DANNA v. EXPEDITIVE LLC

Filing 25

MEMORANDUM OPINION. Signed by Chief Judge Jerome B. Simandle on 1/4/2017. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

RHONDA DANNA,

HONORABLE JEROME B. SIMANDLE

Plaintiff,
Civil Action
No. 16-34 (JBS/JS)

v.
EXPEDITIVE, LLC,

MEMORANDUM OPINION
Defendant.

SIMANDLE, Chief Judge:
Before the Court is Plaintiff Rhonda Danna’s motion to
enforce settlement. [Docket Item 16.] For the reasons that
follow, the Court will deny Plaintiff’s motion.
1.

This case arises from Plaintiff Rhonda Danna’s

employment with Defendant Expeditive, LLC. (Complaint ¶ 3.)
Plaintiff avers that Defendant failed to pay overtime wages and
retaliated against her for reporting Defendant’s allegedly
unlawful compensation practices. (See generally Compl.)
Plaintiff brought this case before the Superior Court of New
Jersey, Law Division, Salem County, asserting claims under the
Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and New
Jersey state law. Defendant timely removed to federal court.
[Docket Item 1.]
2.

The parties began settlement negotiations at the

initial scheduling conference before Magistrate Judge Joel

Schneider on March 16, 2016. On May 9, 2016, the parties
reported the case settled, and the Court entered an Order of
Dismissal. [Docket Item 12.] Despite continued negotiations
between counsel over email and telephone (see Exhibits A-K to
Plaintiff’s Motion to Enforce Settlement), on June 2, 2016,
Plaintiff notified the Court that the parties had run into
substantial disagreements and requested that the Court reopen
the matter. [Docket Item 13.] Plaintiff then filed this motion
to enforce the settlement agreement. [Docket Item 16.] Plaintiff
takes the position in her motion that the parties entered into
an enforceable agreement over email on April 26, 2016 to settle
this case for $40,000, with payment due within 30 days.
Defendants argue that no contract was created because too many
terms material to the agreement were left open during the email
negotiations. Defendants further assert that negotiations broke
down when defense counsel “learned of a loan made by Defendant
to Plaintiff that was never paid back, in addition to an
unresolved dispute regarding health coverage premiums.”

Def.

Br. at 3 [Docket Item 24].
3.

The construction and enforcement of settlement

agreements is governed by state law. Excelsior Ins. Co. v.
Pennsbury Pain Ctr., 975 F. Supp. 342, 348-49 (D.N.J. 1996).
Under New Jersey law, a “settlement between parties to a lawsuit
is a contract like any other contract.” Peskin v. Peskin, 638
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A.2d 849, 856 (N.J. App. Div. 1994). “A contract arises from
offer and acceptance, and must be sufficiently definite so that
the performance to be rendered by each party can be
ascertainable with reasonable certainty.” Weichert Co. Realtors
v. Ryan, 608 A.2d 280, 284 (1992). “Therefore parties create an
enforceable contract when they agree on its essential terms and
manifest an intent that the terms bind them.” Baer v. Chase, 392
F.3d 609, 619 (3d Cir. 2004) (citing West Caldwell v. Caldwell,
138 A.2d 402, 410 (N.J. 1958)).
4.

The emails provided by Plaintiff in her briefing make

clear that no binding contract was created at any point between
April 26, 2016 and June 1, 2016. While the parties unequivocally
agreed that Defendant would pay $40,000 in exchange for
Plaintiff releasing all claims, the parties never set the time
for performance of the settlement agreement. “[T]he duration of
the contract is deemed an essential term and therefore any
agreement must be sufficiently definitive to allow a court to
determine the agreed upon length of the contractual
relationship.” Baer, 392 F.3d at 619. Even if the tax treatment
of Plaintiff’s settlement is not considered an “essential” term,
despite email evidence that it was a “potential deal breaker,”
see Exhibit D, and even if the Court assumes that counsel had
the authority to settle the case at any time, despite
discussions in the emails of needing client approval regarding
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language in the agreement, see Exhibit H, the parties’ failure
to agree on the time of performance prevents the creation of an
enforceable agreement.
5.

The continued negotiation of when payment would be due

belies Plaintiff’s contention that performance was set for 30
days from April 26. See Exhibit B. Plaintiff’s counsel needed to
request a further update “on the timing issue” on May 6. Exhibit
C. On May 12, plaintiff’s counsel asked again “Can we make it
[payment] 30 days from the date we came to agreement?” Exhibit
D. The time for performance was still open as of May 23, when
plaintiff’s counsel wrote over email that “Time remains a huge
concern.” Exhibit H. Plaintiff was still open to negotiating the
timing of her payment on May 26, when her counsel offered to
accept tax withholding in exchange for payment by June 1.
Exhibit I. Critically, plaintiff’s counsel conceded on June 1
that “At the very least I thought we had agreed on the
settlement figure if [sic] 40,000 and were discussing only taxes
and timing.” Exhibit K. Because the parties never agreed on
several essential terms of the purported contract – the time for
performance, the tax treatment of such payment, and the
resolution of the asserted loan and health insurance premium
debts that were discovered while negotiations were onging – no
binding contract was formed.

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6.

For this reason, the Court will deny Plaintiff’s

motion to enforce settlement. The parties shall meet before
Magistrate Judge Joel Schneider for a renewed initial scheduling
conference at Judge Schneider’s direction.

January 4, 2017
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

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