ROBERT LUTMAN VS. THE SANCTUARY OF CHERRY HILL, LLC (L-0345-19, CAMDEN COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-1776-19T1
ROBERT LUTMAN,
Plaintiff-Respondent,
v.
THE SANCTUARY AT CHERRY
HILL, LLC, STEVEN IMBURGIO
and STEPHANIE WHEELER,
Defendants-Appellants.
______________________________
Argued December 2, 2020 – Decided January 11, 2021
Before Judges Vernoia and Enright.
On appeal from the Superior Court of New Jersey, Law
Division, Camden County, Docket No. L-0345-19.
John W. Leardi argued the cause for appellants (Buttaci
Leardi & Werner LLC, attorneys: John W. Leardi, of
counsel and on the briefs; Nicole P. Allocca, on the
briefs).
William J. Martin argued the cause for respondent
(Martin, Gunn & Martin, PA, attorneys; William J.
Martin and Michael A. Mascino, on the brief).
PER CURIAM
Defendants The Sanctuary at Cherry Hill, LLC (Sanctuary), Steven
Imburgio, and Stephanie Wheeler 1 appeal from a November 22, 2019 order
enforcing a settlement agreement and awarding plaintiff Robert Lutman a
$50,000 judgment, plus counsel fees and costs. We affirm, substantially for the
reasons set forth by Judge Anthony M. Pugliese in his cogent oral opinion .
Sanctuary, a substance abuse and detox facility, surrendered its license
when this action began. Imburgio was an officer and employee of Sanctuary, as
well as the spouse of the sole member and owner of Sanctuary. Wheeler also
was employed by Sanctuary.
In August 2018, Lutman accepted Imburgio's offer to work for Sanctuary,
at a salary of $150,000, with a six-month guarantee and an expense account. On
September 17, 2018, Wheeler asked plaintiff to provide Sanctuary with an
unsecured loan in the amount of $50,000. Plaintiff declined this request and was
terminated from his employment on October 5, 2018.
On February 14, 2019, plaintiff filed an amended complaint against
defendants, alleging: (1) breach of contract; (2) violation of the New Jersey
1
Defendants, at times, also are referenced collectively by the parties as
"Sanctuary Defendants."
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Conscientious Employee Protection Act;2 and (3) retaliation in violation of
common law.3 Defendants moved to dismiss the amended complaint and their
motion was denied. Thereafter, the parties engaged in negotiations through
counsel, and the attorneys exchanged various settlement offers via email.
On August 22, 2019, when it appeared to the parties that Sanctuary would
be sold, plaintiff's counsel advised by email that his client would accept $80,000
to settle the matter, but plaintiff "would need more information on payment: e.g.
when it would be paid, will it be paid at [Sanctuary's] closing etc. If the sale
doesn't go through by October 15th, then we may have to void the agreement.
We can further discuss that." That evening, defendants' counsel emailed her
response, advising, in part:
I'm happy to discuss additional terms, but my client can
only offer $50,000. As I am sure you are aware, there
is a lengthy list of liens and judgments against The
Sanctuary and Steve Imburgio. A settlement agreement
now would ensure your client gets paid at closing.
Plaintiff's counsel replied about an hour later, stating:
My client will accept the $50,000 contingent upon
payment being at closing scheduled for October 1,
2019.
2
N.J.S.A. 34:19-1 to -14.
3
Additional counts in the amended complaint pertain to fictitious defendants
not involved in this appeal.
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If closing does not occur by October 15, 2019, then
plaintiff . . . would want the option of voiding a
settlement, extending the time until the new closing, or
entering a consent judgment for that amount.
The next day, defendants' counsel rejected this offer and countered:
I'm agreeable to extending the time until closing and/or
the warranty to confess judgment, which I think are
more than enough protection if it doesn't sell. My client
wants finality so voiding the settlement agreement isn't
an option. If those are acceptable terms, then, we're
settled, and I can get you a draft agreement.
[(Emphasis added).]
Minutes later, plaintiff's counsel accepted defendants' offer via email,
simply stating, "Ok. We're settled then." In at least two emails thereafter,
counsel for both parties referred to the settlement agreement as "our agreement"
or the "settlement agreement."
On September 9, 2019, defendants' counsel drafted and forwarded a
proposed settlement agreement to plaintiff's counsel. The agreement designated
Sanctuary, Wheeler, and Imburgio as "Sanctuary Defendants," and provided
"The Sanctuary Defendants shall, jointly and severally be responsible for paying
[p]laintiff fifty thousand dollars . . . subject to and in accordance with the terms
of this Paragraph 1." Further, the agreement confirmed defendants would pay
plaintiff $50,000 within thirty days after the sale of Sanctuary. Also, the
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agreement noted that in the event of an uncured default, "Sanctuary Defendants
consent to the Warranty to Confess Judgment in the form attached hereto." The
agreement referenced and attached a stipulation of dismissal with prejudice for
each defendant. Further, the agreement, warranty to confess judgment and
stipulations each provided signature lines for Sanctuary's owner, Imburgio and
Wheeler. The documents were consonant with the settlement terms exchanged
between counsel via email on August 23, 2019.
In October 2019, plaintiff was informed the sale of Sanctuary fell through.
He moved to enforce the parties' agreement. On November 14, 2019, defendants
Imburgio and Wheeler signed individual certifications prepared by counsel for
Sanctuary defendants. The certifications were submitted in opposition to
plaintiff's motion to enforce the settlement, and they contained strikingly similar
language. For example, both Imburgio and Wheeler certified:
At no time did I, on behalf of myself or the other
Sanctuary Defendants, agree to the terms and
conditions outlined in the proposed settlement
agreement without a contingency that such a settlement
only proceed after the sale of the Sanctuary and that any
settlement payment be made from the proceeds of same.
At oral argument, defendants were represented by an attorney from the
same firm as the attorney who negotiated the settlement on defendants' behalf.
Defendants' counsel asserted, "there just simply is more than enough evidence
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to indicate there was not a full meeting of the minds of a complete settlement."
He added, "[y]es, the $50,000 was agreed to. There is a consent judgment that
I've provided to [plaintiff's counsel]." Still, defendant's counsel posited "[t]here
were other terms to be negotiated." Judge Pugliese disagreed, concluding
defendants' argument was "interposed, I would say, inappropriately by your
client after the fact that we have an agreement." The following additional
colloquy occurred between defendants' counsel and Judge Pugliese:
Defendants' Counsel: The only thing the parties had
agreed upon that it was gonna be $50,000, and if for
whatever reason the closing didn't happen or was
delayed, there would be some mechanism for a consent
judgment.
Court: Right.
Defendants' Counsel: Whether it was a warrant to
confess –
Court: Right.
Defendants' Counsel: - -or a consent judgment . . . . The
dispute here is not entry of a consent judgment against
the business, against the Sanctuary at Cherry Hill. The
dispute from the defendants' perspective is that consent
judgment being entered against Ms. Wheeler and Mr.
Imburgio, who are employees of the facility. If you
look at the totality of - -
Court: Who is [defendants' counsel] representing?
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Defendants' Counsel: [Defendants' counsel] is
representing all three parties, Your Honor.
Defendants' counsel continued to press his argument that after August 23,
2019, there were communications between counsel, indicating that "not all of
the terms of the settlement had been resolved." Judge Pugliese rejected this
argument and found there was "a meeting of the minds . . . on August 23rd when
we have the pertinent aspects that were being negotiated, the amount, the timing
of payment into the future, the options of plaintiff to proceed if payment did not
get made." The judge added:
Anything that your client asked for after that,
[plaintiff's counsel] had the right to just say send me the
confession of judgment, it's over, we settled, which is
pretty much what he did. He didn't entertain anything
on his side of the ledger to ask for something more. He
might have made some concessions relative to
something that your client asked for after the fact. But
in no circumstance did he change the core deal that was
made that this was a settlement for $50,000 payable no
later than October 15th only with the caveat that if it
wasn't paid, his client had the option to extend or
confess judgment. That's what I got.
Regarding the argument that Imburgio and Wheeler should not be bound
by any settlement discussions, the judge disagreed. The judge questioned if
defendants' counsel could point to any statement made by the attorney from his
office who negotiated the settlement that informed plaintiff's counsel she was
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representing only the corporate entity, Sanctuary. Defendants' counsel
acknowledged to the court, "[t]here's no contention that at some point [plaintiff's
counsel] was [apprised] that the discussions did not involve the other co-
defendants." Accordingly, Judge Pugliese concluded that counsel who
negotiated the settlement on defendants' behalf did not notify plaintiff's counsel
that she did not have the "authority to negotiate on behalf of Imburgio or
Wheeler" or that she was only making "a deal with respect to the corporate entity
or the LLC." Therefore, the judge granted the motion to enforce the August 23,
2019 agreement against all three defendants, entered a $50,000 judgment in
plaintiff's favor, and awarded him counsel fees and costs.
On appeal, defendants argue the trial court erred in enforcing a "purported
agreement," because it was "not sufficient nor definite enough to establish
unqualified assent by all the parties, nor does it specifically delineate the
[d]efendants' performance." Alternatively, defendants argue the trial court
"turned a blind eye to certifications that created a genuine dispute of material
fact" as to whether the individual defendants were bound by the agreement , and
that it erred by failing to conduct an evidentiary hearing "to establish the intent
of the parties." We are not convinced.
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A settlement agreement, like a contract, requires an offer and acceptance
by the parties, and it "must be sufficiently definite 'that the performance to be
rendered by each party can be ascertained with reasonable certainty.'" Weichert
Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992) (quoting West Caldwell v.
Caldwell, 26 N.J. 9, 24-25 (1958)). A legally enforceable contract "requires
mutual assent, a meeting of the minds based on a common understanding of the
contract terms." Morgan v. Sanford Brown Inst., 225 N.J. 289, 308 (2016).
Once parties to a contract "agree on essential terms and manifest an intention to
be bound by those terms, they have created an enforceable contract." Weichert
Co. Realtors, 128 N.J. at 435. Essential terms are those that go to the "heart of
the alleged agreement." Satellite Ent Ctr., Inc. v. Keaton, 347 N.J. Super. 268,
277 (App. Div. 2002). Alternatively, if the parties do not agree to one or more
essential terms, their contract is ordinarily unenforceable. Ibid.A settlement of a legal claim between parties is a contract like any other
contract, Nolan v. Lee Ho, 120 N.J. 465, 472 (1990), which "may be freely
entered into and which a court, absent a demonstration of 'fraud or other
compelling circumstances,' should honor and enforce as it does other contracts,"
Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div. 1983) (quoting
Honeywell v. Bubb, 130 N.J. Super. 130, 136 (App. Div. 1974)).
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The "[i]nterpretation and construction of a contract is a matter of law for
the court subject to de novo review." Spring Creek Holding Co. v. Shinnihon
U.S.A. Co., 399 N.J. Super. 158, 190 (App. Div. 2008) (quoting Fastenberg v.
Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998)). Thus,
no special deference is accorded a trial court's interpretation of an agreement
entered into by the parties. Kaur v. Assured Lending Corp., 405 N.J. Super.
468, 474 (App. Div. 2009).
On a disputed motion to enforce a settlement, the court should hold a
hearing to establish the facts, "unless the available competent evidence,
considered in a light most favorable to the non-moving party, is insufficient to
permit the judge, as a rational factfinder, to resolve the disputed factual issues
in favor of the non-moving party." Amatuzzo v. Kozmiuk, 305 N.J. Super. 469,
474-75 (App. Div. 1997).
Guided by these principles, we discern no basis to disturb Judge Pugliese's
November 22, 2019 order. The record reflects there was no genuine dispute that
defendants reached an agreement with plaintiff, notwithstanding assertions
made by defendants or their attorney well after August 23, 2019. Indeed,
consistent with the parties' meeting of the minds, as evidenced in the August 23,
2019 email exchange between counsel, defendants' attorney drafted and
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submitted not only a settlement agreement, but stipulations of dismissal and a
warranty to confess judgment. The email exchange also confirmed the amount
of money to be paid to plaintiff, when it would be paid, and if not paid upon the
sale of Sanctuary, that defendants consented to the entry of a warranty to confess
judgment. Further, immediately prior to reaching the agreement, it was
defendants' counsel who insisted "voiding the settlement agreement isn't an
option." The fact that the parties discussed the matter further in subsequent
emails does not lead us to a different conclusion. See Lahue v. Pio Costa, 263
N.J. Super. 575, 596 (App. Div. 1993) ("Where the parties agree upon the
essential terms of a settlement, so that the mechanics can be 'fleshed out' in a
writing to be thereafter executed, the settlement will be enforced
notwithstanding the fact that the writing does not materialize because a party
later reneges.").
As to defendants' contention that a plenary hearing was necessary to
divine the intent of the parties, we are satisfied there were no genuine issues of
material fact warranting such a hearing, as "the available competent evidence,
considered in a light most favorable" to defendants was sufficient to allow Judge
Pugliese to resolve the parties' dispute without an evidentiary hearing.
Amatuzzo, 305 N.J. Super. at 474-75.
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Finally, we are not persuaded that Judge Pugliese erred by holding each
defendant bound by the August 23, 2019 agreement. "New Jersey law
recognizes two types of authority to settle a lawsuit which would bind [an
attorney's] client: actual, either express or implied, and apparent authority."
Burnett v. Cnty. of Gloucester, 415 N.J. Super. 506, 513 (App. Div. 2010)
(citations omitted). Apparent authority is created 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 a client." Amatuzzo, 305 N.J.
Super. at 475.
"[I]t is the clear policy of our courts to recognize acts by . . . attorneys
. . . as valid and presumptively authorized . . . ." Jennings v. Reed, 381 N.J.
Super 217, 231 (App. Div. 2005) (citation omitted). "Consequently, an attorney
is presumed to possess authority to act on behalf of the client, and the party
asserting the lack of authority must sustain 'a heavy burden to establish that
[their] attorney acted without any kind of authority[.]'" Ibid. (citations omitted).
The factfinder must consider the totality of the circumstances to determine
whether apparent authority exists. N.J. Lawyers' Fund for Client Prot. v. Stewart
Title Guar. Co., 203 N.J. 208, 220 (2010).
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Here, after a series of emails were exchanged between counsel,
defendants' counsel prepared a settlement agreement and warranty to confess
judgment which referred to all three defendants as "the Sanctuary Defendants."
These documents, as well as the stipulations of dismissal, included signature
lines for each defendant. Additionally, defendants' counsel agreed at oral
argument that the attorney who negotiated the settlement represented all three
defendants, and that at no time did she inform plaintiff's counsel she did not
have the authority to negotiate on their behalf. Under these circumstances, it is
evident defendants' counsel had apparent authority to settle on behalf of
Sanctuary, Wheeler and Imburgio.
In sum, a binding settlement was reached, and embodied in the written
agreement defendants' counsel drafted. Judge Pugliese did not err in enforcing
it.
To the extent we have not addressed defendants' remaining arguments, we
are satisfied they are without sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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