Do Not Let Defense Attorneys Play Games With Your Settlement

Under New York’s CPLR section 2104, if you want a settlement that is enforceable and binding on the defense, the agreement must be in writing signed by those to be bound, most often the defense lawyer, unless the agreement is taken down by a stenographer in open court before a judge. The purpose of the law is to assure irrefutable proof of the settlement agreement and the terms of the settlement.

CPLR section 2104 states that: “An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in writing subscribed by him or his attorney or reduced to the form of an order adn entered.” (Emphasis Added).

Agreements made between counsel in open court, or in writing, are binding upon the parties and is enforceable as a contract. CPLR section 2104; White v. Mazella-White, 60 A.D.3d 1047, 877 N.Y.S.2d 106 (2nd Dep’t 2009). If you rely on verbal agreements to settle, you have no binding agreement and the defense lawyer can back out of the settlement with impunity. It is risky, and just plain bad practice, to rely on oral agreements to settle. When you settle a case, you must insist that the agreement be confirmed in writing or set forth in the open record in court before a judge and a court stenographer.

The goal is to make sure that you comply with the statutory requirements of CPLR section 2104 when memorializing the terms of a settlement. When the formal requirements for a binding stipulation have been met, there are very few grounds that exist for avoiding its enforcement, and the party seeking to undo the settlement stipulation will have a near-impossible task. The binding stipulation can only be invalidated on such grounds as fraud, collusion or over-reaching.

The stipulation of settlement, whether in writing or made in open court before a judge and stenographer, must be clear and include all matters that are covered by the settlement. The stipulation of settlement is the measure of each parties’ obligiations. DO NOT LEAVE OUT ANY TERMS OR CONDITIONS OF THE SETTLEMENT!

If the stipulation of settlement contains clear and certain language, the courts will not look beyond the stipulation as to parties’ intentions. A stipulation that is in writing or made in open court is the equivalent of a court order or contract, and any attempt by the defense lawyer to change the terms of the settlement will not be tolerated by the court.

“Open court” encompasses proceedings that transpire in the courtroom in the presence of a judge and are recorded by a court stenographer. Two fundamental concepts make up the concept of “open court”: (1) presence of a judge; and (2) memorialization of the proceedings in an official court record. Thus, the judge’s chambers can qualify as “open court” if the judge is present and a stenographer is called to record the proceedings.

Keep in mind that the presence of a stenographer without the judge is not “open court”. Trapani v. Trapani, 147 Misc.2d 447, 556 N.Y.S.2d 210 (Sup. Ct., Kings Co., 1990)(stipulation of settlement made during deposition adn recorded by stenographic reporter did not satisfy CPLR section 2104). Also, a stenographic recording of a settlement in front of a judge’s law clerk in chambers is not sufficient. Conlon v. Concord Pools, Ltd., 170 A.D.2d 754, 565 N.Y.S.2d 860 (3rd Dep’t 1991).

The next time that the defense lawyer tries to change or add new terms to a settlement agreement, remind him/her that you have a binding contract that sets forth all of the terms of the settlement–either in writing or made in open court–and you will not permit any deviation from the terms of the agreement. Compliance with CPLR section 2104 is the key to ensuring that you have an enforceable and binding settlement.