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Keith A. Kleinick, Esq.

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Construction Accident > Information about Structured Settlement

Information about Structured Settlement

The Supreme Court in Kings County heard a case brought by a man against the City of New York, the City of New York Board of Education and Richmond Elevator Company for a head injury he suffered while making a delivery to Bushwick High School. The Plaintiff was struck in the head by a part of a freight elevator maintained by defendant Richmond Elevator Co. Richmond moved for summary judgment dismissing the Complaint. The motion was adjourned several times until it was denied as moot because of intervening events. The Plaintiff and Richmond negotiated toward reaching a settlement of Plaintiffs' claims, and apparently believed they had succeeded. The Plaintiff was to receive a settlement for the entire case is in the amount of $125,000 to be paid by Richmond Elevator as follows $75,000 up front and $50,000 in a structured settlement over ten years.

Do you or someone you know need information about structured settlement? Contact a New York construction accident expert today to get information about structured settlement!

Because, however, of outstanding cross-claims asserted against Richmond by the City Defendants, the discussions between Plaintiff and Richmond stalled. The Plaintiff and Richmond moved against the City Defendants with respect to the cross-claims. The Plaintiff has to provide proper closing papers including a stipulation of discontinuance and a general release for the City of New York, Board of Education, Richmond Elevator and AIG Claim Services. The City of New York and Board of Education thereby discontinued all cross-claims against Richmond for contribution and indemnification. Richmond also promised to discontinue all cross claims against the City and the Board of Education.  The stipulation was signed by counsel for Plaintiff, Richmond, the City Defendants, and by the Plaintiff. The stipulation is not "so ordered" or otherwise signed by Justice hearing the case, which would not affect its enforceability.

It did not take long for a problem to develop. A representative of EPS Settlements Group, acting for Richmond's insurer, sent an e-mail communication to Plaintiff's counsel, advising that "the annuity policy, which will be purchased from American International Life Assurance Company of New York, will be owned by American Home Assurance Company." Included was a Confirmation of Settlement that showed an up front cash payment of $75,000 and a guaranteed monthly income of $510 per month for 10 years, at a cost of $50,000 and benefits totaling $61,200. The Plaintiff through his counsel rejected the details of the purported settlement as set forth in the communication, as well as certain provisions of a Settlement Agreement and Release delivered to them at some point.

By Order to Show Cause, Richmond moved for an Order enforcing a settlement in this matter reached by the parties in open court. The original Justice recused himself from any further proceedings in this action, and Richmond's latest motion, together with its adjourned motion for summary judgment, were referred for decision on the Part 22 calendar. The two motions were heard by another justice who had this to say, “The Defendant Richmond Elevator Company's motion to dismiss or be granted summary judgment is denied as moot. This matter was settled pursuant to stipulation of settlement in Court.”

The order reflects Plaintiff’s objection to the non-assignability of the periodic payments. It is important to note, however, what the order does not address the enforceability of the stipulation as a settlement, or the amount or time of the periodic payments, or the total benefits to be paid on the structured portion of the purported settlement. What is clear is that the Plaintiff has signed the Settlement Agreement and Release, revised by Defendant to delete the non-assignability provision that appeared in the earlier document.

The Court allowed counsel time to make supplemental submissions addressing any issues they wished, and invited argument on two concerns:

  • That the previous stipulation was not an enforceable settlement,
  • That, in any event, the Court would not have the power to require Plaintiff to execute the Settlement Agreement and Release presented by Defendant.

Both counsels did make supplemental submissions.

The pending motions followed, and they first appeared on the Part 22 calendar now with this judge presiding.

The Plaintiff appeared on that date, and indicated to the Court that he opposed both Defendant's and his counsel's respective motions. Because at that point the Plaintiff's interest and his counsel's had diverged, at least in part, the motions were adjourned to allow the Plaintiff to retain additional or substitute counsel. Also, since Defendant's counsel and Plaintiff's counsel suggested that the motions should be determined by the original Justice, the adjournment would allow this judge to consult that Justice on counsel's suggestion.

The justice had this to say, "Stipulations of settlement are favored by the courts and not lightly cast aside." "Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation." Duress, overreaching, or unconscionability would also justify a refusal to enforce a settlement stipulation, but "general contentions that a party felt pressured by the court are insufficient to establish such a claim."  There is no contention by the Plaintiff that "at the time of the stipulation of settlement he was suffering from a mental disease or defect which rendered him incapable of comprehending the nature of the transaction or making a rational judgment concerning the transaction, or that by reason of mental illness he was unable to control his conduct." 

Even so, a stipulation is a contract, and a party may show that "no contract ever came into being." In order for a writing to be enforceable as a settlement agreement, it must "incorporate all the material terms of the purported settlement." "If an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract."

Do you or someone you know need information about structured settlement? Contact a New York construction accident expert today to get information about structured settlement!


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