Tuesday, July 24, 2007

Shock the Conscience

In a decision of likely interest to defense counsel, Judge Howard S. Miller of the District Court, Nassau County, Hempstead Part issued a Decision/Order concerning settlement stipulations often done by the law firm of Israel, Israel & Purdy, LLP. See Omega Diagnostic Imaging, P.C. v State Farm Mut. Ins. Co., 2007 NY Slip Op 51405(U) (Dist. Ct., Nass. Cty., 2007). Typically, Israel puts a clause in their settlement stips that provide that, should the settled-for amount not be paid within 30 (or however many) days, judgment will be entered for the full amount demanded in the Complaint, including full statutory interest, et al.

Judge Miller held (correctly, in my opinion) that there is no basis to stay enforcement of the portion of the stipulation in question. The Court cited to ABCO Refrigeration Supply Corp. v Designs by Keiser Corp., 239 A.D.2d 165 (1st Dep't, 1997) for the proposition that, there being no allegation of fraud, mistake, etc., there is no basis to vacate a stipulation that essentially calls for the defendant to pay the full amount of the Complaint.

State Farm, by Picciano & Scahill, P.C., cited to some Second Department case law for the proposition that unconscionable stipulations should not be enforced. Judge Miller found State Farm's cited case law to be distinguishable and/or sui generis. In any event, Judge Miller found that $2,578, the difference between the settled-for amount and the amount of the judgment, did not shock the Court's conscience.

Those Israel settlement stips are potentially dangerous, to be sure, but things would work a lot more smoothly on a lot of fronts if the carriers made payments quickly, anyway.


David M. Gottlieb, Esq. said...

Would you feel the same way had this decision been published six months ago?


Damin J. Toell, Esq. said...

Actually, yeah. I was assigned clean-up duty on botched II&P settlements more than once, and purposely always found a way to resolve the matter without having to put together a motion that I knew would be little more than a shot in the dark.

The best defense argument may still be out there (or, at least, in my mental drafts of those motions I never had to write), but it would at best only reduce the amounts to be paid, and only in some situations.

David M. Gottlieb, Esq. said...

"In this relatively minor no-fault action"

relative to what?

any guesses?

Damin J. Toell, Esq. said...

Perhaps relative no-fault actions worth somewhere in the neighborhood of $50,000.00 (with a decimal point and zero cents ;)) of the sort commonly prosecuted by Joseph Henig, Esq. in Supreme Court?

David M. Gottlieb, Esq. said...

it's not about the money, it's the principle

large carrier said...

Not getting the stips to the carrier on time has happened in the past too.

And then saying "there's nothing we can do about it . . . "