This case was commenced by summons and complaint filed on September 28, 2022 by plaintiff State Farm Mutual Automobile Insurance Company ("State Farm"), as the subrogee of Michael Schultz, concerning an automobile accident that occurred on July 11, 2021. According to the complaint, Schultz was driving his 2015 Nissan in Albany when he was struck by a 2014 Jeep operated by defendant Johnny Maye and owned by defendant Wesley E. Thomas, resulting in damage to Schultz's vehicle (Complaint ¶¶ 10-15). Pursuant to the provisions of Schultz's auto insurance policy, State Farm paid $13,724.00 for such damages, which through this action it seeks to recover from defendants Thomas and Maye (id. ¶ 16).

Now before me is a motion from State Farm to enforce an alleged settlement of this action (Affirmation in Support of Peter Vario, Esq., dated October 24 2024 ["Vario Aff"] ¶¶ 2-[*2]3). According to plaintiff, on June 5, 2023 the parties settled this matter for the sum of $9,928.82, which the defendants were to pay through a combination of funds from an auto insurance policy with Geico amounting to $7,428.82, along with $2,500 that the named defendants would personally pay at a rate of $50 per month (id.).

In a letter dated June 5, 2023, plaintiff's counsel set forth its understanding of the parties' settlement to defendants' counsel, and provided proposed settlement papers for review and signature (id. ¶ 4, Ex 1). This letter was sent to the attention of James D. Taylor, Esq., and stated as follows:

"In accordance with the settlement of the above captioned matter, enclosed please find a Property Release duly executed by my client, State Farm Mutual Automobile Insurance Company as Subrogee of Michael Schultz.

Kindly hold the Releases in escrow pending my receipt of your settlement check made payable to Law Offices of Stuart D. Markowitz, P.C., as attorneys for State Farm Mutual Automobile Insurance Company, in the amount of $7312.72 and $2,500 made payable to Michael Schultz and $2,500 from GEICO's insureds Wesley E. Thomas and Johnny Maye.^[FN1]Our Tax ID# is XXXXX.

Enclosed is an executed Stipulation discontinuing this action to be held in escrow until all settlement funds are received. Also enclosed is a Settlement Stipulation, please have the defendants, Wesley E. Thomas and Johnny Maye sign and return with first payment. Please sign the enclosed Stipulation of Discontinuance and forward it to my attention with your settlement checks and the executed Settlement Stipulation.

These closing papers are tendered to you by certified mail, return receipt requested, pursuant to CPLR 5003-a, effective July 1, 1992, requiring the payment of this settlement with twenty-one (21) days. Should this settlement draft not be received within twenty-one (21) days from the mailing, this section provides that a judgment may be entered by the clerk without further notice, together with disbursements and interest from the date of this tender. I am confident that this will not be necessary" (id., Ex 1).

Enclosed with this letter is a copy of the Settlement Stipulation, signed by plaintiff's counsel with signature lines for defendants and their attorney (Vario Aff, Ex 1). This Stipulation formally sets forth the material terms outlined in the June 5, 2023 letter.

Also enclosed with plaintiff's June 5 correspondence was a Stipulation of Discontinuance with Prejudice signed only by plaintiff's counsel, along with two Releases fully executed by State Farm (id.). One Release provides that defendants "Wesley E. Thomas and Johnny May[e]" are fully released from all property subrogation claims asserted by State Farm relating to the July 11, 2021 accident, in consideration for the sum of $2,500 to be received from Thomas and Maye (id.). The other Release provides the same release of liability to defendants Thomas and Maye, but also includes Geico among the parties released, in consideration for checks in the sums of $7,312.72 (payable to State Farm) and $116.10 (payable to Michael Schultz), to be received [*3]from Geico (id.).

According to plaintiff, it received the requested payments from Geico totaling $7,428.82, but has yet to receive the additional $2,500 from Thomas and Maye (id. ¶¶ 5-6). Plaintiff avers, nevertheless, that at a December 14, 2023 conference counsel for both parties informed the Court that a settlement had been reached, but they needed to finalize the settlement papers (id. ¶ 7). By Order, dated December 14, 2023, I scheduled a follow up in-person settlement conference on January 19, 2024 in the event that settlement had not been finalized by that time, and I noted that, pursuant to my conference with the parties' attorneys, that I understood that "a settlement has been reached in this matter but the named defendants have not signed the final settlement papers" (id. ¶ 7, NYSCEF Doc. No. 17).

My law clerk wrote the parties on January 16, 2024, again indicating the Court's understanding that the matter had settled, and asking when a stipulation of discontinuance would be filed. In an e-mail communication in response on January 18, 2024, James Taylor, Esq., counsel for defendants, advised:

"We are currently working with our client to get the settlement agreement executed. We anticipate having that completed in the next 30 days" (Vario Aff, Ex 2).

Counsel accordingly requested a 30-day adjournment of the January 19 conference "to afford our office time to have the papers executed and filed" (id.). This request was granted, but the settlement agreement was never signed by defendants. In response to defendants' failure to acknowledge and pay the alleged outstanding amount of $2,500, plaintiff's counsel issued a Notice of Default, dated January 25, 2024 to both defendants, and did so again on September 10, 2024 (id. ¶¶ 10-11). The letter cautioned that "judgment will be entered if the current payment and any arrears are not paid at this office within the time specified in the stipulation of settlement" — notwithstanding the stipulation was still unsigned by defendants (id., Ex 3).

Based on such claimed default, plaintiff now argues that, pursuant to CPLR 5003-a, it is entitled to enter judgment in the amount of $2,500.00, due to the defendant's failure to promptly submit payment within 21 days of plaintiff's June 5, 2023 submission of the Releases and signed settlement agreement ^[FN2] (Vario Aff ¶¶ 12-16).

Following the second notice of default, a Court conference with counsel was held on September 11, 2024, during which it was made clear that there was a dispute between the parties as to the material terms of the settlement agreement (id. ¶ 9). As a result, I issued an Order, dated September 11, 2024, directing the parties to exchange all documents in their possession [*4]regarding any communications or agreements regarding the resolution of the litigation, and I further permitted both parties to make any motion or cross-motion they deemed appropriate in light of their settlement dispute (NYSCEF Doc. No. 19).

Plaintiff's has now moved for a determination that its June 5, 2023 mailing, and the subsequent e-mail exchanges between counsel and the Court, established an enforceable settlement agreement, and it is now entitled to a default judgment due to defendants' failure to pay the $2,500 referenced in plaintiff's June 5, 2023 correspondence (Vario Aff ¶¶ 17-23).

In their cross-motion, defendants oppose plaintiff's application and seek an order discontinuing the action based on the Release plaintiff provided to defendants and their insurer, Geico, in exchange for $7,428.82 (Affirmation in Support of J. William Savage, Esq., dated November 27, 2024 ["Savage Aff "] ¶¶ 5-6, 9). According to defendants, this Release (one of two included in the package of settlement documents) sets forth their understanding of the settlement offer, which they accepted and issued prompt payment to plaintiff (id.). Defendants further argue that, to the extent plaintiff is moving for a default judgment, more than a year has passed since their alleged default for failing to tender the $2,500 in response to plaintiff's June 5, 2023 correspondence, and thus defendants contend that any application for default must be denied pursuant to CPLR 3215(c) (id. ¶¶ 7-8).

Plaintiff's counsel submitted an affirmation in reply and in opposition to defendant's cross-motion (Affirmation in Opposition to Defendant's Cross-Motion and Reply Affirmation in Further Support of Plaintiff's Motion, dated January 16, 2025 ["Reply Aff"] ¶ 2). He argues that plaintiff properly tendered a duly executed release and stipulation of discontinuance to defendants and should now be able to obtain judgment in accordance with CPLR 5003-a (id. ¶ 5). However, if there is a determination that its alleged settlement agreement is unenforceable, plaintiff requests that this action be restored to Court's calendar for further discovery and trial (id. ¶ 6).

CPLR 2104 provides that "[a]n agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in writing subscribed by him or his attorney . . . ". Here plaintiff contends that its settlement papers, combined with statements confirming the existence of a settlement made at court conferences and defense counsel's e-mail exchanges with plaintiff's counsel and the Court result in a written settlement subscribed to by defendants' attorney and thus enforceable, providing for the payment of $7,428.82 from Geico and $2,500 jointly from the two named defendants. For their part, defendants also contend that there is an agreed upon settlement which has already been confirmed by plaintiffs' submission of a signed release for Geico and the defendants upon the payment of $7,428,82 by Geico, and such settlement has been completed by Geico's performance.

I find both these assertions unpersuasive.

Taking plaintiff's argument first, I find that it has failed to show that defendants entered into a settlement agreement enforceable by law, pursuant to CPLR 2104. Plaintiff points to three pieces of evidence which it says meet the requirements of the statute (i.e., an agreement in open court or in a writing subscribed by the client or counsel). First, it notes that there are "email communications from defense counsel to the Court indicating the existence of the settlement" and stating that counsel "just needed time to have the Defendants execute the settlement stipulation" (Vario Aff ¶ 19 & Ex 2). Second, it cites the settlement documents served by [*5]plaintiff (id. ¶ 20). Third, it notes the payment made by defendants' carrier, Geico, which issued the checks required of it under ths settlement (id.). On the basis of all these, it contends that all material terms of the settlement were agreed to by counsel (id. ¶ 21).

Initially, plaintiff's counsel says that the settlement was entered into on June 5, 2023, the date the stipulation of settlement and releases were sent from plaintiff to defendants' counsel (id. ¶ 3 ["On June 5, 2023, the Parties settled this matter for the sum of $9,923.82 . . ."]). But that cannot be right, since by that date there had been neither an agreement entered into in open Court nor a writing by defendants or their counsel confirming that agreement.

Whatever was said in the conference on December 14, 2023 with the Court also does not meet the specific requirements of CPLR 2104. The representations were made at a Teams conference with no record, and while subsequent correspondence from the Court concerning the conference indicated that the parties had represented that there was a settlement, there is no writing which specified the terms disclosed to the Court. Further, the letter noted my understanding that defendants have not signed the settlement papers and scheduled an in-person conference if this had not occurred within 30 days — although it did not specify whether the settlement was conditioned on such sign off. Under these circumstances, the general acknowledgment by the Court of counsel's representation that a settlement had been reached did not suffice to establish a binding agreement (see Diarassouba v Urban, 71 AD3d 51, 55-56 [2d Dept 2009] [open court requirement "not satisfied during less formal stages of litigation, such as pretrial conferences" if not reduced to writing, or "not formally recorded on the court record or elsewhere"], lv dismissed 15 NY3d 741 [2010]; Gustaf v Fink, 285 AD2d 625, [2d Dept 2001] [agreement purportedly reached at pretrial conference did not constitute agreement in open court, when notations made by the judge in file and later computer entries "do not constitute a sufficient memorialization of the terms of the alleged settlement in the Supreme Court official records to satisfy the open court requirement"]; Zambrana v A.G. Memnon, 181 AD2d 730, 731 [2d Dept 1992] [notation by Court that case had settled, with amount of money noted, "did not constitute a sufficient or adequate memorialization of the terms of the settlement to satisfy the 'open court' requirement of CPLR 2104"]; see also Bonette v Long Island College Hosp., 3 NY3d 281, 285 [2004] [letters acknowledging settlement did not establish existence of agreement when they "did not incorporate all the material terms . . ."]). Indeed, finding a settlement on a general notation in a letter that one existed would "create issues of fact and credibility" among the parties and the judge as to the terms agreed to, leading to ancillary fact-finding proceedings and dragging the Court into questions of what was said at the unrecorded proceeding (see Diarassouba, 71 AD3d at 56 [citation and internal quotation marks omitted]).

In the absence of any on the record agreements presented to the Court, there must be a writing memorializing the settlement. The settlement documents sent by plaintiff themselves do not suffice for this purpose, since they were never signed by either defendants or their counsel (see Kataldo v Atlantic Chevrolet Cadillac, 161 AD3d 1059, 1060 [2d Dept 2018] [email confirming settlement sent by defendant seeking to enforce it is insufficient, since "[t]here is no email subscribed by the plaintiff . . . or her former attorney"]). The only candidate, then, is the email of defendants' counsel on January 18, 2024, when coupled with the settlement papers plaintiff had supplied the previous year. The email was sent in response to my law clerk's inquiry again expressing the Court's "understand[ing]" that the case had settled, and asking when a stipulation of discontinuance would be filed, counsel respondent as follows: ""We are currently working with our client to get the settlement agreement executed. We anticipate [*6]having that completed in the next 30 days. . . . We will provide Chambers with a filed copy once filing has been completed."

But the email never indicates counsel's agreement to the settlement terms on the client's behalf. Had the attorney wished to confirm agreement to its terms, he could have done so at any time (see St. Louis v Cap Com Fed. Credit Union, 231 AD3d 1383, 1385 [3d Dept 2024] [finding settlement agreement when material terms "were set forth in an email by [defendant's counsel and accepted in a response by [plaintiff's] former attorney, who had apparent authority to settle the case on [its] behalf"]). But counsel's only representation was that he "anticipated" his clients would sign the relevant documents and they would be filed, and counsel would "work with" them to do so.

The language used here is of expectation, not of promise. Throughout this process, counsel made clear that he believed defendants would sign, and was attempting to aid in this occurring. What he never said was that he agreed to the settlement on their behalf. To the contrary, all of the relevant communications, including those with the Court, are clear that while counsel had agreed to the terms of the settlement in principle, to be finalized the clients had to sign. Where it is the case that "if the parties to an agreement do not intend it to be binding upon them until it is reduced to writing and signed by . . . them, they are not bound and may not be held liable until it has been written out and signed" (Scheck v Francis, 26 NY2d 466, 469-470 [1970]). If no such signature is ultimately obtained, then no enforceable agreement has been reached under CPLR 2104 (see Estate of Amendola v Kendzia, 48 AD3d 1173, 1174 [4th Dept 2008] [when attorney wrote that "settlement was subject to signing of a formal written agreement," there was no settlement if that did not occur]; see also Phillips v Pamper Decorating Serv., 228 AD2d 425 [2d Dept 1996] [no settlement where the parties did not agree "whether the settlement offer of the appellant's counsel was conditioned upon his client's approval"]). While "a stipulation of settlement made by counsel in open court may bind his or her client even where it exceeds his actual authority, such is not the case where, as here, the proposed settlement agreement was reached out of court and the requisite releases and stipulation of settlement were rejected and never signed by plaintiff" (see Katzen v Twin Pines Fuel Corp., 16 AD3d 133, 134 [1st Dept 2005] [emphasis in original; citations omitted]).

True, when the parties have entered into an agreement in writing or open court that sets forth all the material terms of the settlement, the fact that they are subsequently to engage in ministerial tasks pursuant thereto, such as the signing of releases or other documents, does not invalidate that agreement (see Shah v Wilco Systems, Inc., 81 AD3d 454, 455 [1st Dept 2011], lv dismissed 17 NY3d 901 [2011]; see also Tooker v Castille, 260 AD2d 298, 298 [1st Dept 1999] [while plaintiff's sisters had to "sign releases in order for the stipulation of settlement that she agreed to in open court to take effect," this was "viewed by all present, particularly the court, as a ministerial act"]). But in this case, there is no writing subscribed by defendants or their counsel setting forth the material terms of the settlement. It was the settlement documents themselves that were awaiting signature, and the only writing to which plaintiff can point to as showing the requisite agreement is an email from counsel stating that expected that defendants themselves would place the requisite signatures on the documents.

In sum, there is no writing or statement in open court which reflects that defendants agreed to the material terms of the settlement, and plaintiff has not proven the existence of a settlement that the Court may enforce (see Van Syckle v Powers, 106 AD2d 711, 712 [3d Dept 1984] ["Since the agreement was not in writing or conducted in open court as required by CPLR [*7]2104, it is not binding against plaintiffs"]).

In light of these findings, plaintiff's argument that it is entitled to costs, disbursements and interest under CPLR 5003-a is without merit. That statute requires prompt payment when a matter has been "settled." But for reasons set forth above, the case has not settled, and thus there is no basis to apply CPLR 5003-a (see GEICO General Insurance Company vs. Times Cab Corp., 68 Misc 3d 1212 [A], [Civ Ct, City of New York Aug 12, 2020] [since defendants did not sign settlement papers, there was no agreement under CPLR 2104, and thus no relief granted under CPLR 5003-a]).

On the other hand, the record also does not support defendants' argument that the matter should be discontinued under CPLR 3217(b), on the ground that the release provided for counsel has been signed, and the requisite payment made by GEICO, defendants' insurer (see Savage Aff ¶ 5). This argument is essentially based on the inartful drafting of the documents. Although separate releases were prepared for Thomas and May, and for Geico — each reflecting the amounts they owed under the proposed (but never signed) settlement agreement — the latter release stated that both the named defendants and Geico would be released upon Geico's payment of $7,448.82.

The problem is that when all of the documents submitted by plaintiffs to defendants are viewed together, they make clear that the intent of the offer was to settle the matter only when the proposed payments by defendants as well as that of Geico were made. The cover letter and proposed settlement agreement both said the matter would be compromised for a total payment of $9,928.82, in the form of $2,500 that would be paid directly by Thomas and Maye on a monthly basis, with the balance of $7,428.82 being paid by GEICO with proceeds from defendants' auto insurance policy (see Vario Aff, Ex 1). It then included one release fully releasing defendants Thomas and Maye from all liability for the property subrogation claim that arose out of the July 11, 2021 accident in exchange for a $2,500 payment, while it is the other release that states that defendants Thomas and Maye, along with their insurer, Geico, will be fully released from all liability arising from State Farm's subrogee claim upon payment from Geico of a total of $7,428.82.

Given this record, there is at the very least ambiguity as to the effect of the Geico release when read in the context of the other settlement documents. Yet to be binding, the settlement papers signed must be sufficient to create a binding contract — that is, "there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms" (Matter of Express Indus. and Term. Corp. v New York State Dept. of Transp., 93 NY2d 584, 589 [1999]; see also Matter of Estate of Eckert, 217 AD3d 1151, 1152-1154 [3d Dept 2023] [noting that contract principles are applicable to written settlement agreements], lv dismissed 40 NY3d 1024 [2023]; Teixeira v Woodhaven Ctr. of Care, 173 AD3d 1108, 1109 [2d Dept 2019] ["to be enforceable, a settlement agreement must set forth all material terms, and there must be a clear mutual accord between parties"]). To determine whether there has been such assent, I must "look to the basic elements of the offer and the acceptance" (Matter of Express Indus. and Term. Corp., 83 NY2d at 589). In other words, I must determine whether there has been a "sufficiently definite offer such that its unequivocal acceptance will give rise to an enforceable contract" (id.). Indeed, "definiteness as to material matters is of the very essence of contract law" (id.).

Again, the plaintiff's offer is set forth in its cover letter, proposing a settlement that would result in a payment of $9,928.82, which is reflected in the settlement agreement and the [*8]two releases. Cutting against this is language in one of the releases which appears to release the two defendants upon payment by Geico. Plaintiff would have me ignore the other documents, and determine this matter has been settled on the basis of this one release alone. But under the above standards the contradiction between the various elements of the proposal — which is what there would be if I accept defendants' proffered reading of the release — would just mean that there was no agreement at all.

Finally, I note that defendant does not on this basis seek dismissal of the claim; rather, it asks that I "discontinue" the action pursuant to CPLR 3217(b) (see Savage Aff ¶ 2). That provision states:

"[Discontinuance b]y order of court. Except as provided in subdivision (a), an action shall not be discontinued by a party asserting a claim except upon order of the court and upon terms and conditions, as the court deems proper. After the cause has been submitted to the court or jury to determine the facts the court may not order an action discontinued except upon the stipulation of all parties appearing in the action."

But this provision concerns "discontinuance," which "is the CPLR word for a 'withdrawal' of an action." (Hon. Mark C. Dillon, Practice Commentaries, CPLR 3217:1). In short, it "limits the unfettered right of the plaintiff to discontinue an action" (id. [emphasis added]). The purpose of this provision is to allow the Court to deny or place conditions on discontinuance when there exist "special circumstances, such as prejudice to a substantial right of the defendant, or other improper consequences" (see Parraguirre v 27th St. Holding, LLC, 37 A D3d 793, 793-794 [2d Dept 2007]).

But here, defendants seek to use the provision for an entirely different purpose: as a sword to compel the action brought by plaintiff to be terminated against its will. When, however, a defendant is seeking "a disposition imposed by the court against the will of the party imposing a claim," the CPLR uses a "different nomenclature" that of "dismissal" — which is what defendants are asking for here (see Hon. Mark C. Dillon, Practice Commentaries, CPLR 3217:1). That relief, however, requires use of a different set of statutory tools and standards — CPLR 3211, 3212, etc. The statute regarding voluntary discontinuance has no role to play here. To the extent defendant is seeking to squeeze the present circumstances into some kind of implied request for discontinuance by presenting a release which, taken out of context, appears to say that the action will be terminated by acceptance of GEICO's payment, it will not work. The statute, after all, is entitled "Voluntary Discontinuance (emphasis added)." It is not intended as a vehicle for a defendant to secure dismissal of an action without actually asking for it, or meeting the statutory requirements for such.

So, where does this leave the action? Where the parties left it: without an enforceable settlement agreement, and with plaintiff insisting on a settlement that includes payment by the individual defendants, and the individual defendants (or their counsel) thus far declining to sign such an agreement. Absent an agreement, however, the litigation must continue, notwithstanding the extremely limited amount of money at issue. A conference is therefore scheduled below to set a discovery schedule, if that is truly the path the parties wish to follow.

Finally, there is the issue of what becomes of the release and moneys paid by Geico. Those funds were paid as part of a proposed settlement, in return for a release that purported to be for Geico and the defendants. For reasons set forth above, the defendants have not signed and the claims against them are not released. As to Geico, it is not a party to this action, and its obligations to pay are set by the insurance policy and attendant legal requirements, from which it [*9]is not exempted by a release prepared by plaintiff in an abortive attempt at resolution. It is not clear under what basis plaintiff may continue to hold funds payed by Geico for a release that has not settled the matter nor altered any obligations the insurer may otherwise have to pay for defendants' defense and any award against them as provided for by the policy. At the scheduled conference, therefore, the parties shall be prepared to discuss whether and under what circumstances those funds should be returned absent a legally binding agreement on settlement.

In light of the foregoing, it is

ORDERED that plaintiff's motion is denied; and it is further

ORDERED that defendants' cross-motion is denied; and it is further

ORDERED that this matter is returned to the Court's active docket and a scheduling conference with counsel for the parties shall be held, via Microsoft Teams, on March 20, 2025 at 1:00 p.m., unless the parties can come to some mutual agreement that resolves this matter without any further litigation, and file a stipulation of discontinuance in advance of the conference date. At the conference, the parties shall address what further orders the Court shall issue in regard to discovery, as well as the fate of the moneys paid by Geico pursuant to the — at present — unenforceable release signed on plaintiff's behalf.

This constitutes the Decision & Order of the Court. This Decision & Order is being electronically filed with the Clerk of the Court. The signing of this Decision and Order and electronic filing shall not constitute notice of entry under CPLR 5513, and counsel is not relieved from the applicable provisions of that Rule respecting to filing and service of Notice of Entry.

1. Notice of Motion and Affirmation in Support of Peter Vario, Esq., dated October 24, 2024, with Exhibits annexed thereto.

2. Notice of Cross-Motion and Affirmation in Support of J. William Savage, Esq., dated November 27, 2024, with Exhibits annexed thereto.

3. Affirmation in Opposition to Defendants' Cross-Motion and Reply Affirmation in Further Support of Plaintiff's Motion of Peter Vario, Esq., dated January 16, 2025, with Exhibit annexed thereto.