Elizabeth Gonzalez v. Banaco II LLC
- Lorna Schofield
- 1:19-cv-05602
- U.S. District Court · Southern District of New York
- 2
In Gonzalez v. Banaco IT, Judge Schofield denied approval of a settlement, without prejudice to renewal, until counsel corrects specified errors and ambiguities.
The proposed settlement was not approved, and counsel for the parties had to correct the agreement and attached affidavits and file revised materials by January 16, 2020.
What happened
In Ana Elizabeth Gonzalez v. Banaco IT LLC, the parties submitted a settlement agreement and asked the court to review it.
The court identified unclear language about confession-of-judgment documents, an inaccurate statement about who determines attorney’s fees, and inconsistent payment amounts of $23,000 and $34,500. The documents also referred to unexplained liquidated damages of $11,500.
The court denied approval of the settlement agreement, without prejudice to renewal after corrections. Judge Lorna G. Schofield ordered counsel to file revised documents and related materials by January 16, 2020.
The detailed version
- Elizabeth Gonzalez v. Banaco II LLC · No. 1:19-cv-05602
- Lorna Schofield
- Jan. 3, 2020
Background
On December 6, 2019, the parties filed a joint letter and settlement agreement for court review. The court reviewed the proposed agreement under the requirements described in Cheeks v. Freeport Pancake House, Inc. and related decisions concerning whether a settlement is fair and reasonable.
Problems Identified in the Agreement
The court stated that it could not determine the settlement’s fairness and reasonableness until counsel corrected several mistakes or ambiguities:
1. A critical typo in the final paragraph of section I made the rights and duties concerning the confession-of-judgment provision unclear. The agreement appeared to contain incomplete or improperly connected language about the documents being held in escrow and not being entered or filed.
2. The final sentence in sections 1(a) through 1(d) stated that determining the plaintiff’s share, counsel fees, and costs was solely the responsibility of the plaintiff and counsel. The court found that statement inaccurate because the court determines the proper attorney’s fees. Counsel was directed to amend or omit those sentences and include the specific attorney’s fees and costs requested by plaintiff’s counsel.
3. Affidavits of confession of judgment attached to the agreement stated that the agreement required defendants to pay $34,500. The agreement itself provided for a payment of $23,000 and did not mention $34,500. The affidavits described the additional $11,500 as liquidated damages but did not explain what those damages were. Counsel was directed to correct the inconsistency and could clarify the meaning of the $11,500 and the $34,500 total.
Ruling
The court denied approval of the settlement agreement, without prejudice to renewal after counsel corrected the identified mistakes and ambiguities. The court ordered counsel to file a revised executed agreement, revised affidavits, and accompanying materials by January 16, 2020. Judge Lorna G. Schofield did not approve the agreement in this order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.