What is a Notice of Settlement?

Background

Section 1250.2(c) of the Rules of the Appellate Division, All Departments (22 NYCRR), provides, in pertinent part, that "[t]he parties or their attorneys shall immediately notify the court when there is a settlement of a matter or any issue therein or when a matter or any issue therein has been rendered moot.

Pursuant to 11 NYCRR 216.9, releasors have a right to be notified — in writing, and under certain circumstances — when a settlement check of $5,000 or more is sent to the Releasors’ lawyer or other representative.

The Court's Decision

A directive to settle ‘is reserved for more complicated dispositions, such as orders involving restraints or contemplating a set of follow-up procedures’ (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C2220:4, at 170). Because the decision ordinarily entails more complicated relief, the instruction contemplates notice to the opponent so that both parties may either agree on a draft or prepare counter proposals to be settled before the court... The common element in both directives is that further drafting and judicial approval of the judgment or order is contemplated” (Funk v. Barry, 89 NY2d 364, at 367.)

Timeline

Pursuant to 22 NYCRR 202.48, if the justice's decision says “settle order or submit order on notice,” unless otherwise specifically directed by the court, the winning party must prepare the order, attach the order to a notice of settlement and serve it on the other parties to the lawsuit at least five (5) days before its settlement date [ten (10) days if the order is served by mail]. The order, together with the notice of settlement, must be served and presented to the court within sixty (60) days of the justice's decision. The party settling the order must also submit an original affidavit of service showing the proposed order and notice of settlement were served on all other parties to the case.

An opposing party may submit a proposed counter order, but such an order must be made returnable on the same day and place as the original order and served at least two (2) days before the return day [seven (7) days if served by mail].

Monetary Awards

Pursuant to 22 NYCRR 1250.2(c), if any of the parties and their counsel — without good cause shown — fail to comply with the immediate notification requirement, then they may be subject to the “imposition of sanctions.”

Recent Rulings on Notice of Settlement

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