Burden of Proof: Make It Stick
9.15.2024
Attorneys (and, less often, parties) reach agreements with one another in litigation all the time. Being lawyers, of course, we cannot simply call them “agreements”; instead, we refer to them as “stipulations.”
Lawyers’ stipulations can cover an almost infinite range of agreements, some relatively insignificant and some of the utmost importance. Stipulations can range from mundane (agreeing to start a deposition at 11 a.m. instead of 10 a.m.) to dire (extending the time of a defendant to interpose an answer to avoid a default). Stipulations can be oral or written and should be, wherever and whenever possible, written. We are all familiar with the phrase “not worth the paper it’s written on.” The lawyer’s critical task when entering into a stipulation that the lawyer wants enforced (the goal, after all, is being able to have a court enforce the stipulation to your client’s benefit) is to draft and execute a stipulation that is enforceable. In other words, “make it stick.”
Perhaps the Most Important Tool in the CPLR
David had the pleasure of sitting down after a CPLR update with his two co-panelists (and mentors), Professor Jay C. Carlisle of Pace Law School and Professor Richard T. Farrell of Brooklyn Law School. Talk turned to what each thought was the most important provision in the CPLR for a lawyer to master. The unanimous choice? CPLR 2104.
CPLR 2104 is a beautiful thing. Weighing in at a mere 81 words, an agreement between lawyers that comports with the requirements of CPLR 2104 is enforceable by the courts:
An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his[sic] attorney or reduced to the form of an order and entered. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.
Sounds simple, and it is (although part of the rule is, unfortunately, phrased in terms of what will not be a binding stipulation). So why do lawyers struggle with drafting stipulations that are enforceable?
What the Statute Requires: ‘Open Court’
CPLR 2104 provides three paths to an enforceable stipulation.
The first is “one made between counsel in open court.” Simple, except for the “open court” element, which has confused attorneys over the years. As the Court of Appeals has explained:
The term “open court” as it has been used since ancient times and as, it will be suggested, it is used in CPLR 2104, is a technical term in the law. It refers to a judicial proceeding in a court, whether held in public or private, and whether held in the court house, a courtroom, or any place else, so long as it is, in an institutional sense, a court convened, with or without a jury, to do judicial business. Typically, in a court of record an open court has in attendance a clerk who makes entries of judicial events in a docket, register, or minute book, and in modern times there is a court reporter, who makes a record of all the proceedings. An open court is not a ‘judge in chambers,’ in the technical sense of that phrase, and it is neither a Judge nor a clerk acting in his proper person anywhere, whether in the courtroom or elsewhere.[1]
The Dolgin court continued:
Judicial proceedings in “open court,” wherever held, including chambers of course, and informal conferences in chambers or robing rooms or even a courtroom are manifestly disparate. Even before full reporting in open court became universal in courts of record, the formality, publicity, and solemnity of an open court proceeding marked it as different from the preliminary atmosphere attached to informal conferences elsewhere. Moreover, the proceedings in open court would always have some formal entries, if only in the clerk’s minutes, to memorialize the critical litigation events. In the latter days, it has also meant an available full transcript beyond dispute and the fallibility of memory.[2]
It’s simple: when parties and/or their attorneys reach an agreement before a judge memorialized by a court reporter, that equals “open court.” That being said, there are extant decisions shoehorning other scenarios into the “open court” construct.
Departures From ‘Open Court’ Requirement
In a First Department decision decided shortly before Dolgin and cited by that court as an estoppel-based exception to the “open court” construct, a settlement agreement reached at the conclusion of trial was enforced notwithstanding the absence of a court reporter:
After trial to a jury lasting several days both sides rested at about 5:00 P.M. on a Friday. At the court’s suggestion the parties conducted successful settlement negotiations. At about 6:00 P.M. the court was advised that they had reached agreement. By this time the court reporter was unavailable to record the stipulation of settlement. In lieu thereof the Justice made detailed, complete notes of the settlement terms. On the following Monday, the defendant, having had a change of heart, attempted to disavow the settlement and requested that the trial continue to a conclusion. Plaintiff’s counsel dictated the terms of the settlement into the record and stated that defendant’s counsel had telephoned him on Sunday with the sole request to renegotiate the amounts of the initial payment of $10,000, which he refused to do.
***
Of course, the better practice is to reduce settlement stipulations to either writing or to enter them in the record in open court. Here, however, there is no dispute that full agreement had been reached, nor is there any dispute as to the terms thereof. A record was made in written notes by the Justice in his chambers.
Under the unique facts and circumstances of this case, we hold that there was substantial compliance with CPLR 2104 (citation omitted). Our affirmance herein should in no way be construed as a departure from the requirements of said Rule, lest unquestionable settlements be subsequently impugned by one of the consenting parties.[3]
The Court of Appeals did not hear the appeal.
Golden Arrow was cited in a civil court decision in 1979, which held that “the underlying purpose of CPLR 2104 [was] substantially complied with and enforced a settlement agreement made on the record at a deposition.”[4] When defendant contested the validity of the settlement as not enforceable under CPLR 2104, the court determined “the stipulation on its face is clear and unambiguous,” and that the unilateral mistake as conceded by defendants “is insufficient to abrogate an otherwise proper stipulation of settlement.” In explaining their rational, the court discussed the meaning of “open court” and explained that
the examination before trial was scheduled pursuant to statute and under the aegis of the court. Either party was free to obtain court rulings during the examination or to appropriately move the court regarding the conduct of the examination including a request that the court actually monitor the examination. Such examinations are frequently conducted at the court, but the fact that for the convenience of the parties it was held at defendants’ attorney’s office does not diminish the authorization of the court. Defendant was personally present, made no objection to the settlement stipulation, the stipulation was recorded contemporaneously, reduced to writing, is concededly accurate and is unambiguous. Solemnity, formality and accuracy have been satisfied and the underlying purpose of CPLR 2104 has been substantially complied with (citations omitted).
Both Golden Arrow and Hub were cited in a Supreme Court decision where the plaintiff moved to enforce an oral settlement, which had been reported to the court by defendant, and settlement papers had been signed by plaintiff but not defendant.[5]The parties reached an oral settlement of the matter of $350,000 a few days prior to jury selection. Thereafter, defendant reported the settlement to the court and forwarded settlement documents, including assignment, release and guarantee to the plaintiff. The plaintiff executed and returned the papers to defendant’s counsel to hold in escrow pending delivery to the plaintiff of a check in the settlement. The plaintiff alleges, without contradiction from the defendant, that counsel advised the settlement check had been sent. The check had not been sent, and prior to remitter of the check, the defendant became aware that the plaintiff had been indicted by a “Federal Grand Jury for allegedly taking kickbacks from the contractor whose nonperformance precipitated the instant action on the performance bond. Defendant then advised plaintiff that it would not honor the agreement of settlement.”
Despite the settlement agreement having not been evidenced by a writing subscribed to by defendant, or one made in court, the Tenwood court determined “that the settlement stipulation must be enforced based upon the unique facts of this case,” noting “the attorney for the repudiating defendant prepared documents which conformed to the oral settlement agreement, and transmitted them to the attorney for the movant under circumstances which clearly justified the recipient’s assumption that after their execution and return, an agreement would be formally consummated, and the settlement proceeds forthcoming.”
We do not advise relying on these decisions, each of which describes their underlying facts as “unique.” But desperate times call for desperate measures, and having these citations handy may prove useful.
‘Writing Subscribed’
The second path is “in a writing subscribed by him or his attorney.” The Court of Appeals in Dolgin explained this requirement dates to 1796, and this is the mechanism most frequently employed by attorneys to effectuate stipulations.
A decision this year by Queens County Supreme Court Justice Catapano-Fox highlights a crucial element that can void a writing that conforms to CPLR 2104. In Nieves v. Mt. Sinai Queens Hosp.,[6] the parties engaged in a private mediation in a wrongful death action and, after a settlement was agreed to, entered into a post-mediation settlement agreement, the terms of which were confidential. At the mediation, plaintiff’s counsel represented that there was no Medicare lien, based upon a “no lien” letter obtained from the Centers for Medicare and Medicaid Services, the entity responsible for enforcing Medicare liens for monies expended by the government.
Subsequently, defendants obtained a lien letter for an Aetna Medicare Advantage lien totaling $907,000. After reviewing the pertinent facts, and determining that “[p]laintiff demonstrated that the Post Mediation agreement was based on a mistake and did not represent a true meeting of the minds,” and that “[d]efendants demonstrated that plaintiff testified about the existence of Aetna Medicare insurance at her deposition, and correctly noted that it was incumbent on plaintiff to pursue this potential lien prior to entering into the mediation,” Justice Catapano-Fox held:
[A] plain reading of the caselaw shows that the mutual mistake, the Aetna Medicare lien, existed at the time of the mediation and was so substantial that the Post Mediation agreement failed to represent a true meeting of the parties’ minds (citation omitted). Plaintiff presented affidavits from decedent’s children Jennifer Ruiz and David Nieves, who stated they agreed to the settlement terms without knowledge of any liens, and would not have assented to the settlement if aware of the substantial Aetna Medicare lien that would severely diminish the estate’s share of the settlement (citation omitted). The email exchanges between counsel also demonstrate that neither party was aware of the existence of the Medicare lien prior to or at the time of the mediation. Therefore, plaintiff demonstrated that vacatur of the settlement based upon mutual mistake is warranted.
Both parties cited a 2003 Second Department decision, Mahon v. New York City Health & Hosps. Corp,[7] in support of their respective positions, where that court held:
In order to vacate the stipulation of settlement on the ground of mutual mistake, the plaintiff was required to demonstrate that the mistake existed at the time the stipulation was entered into and that it was so substantial that the stipulation failed to represent a true meeting of the parties’ minds (citations omitted). The plaintiff met this burden, as she established that none of the parties considered the impact of a potential Medicaid lien in negotiating the settlement and that therefore there was no true meeting of the parties’ minds with respect to the amount of damages. Moreover, under these circumstances, enforcement of the stipulation would be unjust (citations omitted).
There are additional facts and relevant case law set forth in the Nieves decision, and it warrants a close reading. Bookmark it as a tutorial on the impact mutual mistakes may have on an otherwise enforceable stipulation.
‘Reduced to the Form of an Order and Entered’
This provision of CPLR 2104 is the least cited and, we would argue, the least understood provision in CPLR 2104. Weinstein Korn & Miller offers analysis which is both brief and opaque:
The third type of stipulation requires the signature of a judge on an agreement in the form of an order. Once the order is entered, all parties will be bound by it. See CPLR 2219(a) (form of order).[8]
The reference to CPLR 2219(a) is a bit confusing, since CPLR 2219(a), discussing the form of an order, relates to an order deciding a motion:
An order determining a motion relating to a provisional remedy shall be made within twenty days, and an order determining any other motion shall be made within sixty days, after the motion is submitted for decision . . . Except in a town or village court or where otherwise provided by law, upon the request of any party, an order or ruling made by a judge, whether upon written or oral application or sua sponte, shall be reduced to writing or otherwise recorded.
Yet CPLR 2104 is applicable “relating to any matter in an action,” not just motions.
“[A]n order or ruling made by a judge” . . . “shall be reduced to writing . . .” By whom? Presumably by the judge, but we suppose anyone could perform the ministerial act of drafting an order for the judge’s signature. When? Since this is not a situation where a stenographic record is being made (otherwise the stipulation would fall under the “open court” method), and there is no requirement that the order be written contemporaneously, the order presumably can be written up at any time. Where? Again, since there is no “open court” requirement, and since CPLR 2219(a) specifies an order “made by a court or a judge out of court,” the order can presumably be written up at any location. How? The only requirement is “reduced to writing,” so presumably a cocktail napkin would suffice. Okay, maybe not a cocktail napkin, but what is actually required? CPLR 2219(a) specifies:
An order determining a motion made upon supporting papers shall be signed with the judge’s signature or initials by the judge who made it, state the court of which he or she is a judge and the place and date of the signature, recite the papers used on the motion, and give the determination or direction in such detail as the judge deems proper.
But we are talking about a stipulation between parties, not an order deciding a motion, so the only non-motion related gleaned from CPLR 2219(a) is the requirement that the order contain the judge’s signature or initials, identifying the court, together with the place and date of the signature.
And this is not what we in the biz refer to as “so ordered” stipulations, which are written stipulations drafted and signed by the parties and/or their attorneys, which are then given to the court for dating and signing following the written directive “so ordered.” A “so ordered” stipulation is certainly necessary where there is an agreement among the parties to amend or otherwise change a prior court order, which the parties are not free to do without the consent of the court, and is necessary protection so that the court does not later take the position the change was in violation of the court’s prior order. Other stipulations can be “so ordered,” but if properly drafted and executed pursuant to CPLR 2104 they are already enforceable, and being “so ordered” does not make them more enforceable.
A recent Second Department decision, Matter of Izzo v. Salzarulo,[9] provides some additional insight into what “reduced to the form of an order and entered,” means. Discussing the enforceability of a custody agreement allegedly entered into during a hearing, but not placed on the record, the court noted:
Pursuant to CPLR 2104, an agreement between parties is binding against them where, as here, it was reduced to the form of an order and entered. Since “settlement agreements must abide by the principles of contract law, ‘for an enforceable agreement to exist, all material terms must be set forth and there must be a manifestation of mutual assent.’” CPLR 2104 does not require the parties or the court to place on the record an agreement between the parties that is reduced to an order. However, failing to do so makes the agreement open to collateral litigation (citations omitted)
Diarassouba v Urban,[10] offers additional guidance (maybe):
[A] settlement agreement is valid only if both parties stipulate to the settlement in a written agreement or it is made in open court and placed on the record. . . . The definition of “open court” is often determinative on the issue of whether the parties agreed to a settlement. The Court of Appeals has defined open court as “a judicial proceeding in a court, whether held in public or private, and whether held in the court house, or a courtroom, or any place else, so long as it is, in an institutional sense, a court convened, with or without a jury, to do judicial business.”[11] In addition to an agreement among the parties, courts require a formal entry of some kind, onto the stenographic record, or elsewhere, even “if only in the clerk’s minutes, to memorialize the critical litigation events.”[12]
Relying on this definition, courts have held that notations on trial calendars or records indicating a settlement do not comport with the requirements of CPLR 2104.[13] Other insufficient notations include those in a clerk’s docket card,[14] as well as those in a court’s personal file.[15] If not reduced to a writing signed by the parties or in an order, the open court requirement also is not satisfied in locations without a justice presiding,[16] and it is not satisfied during less formal stages of litigation, such as a pretrial conference.[17]
Perhaps Diarassouba is best instructive in defining what “reduced to an order” is not.
Our recommendation? Draft your own stipulation, or ask for a reporter and make a record, or offer to write up an order for the court to be signed by the court and then entered.
CPLR 2104 is a potent litigation tool, but one that requires strict compliance. Use it wisely and carefully. A properly drafted and executed stipulation is critical to preserving and enforcing a client’s rights. So, do it right, and “make it stick.”
David Paul Horowitz, of the Law Offices of David Paul Horowitz, has represented parties in personal injury, professional negligence, and commercial litigation for over 30 years. He also acts as a private arbitrator and mediator and a discovery referee overseeing pre-trial proceedings and has been a member of the Eastern District of New York’s mediation panel since its inception. He drafts legal ethics opinions, represents judges in proceedings before the New York State Commission on Judicial Conduct and attorneys in disciplinary matters, and serves as a private law practice mentor. He teaches classes in New York practice, professional responsibility, and electronic evidence and discovery at Columbia Law School.
Katryna L. Kristoferson is a partner at the Law Offices of David Paul Horowitz and has litigation experience across many practice areas. She has lectured at CPLR update, motion practice, and implicit bias CLEs, and teaches a course on bias and the law at the Elizabeth Haub School of Law at Pace University.
Endnotes
[1] In re Dolgin Eldert Corp., 31 N.Y.2d 1, 4–5, 286 N.E.2d 228, 229–30 (1972).
[2] Id.
[3] Golden Arrow Films, Inc. v. Standard Club of California, Inc., 38 A.D.2d 813, 814 (1972), lv. granted, 30 N.Y.2d 486 (1972).
[4] Hub Press, Inc. v. Sun-Ray Lighting Co., 100 Misc. 2d 1055, 420 N.Y.S.2d 443 (Civ. Ct. 1979).
[5] A. J. Tenwood Assocs., Inc. v. United States Fire Ins. Co., 104 Misc. 2d 467 (Sup. Ct., N.Y. Co. 1980).
[6] 2024 N.Y. Slip Op. 24135 (Sup. Ct., Queens Co. 2024).
[7] 303 A.D.2d 725 (2d Dep’t 2003).
[8] 4 New York Civil Practice: CPLR (Weinstein Korn & Miller) P 2104.00 (2024).
[9] 2024 N.Y. Slip Op. 03751 (2d Dep’t 2024).
[10] 71 A.D.3d 51 (2d Dep’t 2009).
[11] Matter of Dolgin Eldert Corp., 31 N.Y.2d 1, 4-5 (1972).
[12] Id. at 10; see Kalomiris v. County of Nassau, 121 A.D.2d 367, 368 (1986); Graffeo v. Brenes, 85 A.D.2d 656. (1981); Deal v. Meenan Oil Co., 153 A.D.2d 665 (1989).
[13] See Avaltroni v. Gancer, 260 AD2d 590 (1999); Lamuraglia v. New York City Tr. Auth., 255 A.D.2d 365 (1998); Johnson v. Four G’s Truck Rental, 244 A.D.2d 319 (1997).
[14] See Kalomiris v. County of Nassau, 121 A.D.2d at 368.
[15] See Phillips v. Pamper Decorating Serv., 228 A.D.2d 425 (1996); Zambrana v Memnon, 181 A.D.2d 730 (1992).
[16] See Kushner v. Mollin, 144 A.D.2d 649 (1988).
[17] See Gustaf v. Fink, 285 A.D.2d 625 (2001).
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