Ream v. Hill, Inc.
- Sarah Cave
- 1:16-cv-07462-SLC
- U.S. District Court · Southern District of New York
- 10
In Ream v. Berry-Hill Galleries, Judge Cave declined to enforce the settlement, confession of judgment, or $150,000 judgment on the existing record.
Christopher Ream, Berry-Hill Galleries, Inc., and James Berry Hill are directly affected by the court's refusal to enforce the settlement and judgment on the current record. The order also sets a filing deadline for Ream and leaves the case closed until further notice. Claims against David Berry Hill had previously been dismissed without prejudice.
What happened
Christopher Ream sued Berry-Hill Galleries, Inc., James Berry Hill, and David Berry Hill over employment-related claims, including breach of contract and Fair Labor Standards Act claims. The parties later reached a settlement that included a $150,000 confession of judgment, but the defendants allegedly failed to pay. The court entered judgment against Berry-Hill Galleries and James Berry Hill, while claims against David Berry Hill were dismissed without prejudice.
The court found problems with enforcing the settlement and judgment. The settlement and confession of judgment did not say that the federal court would keep jurisdiction to enforce them, the confession was not notarized as required by New York law, and the copy of the settlement in the record was incomplete. The record also did not show that the settlement had received the required review for fairness under the Fair Labor Standards Act.
Judge Sarah L. Cave declined to enforce the settlement, confession of judgment, or judgment on the current record. She required Christopher Ream to tell the court by October 16, 2020, whether he would submit a complete agreement for fairness review, request another settlement conference, or pursue enforcement in New York state court; the case remained closed until further notice.
The detailed version
- Ream v. Hill, Inc. · No. 1:16-cv-07462-SLC
- Sarah Cave
- Oct. 1, 2020
Background
Christopher Ream filed employment-related claims against Berry-Hill Galleries, Inc., James Berry Hill, and David Berry Hill, including breach of contract and claims under the Fair Labor Standards Act. After a settlement conference, the parties placed material settlement terms on the record. One term required the defendants to execute a confession of judgment for $150,000. The agreement contemplated that the case would not be dismissed until the payments were made.
The record did not show that the settlement was reviewed and approved under the Fair Labor Standards Act. An earlier order stated that the parties could not dismiss the action with prejudice unless the settlement was approved by the court or the Department of Labor. The parties also did not provide an agreement stating that the court would retain jurisdiction to enforce the settlement.
After the defendants allegedly missed the payment deadline, Ream requested entry of judgment. Judge Henry B. Pitman entered a $150,000 judgment against James Berry Hill and Berry-Hill Galleries, Inc. Claims against David Berry Hill were dismissed without prejudice. Ream later sought post-judgment information and filed a motion for contempt after James Berry Hill did not respond to a subpoena. The court administratively terminated that motion while it clarified the status of the case.
Court’s analysis
Judge Cave explained that enforcing a settlement agreement is generally a state-law contract matter. A federal court may use ancillary jurisdiction—limited authority connected to an existing case—only when its dismissal order expressly retains jurisdiction over the settlement or incorporates the settlement’s terms into the order. Neither the settlement agreement nor the confession of judgment expressly requested retention of jurisdiction, and no court order incorporated their terms or stated that the court intended to retain jurisdiction.
The court also applied New York law because the agreement provided that New York law governed interpretation of the confession of judgment. New York law generally requires a notarized affidavit for a judgment by confession. The confession of judgment here was not notarized. The court therefore stated that it could not form the basis for a valid judgment and that this defect called the judgment’s enforceability into question.
The settlement document itself was also incomplete. The copy in the record was missing Ream’s initials on each page, omitted the signature page, and appeared to have pages out of order. In addition, the court had not conducted the fairness review required for a Fair Labor Standards Act settlement. The court stated that a complete, fully executed agreement and a letter explaining why the agreement was fair and reasonable would be needed before it could conduct that review.
Disposition
Judge Sarah L. Cave declined to enforce the agreement, confession of judgment, or judgment on the current record. She directed Ream to file a letter by October 16, 2020, identifying how he intended to proceed. The options described were to submit the complete agreement for fairness review and then request that the court retain jurisdiction, request a new settlement conference followed by review, or bring a separate enforcement action in New York state court. The court stated that the case would remain closed until further notice. The order did not grant or deny the contempt motion; that motion had previously been administratively terminated.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.