Aboutaam v. El Assaad

Background

Defendants Ahmad El Assaad and Pride Invests SAL moved to enforce a settlement agreement allegedly reached with plaintiff Hicham Aboutaam during a settlement conference before Magistrate Judge Katharine H. Parker. Judge Parker issued a Report and Recommendation recommending that the motion be denied. She concluded that the settlement agreement was not enforceable under either New York law or federal common law. The defendants objected to that recommendation.

Court’s analysis

The court reviewed the defendants’ objections under the standards governing objections to a magistrate judge’s Report and Recommendation. It adopted Judge Parker’s analysis concerning whether the parties had formed an enforceable settlement agreement.

First, the court rejected the defendants’ argument that the oral settlement was made in “open court.” New York Civil Practice Law and Rules § 2104 generally requires a settlement agreement to be in a signed writing or entered as a court order, subject to an exception for agreements made between counsel in open court. Relying on New York authority, the court concluded that an off-the-record settlement conference did not fall within that exception. The court also rejected the argument that a judge’s email or notes summarizing the agreement could serve as the required writing, particularly because the defendants had not provided supporting authority for an agreement involving the conveyance of real property.

Second, the court upheld Judge Parker’s conclusion that the parties reserved the right not to be bound until they signed a written agreement. Under the four factors used by federal courts in the Second Circuit to assess whether parties intended to be bound without a writing, the court focused on the first factor: whether the parties expressly reserved that right. It agreed that the effective-date and merger clauses in plaintiff’s initial draft agreement were persuasive evidence that the parties did not intend to be bound until written execution.

Disposition

The court adopted the Report and Recommendation in its entirety and denied defendants’ motion to enforce the settlement agreement. The Clerk of Court was directed to terminate the motion at ECF No. 136.