O'Quinn v. City of New York

Background

Carroll O’Quinn and the City of New York settled the underlying action on December 1, 2023. Their agreement required the City to pay a gross settlement amount of $61,000 and stated that the amount covered the claims, damages, costs, and fees that had been or could have been alleged in the action. The agreement also stated that payment would be made in one check payable to Carroll O’Quinn and that O’Quinn would be responsible for tax liabilities.

The court later entered an amended dismissal order that retained jurisdiction to enforce the settlement agreement. In February 2024, the City sent O’Quinn a check for $39,957.41. The City explained that it had withheld $21,042.59 for unpaid parking and camera-violation summonses, including interest. The opinion states that O’Quinn had received 151 summonses and that the Parking Violations Bureau entered default judgments because he failed to appear or pay.

O’Quinn objected to the deduction and moved to enforce the settlement agreement, seeking payment of the withheld $21,042.59.

Court’s Analysis

The court treated enforcement of the settlement agreement as a breach-of-contract matter governed by New York law. The City argued that it had a right of setoff. Setoff allows parties that owe each other money to apply one debt against the other.

The court held that the City established its right to setoff under both New York common law and New York Debtor and Creditor Law section 151. For common-law setoff, the debts had to be mutual, meaning they were owed to and from the same parties in the same capacity. The court found that requirement satisfied because the City was responsible for paying the settlement and was also owed the parking and camera-violation judgments. The fact that different City offices handled the settlement payment and the violation judgments did not defeat mutuality.

The court also held that section 151 applied. It concluded that the Parking Violations Bureau’s judgments satisfied the statute’s requirement of an order or similar enforcement event involving a creditor’s property. The opinion states that the City therefore could set off the matured judgment debts against the settlement obligation.

The court rejected O’Quinn’s argument that the settlement agreement barred setoff. Under the court’s reading of New York law, setoff operates as a background legal right, and a contract must clearly and specifically waive that right to eliminate it. The agreement’s reference to a “gross total sum” of $61,000 did not clearly and specifically waive setoff. The court also noted that the agreement contained waivers by O’Quinn, but the City did not agree to waive rights or claims against him.

The court further rejected O’Quinn’s fairness arguments. It found that O’Quinn was not blameless because he had signed an affidavit stating that, to the best of his knowledge, the City had no outstanding parking-related liens against him or his property, and because he was in the best position to know what debts he owed. The court also found that he had repeatedly failed to appear or pay the summonses. It rejected his argument that the City could not apply setoff without his agreement and found that he had already had opportunities to use the procedures available to challenge the summonses.

Disposition

The court denied O’Quinn’s motion to enforce the settlement agreement. The court held that the City could withhold $21,042.59 from the $61,000 settlement to address O’Quinn’s unpaid parking and camera-violation judgments.

The court also ruled on the City’s motion for leave to file a sur-reply, an additional written response. That motion was granted in part and denied in part: it was granted insofar as the court considered the arguments in the City’s filing and O’Quinn’s response, and it was otherwise denied as moot. Judge Laura Taylor Swain stated that the Memorandum Order resolved docket entries 116 and 121.