ED-GEL, LLC, ETC. VS. KRS GLOBAL BIOTECHNOLOGY, INC. (L-4492-15, CAMDEN COUNTY AND STATEWIDE) ( 2018 )


Menu:
  •                         NOT FOR PUBLICATION WITHOUT THE
    APPROVAL OF THE APPELLATE DIVISION
    This opinion shall not "constitute precedent or be binding upon any court."
    Although it is posted on the internet, this opinion is binding only on the
    parties in the case and its use in other cases is limited. R. 1:36-3.
    SUPERIOR COURT OF NEW JERSEY
    APPELLATE DIVISION
    DOCKET NO. A-4758-16T3
    ED-GEL, LLC (d/b/a TRIMIX
    LABORATORIES, LLC),
    Plaintiff-Appellant,
    v.
    KRS GLOBAL BIOTECHNOLOGY,
    INC.,
    Defendant-Respondent.
    __________________________________
    Argued April 23, 2018 – Decided August 14, 2018
    Before Judges Sabatino and Ostrer.
    On appeal from Superior Court of New Jersey,
    Law Division, Camden County, Docket No.
    L-4492-15.
    Michael J. Confusione argued the cause for
    appellant (Hegge & Confusione, LLC, attorneys;
    Michael J. Confusione, of counsel and on the
    brief).
    Robert S. Shiekman          argued    the   cause    for
    respondent.
    PER CURIAM
    Plaintiff ED-Gel, LLC, appeals from a trial court order
    enforcing a settlement of its breach of contract action against
    defendant     KRS   Global   Biotechnology,    Inc.      We   conclude    that
    plaintiff's counsel had both apparent and actual authority to
    enter into a binding settlement agreement.            We therefore affirm.
    Plaintiff alleged it owns intellectual property related to
    erectile      dysfunction    treatments,     and   licensed   defendant     to
    compound and sell some of its formulas.            According to plaintiff,
    defendant prematurely terminated the contract.            Plaintiff sought
    monetary damages for unpaid commissions, lost income, and the cost
    of products that defendant received but did not pay for. Plaintiff
    also sought a list of the prescribing physicians and patients who
    received the medication, and related details.
    The    parties   eventually   filed    cross-motions    for   summary
    judgment.      On the return date, counsel for the parties obtained
    the court's permission to engage in settlement discussions rather
    than   oral    argument.     Plaintiff's     managing   member,   Thomas    J.
    Harkins, Jr., was present in court.          Defendant's principal was in
    contact with counsel by telephone, as he was traveling.
    What transpired thereafter is the subject of certifications
    of defendant's counsel, Robert S. Shiekman; plaintiff's counsel,
    James Herman; and Harkins. Brian Herman, who served as plaintiff's
    co-counsel, did not file a certification.1            We note at the outset
    1
    For convenience, we refer to the Hermans by their first names,
    and mean no disrespect in doing so.
    2                              A-4758-16T3
    that James and Harkins certified that their statements were "true
    to the best of [their] personal knowledge and belief."
    James asserted that a settlement was ultimately reached,
    except regarding the method of payment, specifically, whether a
    lump sum payment would be made within thirty days, or two payments
    backed by a personal guaranty of defendant's president.                James
    reported the status of the negotiations to the court, which carried
    the motion to a future date, awaiting word whether the final issue
    was resolved.     James stated that Brian and Harkins went to lunch
    to celebrate the settlement.         Meanwhile, he and Shiekman agreed
    outside the courthouse there would be a single payment after
    receiving a communication on the payment issue from defendant's
    vice-president.
    James   said    he   prepared   a   draft   written   agreement    "in
    accordance with what I believed were the full and final settlement
    terms" and forwarded it to Harkins and Shiekman for execution.            In
    addition to the monetary terms, it included a confidentiality
    provision and a general release.         Defendant's principal signed it
    and transmitted payment, which James held in escrow.
    Harkins refused to sign. He contended his attorneys pressured
    him to settle.      He admitted that he agreed at the courthouse to
    the financial terms of the settlement.           He stated, "After hours
    of repelling my attorneys' incessant pressure, I accepted an offer
    3                            A-4758-16T3
    from opposing counsel."        However, "I did not consider acceptance
    of price a complete agreement because I had other claims from my
    lawsuit I expected my attorneys to argue for me."
    He stated that he wanted his attorneys to secure defendant's
    agreement    to    provide   physician     and   patient    information.      He
    acknowledged he did not bring it up at the courthouse, blaming
    James for allegedly not telling him that he had to raise it then.
    Harkins    also    contended   a   confidentiality       provision   was   never
    mentioned during the negotiations.               Thus, he objected to its
    inclusion in the agreement, as well as a general, as opposed to a
    limited, release.         He also objected to the "attorney advice"
    provision on the ground that he did not have a full opportunity
    to review and comment on the agreement.
    Shiekman stated that he and plaintiff's counsel "reached
    settlement terms resolving" the case; "the terms of the Settlement
    Agreement were fully negotiated by counsel for the parties"; and
    the "[t]he Settlement Agreement included three (3) material terms"
    – which were, first, that defendant would make a timely payment
    to plaintiff, defendant would execute the settlement agreement,
    and plaintiff would do so as well.               In a second certification,
    Shiekman asserted that James's draft agreement "mirrored, exactly,
    the settlement terms that were agreed upon in Court," although
    Shiekman    does    not   explicitly     address   the     confidentiality    or
    4                               A-4758-16T3
    release provisions.    He reiterated that the agreement included the
    "three (3) material terms" just described.
    In granting defendant's motion to enforce the settlement, the
    trial court relied on Harkins's concession that he accepted an
    offer of settlement, and the principle that an oral settlement
    agreement can be enforceable. The court entered an order declaring
    that James's draft settlement agreement was binding on the parties.
    On   appeal,   plaintiff   contends   that   the   existence     of    a
    settlement, and its material terms, were both genuinely disputed.
    Defendant responds that both attorneys agreed they reached a
    settlement, which the draft writing embodied.
    Our system strongly values the settlement of litigation, and
    we "'strain to give effect to the terms of a settlement wherever
    possible.'"    Brundage v. Estate of Carambio, 
    195 N.J. 575
    , 601
    (2008) (quoting Dep't of Pub. Advocate v. N.J. Bd. of Pub. Utils.,
    
    206 N.J. Super. 523
    , 528 (App. Div. 1985)).         The burden to prove
    a settlement agreement is borne by the party seeking to enforce
    it.   Amatuzzo v. Kozmiuk, 
    305 N.J. Super. 469
    , 475 (App. Div.
    1997).
    "On a disputed motion to enforce a settlement, as on a motion
    for summary judgment, a hearing is to be held to establish the
    facts unless the available competent evidence, considered in a
    light most favorable to the non-moving party, is insufficient to
    5                                A-4758-16T3
    permit the judge . . . to resolve the disputed factual issues in
    favor of the non-moving party."             
    Id. at 474-75.
          And, absent an
    evidentiary hearing by the trial court, we review de novo whether
    a binding settlement was reached.              Cf. Henry v. N.J. Dept. of
    Human Servs., 
    204 N.J. 320
    , 330 (2010) (stating that appellate
    court reviews grant of summary judgment de novo, applying the same
    standard as the trial court).
    As a threshold issue, we observe, that, strictly speaking,
    the   "certifications"     of    Harkins    and   James    are   not    competent
    evidence. Rule 1:4-4(b) requires the following language to precede
    the affiant's signature: "'I certify that the foregoing statements
    made by me are true.           I am aware that if any of the foregoing
    statements   made   by    me    are   willfully   false,    I    am    subject   to
    punishment.'"   Absent such a verification, a certification has no
    evidentiary value.       Pascack Cmty. Bank v. Universal Funding, LLP,
    
    419 N.J. Super. 279
    , 288 (App. Div. 2011).           Rather than follow the
    Rule, Harkins and James certified that "the statements made herein
    by me are true to the best of my personal knowledge and belief
    . . . ."     See Jacobs v. Walt Disney World Co., 
    309 N.J. Super. 443
    , 454 (App. Div. 1998) (stating that factual assertions based
    merely upon information and belief are inadequate under Rule 1:6-
    6). However, as defendant does not object to James's and Harkins's
    certifications on this ground, we shall consider them.
    6                                 A-4758-16T3
    Even so, we discern no genuine dispute that James and Shiekman
    reached an oral agreement in the courthouse, as supplemented
    shortly thereafter with a resolution of the manner of payment
    issue.     The two attorneys agreed the draft that James forwarded
    to Shiekman embodied their agreement, notwithstanding that neither
    attorney expressly asserted that he agreed to a general, as opposed
    to a limited release, and to a broad confidentiality provision.
    Since the lawyers reached agreement, the dispositive issue
    is whether James had authority to settle the case according to the
    terms in his draft agreement.    "[A]n attorney for a private party
    may settle a lawsuit based on actual or apparent authority to do
    so."     Seacoast Realty Co. v. W. Long Branch Borough, 
    14 N.J. Tax 197
    , 202-03 (Tax 1994); see also 
    Amatuzzo, 305 N.J. Super. at 475
    .
    Actual authority may be express or implied.    Newark Branch,
    N.A.A.C.P. v. W. Orange Twp., 
    786 F. Supp. 408
    , 423 (D.N.J. 1992).
    Implied authority exists when "an agent is authorized to do what
    he may reasonably infer the principal desires him to do in light
    of the principal's manifestations and facts as he knows or should
    know them when he acts."     Lampley v. Davis Mach. Corp., 219 N.J.
    Super. 540, 548-49 (App. Div. 1987).    "The focus is on the agent's
    reasonable perception of the principal's manifestations toward
    him."    Newark Branch, 
    N.A.A.C.P., 786 F. Supp. at 424
    .
    7                           A-4758-16T3
    Apparent authority arises when "the client's voluntary act
    has placed the attorney in a situation wherein a person of ordinary
    prudence would be justified in presuming that the attorney had
    authority to enter into a settlement, not just negotiations, on
    behalf of the client."   
    Amatuzzo, 305 N.J. Super. at 475
    ; see also
    LoBiondo v. O'Callaghan, 
    357 N.J. Super. 488
    , 497 (App. Div. 2003)
    (stating that creation of apparent authority is based on "the
    actions of the principal, not the alleged agent").   Thus, implied
    actual authority depends on the agent's reasonable perceptions of
    the principal's actions; apparent authority depends on a third-
    party's perceptions.
    James had actual authority to settle.   We assume for purposes
    of this appeal that Harkins did not expressly authorize James to
    agree to a confidentiality provision or a general release, or to
    omit a provision on physician and patient lists.      Yet, James's
    authority was implied.     Harkins was present at the settlement
    negotiations.   He was aware James was negotiating with Shiekman,
    and Harkins permitted him to do so.     Although Harkins complains
    that his attorney pressured him, he concedes that he relented.     He
    concedes that he approved the financial terms of the settlement.
    He did not raise the issue of physician and patient lists during
    the courthouse sessions, nor did he expressly impose any explicit
    restrictions on the positions James took in his discussions with
    8                          A-4758-16T3
    Shiekman.      He also does not claim he raised any objection when the
    attorneys informed the court that an agreement was reached, but
    for the open issue as to payment terms.              Thus, it was reasonable
    for James to infer that Harkins gave him the authority to settle.
    James also had apparent authority to settle.              Regardless of
    the pressure he may have felt, Harkins sent James to the settlement
    negotiations with Shiekman.         "In New Jersey it has been held that
    sending   an    attorney   to   a   settlement      conference   presumptively
    establishes that the attorney has authority to settle . . . ."
    
    Seacoast, 14 N.J. Tax at 204
    .            Apparent authority may exist where
    the principal "places the attorney in a position where 'a person
    of ordinary prudence, conversant with business usages and the
    nature of the particular business, is justified in presuming that
    such   agent    has   authority     to    perform    the   particular   act    in
    question.'"      
    Id. at 204-05
    (quoting United States Plywood Corp.
    v. Neidlinger, 
    41 N.J. 66
    , 74 (1963)).              Harkins's presence at the
    negotiations that James spearheaded would suggest to Shiekman that
    James had the authority to reach a settlement.
    In sum, a binding settlement was reached, which was embodied
    in the written agreement that James drafted.               The trial court did
    not err in enforcing it.
    Affirmed.
    9                             A-4758-16T3