Peters v. Huttel

Background

Tyrone Peters, proceeding without a lawyer, brought claims under 42 U.S.C. § 1983 against Correction Officer Daniel Huttel, Correction Officer Jeffrey Erns, and Sergeant Duane Malark. After the court granted defendants’ motion for partial summary judgment in December 2019, the parties continued toward trial. In July 2021, Peters made a $300 settlement demand. On August 20, 2021, defendants offered $300 in exchange for dismissal of the case and a full release of liability covering the defendants, New York State, and its agencies, departments, and officials. Peters agreed to accept the offer.

Defendants then told the court that the parties had settled and were preparing settlement paperwork. The court issued a 60-day order discontinuing the case. Before the paperwork was completed, Peters sent a letter stating that he intended to rescind the agreement and proceed to trial. Defendants later moved to enforce the alleged oral settlement.

Legal standards

The court explained that settlement agreements are contracts and are generally required to be in writing or placed on the record in open court. Because the Second Circuit had not decided whether federal or state law governs a motion to enforce a settlement, the court considered both New York law and federal common law.

Under New York Civil Practice Law and Rules § 2104, a settlement generally is not binding unless it is in a signed writing or is reduced to an order and entered. Courts may recognize substantial compliance with that requirement in circumstances such as a settlement reached on the record at a deposition or settlement conference, or a settlement formally recorded by the court.

Under federal common law, the court applied four factors addressing whether the parties intended to be bound by an oral agreement: whether they reserved the right not to be bound without a writing; whether either party partially performed; whether all material terms were agreed upon; and whether the type of agreement is usually put in writing.

Court’s analysis

The court held that the alleged settlement did not satisfy New York’s writing requirement. The parties agreed that the settlement was never put in writing and was never entered on the record in open court. Defendants’ letter informing the court that the parties had reached an agreement did not substantially comply with the statute.

The court also found that all four federal-law factors weighed against enforcement. First, defendants did not dispute Peters’s assertion that their counsel told him the agreement would not be finalized until the documents were signed. The court therefore found an implied reservation of Peters’s right not to be bound until a written agreement was executed.

Second, neither side partially performed the alleged agreement. Defendants had not paid Peters or sent him settlement papers, and merely informing the court of the agreement was not partial performance.

Third, the court found that at least one material term may not have been resolved. Peters said that the settlement included a request that defendants’ counsel speak with Huttel about the alleged assault and ask him not to engage in similar conduct toward other inmates. According to Peters, counsel agreed only to pass along Peters’s concerns. The court concluded that whether and how counsel would speak to defendants appeared to remain unresolved.

Fourth, the court found that settlement agreements resolving litigation of this type are usually committed to writing. Defendants acknowledged that most settlement agreements involving the Office of the Attorney General are written, and their letter to the court referred to preparing settlement paperwork.

Disposition

The court concluded that the parties did not intend to be bound by the oral agreement and denied defendants’ motion to enforce the settlement agreement. The clerk was directed to terminate the motion. The court also directed the parties to appear for a telephonic pretrial conference on May 17, 2022, and directed defendants to arrange for Peters to participate by telephone.