NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-1789-24
AMIHAI DABAH, individually and derivatively on behalf of NAYA STONE LLC,
Plaintiff-Appellant,
v.
AVRAHAM DAHAN and AVRD CORP.,
Defendants-Respondents,
and
WORLD INTERNATIONAL STONE, INC.,
Defendant.
______________________________
Submitted February 24, 2026 – Decided August 28, 2026 Before Judges Rose and DeAlmeida.
On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No.
C-000012-24.
Sills Cummis & Gross, PC, attorneys for appellant (Joseph B. Fiorenzo and William R. Tellado, on the brief).
Michael M. Cohen, attorney for respondents.
PER CURIAM Plaintiff Amihai Dabah, individually and derivatively on behalf of Naya Stone, LLC (Naya), appeals from two Chancery Division orders: (1) the December 19, 2024 order granting defendant Avraham Dahan's motion for reconsideration of the court's November 8, 2024 order denying his motion to enforce a settlement, vacating that order, and granting his motion to enforce a settlement; and (2) the January 5, 2025 order memorializing the terms of the settlement. We affirm.
I.
A. The Formation of Naya In 2018, plaintiff was engaged in the retail tile business through his ownership of Jac Elan, LLC (Jac). He and defendant agreed to start a business together in the wholesale stone industry. Defendant prepared a business plan for the proposed venture.
The two encountered difficulties as they negotiated their planned business. Ultimately, plaintiff agreed to move forward with the venture on two
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conditions. First, he demanded Yair Golan be a third member of the company and act as intermediary between plaintiff and defendant. Second, he insisted defendant be a non-managing member and/or silent partner in the new entity with limited rights to review the company's books and records or participate in its day-to-day operations. Defendant and Golan agreed to the conditions.
On September 20, 2018, plaintiff, defendant, and Golan formed Naya, a New Jersey limited liability company. Each had a one-third interest in the entity. The three members of Naya did not execute an operating agreement. Defendant contributed significant capital to Naya.
In November 2018, defendant signed a silent partner contract in which he agreed "to forfeit all involvement in daily operations [and] all access to accounting and financial aspects of" Naya. In addition, the agreement entitled him "only to the end of year finances as filed by the company's accountant and his end of year profit distribution as stipulated in the partnership agreement. "
B. Naya's Business Activity After Naya was formed, plaintiff began searching for existing businesses and warehouse space for the company to purchase. He found Arena Stone Ltd. (Arena), which operated a wholesale slab business, and was interested in selling its business and real property, including its warehouse in Carlstadt.
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With the consent of its three principles, Naya entered into agreements to acquire Arena's business, assets, inventory, and the parcel on which its warehouse was located (the Property). The transaction was memorialized in an asset purchase agreement, a real estate purchase and sale agreement, and a promissory note. The real estate purchase agreement required Naya's members to sign personal guarantees and provide personal financial records to Arena. Naya also entered into a lease with C&C Arc Stone Realty, LLC (C&C), an Arena affiliate, to occupy the warehouse for five years with the option to purchase the Property for $4,000,000 at any time during the lease, so long as certain conditions were met (the Option). Plaintiff personally guaranteed the lease.
In or about September 2018, plaintiff, defendant, and Golan began discussing the possibility of defendant and Golan obtaining an interest in Jac. Negotiations were unsuccessful and defendant and Golan did not obtain an interest in plaintiff's retail tile business.
Following the purchase of Arena's assets and business, the three members of Naya encountered difficulties operating the company. Defendant refused to execute a personal guarantee in connection with the warehouse lease. As a
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result, C&C declared Naya in default on the lease and purported to terminate the Option.
In addition, defendant alleged plaintiff and Golan froze him out of Naya's business by refusing him access to the company's books and records. He also accused plaintiff and Golan of engaging in misappropriation, fraud, and other misconduct, including with respect to Naya's business transactions with Jac.
According to plaintiff, the disputes hindered Naya's ability to move forward with the sale of its assets and property to Shawnee Transportation, Inc. (Shawnee) for $10,000,000. Plaintiff alleged the transaction would result in a net profit of approximately $1.6 million for each of the members of Naya. Plaintiff transmitted Shawnee's offer to defendant and Golan, seeking their consent to the deal. Golan consented, but defendant refused to do so.
C. Foreign Actions Defendant sued Golan, Golan's company, defendant World International Stone, Inc., and others in Israel for fraud, breach of contract, and other claims arising from unrelated real estate transactions (the Israel Action). Defendant acquired Golan's one-third interest in Naya at the conclusion of the Israel Action and thus became a two-thirds owner of the entity.
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On April 22, 2021, defendant filed suit against plaintiff, Naya, Golan, and others in New York State Supreme Court, alleging plaintiff had frozen him out of Naya's business (the New York Action). In that suit, defendant sought, among other things, an order compelling plaintiff to transfer ownership of Jac to Naya.
D. The Chancery Division Actions On April 1, 2022, plaintiff filed suit in the Chancery Division (the First Action). He sought, among other things, to resolve the deadlock by compelling the sale of Naya's assets to Shawnee and dissolving Naya pursuant to the New Jersey Revised Uniform Limited Liability Company Act (the Act), N.J.S.A. 42:2C-1 to -94.
Plaintiff filed an order to show cause for a preliminary injunction: (1)
compelling Naya's members to execute all documents necessary to effectuate acceptance of Shawnee's offer, subject to the dissolution and winding up provisions of the Act; and (2) authorizing plaintiff exclusively to take all actions necessary to sell Naya's property and assets to Shawnee. On May 26, 2022, the court denied plaintiff's application.
Defendant subsequently sought an order to show cause in the First Action seeking temporary restraints and preliminary injunctive relief to, among other
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things, appoint a receiver, and restrain Naya from paying plaintiff's legal fees. On May 26, 2002, the court denied defendant's request for temporary restraints.
On July 22, 2022, the court denied defendant's request for a preliminary injunction and appointed an attorney as custodian of Naya. The court directed the custodian to file a report on the reasonableness and bona fides of Shawnee's offer and the status of Naya's business.
On August 31, 2022, the custodian filed a report concluding the Shawnee offer was "reasonable and fair." In accordance with the custodian's report, on September 22, 2022, the court entered an order authorizing plaintiff, on behalf of Naya and its members, to: (1) take all actions necessary to effectuate and close the sale of Naya's property and assets to Shawnee in accordance with the terms of Shawnee's offer; and (2) execute any and all documents and take any and all actions necessary to exercise the Option. The court also found Naya's members were deadlocked.
On October 3, 2022, Naya advised C&C it was exercising the Option.
C&C rejected Naya's attempt to exercise the Option, claiming it had been terminated for cause based on defendant's refusal to provide financial records and sign a personal guaranty. On November 1, 2022, Naya initiated an action
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in the Chancery Division against C&C seeking to, among other things, compel C&C to permit it to exercise the Option (the Option Action).
Pursuant to a May 12, 2023 consent order, the court dismissed the First Action without prejudice. Plaintiff subsequently refiled the action (the Second Action). Pursuant to a December 8, 2023 consent order, the court dismissed the Second Action without prejudice.
Plaintiff subsequently refiled the action (the Third Action), which is the subject of this appeal. In early 2024, defendant sought an order to show cause for a temporary restraining order and preliminary injunction seeking to, among other things, remove plaintiff as manager of Naya. On April 25, 2024, and May 22, 2024, the court rejected defendant's application and reaffirmed plaintiff as Naya's managing member.
E. The Eviction Action On June 5, 2024, C&C filed an action in the Special Civil Part seeking a judgment of possession to evict Naya from the Property (the Eviction Action) . C&C alleged Naya was in default for failing to make a balloon payment on the promissory note associated with its purchase of Arena. Naya moved to transfer the Eviction Action to the Chancery Division and consolidate it with the Option Action. The court in the Eviction Action ordered Naya to place $501,206.19
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due under the promissory note in the escrow account of C&C's attorney by the close of business on September 13, 2024, as a condition of granting Naya's motion to transfer the Eviction Action and consolidate it with the Option Action. The court warned that failure to make the escrow payment would result in Naya forfeiting its rights under the Option.
On September 12, 2024, defense counsel wrote plaintiff's counsel, Dov B.
Medinets, demanding plaintiff make the escrow payment in full. Medinets responded by stating counsel for the parties had agreed Naya's members would contribute to the escrow in amounts commensurate with their membership interest, i.e., plaintiff would contribute one third and defendant would contribute two thirds. Defendant's counsel denied any such agreement had been reached.
F. Settlement Discussions With the escrow deadline approaching, plaintiff called defendant on the morning of September 13, 2024. He advised defendant he would agree to the settlement of all claims the parties had against each other on the following non- negotiable terms: (1) plaintiff would transfer his one-third interest in Naya to defendant; (2) defendant would release any claims he had to Jac; (3) defendant and Naya would release plaintiff and Jac from any and all claims defendant and Naya had or may have against plaintiff and Jac; (4) defendant and Naya would
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pay all Naya's creditors and suppliers; (5) defendant and Naya would pay plaintiff's and Naya's legal fees incurred to date in the Third Action, the Option Action, the Eviction Action, and the New York Action, and plaintiff's legal fees going forward in the Option Action; (6) defendant and Naya would indemnify plaintiff with respect to any claims in the Option Action; and (7) plaintiff would receive his normal September salary.
In response to plaintiff's offer, defendant asked the total amount owed to Naya's suppliers and creditors. Plaintiff advised defendant Naya owed approximately $500,000 to $600,000 to suppliers for materials already delivered, and three containers of materials were enroute to Naya for which approximately $200,000 would be due upon delivery. In addition, plaintiff stated he and Naya owed counsel in the Third Action approximately $150,000, and counsel in the New York Action, Option Action, and Eviction Action approximately $75,000, and Naya owed approximately $40,000 in outstanding credit card charges, for which plaintiff was the guarantor. After several exchanges with defendant, plaintiff communicated the terms of his proposed settlement to Medinets.
At 11:14 a.m. on September 13, 2024, Medinets called defendant's counsel, Andrew Kelly, to communicate the terms of plaintiff's proposed
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settlement. Kelly advised he would speak with defendant and get back to Medinets. At 12:16 p.m., Kelly emailed Medinets with an outline of the seven terms he understood to be part of the proposed settlement, along with defendant's responses. He stated "[s]hould the parties reach agreeable terms, any settlement shall be expressly subject to the parties executing a formal settlement agreement." The substance of defendant's response was as follows:
• Plaintiff transfers his one-third interest in Naya to defendant. Defendant agreed to this term, provided plaintiff gives up all claims against Naya and defendant.
• Defendant releases any claim to Jac Elan.
Defendant did not agree to this term and countered that he would release any claims to Jac "going forward" but demanded an accounting and access to the books and records of Naya and Jac for the period January 1, 2019, to August 31, 2024 and reserved his right to sue plaintiff and Jac for any claims arising during this period.
• The parties dismiss the New York Action and the Third Action. Defendant agreed but reserved his rights for claims arising for the period January 1, 2019 to August 31, 2024.
• Defendant will indemnify plaintiff for all Naya bills, outstanding credit card charges, and all obligations of Naya. Defendant rejected this term.
• Plaintiff will receive his September salary.
Defendant agreed to this term.
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• Naya will continue to pay the lease for plaintiff's car until it expired in February 2025. Defendant rejected this term.
• Defendant will indemnify plaintiff for all claims being litigated against plaintiff by C&C and any associated costs including, but not limited to, paying plaintiff's legal fees for having to continue defending against C&C. Defendant rejected this term.
At 2:11 p.m., Medinets responded by email: "[Plaintiff] made an offer to walk away from everything for some very basic and minor protections. The terms (apart from the car which apparently was not supposed to be a part of this and I retract) were not negotiable. Accordingly, there is apparently no deal."
At about 2:30 p.m., plaintiff met with defendant outside defendant's offices in Brooklyn, where they had a discussion on the sidewalk. According to plaintiff, he told defendant the terms of his proposed settlement were non- negotiable and provided justification for his position. Defendant told plaintiff he wanted to retain the right to sue plaintiff if he later discovered he had engaged in wrongdoing while operating Naya. Plaintiff told defendant Naya's outstanding debts were between approximately $700,000 and $900,000, and to decide immediately if he accepted the settlement. Defendant declined to give an immediate response. At around 3:15 p.m., plaintiff advised defendant the
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settlement was off because defendant could not make up his mind. Plaintiff walked away.
Commencing at 3:40 p.m., plaintiff and defendant exchanged numerous text messages concerning the settlement proposal.
At 4:20 p.m., Kelly emailed Medinets with revised responses to the settlement proposal, the substance of which follows:
• Plaintiff transfers his one-third interest in Naya to defendant. Defendant agreed to this term, provided plaintiff gives up all claims against Naya and defendant.
• Defendant gives up any claim to Jac. Defendant agreed.
• The parties would dismiss the New York Action and Third Action. Defendant agreed.
• Defendant would indemnify plaintiff for all Naya bills, outstanding Naya credit card charges, and all obligations of Naya. Defendant agreed but demanded plaintiff provide a certified list of all such debts and agree to indemnify Naya for any debts not listed.
• Plaintiff would receive his September salary.
Defendant agreed.
• Naya would continue to pay the lease for plaintiff's car until it expired in February 2025.
Defendant rejected this term.
• Defendant would indemnify plaintiff for all claims being litigated against him by C&C and any A-1789-24
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associated costs including, but not limited to, paying plaintiff's legal fees for having to continue defending against C&C. Defendant agreed that Naya would indemnify plaintiff but not defendant personally.
Kelly again stated any settlement was expressly subject to the parties' executing a written settlement agreement.
At the time Kelly sent the 4:20 p.m. email, plaintiff was sitting outside his bank waiting for confirmation defendant had wired his two thirds of the escrow payment to the trust account of C&C's attorney. He was prepared to wire his one third of the payment once he confirmed defendant's payment had been made. He continued to exchange text messages with defendant.
Beginning at 4:25 p.m. and continuing to 4:45 p.m., plaintiff and defendant had the following text message exchange:
Plaintiff: My lawyer didn't put it in there, but my share of profit for 2023 which is about 63k. R u good with that?
Defendant: I didn't see what he wrote??
Plaintiff: He didn't write. I'm asking you if you're ok if I add it in.
Defendant: Did you tell [Medinets] to call [Kelly]?
Plaintiff: Yes. They spoke. Now he's calling [C&C's attorney] to let her know the wire went out.
At 4:55 p.m., Kelly sent Medinets an email message stating:
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Further to my prior email below and our subsequent discussions, the settlement terms below are agreed upon with the following additions:
If there are any profits distributed from Naya for calendar year 2023, [plaintiff] shall be entitled to receive 1/3 rd of those profits.
Naya will pay the outstanding legal fees of . . . Medinets and Avi Frisch [(Naya's landlord-tenant attorney)] up to $25,000.
Based on the parties' agreement to the foregoing terms and the terms detailed below, [defendant] initiated the wire for $501,206.19 to [C&C's attorney's] trust account.
Please confirm [plaintiff's] agreement to the settlement terms by return email and we will coordinate the drafting of a formal settlement agreement on Monday.
Beginning at 4:56 p.m. and continuing to 5:10 p.m., plaintiff and defendant had the following text message exchange:
Defendant: [Medinets] need to confirm email he just received.
Defendant: Please call him asap!
Defendant: ?
Defendant: My wire cut off is 5:15 Defendant: Need a confirm email from [Medinets]
Plaintiff: One sec
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Defendant: Wire cut off Defendant: ??
Plaintiff: The order mentioned by 4:30 p.m. [Kelly]
said you sent already.
Plaintiff: You need to send NOW Defendant: I can't without confirm Defendant: Have [Medinets] confirm Defendant: What's problem [(sic)]
Defendant: You said it's agreed
Defendant: Did [Medinets] send confirmation? Still waiting . . .
Defendant: Pls have [Medinets] send At 5:12 p.m., Medinets sent Kelly an email stating:
I cannot speak as to the outstanding fees with any certainty, and the deal is not contingent on those fees being below any particular threshold. There is also [plaintiff's counsel]. Other than that, the above emails collectively accurately outline the major points of the agreement. Of course, a more detailed document will need to be agreed to. The main takeaway is that [plaintiff] is walking away from Naya and will have no further exposure from [defendant] or from C&C. All Naya debts will be paid, so [plaintiff] is not ruining his relationship with his suppliers, lawyer, vendors, etc.
Especially as some of these are in [plaintiff's] name.
We will, of course, be doing full releases as well.
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At 5:26 p.m., Kelly sent Medinets an email stating, "My understanding is our clients just spoke and have agreed that Naya bills will be indemnified up to $500,000 inclusive of legal bills owed by Naya. After speaking with your client, please confirm by return email."
Also at 5:26 p.m., defendant texted plaintiff, as follows: "Email sent to [Medinets]. Have him reply ASAP." At 5:32 p.m., plaintiff replied, "Sent."
At 5:33 p.m., Medinets sent Kelly an email stating, "$500,000 limit is for suppliers only to be dealt with immediately. This does not include supplies still in transit. This is only what is due right now. There may be other debts of Naya which he will need to pay in due course for [(sic)] Naya cashflow."
Beginning at 5:34 p.m. and continuing to 5:38 p.m., plaintiff and defendant had the following text message exchange:
Defendant: I wired based on your confirmation we have a settlement. Per my lawyer[']s email.
Defendant: Of the settlement terms.
Plaintiff: I understood that the lawyers been email [(sic)] and they're in agreement on the basic agreements of the deal. [Medinets] says that the final agreement will be drafted on Monday. Mazal Tov to you!!!!
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Defendant wired $501,206.19 to the trust account of C&C's attorney, and Naya subsequently paid plaintiff's legal fees to Medinets and plaintiff's counsel. Neither plaintiff nor his attorneys objected to the wire transfer or payments.
In the days that followed, the parties could not agree on a written settlement. Plaintiff contended defendant's proposed written settlement did not reflect the parties' agreement because it contained the following terms to which he did not agree: (1) Naya would only indemnify plaintiff for certain Naya debts, rather than pay those debts directly; (2) plaintiff would be required to indemnify Naya for other debts; (3) defendant would cover plaintiff's legal fees going forward only in the Option Action and legal fees incurred in other actions would be capped at $25,000; and (4) defendant and Naya would not release plaintiff and Jac from future claims arising from plaintiff's management of Naya.
G. Motion to Enforce Settlement On September 30, 2024, defendant moved in the Third Action to enforce the parties' settlement. He argued the terms of the agreement were reflected in Kelly's 4:20 p.m. and 4:55 p.m. emails to Medinets. He also relied on Medinets' 5:12 p.m. email to Kelly, which he described as confirmation of the agreement, with the possible exception of an expansion of the legal fees defendant would
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pay. Defendant's moving papers did not include copies of the text messages exchanged between plaintiff and defendant on September 13, 2024.
On October 15, 2024, while the motion to enforce the settlement was pending, defendant caused Naya to file a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of New Jersey. Plaintiff argued he was a one-third owner of Naya as of October 15, 2024, and the petition was filed without his consent or notification. Defendant argued he was the sole owner of Naya as of October 15, 2024, pursuant to the settlement. Plaintiff moved to dismiss the bankruptcy petition as unauthorized. The Bankruptcy Court adjourned the motion to await the outcome of the motion to enforce the settlement.
Plaintiff opposed the motion to enforce the settlement. He argued the parties failed to agree on all material terms and, as a result, did not reach an enforceable agreement. In addition, he argued because defendant and his counsel did not reveal defendant's intention to file a bankruptcy petition on behalf of Naya, any consideration offered in settlement discussions was illusory, precluding a finding the parties reached an enforceable settlement.
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On November 8, 2024, the court issued an oral decision denying defendant's motion and concluding "the proofs reveal that the parties never entered into an enforceable settlement." The court found:
Kelly's emails were clear; any settlement shall be expressly subject to the parties['] executing a formal settlement agreement. He wrote this in his 12:16 email, his 4:20 email, and his 4:55 email.
This was a condition of settlement, and the parties never satisfied it. Two weeks of negotiations failed to produce a formal agreement. At this point, the settlement collapsed, according to defendant's own terms, upon which the plaintiff reasonably relied.
The court also found Kelly's 4:55 p.m. email "set forth another condition that was never satisfied. It required plaintiff's counsel to, 'Please confirm . . . [plaintiff's] agreement to the settlement terms by return email.' This never happened." The court found "[t]he 5:20 [(sic)] return email identified a disagreement as to payment of legal fees and perhaps other issues."
The court rejected defendant's argument his wiring funds to the escrow was evidence of partial performance of the settlement. The court found:
[Defendant] is frustrated that by this time he had already initiated the wire to C&C's counsel, but this is a risk he assumed by not waiting for the return email, in a decision from which he benefited. Forwarding the escrow prevented the eviction of the company of which he is a two-thirds owner. [Plaintiff], as we all know, only owns one-third of the company.
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A November 8, 2024 order memorialized the court's decision.
On November 12, 2024, defendant moved for reconsideration of the November 8, 2024 order. He argued Kelly's 4:20 p.m., 4:55 p.m., and 5:26 p.m., emails, and Medinets' 5:12 p.m. email represent an enforceable settlement. In support of the motion, defendant also submitted, for the first time, the text messages exchanged between plaintiff and defendant. Plaintiff opposed the motion.
On December 19, 2024, the court issued an oral decision granting defendant's motion for reconsideration, vacating the November 8, 2024 order, and granting defendant's motion to enforce the settlement. The court found the parties' text messages "provide a more complete picture of the parties' settlement agreement" and give context to the attorney's emails. The court explained:
Here, the court is reconsidering its November 8th decision and finds that the parties have in fact entered into an enforceable settlement. [Plaintiff's] text messages to [defendant] demand this result.
Most strikingly, at 5:38 [plaintiff's] text message stated that he understands that the lawyers "are in agreement on the basic agreements of the deal and that a final agreement will be drafted on Monday. Mazel Tov to you." Clearly, [plaintiff] was congratulating [defendant] on reaching a settlement.
This is more than enough evidence to confirm that there was a meeting of the minds on all essential
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terms. The text message was direct and unambiguous.
And perhaps, more important, sent after [defendant]
had partially performed on the settlement by wiring the $500,000 escrow to avoid eviction on a lease that [plaintiff] had personally guaranteed.
The court continued:
If there had not been a settlement, [plaintiff]
could have frantically texted [defendant] to cancel the wire. He could have also called [defendant]. He could have contacted his attorney. But [plaintiff] does none of these things. Instead, he congratulates [defendant].
And he congratulates him because, the court finds, that the parties had reached a settlement as to all essential terms.
[Plaintiff's] confidence was also shared by his attorney. This is the court's inescapable conclusion after it has revisited . . . Medinets'[] email communications in light of [plaintiff's] text messages.
[] Medinets writes to [defendant's] counsel at 5:12 that the above emails "collectively accurately outline the major points of the agreement." This is in response to a 4:55 email from [defendant's] counsel asking him to "confirm [plaintiff's] agreement to the settlement terms." It is, thus, undisputed that counsel for the parties acknowledged a settlement by way of email.
It is also undisputed that the parties acknowledged a settlement by way of text messages.
And it is further undisputed that the actions of the parties and counsel acknowledged a settlement, because [defendant] wired the escrow funds and paid nearly $80,000 of [plaintiff's] legal fees without any objection from [plaintiff] or his attorneys.
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The court noted Medinets asked C&C's attorney to confirm defendant's funds arrived in her trust account. The court found, "not only did . . . Medinets not object to [defendant's] performance, he wanted to confirm it. This only happens if there was a settlement. The court will not allow [plaintiff] to renege on it, particularly after he benefited from the escrow payment and the payment of legal fees."
The court held it "no longer finds that the settlement was conditioned upon a written settlement agreement." The court found plaintiff
benefited from the escrow payment on September 13th and, critically, he benefited from the payment of his legal fees weeks later. At this point, he and his attorneys knew that the written agreement remained elusive, yet they, nevertheless, accepted [defendant's]
further performance and payment of legal fees. This demonstrates an intention to be bound and confirms that the parties had discarded any condition that the settlement was expressly contingent upon a written agreement, if this condition ever existed at all.
A December 19, 2024 order memorialized the court's decision.
On January 6, 2025, the court entered an order detailing the terms of the parties' settlement. This appeal followed.
Plaintiff argues the motion court erred because it: (1) failed to consider whether defendant's filing of a bankruptcy petition on behalf of Naya frustrated the intent of the agreement or made defendant's performance under the A-1789-24
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agreement impossible; (2) incorrectly found the parties had a meeting of the minds on the material terms of a settlement agreement, including terms defendant expressly rejected; (3) overlooked the parties' express condition any settlement agreement must be in writing; and (4) if correct in its conclusion the parties reached a settlement agreement, failed to include general releases, immediate payments of debts, and other material terms on which the parties had a meeting of the minds.
II.
We begin with the court's grant of defendant's motion for reconsideration.
The November 8, 2024 order was interlocutory. As the Supreme Court explained, "[b]y definition, an order that 'does not finally determine a cause of action but only decides some intervening matter pertaining to the cause[,] and which requires further steps . . . to enable the court to adjudicate the cause on the merits[,]' is interlocutory." Moon v. Warren Haven Nursing Home, 182 N.J. 507, 512 (2005) (quoting Black's Law Dictionary 815 (6th ed. 1990)); see also Wein v. Morris, 194 N.J. 364 (2008).
A court "has the inherent power, to be exercised in its sound discretion, to review, revise, reconsider and modify its interlocutory orders at any time prior to the entry of final judgment." Johnson v. Cyklop Strapping Corp., 220 N.J.
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Super. 250, 257 (App. Div. 1987). As Judge Pressler explained, "the strict and exacting standards of Rule 4:50" do "not apply to interlocutory orders entered prior to final disposition." Ibid. Nor do the limitations of Rule 4:49-2 apply to requests for relief from interlocutory orders. Sullivan v. Coverings & Installation, Inc., 403 N.J. Super. 86, 96-97 (App. Div. 2008). See also Del Vecchio v. Hemberger, 388 N.J. Super. 179, 188-89 (App. Div. 2006); Cummings v. Bahr, 295 N.J. Super. 374 (App. Div. 1996); D'Atria v. D'Atria, 242 N.J. Super. 392 (Ch. Div. 1990). We review the denial of a motion for reconsideration of an interlocutory order for an abuse of discretion. Johnson, 220 N.J. Super. at 263-64.
The motion court did not mistakenly exercise its discretion when it reconsidered the November 8, 2024 order based on defendant's submission of the text messages between plaintiff and defendant. Our review of the record revealed those messages provide critical context to the emails exchanged by the parties' attorneys as they negotiated a settlement agreement. While defendant offers no explanation for having failed to submit the text messages in support of his motion to enforce the settlement, because the November 8, 2024 order was interlocutory, Rule 4:49-2 does not apply and defendant need not demonstrate the text messages were "new or additional information . . . which it could not
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have provided on the first application." See Cummings, 295 N.J. Super. at 384 (quoting D'Atria, 242 N.J. Super. at 401-02).
We turn to the merits of the motion court's conclusion the parties reached an agreement on the material terms of a settlement. "Settlement of litigation ranks high in our public policy." Nolan v. Lee Ho, 120 N.J. 465, 472 (1990) (quoting Jannarone v. W.T. Co., 65 N.J. Super. 472 (App. Div. 1961)). "It is the policy of the law to encourage settlements . . . ." Judson v. Peoples Bank & Tr. Co., 25 N.J. 17, 35 (1957).
"An agreement to settle litigation is 'governed by [the general] principles of contract law.'" Globe Motor Co. v. Igdalev, 225 N.J. 469, 482 (2016) (alteration in original) (quoting Brundage v. Est. of Carambio, 195 N.J. 575, 600-01 (2008)). A valid settlement agreement requires an offer and acceptance by the parties, "and the terms of the agreement must 'be sufficiently definite [so] that the performance to be rendered by each party can be ascertained with reasonable certainty.'" GMAC Mortg., LLC v. Willoughby, 230 N.J. 172, 185 (2017) (alteration in original) (quoting Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992)). A contract is formed when there is a meeting of the minds between the parties evidenced by an offer and unconditional acceptance. Morton v. 4 Orchard Land Tr., 180 N.J. 118, 129-30 (2004). "[I]f parties agree
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on essential terms and manifest an intention to be bound by those terms, they have created an enforceable contract." Weichert, 128 N.J. at 435.
That an agreement is oral and not yet reduced to writing is of no consequence. "Where the parties agree upon the essential terms of a settlement, so that the mechanics can be 'fleshed out' in a writing to be thereafter executed, the settlement will be enforced notwithstanding the fact the writing does not materialize because a party later reneges." Lahue v. Pio Costa, 263 N.J. Super. 575, 596 (App. Div. 1993) (quoting Bistricer v. Bistricer, 231 N.J. Super. 143, 145 (Ch. Div. 1987)).
The burden of proving a settlement was reached is on the party seeking to enforce it. Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475 (App. Div. 1997). We review an order enforcing a settlement de novo. Gold Tree Spa, Inc. v. PD Nail Corp., 475 N.J. Super. 240, 245 (App. Div. 2023).
We find ample support in the record for the motion court's conclusion the parties agreed to the essential terms of a settlement. The parties' September 13, 2024 text messages, when read in context with their attorney's emails, establish an agreement to the material terms set forth in the court's January 6, 2025 order. Both set of communications establish a narrowing of the points in contention between the parties until they arrive at a consensus on, as plaintiff characterized
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it, "the basic agreements of the deal." Plaintiff's subsequent manifestation of assent is evident in his "Mazel Tov to you!!!!" message to defendant.
In addition, the parties' subsequent conduct, including defendant's transfer of more than $500,000 to the escrow account of C&C's attorney, and the payment of tens of thousands of dollars of plaintiff's legal fees, each without objection from plaintiff or the parties' attorneys, further corroborates the parties' ratification of the settlement. In addition, we agree with the motion court's finding the parties' post-agreement acts negated their prior conditioning of a settlement on a written agreement. Plaintiff accepted payment of his legal fees after it became apparent the parties were having difficulty agreeing on a written form of the settlement.
Nor are we persuaded by plaintiff's argument the motion court erred because Naya may be excused from performing its obligations under the settlement by the doctrines of impossibility and frustration as result of its bankruptcy petition.1
1 On April 4, 2025, Naya filed its reorganization plan in the Bankruptcy Court. The plan seeks to pay Naya's creditors thirty to forty percent of their claims, and suggests Naya may sue plaintiff and/or Jac for damages, and seeks to claw back fees paid to plaintiff's attorneys. Although Naya's reorganization plan is not in the motion court record, we take judicial notice of the plan, which is on file with a "federal court sitting for this state." N.J.R.E. 201(b)(4). See J.H. v. R & M
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Supervening events that make performance of a contract impractical may excuse performance. See M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171 N.J. 378, 389-90 (2002). "A successful defense of impossibility (or impracticability) of performance excuses . . . contract obligations, where performance has become literally impossible, or at least inordinately more difficult, because of the occurrence of a supervening event that was not within the original contemplation of the contracting parties." JB Pool Mgmt., LLC v. Four Seasons at Smithville Homeowners Ass'n, Inc., 431 N.J. Super. 233, 246 (App. Div. 2013). "The supervening event must be one that had not been anticipated at the time the contract was created, and one that fundamentally alters the nature of the parties' ongoing relationship." Id. at 245.
Similarly, "under the . . . doctrine of frustration of purpose, . . . the supervening event fundamentally has changed the nature of the parties' overall bargain." Id. at 246. Frustration of purpose "arises when a change in circumstances makes one party's performance worthless to the other, frustrating [that party's] purpose in making the contract." Id. at 246-47 (quoting Restatement (Second) of Contracts, § 265 cmt. a (A.L.I. 1981)). "The
Tagliareni, LLC, 239 N.J. 198, 226, n.2 (2019) ("On appeal, a 'reviewing court in its discretion may take judicial notice of any matter specified in Rule 201 , whether or not judicially noticed by the'" trial court.) (quoting N.J.R.E. 202(b)).
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frustration must be so severe that it is not fairly to be regarded as the risks that [the party invoking the doctrine] assumed under the contract." Id. at 247 (alteration in original) (quoting Restatement (Second) of Contracts, § 265 cmt. a (A.L.I.)). As we have held,
[t]o sustain a defense under the doctrine of frustration it does not appear to be sufficient to disclose that the "purpose" or "desired object" of but one of the contracting parties has been frustrated. It is their common object that has to be frustrated, not merely the individual advantage which one party or the other might have achieved from the contract.
[Edwards v. Leopoldi, 20 N.J. Super. 43, 55 (App. Div.
1952).]
Plaintiff argues Naya's bankruptcy, as demonstrated by its reorganization plan, will make it impossible for the company to fulfill its financial obligations under the settlement agreement. He contends the record demonstrates Naya does not intend to pay its suppliers, vendors, and other creditors, or to meet its contractual obligations to plaintiff.
In addition, plaintiff argues his intent when engaging in settlement negotiations was to transfers his interest in Naya to defendant in exchange for the ability to walk away from the business, have Naya's debts paid to protect his relationship with vendors and suppliers, have his Naya-related debts paid, and have no further exposure to attorney's fees or claims related to Naya. He asserts A-1789-24
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that because of its bankruptcy petition, Naya has been prohibited from paying its debts with its suppliers and vendors, which has hurt his business prospects and frustrated the purpose of the settlement.
The flaw in plaintiff's argument is the doctrines of frustration and impossibility provide a defense to the performance of a contract. They are not germane to the analysis of whether the parties, prior to the intervening frustrating event, formed a contract. At the time plaintiff and defendant formed the settlement agreement, Naya had not yet filed its bankruptcy petition. There is no evidence in the record that, at the time of formation, it was impossible for Naya to perform its contractual obligations, or the parties would have been frustrated in carrying out the purpose of the agreement.
Plaintiff, perhaps better than anyone else, was aware of Naya's financial condition at the time the settlement was reached. He presumably believed the company was able to pay its creditors, satisfy plaintiff's outstanding counsel fees, and fulfill its other financial obligations when he was negotiating the settlement. The bankruptcy petition, and the financial circumstances that presumably lead to its filing, were later-occurring events that may or may not have changed the prospects of the parties' fulfilling their contractual obligations.
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Our decision does not preclude plaintiff from applying to the motion court for relief based on his allegation defendant fraudulently entered the settlement agreement with the intent to file Naya's bankruptcy petition to avoid fulfilling its obligations to plaintiff. Nor does this decision preclude either party from raising impossibility or frustration in defense to a breach of contract claim or as a basis for seeking relief from the performance of a contractual obligation. We offer no opinion with respect to any such claims.
To the extent we have not specifically addressed any of plaintiff's remaining contentions, we conclude they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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