PAREDES et al v. EGG HARBOR TOWNSHIP BOARD OF EDUCATION et al
Filing
37
MEMORANDUM OPINION AND ORDER granting Defendants 19 Motion to Enforce Settlement and 23 Motion for Settlement. ORDERED that EHT, EHT Police Dept., and Officer Bower are dismissed from this case. ORDERED that EHT High School is not a party to the settlement and shall not be dismissed. ORDERED that the alternative request of Bower to disqualify Thomas P. Lutz, Esq. is DENIED as moot. Signed by Magistrate Judge Joel Schneider on 5/2/2016. (TH, )
[Doc. Nos. 19, 23]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
DICKSON HIDALGO PAREDES, et
al.,
Plaintiffs,
Civil No. 15-2929 (JBS/JS)
V.
CITY OF ATLANTIC CITY, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
This Opinion addresses whether plaintiffs’ attorney entered
into an oral settlement agreement with the moving defendants
that binds plaintiffs. The answer is yes.
Therefore, the moving
defendants will be dismissed.
This matter is before the Court on the “Motion to Enforce
Settlement or in the Alternative to Disqualify Thomas P. Lutz,
Esquire as Counsel for Plaintiff” [Doc. No. 19]. The motion was
first
filed
by
defendant
Police
Officer
James
M.
Bower
(“Bower”). Thereafter, essentially the same motion was filed by
defendants Egg Harbor Township (“EHT”) and Egg Harbor Township
Police Department (“EHTPD”) [Doc. No. 23]. 1 The Court received
the opposition of plaintiffs [Doc. Nos. 27, 29, 34] and the
1
EHT and EHTPD will be treated the same because they are not
separate legal entities.
1
replies of Bower [Doc. Nos. 28, 33], and recently held oral
argument
and
an
counsel,
Thomas
hearing. 2
evidentiary
P.
Lutz,
Esquire
Bower
(“Lutz”),
and
plaintiffs’
testified
at
the
hearing. Lutz represents plaintiffs Dickson Hidalgo Paredes and
his minor son, D.V.R. Pursuant to 28 U.S.C. '636(c), the parties
consented
to
the
jurisdiction
of
this
Court
to
decide
this
motion. Transcript (“Tr.”) of January 28, 2016 Hearing 5:9 to
6:7.
Background
At all relevant times Bower was a police officer with the
Atlantic City Police Department (“ACPD”) and his teenage son
(Jim) was a student at EHT High School. After Jim’s iPhone went
missing
on
January
9,
2014,
an
iPhone
tracker
indicated
the
phone was located at 7 Glen Drive, Egg Harbor Township, Atlantic
County, New Jersey.
This was the address of plaintiff’s son
(D.V.R.) who was acquainted with Jim from high school. After the
iPhone tracker was activated, Bower called the EHTPD and then
went to D.V.R.’s residence at 6 Glen Drive.
The parties dispute what happened at 6 Glen Drive. The long
and short of it is that plaintiffs claim Bower and members of
the EHTPD illegally entered and searched his home. Bower denies
2
On a disputed motion to enforce a settlement, a hearing must be
held to establish the facts unless the facts are uncontroverted.
Polanco v. Dabney, 2015 WL 357830, at *4 (N.J. App. Div. Jan.
29, 2015).
2
this
occurred.
Subsequent
to
January
9,
2014,
D.V.R.
was
suspended from EHT High School.
On
January
10,
2014,
Bower
filed
a
criminal
complaint
against D.V.R. with the Juvenile Delinquency Chancery Division,
Family Part, Atlantic County. Bower Exhibit (“Exh.”) A. When
Bower appeared at the Intake Services Conference on March 27,
2014, Lutz represented D.V.R. and his father. Lutz requested and
was granted a postponement. In the meantime, on April 4, 2014,
Lutz
served
Atlantic
City
and
EHT
with
a
Tort
Claim
Notice
pursuant to N.J.S.A. Title 59:8-4. Exh. D.
The second court appearance was on April 10, 2014. Although
the parties appeared on that date, the scheduled proceeding was
postponed at the parties’ request. On that date, however, Bower
told Lutz he wanted to “drop the charges” after Lutz told him
D.V.R. was suspended from school for ten (10) days. Tr. 18:1624. Bower, Lutz, plaintiff and/or D.V.R. also spoke about what
happened and shook hands. Tr. 19:20 to 20:18. After Bower left
it was his impression that if he dropped the charges against
D.V.R. plaintiffs would drop the “Tort Claim.” Tr. 20:10-13.
Subsequent
to
these
discussions
Lutz
left
two
voicemail
messages for Bower. 3 Lutz’s April 23, 2014, voicemail message
stated as follows:
3
Bower provided the Court with a CD that contained the voice
mail messages. The parties stipulated to the authenticity of the
messages. The Court transcribed the messages.
3
This is Tom Lutz, the attorney for that kid and his
father. It’s around 2:00 on Wednesday. I just wanted
to touch base with you. My client and his father they
want to dismiss Tort Claims idea.
I think I can
withdraw the Tort Claims Notice. They would do that. I
was just wondering if you have you touched based with
any of your bosses and if they are going to have a
problem with us doing this. I could always draft
something like a little very very short kind of
agreement saying that if you are willing to dismiss it
I will notify EHT and AC that we are going to withdraw
the Notice of Tort Claim and agree not to ever file
anything on that case at all.
If you want to give me a call if you want any
information from me just give me a call, 609-xxx-xxxx.
I didn’t call the EHT’s attorney Mark Freidman yet. I
was going to but I said let me see if I have any
information
from
you.
Any
feedback
from
your
department.
Alright. I’ll check my email later and maybe we can
talk tomorrow or Thursday.
Thanks a lot. Bye.
Lutz’s April 28, 2014, voicemail message to Bower stated:
Hey Jim, this is Tom Lutz, the attorney. Got your VM
this morning. Um, yeah, I figured you didn’t, I
figured you were busy last week and maybe you didn’t
hear something back from your department but I’m glad
you called me. Um, I gotta call that lady today down
at the courthouse or else she is going to reschedule
this and we are all going to have to show up again.
But here is what I will do. If you want to, if you
feel ok to giving me your email address, I can email
what I am going to put together. Like a one page
Release saying that we are going to drop the Tort
Claims Notice and we are not going to do anything when
the two years comes up or when the six months period
ends--that lockout period. And I’ll just put in there
that in exchange for us doing that you will dismiss
the charge. And, since your office said that they did
not have a problem with it, I don’t think EHT is going
[to] have a problem with it either. Mark Freidman, you
know, few weeks ago said, you know, that they didn’t
really care what happens. It’s you, your private
4
complaint. Um, you know, but anyway we can dismiss and
you can dismiss. And then if EHT wants to say
something down the road, then they can. If you want to
give me your email address and I will give you mine.
It’s my initials tl.kloffices@gmail.com. I used to be
Kerstetter and Lutz. So its tl.kloffices@gmail.com. If
you want to shoot me off just something saying, yeah
email me that letter Tom. I’ll do that to you. If you
like it you can change it whatever. But, at least I
can tell the lady at the court that hey we’re are
working on a dismissal and see just will both have to
sign it, and we will mail it in. Email me and I will
get your email address off the, you know, what you
sent to me. And I’ll get that off to you today.
Thanks Jim, Bye.
After receiving this second voice mail message Bower sent
Lutz an email on April 28, 2014 at 11:43 a.m. (Exh. G), which
stated:
Hey Tom, Whatever I have to do on my end you have my
full cooperation.
J Bower.
Bower testified that in effect he told Lutz he would cooperate
fully
to
drop
the
charges
against
D.V.R.
in
exchange
for
plaintiffs dropping the “Tort Claim.” Tr. 23:1-7.
Lutz responded to Bower’s email on April 28, 2014 at 2:27
p.m. (Exh. G) and forwarded a Release. The email reads:
Jim:
Attached is a draft of a Mutual Release. Please read
it and see if it makes sense. I will add whatever
you, or your Police Department, wants added.
I did not mention your son because I did not think
his name needs to be in it. You can have your
office, or the EHT P.D. Of course, look at the
Release before we all sign it. I just want to be
able to call that woman at the Court whom we spoke
5
to last week and
reviewed by all.
say
we
have
a
Release
being
When we have a final draft, I can meet my clients,
witness them sign, and then, if you like, I can meet
you separately (maybe at the Wawa at the corner of
Ocean Heights and English Creek Ave. near my house) to
witness you sign.
Or you can have your own notary
witness it after I see my clients sign the final
draft and then give it to you.
Let me know what you think. By the way, if we all
sign, and then somebody (like EHT's attorney) wants
something else added, my clients will not have a
problem amending/adding to it. I just don't want to
have the woman at the Court need to reschedule an
appearance for everyone, although I can see her
saying we need to reappear before her to sign
something she has prepared.
Her name is: Ms. Joleen Peterson; phone # xxx-xxxx.
I am going to call her now and say we have a Release
in the works, but not fully signed.
Thanks,
Tom Lutz, Esq.
Exhs. G, H. In sum and substance, the Release provided that
Bower
would
dismiss
the
criminal
charge
against
D.V.R.,
and
plaintiff and D.V.R. would withdraw their notice of Tort Claim
and
dismiss
with
prejudice
all
claims
or
potential
claims
against Bower, the ACPD and the EHTPD. Exh. H.
The next communication between Bower and Lutz was on May 5,
2014 at 10:08 a.m., when Bower sent the following email (Exh. I)
confirming that he withdrew his criminal complaint that morning.
(Tr. 32:19 to 33:33).
6
Hey Tom it's Jim Bower the charges have been withdrawn
as of 5/5/14. Let's get this behind us, I'm sure you
have more important cases to deal with. Thanks for
your integrity. That means more to me than a signed
piece of paper.
Jim Bower
The signed withdrawal Bower filed with the Chancery DivisionFamily Part, Atlantic County (Dkt. No. FJ-01-734-14) (Exh. L)
states:
I do hereby certify that the matters and differences
between the defendant and myself have been amicably
resolved to my full satisfaction. I do hereby
respectfully request that the complaint heretofore
signed by me in the above matter be withdrawn and that
these proceedings be dismissed.
I certify that I am making this request voluntarily,
without any force or duress or promise of reward from
defendant or anyone else.
Bower thought “the matter was behind us” and “over” when he
withdrew the charges. Tr. 34:13-19.
After Bower confirmed with Lutz that the criminal complaint
was withdrawn, Lutz emailed Bower on May 5, 2014 at 12:06 p.m.
(Exh. I) and stated:
Jim:
If you have not withdrawn the charge yet, you may
want to wait. I have a letter drafted to the
Atlantic City Dept. of Law and Egg Harbor Township
Dept. of Law asking for certain assurances from them
because only they can give my clients these
assurances. For example, my clients will want to have
records of the ten day high-school suspension
removed from the juvenile’s record. I also need
their legal departments' permission to approve any
mutual release that we may enter. And I'm asking
7
them both for their consent to have me discuss these
matters further with you.
The problem is that neither legal department has
reached out to me. So, I need to get some input from
them before we resolve anything between you and my
clients. My letters to A.C. and E.H.T. are done and
being mailed today. They may respond to me by saying
they don’t want me to have any further communication
with you. I hope they do not take such a position,
but they may. I will let you know what they say.
Thank you.
Sincerely,
Thomas P. Lutz, Esq.
Bower did not respond to Lutz’s email. Nor did Lutz get
back in touch with Bower as he wrote he would. The next Bower
heard from plaintiffs was when he was served with plaintiffs’
federal court complaint that was filed on April 26, 2015. The
named
defendants
are
the
City
of
Atlantic
City,
New
Jersey,
ACPD, EHT, EHTPD, EHT High School and Police Officer James M.
Bower. Plaintiffs also named John Doe and ABC parties. On April
28, 2015, the Internal Affairs Section of the ACPD acknowledged
to Lutz that it received plaintiff’s complaint about the alleged
improper arrest on January 9, 2014. Exh. M. Bower acknowledged
notification from Internal Affairs on April 28, 2016. Exh. N.
Bower argues that as soon as he dropped the criminal charge
against
D.V.R.
there
was
a
binding
oral
agreement
that
plaintiffs would drop all claims against himself, the ACPD and
the EHTPD. Tr. 59:3-25. Plaintiffs argue there was no binding
agreement until a Release was signed. Plaintiffs also argue the
8
settlement was contingent on D.V.R.’s suspension being removed
from his school records. In response, Bower argues Lutz never
mentioned before he withdrew the charges against D.V.R. that the
release of all claims was contingent or conditioned on D.V.R.’s
suspension being removed from his school records. Tr. 57:25 to
58:20; 59:3-6. Plaintiffs argue the real reason Bower withdrew
the charges against D.V.R. was because he regretted his actions
and
he
was
“anxious”
about
the
ACPD’s
Internal
Affairs
investigation. Tr. 78:12-21. Plaintiffs also argue there was no
binding agreement because Bower did not withdraw his criminal
complaint
with
complaint
was
prejudice.
dismissed
Bower
with
responds
prejudice
by
and
arguing
that
his
after
he
withdrew the charges he had no intention of changing his mind.
Tr. 61:10-13. Plaintiffs also argue that Bower waited too long
to
raise
his
“settlement”
defense
and
this
demonstrates
the
defense is not viable.
At bottom, the Court must decide whether Bower and Lutz
entered
into
a
binding
oral
settlement
agreement
that
Bower
would drop the criminal charge against D.V.R. in exchange for
plaintiffs releasing their claims against Bower, the ACPD and
the EHTPD. As discussed herein, the Court holds that Bower and
Lutz
entered
into
an
oral
settlement
agreement
binding
plaintiffs and, therefore, Bower, the ACPD, EHT and the EHTPD
shall be dismissed from the case.
9
Discussion
The construction and enforcement of the parties’ alleged
settlement agreement is governed by principles of New Jersey
contract law. Plymouth Mutual Life Ins. Co. v. Illinois MidContinent Life Ins. Co. of Chicago, Ill., 378 F.2d 389, 391 (3d
Cir. 1967); Pacific Alliance Grp. Ltd. v. Pure Energy Corp.,
C.A. No. 02-4216 (DRD), 2006 WL 166470, at *2 (D.N.J. Jan. 23,
2006).
Under
New
Jersey
law
a
settlement
agreement
between
parties to a lawsuit is a separate and independent contract from
the underlying dispute. Plymouth Alliance Grp., at *2 (citation
omitted).
“The
burden
is
on
the
moving
party
[in
this
case
Bower] to establish that the parties entered into a contract of
settlement.” LNT Merch. Co. v. Dyson, Inc., C.A. No. 08-2883
(SRC),
2009
WL
2169236,
at
*2
(D.N.J.
July
21,
2009)(citing
Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475 (App. Div. 1997));
United States v. Lightman, 988 F. Supp. 448, 458 (D.N.J. 1997).
A
settlement
agreement
is
a
form
of
a
contract
and
may
be
enforced even if it is not in writing. Pascerella v. Bruck, 190
N.J. Super. 118, 124 (App. Div. 1983)(“That the agreement to
settle was orally made is of no consequence[.]”).
New Jersey public policy favors settlements of litigation.
See
Nolan
However,
by
Nolan
v.
Lee
notwithstanding
the
Ho,
120
policy
N.J.
465,
favoring
472
(1990).
settlements,
a
settlement “should not be enforced where there appears to have
10
been an absence of mutuality of accord between the parties or
their
attorneys
in
some
substantial
particulars,
or
the
stipulated agreement is incomplete in some of its material and
essential terms.” McDonnell v. Engine Distributors, C.A. No. 031999, 2007 WL 2814628, at *3 (D.N.J. Sept. 24, 2007) (citation
and quotation omitted).
In order to have an enforceable settlement there “must be a
‘meeting of the minds’ for each material term to an agreement.”
Pacific Alliance, at *3 (citing Sampson v. Pierson, 140 N.J. Eq.
524 (N.J. Ch. 1947)). “A meeting of the minds occurs when there
has been a common understanding and mutual assent of all the
[material] terms of a contract.” Knight v. New England Mut. Life
Ins. Co., 220 N.J. Super. 560, 565 (App. Div. 1987). The meeting
of the minds requirement is an essential element to the valid
formation of all contracts. Am. Furniture Mfg. Inc. v. Value
Furniture
&
Mattress
Warehouse,
2009
WL
88922,
at
*2
(N.J.
Super. Ct. App. Div. Nov. 18, 2008). Where the parties do not
agree to one or more essential terms, courts generally hold that
an agreement is unenforceable. Weichert Co. Realtors v. Ryan,
128 N.J. 427, 435 (1992).
Objective
manifestations
of
intent
are
controlling
when
determining if there is a meeting of the minds. See Brawer v.
Brawer,
329
N.J.
Super.
273,
283
(App.
Div.
2000)(citation
omitted)(“A contracting party is bound by the apparent intention
11
he
or
she
outwardly
manifests
to
the
other
party.
It
is
immaterial that he or she has a different, secret intention from
that outwardly manifested.”); Leitner v. Braen, 51 N.J. Super.
31, 38 (App. Div. 1958)(“The phrase, ‘meeting of the minds,’ can
properly
mean
only
the
agreement
reached
by
the
parties
as
expressed, i.e., their manifested intention, not one secret or
undisclosed, which may be wholly at variance with the former.”).
“Where
there
is
a
misunderstanding
between
the
parties
pertaining to one of the material terms of an agreement, there
is no meeting of the minds, and therefore no contract.” Pacific
Alliance Grp., at * 3; see also D.R. by M.R. and B.R. v. East
Brunswick Bd. of Educ., 838 F. Supp. 184, 191-92 (D.N.J. 1993)
(“[A] contract cannot be made when there has been no common
understanding and mutual assent to the terms of a contract.”);
Big M, Inc. v. Dryden Advisory Grp., C.A. No. 08-3567 (KSH),
2009 WL 1905106, at * 22 (D.N.J. June 30, 2009) (finding no
meeting of the minds where the parties did not attach the same
meaning to a contract term).
Having
heard
the
live
testimony
of
Bower
and
Lutz,
and
having reviewed the communications in evidence, the Court is
convinced that Bower and Lutz entered into an oral settlement
agreement
that
binds
plaintiffs.
Pursuant
to
the
agreement,
plaintiffs agreed to release their claims against Bower, the
ACPD
and
the
EHTPD,
if
Bower
12
dismissed
the
criminal
charge
against D.V.R. Bower fulfilled his part of the agreement on May
5, 2014 when he dismissed the criminal charge against D.V.R. As
soon
as
the
charge
was
dismissed,
the
settlement
agreement
became effective. Thus, plaintiffs’ claims against Bower, the
ACPD and the EHT/EHTPD will be dismissed.
As
already
noted,
the
parties
may
enter
into
an
oral
agreement to settle if they agree upon the material terms of
their settlement. Further, an oral settlement agreement need not
be made in the presence of the court nor reduced to writing in
order to have legal effect. Pascerella, supra; Lang v. Tewksbury
Township, C.A. No. 10-2564 (MLC), 2012 WL 503677, at *2 (D.N.J.
Feb. 15, 2012). This is precisely what occurred here. At all
relevant times Lutz made it clear that his clients were willing
to withdraw their “Tort Claim” if Bower withdrew his complaint. 4
On April 23, 2014, Lutz told Bowers, “I think I can withdraw the
Tort Claims Notice…. I will notify EHT and AC that we are going
to withdraw the Notice of Tort Claim and agree not to ever file
anything on that [D.V.R.] case at all.” On April 28, 2014, Lutz
told Bowers:
But here is what I will do. If you want to, if you
feel ok to giving me your email address, I can email
4
It is clear from the parties’ actions and the context of the
parties’ discussions, that when they referred to the “Tort
Claim” or “Tort Claims,” they intended that all claims against
Bowers, the ACPD and the EHTPD would be dismissed or withdrawn.
In fact, plaintiffs do not contest the assertion that “Tort
Claims” refers to all of plaintiffs’ claims and not just those
which required notice pursuant to N.J.S.A 59:8-4.
13
what I am going to put together. Like a one page
Release saying that we are going to drop the Tort
Claims Notice and we are not going to do anything when
the two years comes up or when the six months period
ends--that lockout period. And I’ll just put in there
that in exchange for us doing that you will dismiss
the charge…. Um, you know, but anyway we can dismiss
and you can dismiss.
Bower’s email later the same day agreed with Lutz’s settlement
terms. Bower wrote, “Hey Tom, whatever I have to do on my end
you have my full cooperation.” The Release Lutz sent Bower on
April
28,
Release
2014
confirmed
provided
complaint
with
that
the
if
prejudice,
parties’
Bower
settlement
dismissed
plaintiffs
terms.
D.V.R.’s
would
The
criminal
dismiss
with
prejudice all claims or potential claims against James Bower and
the AC and EHT Police Departments. The Release Lutz sent Bower
specifically reads:
MUTUAL RELEASE
This Mutual Release dated April
, 2014 is given by
Dickson Hidalgo Paredes and his son (D.V.R.].
…
WHEREAS, the three individuals Mr. Bower, Mr. Paredes,
and his son [D.V.R.], have agreed to dismiss the
complaint and Notice of Tort Claim, the three
Releasors agree to the following:
…
2.
Dickson Hidalgo Paredes, and his son [D.V.R], (a
juvenile) will withdraw the Notices of Tort Claim
filed against the Atlantic City Police Dept., the Egg
Harbor
Township
Police
Dept.,
and
dismiss
with
prejudice all claims or potential claims against James
Bower and both Police Departments.
14
On
May
5,
complaint.
2014,
(“Hey
Bower
Tom
confirmed
its
Jim
to
Bower.
Lutz
The
he
withdrew
charges
have
his
been
withdrawn as of May 5, 2014.” Exh. I).
The
foregoing
unmistakingly
complaint
clear
plaintiffs
voice
that
would
and
if
email
Bower
dismiss
exchanges
dismissed
and
make
his
release
it
criminal
their
claims
against Bower, the ACPD and the EHTPD. The settlement agreement
was effective as soon as Bower dismissed his complaint against
D.V.R. Lutz’s contrary arguments are not persuasive.
Lutz
argues
the
parties’
settlement
agreement
was
not
effective until a Release was signed. However, this position is
belied by the parties’ written communications. Nowhere did Lutz
state that the parties’ settlement was contingent or conditioned
on a signed Release. The Court does not find credible Lutz’s
account that he indicated to Bower the settlement was contingent
on a signed Release. See generally Tr. 66:12 to 69:25. The Court
finds that if this were the case the condition would have been
specifically spelled out in Lutz’s voice and email messages.
This was not done. Although there were fleeting references to a
Release in some of Lutz’s communications, he never indicated the
settlement was conditioned on a signed Release. It is of no
moment that Lutz may have subjectively wanted a signed Release.
This is so because a contract only arises from the “manifest
intention
of
the
parties.”
Finocchairo
15
v.
Squire
Corrugated
Container Corp., C.A. No. 05-5154 (SRC), 2008 WL 305337, at *3
(D.N.J. Jan. 28, 2008 (citation and quotation omitted). Lutz
never manifested an intention that a signed Release was a precondition to a final settlement. A party’s secret or different
intention from what is outwardly manifested is not controlling.
Brawer, 329 N.J. Super. at 283. (“[O]bjective manifestations of
intent are sufficient and controlling.”). Before Bower withdrew
his
complaint
Lutz
never
manifested
that
a
Release
must
be
signed before the Release became effective.
Lutz insists he required a signed Release to settle. His
Reply Certification [Doc. No. 34] states at &7, “I chose to
require
both
Settlement
Mr.
Paredes
and
Agreement/Release.”
D.V.R.
to
(Emphasis
in
approve
a
final
original).
This
argument fails because Lutz never expressed or manifested this
intention
to
Bower.
Lutz’s
unexpressed
intentions
are
not
controlling. Lutz argues, “Officer Bower knew [Lutz] required
both
[plaintiffs’]
signatures.
And
I
never
waived
that
requirement.” Id. To the contrary, Bower justifiably believed
his
settlement
agreement
was
effective
when
he
withdrew
his
complaint. Tr. 34:13-17; 48:1-3; 59:16-25. The key email Lutz
relies upon is from April 28, 2014 (Exh. G) when he sent Lutz a
“draft of a Mutual Release.” Although Lutz indicates his client
will review and sign the Release, Lutz never indicated in this
or any other communication that a signed Release was a condition
16
to settling. This being the case, Bower had no reason to believe
anything other than the fact that if he withdrew his complaint
the “deal was done.” The fact that Bower did not believe a
signed Release was a condition to settling is evidenced by his
May 5, 2014 email (Exh. I) where he told Lutz, “[t]hanks for
your integrity. That means more to me than a signed piece of
paper.”
It
also
is
of
no
moment
that
Lutz
contemplated
that
a
Release would eventually be signed. In other words, a signed
Release is not a sine qua non for a binding settlement. Oral
settlements are binding even when the parties contemplate the
later
execution
of
a
formal
document
to
memorialize
their
undertaking. Holland v. New Jersey Resources Corp., C.A. No. 1207858, 2013 WL 3288162, at *2 (D.N.J. June 28, 2013)(citation
and quotation omitted); Finocchiaro, at *3 (“[A]n oral agreement
as to the essential terms of a settlement is valid even though
the parties intend to reduce their agreement to a formal writing
at a later time”); Bowles v. New York Liberty, C.A. No. 11-3529
(ES), 2014 WL 7148916, at *2 (D.N.J. Dec. 15, 2014)(citation
omitted)(“If
the
negotiations
are
finished
and
the
contract
between the parties is complete in all its terms and the parties
intend
that
although
it
lacking
shall
in
be
binding,
formality
17
then
and
it
is
although
enforceable,
the
parties
contemplate
that
a
formal
agreement
shall
be
drawn
and
signed.”).
In another attempt to defeat Bower’s motion, Lutz argues
the
settlement
was
contingent
on
EHT
removing
D.V.R.’s
suspension. This argument is rejected. Lutz did not mention this
issue
to
Bower
until
after
the
parties
agreed
on
their
settlement terms and until after Bower withdrew his complaint.
Tr.
58:10-20.
As
already
discussed,
once
the
complaint
was
withdrawn the settlement agreement was effective. The removal of
D.V.R.’s suspension was an afterthought that occurred to Lutz
after the parties’ oral agreement became effective. A contract
is
enforceable
if
the
parties
agree
on
essential
settlement
terms and manifest an intention to be bound by those terms.
United States v. Lightman, 988 F. Supp. at 458. The removal of
D.V.R.’s suspension was not an agreed upon settlement term. The
fact that this was an afterthought on Lutz’s part is evidenced
by Lutz’s testimony that the removal of D.V.R.’s suspension did
not occur to him until after he sent the Release to Bower. Tr.
93:14 to 94:19. The Court finds that it was not until after
Bower withdrew his criminal complaint that Lutz first mentioned
the removal of D.V.R.’s suspension. By that time the parties’
settlement agreement was binding.
Lutz
argues
the
parties’
settlement
was
not
effective
because Bower did not withdraw his complaint with prejudice.
18
This argument is also meritless. Bower unquestionably withdrew
his
complaint
and
no
one
can
seriously
argue
there
is
a
possibility of reinstatement. Further, Bower satisfied his end
of the parties’ agreement because a withdrawal is with prejudice
unless “without prejudice” language is mentioned; this did not
occur
here.
Bower
confirmed
he
intended
to
withdraw
his
complaint with prejudice which is evidenced by the fact he never
sought to reinstate his complaint. Tr. 61:10 to 62:9. This is
true even though plaintiffs are trying to back out of their
agreement. Further, it would be inherently unfair to Bower if
his
settlement
is
now
voided
since
plaintiffs
have
already
enjoyed the “benefit of the bargain,” i.e., Bower withdrew the
criminal complaint against D.V.R. with prejudice.
Lutz argues the real reason Bower withdrew his complaint
was because he was anxious about the ACPD’s Internal Affairs
investigation
and
not
because
of
the
parties’
settlement
agreement. See Sur-Reply Certification of Lutz, &&5-6, 10 [Doc.
No. 29]. This argument is debunked by the fact that Bower’s
complaint
was
involvement
of
withdrawn
the
long
ACPD’s
before
Internal
he
was
Affairs
notified
section.
of
the
Bower
withdrew the criminal complaint on May 5, 2014. The earliest
date Bower was notified of the involvement of Internal Affairs
was on April 28, 2016, almost two (2) years later.
19
Last, Lutz argues Bower waited too long after his May 5,
2014
email
to
raise
the
defense
of
the
parties’
settlement
agreement. Lutz implies that because Bower did not raise the
issue right after his May 5, 2014 email, this shows Bower’s
defense lacks credibility. This argument is rejected. Bower is
not a lawyer and has no formal legal training. He did not know
or have reason to believe Lutz would use his silence against
him. Further, after the complaint was filed Bower did not wait
an inordinate amount of time to file the present motion. 5
Although the Court finds there was a binding oral agreement
to settle, the Court is compelled to make it clear who is and
who is not included in the settlement. The only parties who
settled
and
who
released
claims
against
each
other
are
plaintiffs, Bower, the ACPD and the EHTPD. EHT High School did
not settle and remains a party to the case. Further, the parties
only agreed to settle and release the EHTPD. The parties did not
settle and release the EHTPD’s individual police officers. This
was never discussed in the context of the parties’ settlement
discussions. This is also evidenced by the fact that individual
5
To the extent necessary, the Court deems Bower’s answer to
include an affirmative defense of release. The same is true for
EHT/EHTD. See Feuerstein v. Simpson, 582 Fed. Appx. 93, 97 n.3
(3d Cir. 2014)(a court may sua sponte grant leave to amend on
its own initiative).
20
EHT police officers were not included or even mentioned in the
Release Lutz prepared. 6
Conclusion and Order
Accordingly, for all the foregoing reasons,
IT IS HEREBY ORDERED this 2nd day of May, 2016, that the
motions
to
defendants
Department,
enforce
Egg
the
Harbor
plaintiffs’
Township,
Atlantic
City
settlement
Egg
Police
Harbor
agreement
Township
Department
and
with
Police
Police
Officer James M. Bower, filed by defendants Bower and by Egg
Harbor Township and the Egg Harbor Township Police Department,
are GRANTED. These parties shall be dismissed from the case. 7 EHT
High School is not a party to the settlement agreement and shall
not be dismissed; and it is further
6
To be clear, plaintiffs do not dispute the general proposition
that Lutz had authority to enter into a binding settlement
agreement. See Reply Certification of Lutz at &3. Nevertheless,
even if plaintiffs denied Lutz had this authority the argument
would be rejected because of Lutz’s apparent authority. Where a
client’s words or conduct communicated to its adversary creates
a reasonable belief that the attorney possesses authority to
conclude a settlement, the settlement may be enforced. Amatuzzo
v. Kozmiuk, 305 N.J. Super. 469, 475 (App. Div. 1997). Lutz’s
continuous settlement negotiations and the fact that plaintiffs
never objected to Lutz’s negotiations, created a reasonable
belief on Bower’s part that Lutz had the apparent authority to
bind plaintiffs. At all relevant times Lutz was held out as
plaintiffs’ attorney with authorized settlement authority.
7 As noted, EHT and the EHTPD are not separate legal entities.
Tr. 98:22 to 99:11.
21
ORDERED that the alternative request of Bower to disqualify
Thomas P. Lutz, Esquire, as counsel for plaintiffs is DENIED as
moot. 8
s/Joel Schneider
JOEL SCHNEIDER
United States Magistrate Judge
8
For completeness sake the Court adds that plaintiffs do not
argue that Lutz lacked the authority to bind the minor
plaintiff. In any event, Bower cites authority that this is
permitted. Roe v. Gunnery, Inc., HHDCV 115035705, 2013 WL
1849284 (Conn. Super. Ct. Apr. 10, 2013)(binding the minor
plaintiff to an oral settlement agreement entered into by his
attorney and refusing to void the “contract”).
22
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