In this accounting proceeding, the respondents Arlene Lagin, Steven Lagin and Susan Feiwell (hereafter "respondents") move for an order 1) vacating an undated stipulation and declaring same to be null and void; and 2) determining that there are no grounds for the entry of a final decree.

Respondents are children of the decedent, Nathan Lagin, and remaindermen of a testamentary trust created for the benefit of the decedent's wife, Ann C. Lagin, under Article FOUR of the decedent's Will. Letters of Trusteeship issued to Ann C. Lagin and Milton Sosinsky. Ann C. Lagin died on September 1, 1997. On August 29, 2002, the surviving trustee, Milton Sosinsky (hereafter "petitioner") filed a petition requesting judicial settlement of his account, together with a formal accounting for the period June 27, 1986 through June 11, 2002.

On or about November 3, 2003, after the completion of SCPA 2211 examinations and document review, respondents unsuccessfully attempted to interpose objections to the accounting proceeding. Subsequently, respondents moved for an order permitting the late filing of objections to the accounting. Settlement conferences between counsel and their respective clients ensued, including several court conferences. During the course of negotiations, additional applications for various other relief were made and were adjourned on consent as the parties continued to attempt to resolve their differences. After extensive negotiations, petitioner's counsel prepared a proposed stipulation of settlement and forwarded same to respondent's counsel. By correspondence dated November 8, 2004 from petitioner's counsel, the court was informed that the parties had reached a settlement and pursuant to the terms of the undated stipulation, all pending motions were withdrawn. The stipulation was signed by counsel on behalf of the respective parties. Approximately four days following the court's receipt of the stipulation of settlement, the court received an ex parte communication from respondent Arlene Lagin wherein she asserted that her counsel possessed no authority from her or her sister, Susan Feiwell. After a court conference, respondents served the instant motion seeking vacatur of the stipulation.

In support of the motion, respondents submit the affirmation of counsel wherein he asserts that based upon conversations with his three clients, he believed he had authorization to enter into a stipulation on their behalf only to learn a few days after the execution of the stipulation that Arlene Lagin and Susan Feiwell did not intend to authorize him to execute the stipulation. No allegation is made that counsel did not have authorization from Steven Lagin. [*2]

Petitioner's counsel asserts that counsel for the respondents possessed actual authority, or at least, apparent authority to settle the matter, submitting various correspondence from respondent's counsel to support that contention. Petitioner's counsel argues that the respondent's motion is procedurally defective inasmuch as it is supported only by the affirmation of counsel and not by an affidavit of respondents. It is also asserted that it would be inequitable to grant the

relief requested by the respondents as almost all trust monies have been distributed and the trust amount remaining does not warrant further litigation expenses.

In reply, respondents' counsel states that in a conversation with Arlene Lagin concerning a document that she believed to be a forgery, he believed he was given authority to settle the accounting proceeding so as to remove the trustee, Milton Sosinsky, from any further role. Counsel states he was not aware of any problems until a few days after executing the stipulation when he received a communication from Arlene Lagin wherein she stated she had not agreed to the settlement.

It is well settled that stipulations of settlement are favored by the courts and not lightly cast aside (Matter of Galasso, 35 NY2d 319, 321 [1974]). Only where there is sufficient cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation (Matter of Frutiger, 29 NY2d 143, 149-150 [1971]). Inasmuch as the respondents failed to make such a showing, respondents must then demonstrate that their counsel was without authority of any sort to enter into the stipulation and, therefore, no contract ever came into being (Hallock v State of New York, 64 NY2d 224, 230 [1984]; Siegel v Ocean Park Housing, Inc., 248 AD2d 459, 460 [1998]).

Upon review of the papers submitted, it appears that there is a factual issue as to whether respondents' counsel had actual authority to enter into a settlement on respondent's behalf as there was evidence of consultation between counsel and respondents concerning the subject matter of the stipulation (cf. Suslow v Rush, 161 AD2d 235 [1960]; Slavin v Polyak, 99 AD2d 466 [1984]). The court notes, however, that within days after execution of the stipulation, respondent Arlene Lagin notified the court that she did not authorize her attorney to enter into any settlement agreement and counsel states that he had a mis-communication with his client. Under the circumstances, a hearing is required to determine whether respondent's attorney was authorized to enter into the stipulation of settlement (Slavin v Polyak, 99 AD2d 466 [1984]).

Petitioner's argument that respondents' counsel had apparent authority is misplaced. While it is true that even a party who is not present at the negotiation may still be bound by the settlement if she has cloaked her attorney with apparent authority (Hallock v State of New York, 64 NY2d 224, 230 [1984]), here there was no such apparent authority. The existence of apparent authority depends upon a factual showing that the third party relied upon the misrepresentation of the agent because of some misleading conduct on the part of the principal—not the agent (Indosuez Int'l Fin. B. V. v National Reserve Bank, 98 NY2d 238, 246 [2002]; Hallock v State of New York, 64 NY2d 224 [1984]; Ford v Unity Hosp., 32 NY2d 464, 473 [1973]). Here, there was no showing that respondents conveyed to petitioner or to his counsel by "words or conduct" that their attorney possessed the authority to settle the proceeding. Authority of an attorney to enter into settlement negotiation does not constitute authority to enter into a binding settlement under CPLR 2104 unless that settlement is entered into in open court (Hallock v State of New York, 64 NY2d 224 [1984]) which is not the case herein. [*3]

Accordingly, a hearing is required as set forth above to determine the question of whether respondents' counsel was authorized to enter into a binding agreement. The hearing will take place at the courthouse on Monday, November 14, 2005 at 10:00 a.m.

The above constitutes the order of this court.

Dated: September 23, 2005

JOHN B. RIORDAN

Judge of the

Surrogate's Court