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

Filing 66

OPINION. Signed by Judge Noel L. Hillman on 5/15/2018. (tf, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

TRANSPORTATION INSURANCE
COMPANY,

1:15-cv-00663-NLH-AMD
OPINION

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

APPEARANCES:
EVAN YABLONSKY
SAMUEL J. THOMAS
BRESSLER AMERY & ROSS PC
325 COLUMBIA TURNPIKE
SUITE 300
FLORHAM PARK, NJ 07932
On behalf of Plaintiff
GARY PAUL LIGHTMAN
GLENN A. MANOCHI
LIGHTMAN & MANOCHI
4 ECHELON PLAZA
201 LAUREL ROAD, 8th FLOOR
VOORHEES, NJ 08043
On behalf of Defendants
HILLMAN, District Judge
Currently before the Court is the motion of Plaintiff to
enforce a settlement agreement entered between the parties on
July 12, 2016. 1

1

The settlement agreement provided that Defendant

On July 28, 2016, the Court signed the parties’ Joint
Stipulation of Dismissal with Prejudice, which provided that
this Court retained “jurisdiction until April 30, 2018 to

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

enforce the terms of the Settlement and Release Agreement
entered into by both parties.” (Docket No. 59.) Plaintiff
filed its motion to enforce the settlement agreement on March
13, 2018. (Docket No. 62.) The Court therefore has subject
matter jurisdiction to consider Plaintiff’s motion. See
Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375,
381–82 (1994) (providing that a court may retain jurisdiction to
enforce a settlement agreement under the doctrine of ancillary
jurisdiction if the parties’ obligation to comply with the
settlement agreement had been made part of the order dismissing
the complaint in the action, either by (1) a separate provision
in the order stating that the court retains jurisdiction over
the settlement agreement, or (2) incorporation of the terms of
the settlement agreement into the order).
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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

2

Alternatively, Plaintiff seeks an order granting it leave to
file an amended complaint against Defendant to reopen the case
and to include claim for breach of the settlement agreement.
Such relief is unnecessary and duplicative. The parties’
settlement agreement is valid, and the remedy of rescission
(including the repayment of previously paid funds) and
reinstatement of a previously settled matter to the trial list,
is an extraordinary remedy and requires an express agreement by
the parties in the agreement, as well as acquiescence of the
Court. See Kaur v. Assured Lending Corp., 965 A.2d 203, 209
(N.J. Super. Ct. App. Div. 2009) (explaining that restoring a
matter to the trial list involves more than simply an agreement
of the parties, the court is an interested party, and such a
remedy should not be left to a vague suggestion but must be
clearly set forth in the agreement). Here, Plaintiff does not
need to institute a separate breach of contract case against
Defendant because the Court retained jurisdiction to enforce the
terms of the settlement agreement and Plaintiff brought its
motion to enforce the agreement before the expiration of the
Court’s jurisdiction.
3

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
4

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 shall be limited to contesting the
payment default or improper notice of default).

A

copy of the Stipulated Final Judgment is attached
hereto as Exhibit A.
(Docket No. 62-3.)
3. Analysis
A settlement agreement between parties to a lawsuit is a
contract.

Nolan v. Lee Ho, 577 A.2d 143, 146 (N.J. 1990)

(emphasizing that “[s]ettlement of litigation ranks high in our
public policy”).
of law.

The interpretation of a contract is a question

Travelers Property Casualty Company of America v. USA

Container Co., Inc., 686 F. App’x 105, 110–11 (3d Cir. 2017)
(citing Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt.
Osteopathic Med. & Physical Therapy, 46 A.3d 1272, 1276 (N.J.
2012)); cf. Kieffer v. Best Buy, 14 A.3d 737, 742 (N.J. 2011)
5

(explaining that the construction of a contract is a question of
law for the court; however, that rule is predicated upon the
absence of an issue of fact).
The Third Circuit has recently summarized the analysis of a
contract under New Jersey law: 3

3

The Court notes that neither party submitted a brief with
citations to law to support its arguments. Under L. Civ. R.
7.1(d)(1), every motion must be supported by “a brief, prepared
in accordance with L. Civ. R. 7.2.” A moving party is relieved
of that obligation if that party files a statement under L. Civ.
R. 7.1(d)(4) that “no brief is necessary and the reasons
therefor.” A motion that is not accompanied by either a brief
or a statement that no brief is necessary may be rejected by the
court. Kennedy v. City of Newark, 2011 WL 2669601, at *2
(D.N.J. 2011); cf. Stavitski v. Safeguard Properties Management,
LLC, 2018 WL 501646, at *2 (D.N.J. 2018) (finding that despite
the plaintiff’s failure to comply with L. Civ. R. 7.2(d)(4), in
the interests of expediency, the court nevertheless considered
plaintiff’s motion). However, a notice of motion that indicates
that the relief sought is supported by an affidavit may be
accepted as satisfying the requirements under L. Civ. R.
7.1(d)(1). Id. (citing Damiano v. Sony Music Entm't, Inc., 168
F.R.D. 485, 489 (D.N.J. 1996)). Even though Plaintiff did not
provide a L. Civ. R. 7.1(d)(4) statement, Plaintiff filed its
notice of motion indicating that it was relying upon an attached
affidavit of counsel. (Docket No. 62.) The Court will deem
that sufficient to comply with the procedural requirements of L.
Civ. R. 7.1(d)(4).
The lack of any discussion of the relevant law by the
parties is more troubling than the procedural issue. First,
Plaintiff does not indicate which state’s law applies to the
settlement agreement. Absent a choice of law clause in a
contract, as here, the governing law generally is the law of the
forum where the contract is executed and performed. Centennial
Ins. Co. v. Lithotech Sales, LLC, 29 F. App’x 835, 837, 2002 WL
312873, at *1 (3d Cir. 2002) (citing Restatement (Second) of
Conflict of Laws § 188(3) (1971)) (other citation omitted).
Thus, the Court will apply New Jersey law to the interpretation
of the settlement agreement. Second, the parties do not cite to
any law to support their arguments, leaving the Court to set
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Under New Jersey law, courts should enforce contracts as
the parties intended, which is assessed by examining the
plain language of the contract, the surrounding
circumstances, and the purpose of the contract. In
addition, contract provisions are to be interpreted so as
to give each provision meaning, rather than rendering some
provisions superfluous. . . . [A] court will not make a
different or better contract than the parties themselves
have seen fit to enter into.
MacDonald v. CashCall, Inc., 883 F.3d 220, 228–29 (3d Cir. 2018)
(citations omitted).
Here, Defendant does not argue that it did not default
under the agreement, and Defendant does not argue that the
agreement is unenforceable.

Instead, Defendant focuses on the

remedies available to Plaintiff for its breach of the settlement
agreement.

The Court finds Defendant’s argument in opposition

to Plaintiff’s motion, and its apparent interpretation of the
settlement agreement, on the issue of Plaintiff’s remedies to be
a non-sequitur.
Defendant argues that because the agreement provides for
only one remedy for Defendant’s breach – a motion for default –
Plaintiff’s motion to enforce the settlement agreement and to

forth the relevant law it must follow. Because, however, the
interpretation of the settlement agreement in this case does not
require the assessment of disputed facts, and only requires the
Court’s construction of the agreement as a matter of law, the
Court will resolve Plaintiff’s motion, rather than direct the
parties to provide caselaw-supported briefs, despite the
procedural and substantive missteps.

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obtain judgment in its favor is improper, and suggests that
Plaintiff may refile its motion as one for default.

Defendant

also argues, however, that the motion for default is only
relative to the Joint Stipulation, and Defendant did not sign
the Joint Stipulation.

Thus, under Defendant’s view, even if

Plaintiff re-styled its motion as one for default, Plaintiff
would not be permitted to assert such a motion because it can
only be based on the Joint Stipulation, which is lacking. 4
Similarly, Defendant suggests that instead of its instant
motion, Plaintiff has the option to file a new lawsuit to assert
other remedies it may have.

Defendant does not explain what

those other remedies are, and such a contention is in direct
contradiction to its argument that the motion for default based
on the Joint Stipulation is Plaintiff’s only available remedy
under the settlement agreement.
The Court must construe the terms of the settlement
agreement based on their plain meaning, the circumstances
surrounding the settlement, and the ultimate purpose of the
agreement.

Through the settlement agreement, Defendant agreed

to pay Plaintiff $98,982.05 in nineteen payments.
does not dispute this.

Defendant

Defendant failed to make the last

4

Defendant does not argue that the lack of a Joint Stipulation
negates the entire settlement agreement.
8

payment, which breached the parties’ agreement.
not dispute this either.

Defendant does

Defendant’s only dispute is with

Plaintiff’s chosen remedy for Defendant’s admitted breach.

It

appears to the Court that Defendant’s interpretation of the
settlement agreement provides Plaintiff with no ability to
remedy Defendant’s breach.

The Court cannot find as a matter of

law that the parties intended for Plaintiff to have no ability
to obtain relief for Defendant’s admitted breach of their
agreement.

See, e.g., U.S. v. Winstar Corp., 518 U.S. 839, 870

n.15 (1996) (noting that “few contract cases would be in court
if contract language had articulated the parties’ postbreach
positions as clearly as might have been done, and the failure to
specify remedies in the contract is no reason to find that the
parties intended no remedy at all”).
Focusing on the plain language of the agreement rather than
on the title of Plaintiff’s motion, the agreement provides that
when Defendant failed to make a required payment, Plaintiff
would send Defendant a Notice of Default.

Defendant failed to

may the final payment on January 20, 2018, and on January 24,
2018 Plaintiff sent Defendant the Notice of Default via email.
The plain language of the agreement provides that when
Defendant failed to cure that default within seven business days
of receipt of the Notice of Default, all unpaid amounts would
become immediately due and payable to Plaintiff.
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Defendant did

not make its final payment to Plaintiff within seven business
days of receipt of the Notice of Default.

Therefore, as of

February 2, 2018, Defendant was obligated to immediately pay
Plaintiff the final payment.

Defendant failed to do so.

The remainder of the default provision in the parties’
agreement explains the procedure if a Joint Stipulation is held
by Plaintiff.

It also provides that in the event of an uncured

default, Plaintiff “shall be permitted” to file a default motion
to enforce the Joint Stipulation.

Nothing in this language,

however, requires Plaintiff to file a default motion. 5

The

agreement plainly provides that the parties agreed to allow
Plaintiff to file such a motion, but only if it chose to do so. 6
Moreover, nothing in this language limits Plaintiff’s remedies
for Defendant’s breach of its obligation to immediately pay

5

The Court notes that even if Defendant signed the Joint
Stipulation and Plaintiff filed a motion for default, the
settlement agreement only permitted Defendant to oppose the
motion if Defendant had not been provided with timely notice of
default or the amount Plaintiff claimed was in default was
incorrect. Defendant does not contend either error exists,
regardless of how Plaintiff styled its motion.
6

The Court also notes the irony of the defense that Plaintiff’s
remedy is limited by the failure of the Plaintiff to hold the
contemplated signed Joint Stipulation. There should be no
question that the agreement contemplated Defendant’s
acquiescence in such a stipulation and it would appear that if
Defendant had refused (as Plaintiff claims) to sign the
stipulation it would be in breach of the agreement. Equity
considers done what ought to be done. Defendant may not use its
own breach of the agreement to bar Plaintiff’s enforcement of
its essential terms.
10

Plaintiff the final payment.

Any limitations of a party’s

remedies for the other party’s breach must be specifically
agreed upon.

See, e.g., Kaur v. Assured Lending Corp., 965 A.2d

203, 208–09 (N.J. Super. Ct. App. Div. 2009) (“The circumstances
here reveal a settlement that incorporated within its terms a
series of installment payments with dates certain.

Payments

were made and accepted consistent with the terms of the
agreement until the default.

The only mention of remedy is

contained first in Paragraph IV, providing for enforcement (and
phrased as ‘may’) and Paragraph XI (phrased as ‘opportunity’).
In both instances, enforcement was not mandated but left to
plaintiffs’ choice as to when to enforce.”); id. (explaining
that a limitation of remedies should not be left to a “vague
suggestion,” but must be clearly set forth in the agreement).
When they resolved their dispute, Plaintiff and Defendant
agreed in their settlement agreement that this Court would
retain jurisdiction over the action to resolve “any dispute”
concerning the settlement agreement.

(Docket No. 62-3 at 6.)

The parties also agreed in their settlement agreement and in
their joint stipulation of dismissal that this Court would
retain jurisdiction over the action “to enforce the terms” of
the agreement.

(Docket No. 62-3 at 5; Docket No. 59.)

Under

the terms of the settlement agreement, since February 2, 2018
Defendant undisputedly has owed $77,982.05 to Plaintiff.
11

In

accordance with the parties’ agreements that this Court resolve
any dispute concerning the settlement agreement and enforce its
terms, the Court finds that Defendant has breached its
obligation under the agreement, and that Plaintiff is entitled
to $77,982.05.
4. Conclusion
The Court has been compelled to expend judicial resources
to determine what Defendant does not deny – that it owes
Plaintiff $77,982.05, and its failure to pay Plaintiff is a
breach of the parties’ settlement agreement.

The Court sees no

reason to delay granting Plaintiff’s motion to enforce the
settlement.

Plaintiff will have 15 days to provide to the Court

a proposed from of judgment.
An appropriate Order will be entered.

Date: May 15, 2018
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

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