Stewart v. N.Y.C. Police Dept. et al

Filing 102

REPORT AND RECOMMENDATION re: 91 MOTION for Settlement enforcement of agreement reached at conference on April 11, 2017 filed by T. Fischer, R. Henriquez, City of New York. For the reasons articulated above, I recommended denyin g the defendants' motion (Docket no. 91). Pursuant to 28 U.S.C. § 636 (b) (1) and Rules 72, 6 (a), and 6 (d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of the Court, with extra copies delivered to the Chambers of the Honorable Analisa Torres, Room 2210, 500 Pearl Street, New York, New York 10007, and to the Chambers of the undersigned, Room 1960, 500 Pearl Street, New York, New York 10007. Failure to file timely objections will preclude appellate review. (Objections to R&R due by 11/3/2017.) (Signed by Magistrate Judge James C. Francis on 10/20/2017) Copies Transmitted this Date By Chambers. (anc)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - -:
WAYNE STEWART,
:
15 Civ. 7652 (AT) (JCF)
:
Plaintiff,
:
REPORT AND
:
RECOMMENDATION
- against :
:
CITY OF NEW YORK, DET. R.
:
HENRIQUEZ #2495, and DET. T.
:
FISCHER #7760,
:
:
Defendants.
:
- - - - - - - - - - - - - - - - - -:
TO THE HONORABLE ANALISA TORRES, U.S.D.J.:
Wayne Stewart brings this action against the City of New York
and Detectives “R. Henriquez” and “T. Fischer” pursuant to 42
U.S.C. § 1983; Title II of the Americans’ with Disabilities Act,
42 U.S.C. §§ 12101-12132; and Section 504 of the Rehabilitation
Act of 1973, 29 U.S.C. § 794 et seq.

Mr. Stewart alleges that

during his arrest and detention from July 20, 2014, to July 26,
2014, the defendants denied him: (1) use of his wheelchair, (2)
use

of

his

transportation,

medical

cushion,

and

other

(4)

(3)

medical

wheelchair-accessible
assistance.

At

an

undocumented settlement conference held before me on April 11,
2017, the plaintiff agreed to release the defendants in exchange
for a sum of money, but after receiving proposed settlement papers
from the defendants, the plaintiff did not sign the papers or
perfect the agreement.

The defendants have moved to enforce the

1

April 11, 2017 oral agreement.

For the reasons stated below, I

recommend denying the defendants’ motion.
Discussion
A settlement agreement is a contract and is interpreted
according to principles of contract law.
F.3d 124, 128 (2d Cir. 2007).

Powell v. Omnicom, 497

The question of whether federal

common law or state law applies to the enforcement of settlement
agreements is unsettled in this Circuit, but because there is no
material difference between the New York and federal standards,
there is no need to decide that question here.

See Kaczmarcysk v.

Dutton, 414 F. App’x 354, 355 (2d Cir. 2011); Ciaramella v.
Reader’s Digest Association, Inc., 131 F.3d 320, 322 (2d Cir.
1997).
Under New York law, litigating parties may bind themselves to
a settlement agreement without a writing even if the parties
contemplate later creating a writing to evidence their agreement.
Winston v. Mediafare Entertainment Corp., 777 F.2d 78, 80 (2d Cir.
1985); see also Restatement (Second) of Contracts § 27 (1981).
However, if either party intends not to be bound until a writing
is executed, then “no amount of negotiation or oral agreement to
specific terms will result in the formation of a binding contract.”
Winston, 777 F.2d at 80.

To examine the intent of the parties,

the court considers “the words and deeds [of the parties] which
constitute objective signs in a given set of circumstances.”
2

Id.

(alteration in original) (quoting R.G. Group, Inc. v. Horn &
Hardart Co., 751 F.2d 69, 74 (2d Cir. 1984)).

To that end, the

court considers four factors articulated in Winston:
(1) whether there has been an express reservation of the
right not to be bound in the absence of a writing; (2)
whether there has been partial performance of the
contract; (3) whether all of the terms of the alleged
contract have been agreed upon; and (4) whether the
agreement at issue is the type of contract that is
usually committed to writing.
Id.

“No single factor is decisive, but each provides significant

guidance.” Ciaramella, 131 F.3d at 323.
will not defeat an oral agreement.
A.

A party’s change of heart

Powell, 497 F.3d at 129.

Reservation Not to be Bound

A party’s reservation of the right not to be bound until a
writing is executed can be evidenced by an express reservation or
implied by the nature of the negotiations and the language of draft
agreements.

Jarowey v. Camelot Entertainment Group, Inc., No. 11

Civ. 2611, 2012 WL 7785096, at *4 (S.D.N.Y. Sept. 10, 2012);
Lindner v. American Express Corp., No. 06 Civ. 3834, 2007 WL
1623119, at *6 (S.D.N.Y. June 5, 2007).
Several paragraphs of the proposed settlement papers suggest
that the parties intended the moment of signing as the point that
the settlement would become effective.

First, the agreement’s

paragraph after the “WHEREAS” clauses states, “NOW, THEREFORE, IT
IS HEREBY STIPULATED AND AGREED, by and between the undersigned,
as

follows

.

.

.

.”

([Draft]
3

Stipulation

of

Settlement

(“Stipulation”), attached as part of Exh. A to Declaration of John
L. Garcia dated Sept. 12, 2017 (“Garcia Decl.”), at 1 (emphasis
added)). This language suggests that only the terms of the written
agreement would legally bind the parties.

See Ciaramella, 131

F.3d at 324 (“The agreement’s first paragraph after the WHEREAS
clauses reads, ‘NOW, THEREFORE, with the intent to be legally bound
hereby, and in consideration of the mutual promises and covenants
contained herein, Reader’s Digest and Ciaramella agree to the terms
and conditions set forth below: . . . .’ (emphasis added).
language

demonstrates

that

only

the

terms

of

the

This

settlement

agreement, and not any preexisting pact, would legally bind the
parties.” (alteration in original)).
Two releases annexed to the agreement are also telling.

The

first release is a release by plaintiff’s counsel for attorneys’
fees

and

costs

plaintiff.

and

the

second

is

a

general

release

by

the

([Attorney] General Release, attached as part of Exh.

A to Garcia Decl.; [Plaintiff] General Release, attached as part
of Exh. A to Garcia Decl.).

Before the signature line, each reads,

“IN WITNESS WHEREOF, I have executed this Release this __ day of
__,

2017.”

([Attorney]

Release at 2).

General

Release;

[Plaintiff]

General

This language indicates that a release would be

effective only upon a signature.

See Jarowey, 2012 WL 7785096, at

*5.

4

The agreement also contains a merger clause, which reads:
This Stipulation contains all the terms and conditions
agreed upon by counsel for defendants and counsels for
plaintiff hereto, and no oral agreement entered into at
any time nor any written agreement entered into prior to
the execution of this Stipulation regarding the subject
matter of attorneys’ fees, expenses, or costs shall be
deemed to exist, or to bind the parties hereto, or to
vary the terms and conditions contained herein.
(Stipulation, ¶ 7).

A merger clause is persuasive evidence that

the parties did not intend to be bound prior to a writing.

See

Ciaramella, 131 F.3d at 324 (“[T]he final draft [of the agreement]
contains a merger clause which states, ‘This Settlement Agreement
and General Release constitutes the complete understanding between
the parties, may not be changed orally and supersedes any and all
prior agreements between the parties. . . .

No other promises or

agreements shall be binding unless in writing and signed by the
parties.’

The presence of such a merger clause is persuasive

evidence that the parties did not intend to be bound prior to the
execution of a written agreement.” (third alteration in original)
(footnote omitted)).
Because there is some evidence of an intent to be bound only
by a signed writing, the first Winston factor weighs against
enforcement.
B.

Partial Performance

“Partial

performance

can

be

found

when

‘one

party

has

partially performed, and that performance has been accepted by the

5

party disclaiming the existence of an agreement.’”

Waite v.

Schoenbach, No. 10 Civ. 3439, 2011 WL 3425547, at *7 (S.D.N.Y.
Aug.

5,

2011)

(quoting

Ciaramella,

131

F.3d

at

325).

The

defendants contend that the drafting of the settlement papers
constitutes partial performance.

(Defendants’ Memorandum of Law

in Support of Their Motion to Enforce Settlement (“Def. Memo.”) at
7).

However, the plaintiff obviously rejected that proposal.

Furthermore, an agreement by attorneys on the division of labor
and the drafting of paperwork is not partial performance of an
oral contract.

See Smith v. Haag, No. 08 CV 6360, 2015 WL 866893,

at *6 (W.D.N.Y. March 2, 2015).

To the extent that this finding

is inconsistent with Wesley v. Correction Officer Badge No. 9417,
No. 05 Civ. 5912, 2008 WL 41129, at *3 (S.D.N.Y. Jan. 2, 2008)
(“With respect to the third prong, there was partial performance
of the settlement agreement.

Counsel for Defendants had prepared

and finalized all of the necessary paperwork and mailed them to
Plaintiff

for

his

signature.”),

I

respectfully

disagree

that

drafting paperwork constitutes partial performance of a bargainedfor contract, especially where, as here, drafting the settlement
agreement was not a term of the oral agreement.

This factor is

neutral at best.
C.

The Terms

The monetary terms of the oral agreement are not in dispute;
rather, the parties cannot agree on whether the scope of Mr.
6

Stewart’s release against the defendants was sufficiently clear.
(Def. Memo. at 7-8; Memorandum of Law in Opposition to Defendants’
Motion to Enforce Settlement (“Pl. Memo.”) at 1).

Plaintiff’s

counsel recalls “mention of a release” but cannot remember whether
the plaintiff agreed to execute a general release.
of Amy Jane

Agnew

dated Sept. 18, 2017,

(Declaration

¶ 20).

While the

defendants’ brief adamantly asserts that the plaintiff agreed to
execute a general release (Def. Memo. at 8), the affidavit of
defendants’ counsel makes no mention of any release.

Nor do my

contemporaneous notes taken at the conference.
No evidentiary hearing is warranted to examine the attorneys’
memories of the conference, since there is no indication that they
would testify differently from their briefs and declarations.
Given the uncertainty of whether a release was agreed upon, this
factor does not weigh in favor of enforcement.1

Even if I were to

order counsel to clarify their recollection by affidavit or at a

The plaintiff also argued that even if they had agreed to a
general release, there is no generally accepted definition of that
term and thus agreement had not been reached on the scope of a
release. (Pl. Memo. at 13-15).
I need not decide this issue.
However, the plaintiff and his counsel might refer to the
dictionary for that definition.
See Release, General Release,
Black’s Law Dictionary (10th ed. 2014) (“A broad release of legal
claims that is not limited to a particular claim or set of claims,
such as those at issue in a pending or contemplated lawsuit, but
instead covers any actual or potential claim by the releasing party
against the released party based on any transaction or occurrence
before the release.”).
1

7

hearing, and even if both agreed that the plaintiff assented to a
general release, the fourth factor weighs so strongly against
enforcement that it would predominate.
D.

Fourth Factor

The April 11, 2017 oral agreement was not placed on the
record.

“[S]ettlements of any claim are generally required to be

in writing or, at a minimum, made on the record in open court.”2
Powell, 497 F.3d at 131 (emphasis omitted) (quoting Ciaramella,
131 F.3d at 326); accord Monaghan v. SZS 33 Associates, L.P., 73

This rule, applied in both federal question and diversity
cases, appears to have been distilled by the Second Circuit from
the New York Civil Practice Law and Rules (the “CPLR”) as well as
the California Code of Civil Procedure. See Ciaramella, 131 F.3d
at 326 (“Settlements of any claim are generally required to be in
writing or, at a minimum, made on the record in open court.”
(citing CPLR § 2104, and Cal. Civ. Proc. Code § 664.6)). However,
the Second Circuit in Ciaramella also stated,
2

We note that New York Civil Practice Law and Rules [§]
2104, which sets out technical requirements that must be
met for a settlement agreement to be enforceable under
New York law, may also apply.
However, we need not
address the issue whether section 2104 applies in
federal cases or is consistent with federal policies
favoring settlement.
Because we agree with [the
plaintiff] that, under common law contract principles,
[the plaintiff] never formed an agreement with [the
defendant], we have no reason to rely on section 2104 in
this case.
Id. at 322 n.1 (citations omitted). I will not attempt to resolve
this apparent tension but note that the open court rule is
consistent with the policies underlying the fourth factor. See
Winston, 777 F.2d at 83. The rule is also consistent with the
policy concerns expressed in Powell that there be formal entries
to memorialize agreements and ensure that “parties’ acceptance is
considered and deliberate.” 497 F.3d at 131.
8

F.3d

1276,

1283

(2d

Cir.

1996)

(“We

note

that

the

parties’

agreement did not meet the technical requirements of New York law
for a binding settlement, which mandate a signed writing, an order,
or agreement in ‘open court.’” (citation omitted)); Willgerodt v.
Hohri, 953 F. Supp. 557, 560 (S.D.N.Y. 1997) (“Under New York law,
an oral settlement agreement is only binding if it is made in ‘open
court.’” (footnote omitted)).

“The significance of announcing the

terms of an agreement on the record in open court is to ensure
that there are at least ‘some formal entries . . . to memorialize
the critical litigation events,’ and to perform a ‘cautionary
function’

whereby

deliberate.”

the

parties’

acceptance

is

considered

and

Powell, 497 F.3d at 131 (alteration in original)

(citation omitted) (first quoting Willgerodt, 953 F. Supp. at 560;
then quoting Tocker v. City of New York, 22 A.D.3d 311, 311, 802
N.Y.S.2d 147, 148 (1st Dep’t 2005)).
There is a limited exception to the open court requirement.
An oral settlement agreement may be enforced if it “substantially
complies” with the requirement.

Monaghan, 73 F.3d at 1283; Silas

v. City of New York, 536 F. Supp. 2d 353, 360 (S.D.N.Y. 2008); In
re Dolgin Eldert Corp., 31 N.Y.2d 1, 9-10, 334 N.Y.S.2d 833, 84041 (1972).
the

But there have to be “some formal entries, if only in

clerk’s

events.”

minutes,

to

memorialize

the

critical

litigation

Silas, 536 F. Supp. 2d at 361 (quoting In re Dolgin

Eldert Corp., 31 N.Y.2d at 10, 334 N.Y.S.2d at 840).
9

Some cases

have also held that the requirement is satisfied even if the
memorialization is misplaced or lost.

Id.

Finally, even if the

open court requirement is not substantially complied with, the
court may enforce the agreement if a settlement party relies to
his detriment on the agreement.

Id.

The oral agreement here fits into none of these categories.
There

was

no

documentation,

memorialization
and

there

is

or

no

formal

allegation

detrimentally relied on the agreement.

contemporaneous
that

any

party

The agreement was not made

in open court, but rather in a conference room during confidential
settlement discussions. Furthermore, this is the type of agreement
that would be expected to be reduced to writing or placed formally
on the record.

While this settlement is not particularly complex

and the draft agreement spanned only four pages, “[w]here, as here,
the parties are adversaries and the purpose of the agreement is to
forestall

litigation,

prudence

strongly

suggests

that

their

agreement be written in order to make it readily enforceable, and
to avoid still further litigation.”3

Winston, 777 F.2d at 83.

Indeed, the issues with the attorneys’ recollections of the
conference demonstrate the importance of this rule.

One attorney

states in a brief that he remembers the scope of the release but

The agreement in Winston was also only four pages long.
Winston, 777 F.2d at 83.
3

10

See

does not affirm his memory in his affidavit; the other attorney
recalls discussing a release but does not recall its breadth.
While New York policy strongly favors promoting settlement, it
also favors “certainty, judicial economy, flexibility to conduct
settlement negotiations without fear of being bound by preliminary
offers[,] and the prevention of fraud.”

Bonnette v. Long Island

College Hospital, 3 N.Y.3d 281, 286, 785 N.Y.S.2d 738, 741 (2004).
This

factor

significantly

weighs

in

favor

of

the

plaintiff.

Because none of the other factors weighs in favor of enforcement
and the fourth factor weighs heavily against it,4 I recommend
denying the defendants’ motion.
Conclusion
For the reasons articulated above, I recommended denying the
defendants’ motion (Docket no. 91).

Pursuant to 28 U.S.C. §

The Second Circuit strongly suggests that finding an
agreement non-compliant with the open court rule is sufficient
reason to decline enforcement of an otherwise acceptable
settlement.
See Powell 497 F.3d at 131 (“[S]ettlements of any
claim are generally required to be in writing or, at a minimum,
made on the record in open court.” (first emphasis added) (some
emphasis omitted) (quoting Ciaramella, 131 F.3d at 326)); see also
Silas, 536 F. Supp. 2d at 362 (“In sum, the parties’ oral agreement
in this case does not satisfy the requirements of CPLR [§]
2104. . . .
Thus, returning to the fourth Winston factor, we
conclude that this agreement was of a type that is usually
committed to writing.
However, we need not make a holistic
determination as to the parties’ intent, because CPLR [§] 2104
alone bars enforcement of this settlement agreement.”). But the
Circuit has also stated that “[n]o single factor is decisive” and
“each provides significant guidance.”
Powell, 497 F.3d at 129
(quoting Ciaramella, 131 F.3d at 323). I need not resolve this
issue here as none of the factors weigh in favor of enforcement.
4

11