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Fogarty v. Household Finance Corporation III

United States District Court, D. New Jersey

June 28, 2018




         This matter is before the Court on the “Motion to Enforce Settlement” filed by Defendant Household Finance Corporation (“HFC”). [Doc. No. 191]. The Court received plaintiff's opposition [Doc. No. 195], HFC's reply [Doc. No. 196], and exercises its discretion to issue this Report and Recommendation without oral argument. Fed.R.Civ.P. 78; L. Civ. R. 78.1. This Report and Recommendation is issued pursuant to 28 U.S.C. §636(b)(1)(B).[1]

         For the reasons to be discussed, the Court recommends HFC's motion be granted and that the first proposed Order included with HFC's motion [Doc. No. 191-2] be entered.[2]


         Plaintiff's complaint was removed to federal court on July 17, 2014. [Doc. No. 1]. Plaintiff's amended complaint was filed on August 7, 2014 [Doc. No. 5] and her second amended complaint was filed on January 15, 2016. [Doc. No. 66]. This lawsuit concerns real property located at 12 Lancaster Court, Westampton, New Jersey (hereinafter the “property”) that plaintiff and her then husband, John Fogarty, purchased in 1979. Plaintiff and Fogarty were divorced in mid-2015. Plaintiff generally alleges that her signatures on three mortgages encumbering the property were forged by defendants Fogarty and Dora Cullen. The third mortgage remains of record and is held by HFC. See HFC's Brief at 3, Doc. No. 191-1. Plaintiff's second amended complaint asserts three claims against HFC. In Count I, plaintiff alleges violations under RESPA. In Count IV, plaintiff alleges violations under FCRA. In Count V, plaintiff asserts a quiet title claim seeking to declare the subject mortgage void and enforceable based on forgery. Id.

         HFC's motion seeks to enforce a purported settlement agreement between plaintiff and HFC. HFC alleges plaintiff's counsel agreed to settle plaintiff's claims against HFC on August 25, 2017, when plaintiff's counsel stated as follows in an email that date to defense counsel:

My client has responded as follows in acceptance HFC's settlement offer.
“I confirm that I agree to accept the confidential settlement offer from HFC which includes the dismissing of their claims against me with prejudice, satisfying the mortgage and removing it from land records, fully deleting the trade lien (credit history) on my credit so that the mortgage does not show and the history of it does not show, and in return that I will dismiss my claims against them with prejudice.”
I appreciate that we have brought this matter to a close.
We can work on the paper work when you wish to in the very near future.
Please confirm receipt of this e-mail when you can.

         HFC's Motion, Exhibit 4.[3] Notably, the email does not state the payment of plaintiff's attorney's fees is part of the settlement or a condition to settling. A few minutes after plaintiff's email was sent defense counsel confirmed that plaintiff confirmed the settlement:

Thanks for confirming our deal. We're glad that HFC and Ms. Fogarty were able to reach a resolution. We'll take a first crack at the settlement papers, and will try to get something over to you next week.
Have a good weekend.

Id. In a letter to the Court on August 31, 2017, plaintiff's counsel again confirmed plaintiff settled with HFC:

Dear Judge Schneider:
I represent Cecilia Fogarty, the Plaintiff in the above-referenced action. As you are aware from the letter of August 28, 2017 from Household Finance Corporation's (“HFC”) attorney, Philip A. Magen, Esq., John Fogarty and HFC have come to a settlement agreement. In addition, HFC and my client have come to a settlement agreement.

Exhibit 6. Again, plaintiff did not mention that the payment of plaintiff's attorney's fees was included as part of the settlement. Nor did plaintiff state settlement was contingent on the payment of plaintiff's fees.

         On September 22, 2017, HFC sent a draft Settlement Agreement to plaintiff's counsel. Exhibit 7. When plaintiff's counsel sent HFC her lengthy comments on October 10, 2017 (Exhibit 8), she did not comment on ¶17 of the proposed Settlement Agreement that provided, “each of the parties shall bear their own attorney's fees and costs in connection with the litigation.” Exhibit 7. HFC circulated another draft Settlement Agreement on October 12, 2017 (Exhibit 9) that also did not provide for HFC's payment of plaintiff's attorney's fees.[4]

         Plaintiff's counsel confirmed in her October 19, 2017 email that HFC's payment of plaintiff's legal fees was not part of the settlement. (“I … have explained to [plaintiff] why HFC has agreed to the settlement but does not agree to pay her legal fees. I have told everyone in this matter that I have presented to Mrs. Fogarty what the content of the settlement is and why HFC does not agree to pay her legal fees.” Exhibit 11.) On November 15, 2017, plaintiff's counsel advised HFC that plaintiff would not sign the settlement agreement unless HFC paid her legal fees. Exhibit 13. HFC's motion seeks to enforce its settlement agreement with plaintiff.

         As discussed herein, plaintiff's counsel acknowledged in her opposition papers that the parties settled. In view of this admission, plaintiff's defense to HFC's motion is hard to decipher. The crux of plaintiff's argument appears to be as follows:

It is true that HFC counsel never suggested any willingness to pay Plaintiff's costs and legal fees. However, Plaintiff was and is firm in her belief that in return for dismissing her RESPA and FCRA claims, which may have entitled her to damages, legal fees and costs. Plaintiff's counsel communicated this to HFC at all times throughout the negotiations. This was an open issue. Plaintiff's rejection of the settlement without receiving attorney ...

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