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Lee v. Hospital for Special Surgery

August 10, 2009

JI HYUN LEE, PLAINTIFF,
v.
HOSPITAL FOR SPECIAL SURGERY, DEFENDANT.



The opinion of the court was delivered by: Lewis A. Kaplan, District Judge.

MEMORANDUM OPINION

This employment discrimination action is before the Court on defendant's motion to enforce an alleged settlement agreement.

Facts

The facts are straightforward. Following the commencement of the action, the parties agreed to mediation before Joseph D. Garrison, Esq. Following a full day of mediation, plaintiff agreed to settle the case for $60,000, and the parties agreed upon a host of other terms. According to Mr. Garrison, "[a]fter the [p]arties agreed to these terms, [he] brought both parties (including the Plaintiff) into a conference room [and]... expressly confirmed with Plaintiff and the Hospital that the agreement reached at the Mediation was binding and enforceable, notwithstanding the fact that the agreement had not yet been reduced to writing, and [he] again reviewed the terms."*fn1 "Plaintiff and the Hospital... expressly agreed that the terms of the settlement were binding and enforceable."*fn2

Following the mediation, the lawyers for the parties worked out a written settlement agreement to which both agreed on May 19-20, 2009. The defendant's human resources department requested the settlement check from accounting. But on or about May 20, 2009, plaintiff evidently had a change of heart, told her lawyer that she was not satisfied with the outcome of the mediation, and fired him.*fn3 Her counsel then moved for leave to withdraw, asserting that the case had been settled at the mediation, that he knew of no defense to the defendant's anticipated motion to enforce the settlement, and that he could not oppose such an application consistent with Rule 11.*fn4 New counsel then appeared for plaintiff and seeks to proceed with the lawsuit. Defendant moves to enfore the settlement.

Plaintiff, for her part, has submitted a very carefully drawn affidavit in which she states in relevant part only that:

"3) Following the mediation held on April 27, 2009, a settlement agreement was drafted, the terms of which were never finalized. "4) I received a copy of the draft settlement agreement, but I never agreed to the terms of such settlement agreement. "5) Most importantly, I never signed any such settlement agreement which I understand is a requirement for a binding settlement agreement."*fn5

Thus, she does not deny that an oral settlement agreement was reached with the mediator on April 27, 2009, that the terms were as set forth in the declarations of the mediator and defense counsel, and that she expressly agreed that those terms were binding and enforceable.

Discussion

An oral settlement agreement is binding and enforceable when the parties agree to its terms with the intent to be bound, even where they contemplate a subsequent written agreement.*fn6 Moreover, district courts are empowered to enforce such settlement agreements summarily,*fn7 although the Court naturally assumes that an evidentiary hearing would be necessary if there were a genuine issue as to a material fact.

Here there is no genuine issue of material fact. Plaintiff has not denied that a full and complete agreement was reached at the mediation, that the terms were explained to her, and that she then and there "expressly agreed that the terms of the settlement were binding and enforceable." The only question, then, is whether that was sufficient in law to give rise to a binding legal obligation.

I am satisfied that it was. A settlement agreement is a contract, no different in principle from any other. It arises once the parties reach complete agreement with the intention to be bound.*fn8 In this instance, that occurred at the mediation on April 27, 2009, when the mediator reviewed the terms of the proposed settlement with plaintiff and the defendant and obtained their agreement to its terms and to the proposition that the settlement was "binding and enforceable."

Plaintiff attempts to avoid the inevitable here by reference to N.Y. CPLR § 2104 -- which provides in substance and in relevant part that settlement agreements, save those made by counsel in open court, are enforceable only if in writing and signed -- and Ciaramella v. Reader's Digest Association, Inc.*fn9 Her argument is unpersuasive.

Ciaramella,it is true,noted that the Circuit never had resolved the question whether and when N.Y. CPLR § 2104 applies in federal court.*fn10 Nevertheless, there is substantial reason to conclude that it does not apply in federal court at all*fn11 or, at least, in federal litigation that, like this one, arises ...


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