{"id":1249,"date":"2024-03-05T15:02:42","date_gmt":"2024-03-05T19:02:42","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=1249"},"modified":"2024-03-05T17:38:04","modified_gmt":"2024-03-05T21:38:04","slug":"investment-advisory-business-and-executive-ordered-by-new-york-federal-court-to-pay-agreed-upon-settlement-amount-plus-interest-after-ignoring-court-deadlines","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/03\/05\/investment-advisory-business-and-executive-ordered-by-new-york-federal-court-to-pay-agreed-upon-settlement-amount-plus-interest-after-ignoring-court-deadlines\/","title":{"rendered":"Investment Advisory Business And Executive Ordered By New York Federal Court To Pay Agreed-Upon Settlement Amount, Plus Interest After Ignoring Court Deadlines"},"content":{"rendered":"

\"\"<\/a>By Gerald L. Maatman, Jr., Maria Caceres-Boneau, and Gregory S. Slotnick<\/strong><\/p>\n

Duane Morris Takeaways:<\/em><\/strong> On February 29, 2024, Judge Andrew Carter of the U.S. District Court for the Southern District of New York in Lee v. Grove Group Advisors LLC, et al., Case No. 1:20 Civ. 05937 S.D.N.Y. (Feb. 29, 2024), issued an order<\/a> granting a motion to enforce a settlement agreement reached between the parties nearly three years after it was initially submitted for approval, and more than two years after the Court ultimately approved the agreement as fair and reasonable.\u00a0 The decision underscores the importance of a Court\u2019s retention of jurisdiction over a case in order to enforce or otherwise apply the settlement of a case, and also serves as a reminder that employers and individual business executives who sign settlement agreements to end litigation should always be prepared to make all agreed-upon payments, or else risk the ire of a Judge, the Court\u2019s enforcement of the agreement, and additional interest on the original settlement amount.\u00a0 <\/em><\/p>\n

Case Background<\/strong><\/p>\n

According to the Complaint<\/a> filed by the Plaintiff on July 30, 2020, Plaintiff began working on August 9, 2019 for the defendants \u2013 including an investment advisory company and its Chief Executive Officer\/Co-Founder (together, \u201cDefendants\u201d) \u2013 as a \u201cManufacturing and Engineering Director\u201d for which Defendants agreed to pay Plaintiff an annual salary of $160,000.\u00a0 Complaint (\u201cCompl.\u201d) at \u00b6\u00b6 12, 21-22.\u00a0 Plaintiff claims that Defendants also agreed to provide him with fifteen (15) days of PTO per year.\u00a0 Id<\/em>. at \u00b6 23.\u00a0 According to Plaintiff, in January 2020, Defendants ceased paying him his wages, told him that they\u2019d pay him \u201csoon,\u201d and after he continued to work for Defendants, in February 2020, Defendants sent him a letter stating that his last day of employment was February 13, 2020.\u00a0 Id<\/em>. at \u00b6\u00b6 26-33. The letter also informed Plaintiff that Defendants owed him approximately $24,000 for the period from December 22, 2019 to February 13, 2020, that Defendants did not have the means to pay him at that time, but that they were making \u201cevery effort to raise money for the company in order to pay our liabilities, yours included.\u201d\u00a0 Id<\/em>. at \u00b6 32.<\/p>\n

Plaintiff alleges that on May 15, 2020, Defendants paid him only $3,846.15, and that Defendants did not pay him the balance of what they owed him despite Plaintiff trying to reach out to Defendants on numerous occasions in an attempt to get paid, the only reply from Defendants being \u201cwe will let you know when we get the funds to pay you.\u201d\u00a0 Id<\/em>. at \u00b6\u00b6 34-35.\u00a0 Plaintiff claimed entitlement to $20,153.87 in unpaid earned wages for work performed for Defendants, as well as sixty-four (64) hours of accrued, unused PTO valued at $4,923.07 \u2013 totaling $25,076.94.\u00a0 Id<\/em>. at \u00b6\u00b6 36-38.<\/p>\n

According to the Court Order, the parties reached agreement at mediation and submitted an initial proposed settlement agreement for Court approval on May 27, 2021, as required by Cheeks v. Freeport Pancake House, Inc.<\/em>, 796 F.3d 199 (2d Cir. 2015).\u00a0 Order at 1.\u00a0 On December 28, 2021, after the parties filed a revised agreement, the Court approved the agreement as fair and reasonable, and it provided for payment by Defendants of a settlement sum of $14,990 by January 11, 2022.\u00a0 Id<\/em>. at 1-2.\u00a0 Critically, the Court retained jurisdiction over the case to hear any motion to enforce or otherwise apply the settlement.\u00a0 Id<\/em>.\u00a0 The Order stated that Plaintiff now sought to enforce the agreement, and that the Court provided Defendants with multiple opportunities to respond to the motion to enforce, including a December 4, 2023 order to show cause as to why Plaintiff\u2019s motion to enforce should not be deemed unopposed.\u00a0 Id<\/em>.<\/p>\n

The Court\u2019s Decision<\/strong><\/p>\n

The Court determined that because the parties reached a binding and enforceable agreement, Plaintiff\u2019s motion to enforce the agreement should be granted.\u00a0 Id<\/em>.\u00a0 The order confirmed that to date, Defendants had not paid any of the settlement sum, and that after counsel for Defendants\u2019 request to withdraw was granted by the Court, Plaintiff filed a motion to enforce the settlement on April 12, 2023.\u00a0 Id<\/em>. at 2.\u00a0 Defendants also ignored the Court\u2019s repeated warnings to obtain new counsel.\u00a0 Id<\/em>.\u00a0 On June 5, 2023, the Court issued an order to show cause as to why the Plaintiff\u2019s motion should not be treated as unopposed, and provided another follow-up to Defendants by way of a December 1, 2023 filing.\u00a0 Id<\/em>.\u00a0 Defendants did not respond, and the Court noted that they have not made any filing on the docket since February 9, 2023.\u00a0 Id<\/em>. at 2-3.<\/p>\n

The Court set out the standard of review for settlement agreements, which it stated are interpreted according to general principles of contract law.\u00a0 Id<\/em>. at 3.\u00a0 The Court found that when a judge determines a settlement agreement was in fact reached, the agreement is binding on the parties, and that the parties must be in agreement on all essential terms.\u00a0 Id<\/em>.\u00a0 The order confirmed that once a settlement agreement is reached, it constitutes a binding and conclusive contract, and that the parties are bound to its terms even if they have a later change of heart.\u00a0 Id<\/em>. at 4.<\/p>\n

The Court stated that it may only vacate a stipulation of settlement upon a showing of good cause, such as fraud, collusion, mistake, duress, lack of capacity, or where the agreement is unconscionable, contrary to public policy, or so ambiguous that it indicates by its terms that the parties did not reach agreement.\u00a0 Id<\/em>. at 5.<\/p>\n

In this case, the Court found no such showing of good cause to vacate the agreement, since it was written and signed by the parties and approved by the judge.\u00a0 Id<\/em>.\u00a0 In considering the totality of the circumstances, the Court ruled that Plaintiff established that the signed settlement agreement is enforceable.\u00a0 Id<\/em>. at 6.\u00a0 As a result, the Court granted Plaintiff\u2019s motion to enforce the agreement, as well as Plaintiff\u2019s request for 9% interest per year from the date the funds became due (January 11, 2021) to the date the funds became owed (April 12, 2023 \u2013 the filing date of the motion to enforce settlement).\u00a0 Id<\/em>.\u00a0 The Court calculated such interest to be $3,034.55, and ultimately held Plaintiff is entitled to recover from Defendants, individually, jointly and severally, the total amount of $18,024.55.\u00a0 Id.<\/em><\/p>\n

Implications For Businesses<\/strong><\/p>\n

The\u00a0Lee\u00a0<\/em>decision illustrates that under appropriate circumstances, such as the settlement of an unpaid wage claim providing for a judge to retain jurisdiction, a court is apt to grant motions to enforce a settlement agreement without hesitation (and also award interest on same).\u00a0 In this case, the Court provided Defendants with numerous opportunities to defend themselves and appear on the docket.\u00a0 However, Defendants\u2019 silence spoke volumes, and the Court ultimately approved Plaintiff\u2019s motion to enforce the valid agreement previously reached and submitted on the docket by the parties.<\/p>\n

Businesses and their executives should always ensure their intent and unquestioned ability to make agreed-upon payments as part of any litigation settlement agreement (and to their employees), whether an unpaid wage claim filed on the docket for Court approval in the Second Circuit, or a private, confidential breach of contract claim.\u00a0 This is especially so when a Court retains jurisdiction over a filed matter to enforce any settlement agreement reached.\u00a0 Of course, employers should also make sure that they follow Court Orders and meet Court deadlines to a tee!<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Maria Caceres-Boneau, and Gregory S. Slotnick Duane Morris Takeaways: On February 29, 2024, Judge Andrew Carter of the U.S. District Court for the Southern District of New York in Lee v. Grove Group Advisors LLC, et al., Case No. 1:20 Civ. 05937 S.D.N.Y. (Feb. 29, 2024), issued an order granting … <\/p>\n

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