Motion to Enforce Settlement in Dt Net Lease I Reit v. James L. Coughlan, Robert J. Coughlan, Rita Castagna as the EXECUTOR OF THE ESTATE OF FRANK CASTAGNA, Rita Castagna| Trellis.Law

On January 01, 2020 a Motion-Secondary was filed involving a dispute between Dt Net Lease I Reit, and James L. Coughlan, Rita Castagna, Robert J. Coughlan, for Commercial Division in the District Court of New York County.

Preview
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
------------------------------------------------------------------ x
DT NET LEASE I REIT, :
: Index No. 652850/2020
Plaintiff, : (Masley, J.S.C.)
:
-against- : Motion Seq. No. 006
:
JAMES L. COUGHLAN, ROBERT J. COUGHLAN, :
and RITA CASTAGNA, Individually and as :
EXECUTOR OF THE ESTATE OF FRANK :
CASTAGNA, :
:
Defendants. :
:
:
------------------------------------------------------------------ x

PLAINTIFF DT NET LEASE I REIT’S MEMORANDUM OF LAW IN OPPOSITION
TO MOTION TO ENFORCE SETTLEMENT PURSUANT TO CPLR 2104 AND FOR
SANCTIONS

Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022
212-940-8800

1 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .............................................................................................. 1

STATEMENT OF FACTS ...................................................................................................... 2

ARGUMENT .......................................................................................................................... 7

I. LEGAL STANDARD .................................................................................................. 7

II. DT DID NOT SUBSCRIBE TO A BINDING SETTLEMENT AGREEMENT
UNDER CPLR 2104 .................................................................................................... 8

A. An out-of-court binding settlement under CPLR 2104 requires all material terms
in a writing subscribed to by both parties and a clear expression of mutual
accord. .................................................................................................................... 8

B. The objective circumstances of negotiation show that DT did not intend to enter
into a mutual accord or be bound to a settlement until it and TRITEC both signed
the draft settlement agreement. ................................................................................10

III. DT SHOULD NOT BE REQUIRED TO PAY ATTORNEYS’ FEES AND
COSTS, NOR SHOULD IT BE SANCTIONED ........................................................ 188

CONCLUSION ......................................................................................................................19

2 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

TABLE OF AUTHORITIES

Page(s)

Cases

Attestor Value Master Fund v. Rep. of Argentina,
940 F.3d 825 (2d Cir. 2019) .......................................................................................... 9, 16

Bonnette v. Long Island Coll. Hosp.,
3 N.Y.3d 281 (2004) ...........................................................................................................8

Burgos v. New York Presbyterian Hosp.,
155 A.D.3d 598 (2d Dep’t 2017) .........................................................................................7

Chrysler Cap. Corp. v. Se. Hotel Prop’s. Ltd. P’ship,
697 F. Supp. 794 (S.D.N.Y. 1988) ..................................................................................... 10

Estate of Amendola v. Kendzia,
48 A.D.3d 1173 (4th Dep’t 2008) .................................................................................. 9, 16

In re Civ. Serv. Emps. Ass'n Inc.,
303 A.D.2d 1050 (4th Dep't 2003) ................................................................................. 9, 16

In re George W. & Dacie Clements Agric. Research Inst. v. Green,
130 A.D.3d 1422 (3d Dep’t 2015) ..................................................................................... 10

In re Philadelphia Ins. Indem. Co. v. Kendall,
197 A.D.3d 75 (1st Dep’t 2021) .............................................................................11, 12, 18

In re Pittsford Canalside Props., LLC v Village of Pittsford Zoning Bd. of
Appeals,
181 A.D.3d 1235 (4th Dep’t 2020) .............................................................................. 10,
17

Kowalchuk v. Stroup,
61 A.D.3d 118, 121 (1st Dep’t 2009).....................................................................8, 9, 11,
14

Mut. Life Ins. Co. of NY v. O’Donnell,
146 N.Y. 275 (1895) ....................................................................................................... 7, 8

Rawald v. Dormitory Auth.,
199 A.D.3d 477 (1st Dep’t 2021) ................................................................................ 11,
12

Rudovic v. Rudovic,
131 A.D.3d 1225 (2d Dep’t 2015) .......................................................................................8

Ruffini v. 41 Fifth Owners Corp.,
21 Misc. 3d 1140(A), (NY Civ. Ct. 2008) ........................................................................ 8, 9

3 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

Scheck v. Francis,
26 N.Y.2d 466 (1970) ............................................................................................. 9, 15,
16

Schwartz v. Greenberg,
304 N.Y. 250 (1952) ......................................................................................................... 16

Stone Mountain Holdings, LLC v. Spitzer,
119 A.D.3d 548 (2d Dep’t 2014) ....................................................................................... 19

Teitelbaum Holdings, Ltd. v. Gold,
48 N.Y.2d 51 (1979) ...........................................................................................................7

Teixeira v Woodhaven Ctr. of Care,
173 A.D.3d 1108 (2d Dep’t 2019) ........................................................................... 9, 10,
17

West Hempstead Water Dist. v. Buckeye Pipeline Co., L.P.,
152 A.D.3d 558 (2d Dep’t 2017) ....................................................................................... 19

Winston v. Mediafare Ent. Corp.,
777 F.2d 78 (2d Cir. 1985) ................................................................................. 9, 10,
16, 17

Rules

CPLR 2104 ..................................................................................................................... passim

CPLR 3211 ..............................................................................................................................7

CPLR 3211(a) ..........................................................................................................................8

CPLR 3211(c) ..........................................................................................................................8

CPLR 5003-a ......................................................................................................................... 18

Regulations

22 N.Y.C.R.R. 130–1.1..................................................................................................... 18,
19

Other Authorities

Merriam-Webster.com, entry at 5.c at: https://www.merriam-
webster.com/dictionary/draft ............................................................................................. 11

iii

4 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

DT Net Lease I REIT (“REIT”), by its undersigned counsel, submits this memorandum of

law in opposition to the Motion to Enforce Settlement Pursuant to CPLR 2104 and for Sanctions

(the “Motion”) brought by James Coughlan and Robert Coughlan (collectively, the “Coughlans”)

to enforce a settlement purportedly entered into between and among REIT, DT-XCIII-IS, LLC,

(“Joint Venture” and collectively with REIT, “DT”) 1, the Coughlans and TRITEC Building

Company, Inc. (together with the Coughlans, “TRITEC”). See NYSCEF Doc. No. 70 et seq.

PRELIMINARY STATEMENT

TRITEC seeks to convert the parties’ non-binding settlement negotiations into a binding

settlement agreement, in plain contravention of established law. The objective circumstances of

the parties’ negotiations, including the emails attaching formal drafts of a settlement agreement,

show that DT did not intend to subscribe or be bound to a settlement unless and until it and

TRITEC both signed that formal agreement. TRITEC’s own behavior itself confirms that intent

because it withheld its signature on the draft while it sought to arrange affairs with third parties.

Indeed, TRITEC has never tendered its signature on any draft; and while it was withholding its

signature, it admitted to the Court that the settlement was not finalized. TRITEC was always aware

that DT required that any settlement be consummated quickly; and when TRITEC saw that its own

delays might imperil settlement, it sought to unilaterally characterize signatures as “ministerial”

or a mere matter of “timing.” DT did not agree with TRITEC’s re-characterizations, and

TRITEC’s unilateral statements did not bind DT. The Court should deny TRITEC’s Motion, rule

in DT’s favor by holding that the parties did not enter into a binding settlement, and deny

TRITEC’s subsidiary effort to obtain attorneys’ fees.

1 In the pleadings, the collective term used was “iStar,” but during the pendency of this Motion,
the sale of the REIT interests to Carlyle closed, so the collective term has been changed to “DT.”

5 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

STATEMENT OF FACTS

DT’s settlement discussions with TRITEC were conducted against the backdrop of the

Carlyle Group’s (“Carlyle Group”) then-pending acquisition of a $3 billion portfolio of assets

owned by iStar Inc., including shares in REIT. Chmil Aff. 2 ¶ 2. Accordingly, DT several times

informed TRITEC that there was a short window to conclude settlement and speed was important.

Id.

On December 1, 2021, DT’s counsel emailed counsel for TRITEC and Rita Castagna

(“Castagna”) and suggested that DT thought it was an opportune time to try to move things forward

toward a resolution, and proposed a call with Castagna, TRITEC and the parties’ experts the

following day. Chmil Aff. ¶ 3. DT’s counsel reached out again on December 3rd with regard to

scheduling and specifically stated, “There is huge momentum for getting something done and I am

being asked to push hard for a call early next week. There is a short window to get something

done. Please do what you can on your end to make that happen.” See id. and Exhibit 1 thereto.

(emphasis added).

The call took place on December 7, 2021. Chmil Aff. ¶ 4. During that call, a DT

representative expressed that the goal was for TRITEC to quickly come up with a plan and

monetize it so that the parties could go their separate ways prior to the sale, and asked TRITEC to

come back quickly with a number. Id.

On December 10, 2021, TRITEC’s counsel called DT’s counsel and suggested that if DT

would come back with a number below a certain threshold, he would work to put a settlement

package together. Chmil Aff. ¶ 5. That same day, DT’s counsel emailed TRITEC’s counsel with

2 References to “Chmil Aff.” or “Chmil Affirmation” refer to the Affirmation of Bonnie Lynn
Chmil in Opposition to Motion to Enforce Settlement Pursuant to CPLR 2104 and Sanctions
submitted herewith.

6 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

DT’s counterproposal, which included a demand that the settlement be done by Christmas. Id.,

and Exhibit 2 thereto. TRITEC did not meet that deadline and did not respond to DT’s

counterproposal until December 23, 2021. Chmil Aff. ¶ 6. TRITEC’s response was unacceptable

to DT and despite the holidays, DT, through its counsel, made a counterproposal to TRITEC on

December 27, 2021. Id.

On January 6, 2022, DT’s counsel again emailed TRITEC’s counsel, stating that DT

“wants to wrap things up” and would settle at TRITEC’s number “provided that we have an

agreement in principle by the end of the business day tomorrow and the settlement is documented

by January 11, 2022.” Chmil Aff. ¶ 7 and Exhibit 3 thereto. TRITEC did not confirm any

agreement in principle by the end of the business day, January 7, 2022, and did not document a

settlement by January 11, 2022. Chmil Aff. ¶ 7.

Following further discussions, on January 14, 2022, DT’s counsel telephoned TRITEC’s

counsel and told him that a draft of a proposed settlement agreement would be provided to him on

Monday, January 17, 2022, but that it needed to be signed and done by close of business on

Wednesday, January 19, 2022. Chmil Aff. ¶ 7. DT’s counsel sent TRITEC’s counsel the draft

settlement agreement on January 17, 2022. Id. The next day, DT’s counsel sent a revised draft to

TRITEC’s counsel incorporating a few additional terms that were proposed. Id. TRITEC did not

return comments on the draft agreement until the afternoon of January 19, 2022. Id. TRITEC’s

response included terms objectionable to DT, and particularly in regard to the timing of the

settlement payment. Id. DT’s counsel emailed TRITEC’s counsel that day, stating the settlement

amount was based on “quick payment.” Id. and Exhibit 4 thereto.

There is no email between the parties that stated “we are settled” or that “confirmed

settlement.” Chmil Aff. ¶ 9. There also is no email between the parties that stated in the body of

7 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

the email all of the material terms of any settlement. Id. Complete settlement terms were contained

solely in email attachments, and the emails consistently referred to the attachments as “drafts” of

a settlement agreement that in form that would require signature. Id. As noted above, DT’s

counsel’s January 6, 2022 email stated that the settlement had to be “documented,” and on January

17th, January 18th and January 19th, “drafts” of the settlement agreement were sent between the

parties. Id. That the parties were exchanging drafts and redrafts of the proposed settlement

agreement demonstrates that DT did not intend to subscribe to a settlement until the further

occurrence of a fully executed settlement agreement. Id.

On January 19, 2022, DT’s counsel emailed TRITEC’s counsel a revised draft of the

settlement agreement, and the covering email specifically stated that it “should be the final draft.”

Chmil Aff. ¶ 10. The January 19, 2022 draft is what TRITEC’s January 25, 2022 email, in which

it purports to accept a settlement offer, refers to. Id. However, the final draft attached to the

January 19, 2022 email indicated that the parties’ agreement was not contained in emails, and DT

did not intend to subscribe to a settlement until the further occurrence of full execution of the draft

settlement agreement. Id.

TRITEC has never tendered its signature on the January 19, 2022 draft settlement

agreement. Chmil Aff. ¶ 13. Paragraph 15 of the draft settlement agreement permits signature by

counterparts, so execution of a counterpart of the agreement and delivery of that counterpart to DT

was part of the process for concluding the settlement. Id. TRITEC’s behavior indicates that it did

not intend to be bound until it signed and that it was delaying its signature while it sought to reach

agreements with other parties. Id.

On January 21, 2022, TRITEC’s counsel informed DT’s counsel that he had proposed

mutual release agreements to Castagna and the tenant at the subject property, Cox Automotive,

8 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

Inc., and that as soon as he got their approval, he would have his clients execute the settlement

agreement. Chmil Aff. ¶ 14. This plainly indicated that TRITEC did not intend to subscribe to a

settlement until the draft settlement agreement was executed; and that TRITEC did not intend to

execute the draft settlement agreement unless and until it obtained releases from non-parties to the

draft settlement agreement. Id.

On January 25, 2022, TRITEC’s counsel emailed DT’s counsel stating, “[a]s we discussed,

the 45 days is acceptable and this agreement can be executed….” Chmil Aff. ¶ 16 and Exhibit 6

thereto. But he also stated that he expected to have releases with Castagna executed that day, and

that, “the only outstanding item is hearing back from Burleigh Singleton with respect to the general

releases to and from Cox Automotive.” Id. Counsel’s reference to execution of the agreement

confirms that TRITEC considered such execution to be a necessary further occurrence to

settlement. Id. But despite the statement that the agreement “can be” executed, TRITEC did not

tender its signature on the draft agreement. Id.

In the email from TRITEC’s counsel on January 25, 2022, TRITEC’s counsel stated that

“[t]his isnot a substantive issue, but a timing issue in terms of syncing up all of the signatures.”

Chmil Aff. ¶ 17 and Exhibit 6 thereto. But DT at no point agreed with TRITEC that signature

was merely a timing issue, and there is nothing in the draft settlement agreement indicating that

settlement was conditioned on signature of any other document by Cox Automotive or that

signature of any other such document would need to be “synced up” with signature on the draft

settlement agreement. Chmil Aff. ¶ 17.

On January 28, 2022, in response to an earlier email from the Clerk of the Court, TRITEC’s

counsel sent an email in which he stated that he was “hopeful that the settlement of the first-party

action will be finalized next week.” Chmil Aff. ¶ 18 and Exhibit 7 thereto. Which is to say,

9 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

TRITEC acknowledged in an email to the Court that, as of January 28, no settlement was finalized.

Chmil Aff. ¶ 18. That statement plainly contradicts TRITEC’s current contention that a settlement

was made by email on January 25, 2022. Id.

On February 8th, TRITEC’s counsel sent another reply to the Clerk of the Court, stating:

We have finalized the main settlement agreement as between my clients, defendants
TRITEC Building Company, James L. Coughlan and Robert J. Coughlan, and
defendants DT Net Lease I REIT and DT-XC-III-IS, LLC (collectively “iStar”) and
are just awaiting signatures. It is my understanding that the plaintiffs and iStar have
also finalized their settlement. In addition, we have worked out general releases
between my clients and the plaintiffs. The only hold up as to the entire main
action being discontinued at this time is the status of general releases and a
discontinuance between my clients and defendant Cox Automotive Inc. against
whom my clients have indemnity and contribution cross-claims. I have been
unable, for over a week, to obtain feedback from counsel for Cox, despite
numerous emails and voicemails.”

Chmil Aff. ¶ 19 and Exhibit 7 thereto (emphasis added). The statement that counsel was “awaiting

signatures” indicates that TRITEC intended that signature on the draft settlement agreement was

a further occurrence necessary to settlement. See id. Despite the statement that TRITEC was

“awaiting” signatures, TRITEC never tendered its own signature on the draft. Id.

Later on February 8, 2022, Cox Automotive informed the Court, in relevant part, that it did

not believe itnecessary for Cox to sign a release. Chmil Aff. ¶ 20 and Exhibit 7 thereto. On

February 9, 2022, only after this exchange with the Clerk of the Court, TRITEC’s counsel sent

DT’s counsel another email regarding the proposed settlement (his first email to DT on that topic

since January 25). Chmil Aff. ¶ 21 and Exhibit 6 thereto. The email stated that TRITEC planned

to “simply discontinue against Cox Automotive,” and that, “having accepted [DT’s] final draft,

[his client was] ready to coordinate signatures,” and inquired as to how to go about this “ministeria l

step.” See id. Despite its statement that it was ready to “coordinate” signatures, TRITEC did not

tender its signature on the draft settlement agreement; and DT did not at any time agree that

10 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

signatures on the draft settlement agreement needed to be coordinated or that signature was merely

“ministerial.” Chmil Aff. ¶ 21.

Earlier, on February 2, 2022, iStar Inc. publicly announced that it had signed a definitive

agreement to sell a portfolio of its owned and managed net lease assets to an affiliate of Carlyle

Group. Chmil Aff. ¶ 22. The sale includes REIT and its claims to enforce the subject Completion

Guaranty. See id.

On February 14, 2022, I informed TRITEC’s counsel of this and emailed the Clerk of the

Court and all counsel of record, stating, in relevant part:

“[T]he proposed settlement with Tritec Building Company, Inc. and the Coughlans
was not concluded timely. Throughout the negotiations, the parties were aware
that time was of the essence and that there was a short window to settle the
claims. On February 2, 2022, iStar Inc. announced that it had signed a definitive
agreement to sell a portfolio of its owned and managed net lease assets to an affiliate
of Carlyle. The sale includes DT Net Lease I REIT and its claims to enforce the
subject completion guaranty. As such, DT Net Lease I REIT is not in a position to
proceed with the settlement at this time.”

Chmil Aff. ¶ 23 and Exhibit 7 thereto (emphasis added).

The sale closed on March 22, 2022, and on the closing date, REIT was converted to a

Delaware limited liability company, DT Net Lease I REIT LLC. Chmil Aff. ¶ 24.

ARGUMENT

I. LEGAL STANDARD

Unless a case has been dismissed, the court retains supervisory control over a case and can

entertain a motion to enforce a purported settlement agreement. Teitelbaum Holdings, Ltd. v. Gold,

48 N.Y.2d 51, 54–55 (1979) (citations omitted). A motion to enforce a purported settlement

agreement should be decided on the same standard as a motion to dismiss under CPLR 3211. See

Teitelbaum Holdings, 48 N.Y.2d 56–57; Mut. Life Ins. Co. of N.Y. v. O’Donnell, 146 N.Y. 275,

279–80 (1895); Burgos v. N.Y. Presbyterian Hosp., 155 A.D.3d 598, 599–600 (2d Dep’t 2017);

11 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

Rudovic v. Rudovic, 131 A.D.3d 1225, 1226–27 (2d Dep’t 2015); Kowalchuk v. Stroup, 61 A.D.3d

118, 121 (1st Dep’t 2009); CPLR 3211(a), (c).

II. DT DID NOT SUBSCRIBE TO A BINDING SETTLEMENT AGREEMENT
UNDER CPLR 2104.

A. An out-of-court binding settlement under CPLR 2104 requires all material
terms in a writing subscribed to by both parties and a clear expression of
mutual accord.

CPLR 2104 provides, in pertinent part, “[a]n agreement between parties or their attorneys

relating to any matter in an action ... is not binding upon a party unless it isin a writing subscribed

by him or his attorney or reduced to the form of an order and entered.” CPLR 2104. As the Court

of Appeals has recently observed: “The plain language of the statute directs that the agreement

itself must be in writing signed by the party (or the attorney) to be bound.” Bonnette v. Long

Island Coll. Hosp., 3 N.Y.3d 281, 286 (2004) (denying request to enforce settlement). “[The] rule

is of somewhat ancient origin. It grew out of the frequent conflict between attorneys as to

agreements made with reference to proceedings in actions, and was intended to relieve the courts

from the constant determination of controverted questions of fact with reference to such

proceedings.” Id. (quoting Mut. Life Ins. Co. of NY v. O’Donnell, 146 N.Y. 275, 279 (1895)). The

rule expressed “policy concerns of certainty, judicial economy, flexibility to conduct settlement

negotiations without fear of being bound by preliminary offers and the prevention of fraud.” Id.

If settlements, once entered, are to be enforced with rigor and without a searching
examination into their substance, itbecomes all the more important that they be
clear, final and the product of mutual accord. These concerns obviously lie at the
heart of CPLR 2104, a neutral statute enacted to promote certainty in settlements,
which benefits all litigants.

Id.; accord Ruffini v. 41 Fifth Owners Corp., 21 Misc. 3d 1140(A), at *1 (NY Civ. Ct. 2008).

12 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

To be enforceable under CPLR 2104, “a settlement agreement must set forth all material

terms and there must be a clear mutual accord between the parties.” Teixeira v Woodhaven Ctr.

of Care, 173 A.D.3d 1108, 1109 (2d Dep’t 2019) (citing multiple cases).

An email that merely confirms a purported settlement is not necessarily sufficient
to bring the purported settlement into the scope of CPLR 2104. [citation omitted]
However, where an email message contains all material terms of a settlement and
a manifestation of mutual accord, and the party to be charged, or his or her agent,
types his or her name under circumstances manifesting an intent that the name be
treated as a signature, such an email message may be deemed a subscribed writing
within the meaning of CPLR 2104 so as to constitute an enforceable agreement.

Id. (internal quotations and citations omitted).

Mutual accord is essential to a finding that the parties have subscribed to a binding

settlement agreement. “It is well settled that, ifthe parties to an agreement do not intend it to be

binding upon them until it is reduced to writing and signed by both of them, they are not bound

and may not be held liable until it has been written out and signed.” Scheck v. Francis, 26 N.Y.2d

466, 469–70 (1970) (citing multiple cases); Estate of Amendola v. Kendzia, 48 A.D.3d 1173, 1174

(4th Dep’t 2008) (refusing to enforce settlement) (citing Scheck); Ruffini, 21 Misc. 3d 1040(A) at

*1; In re Civ. Serv. Emps. Ass’n Inc., 303 A.D.2d 1050, 1051 (4th Dep’t 2003) (in refusing to

enforce settlement, court held: “Where, as here, the parties have manifested their mutual intent not

to be bound until execution of a formal written contract, effect will be given to that intention.”)

(citing Scheck and other cases); Kowalchuk v. Stroup, 61 A.D.3d 118, 122-23 (1st Dep’t 2009); see

also Attestor Value Master Fund v. Rep. of Argentina, 940 F.3d 825, 830 (2d Cir. 2019) (citing

Scheck); Winston v. Mediafare Ent. Corp., 777 F.2d 78, 80 (2d Cir. 1985) (“[I]f either party

communicates an intent not to be bound until he achieves a fully executed document, no amount

of negotiation or oral agreement to specific terms will result in the formation of a binding contract.

Because of this freedom to determine the exact point at which an agreement becomes binding, a

party can negotiate candidly, secure in the knowledge that he will not be bound until execution of

13 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

what both parties consider to be final document.”) (applying New York law) (internal citations

omitted); Chrysler Cap. Corp. v. Se. Hotel Prop’s. Ltd. P’ship, 697 F. Supp. 794, 799 (S.D.N.Y.

1988) (“[m]ore is needed than even mutual agreement on all terms . . . ; there must be a

manifestation of consent to be bound to those terms as of a point in time before a contract may be

found.” (emphasis added)) (internal citations omitted).

In addition to setting forth all material terms and containing an expression of mutual assent,

in order to be enforceable, CPLR 2104 requires that the agreement must not be conditioned on a

further occurrence. In re Pittsford Canalside Props., LLC v Village of Pittsford Zoning Bd. of

Appeals, 181 A.D.3d 1235, 1237 (4th Dep’t 2020) (parties only had an “agreement to agree” and

no enforceable settlement when party’s counsel indicated that additional documents and

information were required before finalizing settlement); Teixeira, supra, 173 A.D.3d at 1108 (no

settlement agreement existed where the parties discussed further occurrences necessary to finalize

the agreement); In re George W. & Dacie Clements Agric. Research Inst. v. Green, 130 A.D.3d

1422, 1423–24 (3d Dep’t 2015).

B. The objective circumstances of negotiation show that DT did not intend to
enter into a mutual accord or be bound to a settlement until it and TRITEC
both signed the draft settlement agreement.

“In any given case, it is the intent of the parties that will determine the time of contract

formation. To discern that intent, the Court must look to ‘the words and deeds [of the parties]

which constitute objective signs in a given set of circumstances.’” Winston, 777 F.2d at 80.

TRITEC has offered two cases as legal authority that a mutual accord was formed between it and

DT on a settlement under CPLR 2104. See NYSCEF Doc. No. 86 TRITEC Memo of Law at p.2.

But the facts of those cases are highly dissimilar to the instant action and the cases should be

rejected as inapplicable and providing no guidance to the Court.

14 of 24
FILED: NEW YORK COUNTY CLERK 03/28/2022 06:10 PM INDEX NO. 652850/2020
NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 03/28/2022

In each of TRITEC’s cases, there was an email exchange that expressly indicated an intent

to be immediately bound to settlement. In In re Philadelphia Ins. Indem. Co. v. Kendall, 197

A.D.3d 75 (1st Dep’t 2021), the parties reached an agreement and respondent’s counsel emailed

petitioner’s counsel saying “Confirmed -we are settled for 400K.” Petitioner’s counsel responded

by email with a draft release indicating that respondent’s failure to sign would constitute

“reneging.” Id. at 77. The issue in that case was not mutual accord but signature: whether

counsel’s subscribing signature needed to be re-typed in the email to be binding or could merely

be prepopulated by the email application. In Rawald v. Dormitory Authority, 199 A.D.3d 477, 478

(1st Dep’t 2021), plaintiffs’ counsel sent an email saying “This is to confirm settlement in the sum

of $275,000. Please send release language and parties to be released.” Plaintiffs’ counsel followed

up later in the day, saying “Please confirm we are settled.” Defense counsel responded

“Confirmed. I’ll have release information to you ASAP.” In Kowalchuk v. Stroup, 61 A.D.3d 118

(1st Dep’t 2009), defendant’s counsel told plaintiff’s counsel that his client had executed the

settlement agreement and asked for plaintiff’s counsel’s consent to notify the arbitrator that “we

have a settlement.” Id. at 120. Plaintiff’s counsel agreed and defendant’s counsel then

Case Info

Judge

Andrea Masley Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

March 28, 2022

Case Filing Date

January 01, 2020

County

Parties

BEHAR, JARRETT M Attorney for the Defendant
CHMIL, BONNIE L Attorney for the Plaintiff
DT Net Lease I REIT Plaintiff
James L. Coughlan Defendant
KINBURN, REBECCA Attorney for the Plaintiff
KUSHNER, GARY MARTIN Attorney for the Defendant
PACCIONE, ANTHONY L. Attorney for the Plaintiff
Rita Castagna Defendant
Robert J. Coughlan Defendant
MARC KUSHNER Attorneys for Plaintiffs
Timothy Pastore Attorney
MICHAEL BEHAR Attorney
VICTORIA CORBO Attorney
FREDERICK WHITMER Attorney
BENJAMIN BLUM Attorneys for Defendants

For full print and download access, please subscribe at https://www.trellis.law/.

Motion-Secondary: Dt Net Lease I Reit v. James L. Coughlan, Robert J. Coughlan, Rita Castagna as the EXECUTOR OF THE ESTATE OF FRANK CASTAGNA, Rita Castagna

Preview

Related Topics

Case Info

Parties