It’s almost impossible to wiggle your way out of a stipulation–CPLR R. 2104

Far more parties are finding their stipulations to be oppressive than in the past few months.  I guess that's not true, but there are more appellate decisions on the issue than there have been in the past few months.  And that's close enough for me.  One of the benefits of blogging is that I have the opportunity to notice patterns in appellate law as it develops.  Eventually I hope to see one.  But for now, I'll keep on noting the obvious.  And hopefully, having made you read this, I've made you a little dumber than you were before.  You're welcome.

CPLR R. 2104 Stipulations

ABA Consulting, LLC v Liffey Van Lines, Inc., 2009 NY Slip Op 07923 (App. Div., 1st, 2009)

Next, defendant urges that the settlement agreement should be
vacated on the ground of mutual mistake, arguing that the parties must
have contemplated reimbursement for tax arrears. However, while mutual
mistake may furnish grounds for vacating a written agreement, there is
a " heavy presumption that a deliberately prepared and executed written
instrument manifest[s] the true intention of the parties'" and the
"proponent of reformation must show in no uncertain terms, not only
that mistake or fraud exists, but exactly what was really agreed upon
between the parties'"
(Chimart Assoc. v Paul, 66 NY2d 570, 574 [1986], quoting Backer Mfg. Corp. v Acme Quilting Co.,
46 NY2d 211, 219 [1978]). Defendant has not established that the
parties came to any agreement, or even contemplated the refund of
payments recouped by the taxing authorities, or that either had any
knowledge, at the time the settlement agreement was executed, that
defendant would be audited. Accordingly, the settlement agreement
cannot be vacated on the ground of mutual mistake.

Defendant next argues that the settlement agreement should be
vacated on the ground of unilateral mistake, contending that it was
induced to pay fees upon the mistaken belief that any audit reducing
its tax refunds would entitle it to a proportional refund or credit
from plaintiff. However defendant presents no evidence that plaintiff
fraudulently induced it to enter into the settlement agreement upon the
false representation that it would adjust its fees if additional taxes
were found due, as required for a finding that the contract was the
product of unilateral mistake
(Rosen Auto Leasing, Inc. v Jacobs, 9 AD3d 798,
800 [2004]). In fact, the settlement agreement was an arm's length
transaction between businessmen who were represented by counsel, and
the terms of plaintiff's compensation was consistent with that set
forth in the parties original [*3]consulting agreement
. We find no basis on this record for vacating that agreement (see Greater N.Y. Mut. Ins. Co. v United States Underwriters Ins. Co., 36 AD3d 441, 443 [2007]).

Dubi v Skiros Corp., 2009 NY Slip Op 07793 (App. Div., 2nd, 2009)

"Stipulations entered into in open court are favored by the courts and
are to be set aside only where there is cause sufficient to invalidate
a contract such as fraud, duress, collusion, or mistake" (Feuer v Darkanot, 36 AD3d 753, 753-754; see Ramnarain v Ramnarain, 46 AD3d 655; Hallock v State of New York, 64 NY2d 224, 230; Chernow v Chernow, 51 AD3d 705, 706; Feuer v Darkanot, 36 AD3d 753, 753-754; Desantis v Ariens Co., 17
AD3d 311). In order to vacate a stipulation on the ground of duress, a
party "must demonstrate that threats of an unlawful act compelled his
or her performance of an act which he or she had the legal right to
abstain from performing'"
(Feuer v Darkanot, 36 AD3d at 754, quoting Polito v Polito, 121 AD2d 614, 614-615). "Generalized contentions that a party felt pressured by the court are insufficient" (Desantis v Ariens Co., 17 AD3d at 311; see Matter of Blackstock v Price, 51 AD3d 914; Ross v Clyde Beatty-Cole Bros. Circus, 26 AD3d 321, 322; Shuler v Dupree, 14 AD3d 548, 549; Cavalli v Cavalli, 226
AD2d 666, 667). In the present case, the record fails to support the
plaintiff's contention that the stipulation of settlement was the
product of duress.

Castellano v Castellano, 2009 NY Slip Op 07784 (App. Div., 2nd, 2009)

"Stipulations of settlement are favored by the courts and are not lightly cast aside" (Hallock v State of New York, 64 NY2d 224, 230; see Matter of Siegel, 29 AD3d 914; Shapira v Shapira, 283
AD2d 477, 478 ). "[A]n oral stipulation of settlement with respect to
property issues in a matrimonial action, if spread upon the record and
found to be fair and reasonable by the court, is not to be disturbed
absent a showing of one of the traditional' grounds for vacatur, e.g.,
fraud, duress, mistake or overreaching" (Zafran v Zafran, 28 AD3d 752, 753, quoting Harrington v Harrington, 103 AD2d 356, 359; see Korngold v Korngold, 26 AD3d 358; Leahy v Leahy, 9 AD3d 351, 352).

Applying these principles to the matter at bar, the Supreme
Court properly determined that the plaintiff failed to meet her burden
in seeking to set aside the parties' stipulation of settlement (see Dimino v Dimino, 39 AD3d 799, 800; Brennan-Duffy v Duffy, 22 AD3d 699; Jacobs v Jacobs, 234 AD2d 425), and failed to establish that the stipulation of settlement was the result of duress or [*2]overreaching on the part of the defendant (see Garner v Garner, 46 AD3d 1239, 1240; Rubin v Rubin, 33 AD3d 983, 985-986; Chambers v McIntyre, 5 AD3d 344, 345). Accordingly, the court correctly denied the motion to set aside the stipulation of settlement.

Montgomery Trading LLC v Siegel, 25 Misc 3d 128(A) (App. Term, 1st, 2009)

Civil Court properly denied tenants' motion to vacate the two-attorney, so-ordered
stipulation of settlement resolving the underlying nonpayment summary proceeding since tenants
failed to demonstrate legal cause for such relief, e.g., fraud, collusion, mistake or accident
(see Hallock v State of New York, 64 NY2d 224, 230 [1984]). The belated attempt by
tenants' incoming counsel to inject into the settled litigation an (unpleaded) rent forfeiture
defense not referenced in the stipulation does not provide a proper basis to vacate the binding
stipulation, assented to by tenants upon advice of prior counsel.

Parties should think long and hard before they enter into stipulations, because, once they do, it is extremely difficult to get out of it.  It takes more than a sad story or hindsight.  Much more. 

In some cases, what you thought was an email, might very well be a stipulation.  See, Williamson v Delsener, 2009 NY Slip Op 01333 (App. Div., 1s, 2009).  Remember that.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s