How Should You Structure a Settlement So That You are Not the Subject of Sanctions?

In Repole v. Gawrysiak, A-1602-11T4 (N. J. Super. Ct. App. Div. August 8, 2012), the Appellate Division of the Superior Court of New Jersey upheld the decision of the Law Division of the Superior Court of New Jersey to grant counsel fees to plaintiffs William and Maria Repole (Plaintiffs) for Danielle Gawrysiaks (Defendant) (jointly Parties) continued failure to adhere to prior orders. 

In that case, Defendant appealed the Law Division’s decision to grant the attorney fee award to Plaintiff.
The award was granted after Defendant repeatedly failed to comply with deadlines set in numerous motions enforcing a prior settlement between the Parties. Originally, Plaintiffs commenced a lawsuit against Defendant and their neighbor, seeking damages for alleged property damage and trespass. Ultimately, the litigation settled. Under the terms of the settlement, Plaintiffs were responsible for conveying a piece of their property to Defendant.  Id. at 2.  In return, Defendant was responsible for removing an existing masonry wall and replacing it with a new retaining wall.  Id.

After Defendant delayed construction of the wall, Plaintiffs filed three (3) separate motions seeking enforcement of the settlement.  Each time a new order was entered a new deadline was set for when the wall needed to be completed; Defendant missed the deadline each time.  Defendant also failed to pay the counsel fee imposed during Plaintiffs’ second motion.  As a result of Defendant’s noncompliance, the Court entered a final order enforcing the prior orders, imposed sanctions and granted additional counsel fees.  Id. at 2-3.

Defendant moved to vacate the sanctions and for reconsideration of the counsel fee awards.
Although the awards of sanctions were vacated, the Judge stated that the counsel fee awards related not to the settlement of the underlying litigation, but rather . . . defendant’s continued failure to comply with prior orders. Id. at 4. Additionally, the Judge reasoned that counsel fees were warranted because the attorney’s services were necessary to secure defendant’s compliance with the settlement. Id.

The bottom line is that you can cause yourself harm by failing to cooperate with settlement terms.
It is in your best interest to negotiate terms that you are capable of satisfying. Indeed, when you fail to comply with settlement terms, the result can involve even more cost to you. For example, in this case, the counsel fees were not initially included in the settlement.  It was not until the Defendant repeatedly failed to adhere to his side of the deal hashed out between the Parties, that attorney fees and sanctions were included as a form of penalty.

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