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Jose Nieves and Collin Dewar, On Behalf of Themselves and All Others v. Community Choice Health Plan of Westchester

November 14, 2011


The opinion of the court was delivered by: Briccetti, J.


Plaintiffs Jose Nieves and Collin Dewar filed this class action complaint on January 14, 2008 against defendants Community Choice Health Plan of Westchester, Inc. ("CCHP"), Mount Vernon Neighborhood Health Center, Inc. ("Mount Vernon"), and Sound Shore Medical Center of Westchester, Inc. ("Sound Shore"). Plaintiffs allege that defendants, operating as a single employer, together violated the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.

Now pending before the Court is Magistrate Judge Paul E. Davison's Report and Recommendation ("R&R"), dated August 31, 2011 (Doc. #62), recommending the Court deny (1) plaintiffs' motion to enforce the parties' settlement agreement; (2) Mount Vernon's cross-motion to dismiss the complaint; and (3) CCHP's motion for sanctions against Mount Vernon. Plaintiffs and CCHP have filed objections to the R&R, while Mount Vernon has filed a response to the objections. For the following reasons, the Court DENIES all three motions.


The parties do not dispute Magistrate Judge Davison's recitation of the factual background of this case. Therefore, the Court assumes familiarity with the case background as set forth in the R&R and will not repeat the facts here.


A district court reviewing a magistrate judge's recommended ruling "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge."

28 U.S.C. § 636(b)(1)(C). Parties may raise objections to the recommended ruling, but they must be "specific" and "written," and submitted "[w]ithin 14 days after being served with a copy of the recommended disposition." Fed. R. Civ. P. 72(b)(2); see also 28 U.S.C. § 636(b)(1)(C). When a party submits a timely objection to a report and recommendation, the district court reviews the parts of the report and recommendation to which the party objected under a de novo standard of review. 28 U.S.C. § 636(b)(1)(C); see Fed. R. Civ. P. 72(b)(3) ("The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions."). The district court may adopt those portions of the recommended ruling to which no timely objections have been made, provided no clear error is apparent from the face of the record. See Wilds v. UPS, Inc., 262 F. Supp. 2d 163, 169 (S.D.N.Y. 2003). The clearly erroneous standard also applies when a party makes only conclusory or general objections, or simply reiterates its original arguments. Ortiz v. Barkley, 558 F. Supp. 2d 444, 451 (S.D.N.Y. 2008).

I. Motion to Enforce Settlement Agreement

Plaintiffs and defendant CCHP object to the R&R insofar as Magistrate Judge Davison recommended the Court not enforce the purported settlement agreement. In the R&R, Magistrate Judge Davison applied the four-pronged analysis set forth in Ciaramella v. Reader's Digest Ass'n, 131 F.3d 320, 323 (2d Cir. 1997) (citing Winston v. Mediafare Entertainment Corp., 777 F.2d 78, 80 (2d Cir. 1985)), and determined the parties did not intend to be bound by the oral representations and informal agreements contained within emails that had been the basis of their negotiations.

Pursuant to Winston, in determining whether to enforce a settlement in the absence of a written agreement, the court examines the following factors: "(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." Winston, 777 F.2d at 80. The court examines each of the four factors as no single one is determinative of the outcome. See Edwards v. City of New York, 2009 U.S. Dist. LEXIS 75604, at *5 (E.D.N.Y. Aug. 21, 2009) (citing Ciaramella, 131 F.3d at 323). If, however, a party states its intent not to be bound until the agreement is fully executed, that fact is determinative. Pereira v. Sonia Holdings (In re Artha Mgmt.), 91 F.3d 326, 329 (2d Cir. 1996).

Magistrate Judge Davison determined (1) the presence of a merger clause was evidence the parties did not intend to be bound by any oral agreement or agreements contained within the parties' correspondence they may have reached prior to the execution of a written agreement; (2) the parties' preparation of the settlement documents and the standing down on discovery did not constitute partial performance; (3) because the parties had not yet agreed on a cy pres recipient, there were outstanding issues to be negotiated; and (4) a settlement agreement is the type of agreement which is generally reduced to writing.

A. Express Reservation

Relying on the presence of a merger clause in the draft of the settlement agreement and language in the parties' correspondence from which the Court inferred the need to negotiate terms of the agreement further, Magistrate Judge Davison found that the parties had ...

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