant's default is for Plaintiff to file a motion for default, seeking this Court's approval to file, execute and enforce a Stipulated Final Judgment. The only rub, Defendant argues, is that Defendant did not sign a Stipulated Final Judgment, and therefore Plaintiff's motion to enforce the settlement agreement and obtain a final judgment for Defendant's breach is not a remedy permitted by the settlement agreement. Defendant suggests that Plaintiff is not left without options, as Plaintiff can refile its motion as a motion for default, which is permitted under the agreement, or institute a separate lawsuit for other remedies not limited by the settlement agreement.

         In response, Plaintiff contends that Defendant's opposition is just another delay tactic, as the provision for default in the parties' agreement was not specified as the sole remedy for Defendant's breach, but rather one option available to Plaintiff in the event of Defendant's default of the installment payment agreement.

         2. The Default Provision in the Settlement Agreement

         Section 2 concerns default. In the event that Defendant “does not present timely payment of any installment”:

• Counsel for Plaintiff will provide Defendant with a Notice of Default sent by electronic email.
• Within seven business days of receipt of the Notice of Default, “all unpaid amounts shall become immediately due and payable to” Plaintiff.
• Counsel for Plaintiff “shall hold the Joint Stipulation for Entry of Stipulated Final Judgment and the Stipulated Final Judgment in the amount of $98, 982.05 [] less any payments made by [Defendant] to [Plaintiff] pursuant to this agreement in escrow pending the occurrence of an uncured default, if any. In the event of an uncured default [Plaintiff] shall be permitted to file a motion (the “Default Motion”) with the United States District Court for the District of New Jersey seeking the Court's approval to file, execute and enforce the Stipulated Final Judgment (which opposition ...

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