ED-GEL, LLC, ETC. VS. KRS GLOBAL BIOTECHNOLOGY, INC. (L-4492-15, CAMDEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4758-16T3

ED-GEL, LLC (d/b/a TRIMIX
LABORATORIES, LLC),

Plaintiff-Appellant,

v.

KRS GLOBAL BIOTECHNOLOGY,
INC.,

Defendant-Respondent.
__________________________________

Argued April 23, 2018 – Decided August 14, 2018

Before Judges Sabatino and Ostrer.

On appeal from Superior Court of New Jersey,
Law Division, Camden County, Docket No.
L-4492-15.

Michael J. Confusione argued the cause for
appellant (Hegge & Confusione, LLC, attorneys;
Michael J. Confusione, of counsel and on the
brief).

Robert S. Shiekman argued the cause for
respondent.

PER CURIAM

Plaintiff ED-Gel, LLC, appeals from a trial court order

enforcing a settlement of its breach of contract action against
defendant KRS Global Biotechnology, Inc. We conclude that

plaintiff's counsel had both apparent and actual authority to

enter into a binding settlement agreement. We therefore affirm.

Plaintiff alleged it owns intellectual property related to

erectile dysfunction treatments, and licensed defendant to

compound and sell some of its formulas. According to plaintiff,

defendant prematurely terminated the contract. Plaintiff sought

monetary damages for unpaid commissions, lost income, and the cost

of products that defendant received but did not pay for. Plaintiff

also sought a list of the prescribing physicians and patients who

received the medication, and related details.

The parties eventually filed cross-motions for summary

judgment. On the return date, counsel for the parties obtained

the court's permission to engage in settlement discussions rather

than oral argument. Plaintiff's managing member, Thomas J.

Harkins, Jr., was present in court. Defendant's principal was in

contact with counsel by telephone, as he was traveling.

What transpired thereafter is the subject of certifications

of defendant's counsel, Robert S. Shiekman; plaintiff's counsel,

James Herman; and Harkins. Brian Herman, who served as plaintiff's

co-counsel, did not file a certification.1 We note at the outset

1
For convenience, we refer to the Hermans by their first names,
and mean no disrespect in doing so.

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that James and Harkins certified that their statements were "true

to the best of [their] personal knowledge and belief."

James asserted that a settlement was ultimately reached,

except regarding the method of payment, specifically, whether a

lump sum payment would be made within thirty days, or two payments

backed by a personal guaranty of defendant's president. James

reported the status of the negotiations to the court, which carried

the motion to a future date, awaiting word whether the final issue

was resolved. James stated that Brian and Harkins went to lunch

to celebrate the settlement. Meanwhile, he and Shiekman agreed

outside the courthouse there would be a single payment after

receiving a communication on the payment issue from defendant's

vice-president.

James said he prepared a draft written agreement "in

accordance with what I believed were the full and final settlement

terms" and forwarded it to Harkins and Shiekman for execution. In

addition to the monetary terms, it included a confidentiality

provision and a general release. Defendant's principal signed it

and transmitted payment, which James held in escrow.

Harkins refused to sign. He contended his attorneys pressured

him to settle. He admitted that he agreed at the courthouse to

the financial terms of the settlement. He stated, "After hours

of repelling my attorneys' incessant pressure, I accepted an offer

3 A-4758-16T3
from opposing counsel." However, "I did not consider acceptance

of price a complete agreement because I had other claims from my

lawsuit I expected my attorneys to argue for me."

He stated that he wanted his attorneys to secure defendant's

agreement to provide physician and patient information. He

acknowledged he did not bring it up at the courthouse, blaming

James for allegedly not telling him that he had to raise it then.

Harkins also contended a confidentiality provision was never

mentioned during the negotiations. Thus, he objected to its

inclusion in the agreement, as well as a general, as opposed to a

limited, release. He also objected to the "attorney advice"

provision on the ground that he did not have a full opportunity

to review and comment on the agreement.

Shiekman stated that he and plaintiff's counsel "reached

settlement terms resolving" the case; "the terms of the Settlement

Agreement were fully negotiated by counsel for the parties"; and

the "[t]he Settlement Agreement included three (3) material terms"

– which were, first, that defendant would make a timely payment

to plaintiff, defendant would execute the settlement agreement,

and plaintiff would do so as well. In a second certification,

Shiekman asserted that James's draft agreement "mirrored, exactly,

the settlement terms that were agreed upon in Court," although

Shiekman does not explicitly address the confidentiality or

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release provisions. He reiterated that the agreement included the

"three (3) material terms" just described.

In granting defendant's motion to enforce the settlement, the

trial court relied on Harkins's concession that he accepted an

offer of settlement, and the principle that an oral settlement

agreement can be enforceable. The court entered an order declaring

that James's draft settlement agreement was binding on the parties.

On appeal, plaintiff contends that the existence of a

settlement, and its material terms, were both genuinely disputed.

Defendant responds that both attorneys agreed they reached a

settlement, which the draft writing embodied.

Our system strongly values the settlement of litigation, and

we "'strain to give effect to the terms of a settlement wherever

possible.'" Brundage v. Estate of Carambio, 195 N.J. 575, 601

(2008) (quoting Dep't of Pub. Advocate v. N.J. Bd. of Pub. Utils.,

206 N.J. Super. 523, 528 (App. Div. 1985)). The burden to prove

a settlement agreement is borne by the party seeking to enforce

it. Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475 (App. Div.

1997).

"On a disputed motion to enforce a settlement, as on a motion

for summary judgment, a hearing is to be held to establish the

facts unless the available competent evidence, considered in a

light most favorable to the non-moving party, is insufficient to

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permit the judge . . . to resolve the disputed factual issues in

favor of the non-moving party." Id. at 474-75. And, absent an

evidentiary hearing by the trial court, we review de novo whether

a binding settlement was reached. Cf. Henry v. N.J. Dept. of

Human Servs., 204 N.J. 320, 330 (2010) (stating that appellate

court reviews grant of summary judgment de novo, applying the same

standard as the trial court).

As a threshold issue, we observe, that, strictly speaking,

the "certifications" of Harkins and James are not competent

evidence. Rule 1:4-4(b) requires the following language to precede

the affiant's signature: "'I certify that the foregoing statements

made by me are true. I am aware that if any of the foregoing

statements made by me are willfully false, I am subject to

punishment.'" Absent such a verification, a certification has no

evidentiary value. Pascack Cmty. Bank v. Universal Funding, LLP,

419 N.J. Super. 279, 288 (App. Div. 2011). Rather than follow the

Rule, Harkins and James certified that "the statements made herein

by me are true to the best of my personal knowledge and belief

. . . ." See Jacobs v. Walt Disney World Co., 309 N.J. Super.

443, 454 (App. Div. 1998) (stating that factual assertions based

merely upon information and belief are inadequate under Rule 1:6-

6). However, as defendant does not object to James's and Harkins's

certifications on this ground, we shall consider them.

6 A-4758-16T3
 Even so, we discern no genuine dispute that James and Shiekman

reached an oral agreement in the courthouse, as supplemented

shortly thereafter with a resolution of the manner of payment

issue. The two attorneys agreed the draft that James forwarded

to Shiekman embodied their agreement, notwithstanding that neither

attorney expressly asserted that he agreed to a general, as opposed

to a limited release, and to a broad confidentiality provision.

Since the lawyers reached agreement, the dispositive issue

is whether James had authority to settle the case according to the

terms in his draft agreement. "[A]n attorney for a private party

may settle a lawsuit based on actual or apparent authority to do

so." Seacoast Realty Co. v. W. Long Branch Borough, 14 N.J. Tax

197, 202-03 (Tax 1994); see also Amatuzzo, 305 N.J. Super. at 475.

Actual authority may be express or implied. Newark Branch,

N.A.A.C.P. v. W. Orange Twp., 786 F. Supp. 408, 423 (D.N.J. 1992).

Implied authority exists when "an agent is authorized to do what

he may reasonably infer the principal desires him to do in light

of the principal's manifestations and facts as he knows or should

know them when he acts." Lampley v. Davis Mach. Corp., 219 N.J.

Super. 540, 548-49 (App. Div. 1987). "The focus is on the agent's

reasonable perception of the principal's manifestations toward

him." Newark Branch, N.A.A.C.P., 786 F. Supp. at 424.

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 Apparent authority arises when "the client's voluntary act

has placed the attorney in a situation wherein a person of ordinary

prudence would be justified in presuming that the attorney had

authority to enter into a settlement, not just negotiations, on

behalf of the client." Amatuzzo, 305 N.J. Super. at 475; see also

LoBiondo v. O'Callaghan, 357 N.J. Super. 488, 497 (App. Div. 2003)

(stating that creation of apparent authority is based on "the

actions of the principal, not the alleged agent"). Thus, implied

actual authority depends on the agent's reasonable perceptions of

the principal's actions; apparent authority depends on a third-

party's perceptions.

James had actual authority to settle. We assume for purposes

of this appeal that Harkins did not expressly authorize James to

agree to a confidentiality provision or a general release, or to

omit a provision on physician and patient lists. Yet, James's

authority was implied. Harkins was present at the settlement

negotiations. He was aware James was negotiating with Shiekman,

and Harkins permitted him to do so. Although Harkins complains

that his attorney pressured him, he concedes that he relented. He

concedes that he approved the financial terms of the settlement.

He did not raise the issue of physician and patient lists during

the courthouse sessions, nor did he expressly impose any explicit

restrictions on the positions James took in his discussions with

8 A-4758-16T3
Shiekman. He also does not claim he raised any objection when the

attorneys informed the court that an agreement was reached, but

for the open issue as to payment terms. Thus, it was reasonable

for James to infer that Harkins gave him the authority to settle.

James also had apparent authority to settle. Regardless of

the pressure he may have felt, Harkins sent James to the settlement

negotiations with Shiekman. "In New Jersey it has been held that

sending an attorney to a settlement conference presumptively

establishes that the attorney has authority to settle . . . ."

Seacoast, 14 N.J. Tax at 204. Apparent authority may exist where

the principal "places the attorney in a position where 'a person

of ordinary prudence, conversant with business usages and the

nature of the particular business, is justified in presuming that

such agent has authority to perform the particular act in

question.'" Id. at 204-05 (quoting United States Plywood Corp.

v. Neidlinger, 41 N.J. 66, 74 (1963)). Harkins's presence at the

negotiations that James spearheaded would suggest to Shiekman that

James had the authority to reach a settlement.

In sum, a binding settlement was reached, which was embodied

in the written agreement that James drafted. The trial court did

not err in enforcing it.

Affirmed.

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