Gibbons Law Alert

Gibbons Law Alert

Tagged: Settlement

Appellate Division Holds Settlement Reached at Voluntary Mediation Is Unenforceable in the Absence of a Signed Written Settlement Agreement

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Posted in General Litigation

On April 6, 2023

In Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, LLC, a case decided 10 years ago, the New Jersey Supreme Court upheld the confirmation of an oral settlement agreement that was made at a court-ordered mediation session. The court announced, however, that “going forward, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable.” In a recent, to-be-published decision, the Appellate Division held that Willingboro’s “broad, bright-line rule” requiring a signed written settlement agreement extends to voluntary mediations, too. The new case, Gold Tree Spa, Inc. v. PD Nail Corp., involved a dispute over the plaintiffs’ sale of two nail salons to the defendants. After the plaintiffs filed suit, the parties voluntarily agreed to mediation, resulting in the mediator’s creation of a draft settlement agreement. Several hours after the mediation ended, one of the plaintiffs decided she did not want to settle and refused to sign the agreement. The defendants moved to enforce the settlement, and the plaintiffs responded that they would honor the settlement agreement only if certain contingencies regarding an assignment of the lease of one of the salons could be met. The defendants then contacted the mediator to finalize the settlement agreement and circulated the lease assignment and related documents. The plaintiffs raised issues...

Opinion Holds That Non-Monetary Reverse Payments Trigger Actavis Antitrust Scrutiny, Creating Split Within D.N.J.

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Posted in Antitrust

On November 12, 2014

An opinion issued on October 6, 2014, by Judge Sheridan of the United States District Court for the District of New Jersey further muddied the legal waters as to what type of “reverse payments” made by makers of brand-name pharmaceuticals to their generic competitors to settle patent litigation are subject to antitrust scrutiny under the Supreme Court’s decision in FTC v. Actavis. Judge Sheridan held that Actavis applies to non-monetary payments, such as a promise by the brand-name manufacturer in exchange for which the generic agrees to delay entry. Importantly, however, a non-monetary payment must be capable of being reliably converted to a monetary value so that it can be evaluated against the Actavis factors. Judge Sheridan’s holding runs counter to Judge Walls’s decision earlier this year in In re Lamictal Direct Purchaser Antitrust Litigation, which limited Actavis to reverse payments involving an exchange of cash and was the subject of a prior blog post.

Court Holds Only Reverse Payment of Money Requires Actavis Antitrust Scrutiny

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Posted in Antitrust

On February 6, 2014

Recent years have seen a significant number of antitrust challenges to so-called “reverse payment” pharmaceutical patent litigation settlements between brand name manufacturers and their generic competitors. The Supreme Court’s decision in FTC v. Actavis resolved a split among the courts of appeal, and held that settlements in which “large and unjustified” reverse payments are made are subject to antitrust scrutiny in the form of a traditional “rule of reason” analysis. In the wake of Actavis, the lower courts have begun to grapple with the question of what, if any, application Actavis has to the disposition of antitrust challenges to patent settlements that do not include a large payment of cash by the brand producer to the generic, but may include other forms of non-monetary consideration.

New Jersey Supreme Court Upholds Oral Settlement Reached During Mediation, But Requires Future Settlements to Be Written

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Posted in General Litigation

On September 12, 2013

In a recent 6-0 opinion, the New Jersey Supreme Court has held that, going forward, settlement agreements reached during court-ordered mediation must be reduced to a signed writing before mediation ends in order to be enforceable. The Court also found that a party waives New Jersey’s mediation-communication privilege, set forth in N.J.R.E. 519, by not objecting to evidence of conversations that took place during the mediation and by offering evidence of mediation communications.

Pennsylvania Superior Court Defines Standard for Determining Insurer’s Control of Litigation and Settlement When Seeking to Defend Insured Subject to a Reservation of Rights

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Posted in Insurance

On July 24, 2013

The Pennsylvania Superior Court recently set forth a new standard for determining when an insured must seek the insurer’s consent to settle underlying third-party claims where the insurer had previously offered to defend the insured under a reservation of its right to decline coverage for any adverse judgment that might be entered against the insured later.

Plaintiffs in Moldy Washing Machine Litigation May Proceed as a Class

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Posted in Class Action Defense

On December 12, 2012

A recent Seventh Circuit decision, authored by Judge Richard Posner, could have an impact on future class action litigations. In Butler, et al. v. Sears, Roebuck & Co.,—a lawsuit involving product defects that allegedly cause mold buildup in washing machines sold by Sears between 2001 and 2004—the Seventh Circuit sought to clarify “predominance,” a concept that, in the context of class action litigation, has been shrouded by ambiguity. In its opinion, the Seventh Circuit explained that “[p]redominance is a question of efficiency.” Put simply, predominance asks whether it is “more efficient . . . to decide some issues on a class basis or all issues in separate trials?”

Failure to Strictly Comply With the Express Terms of the Notice Provisions in a Claims-Made Insurance Policy Will Forfeit Available Coverage

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Posted in Insurance

On April 26, 2012

The Third Circuit’s recent decision in Atlantic Health System Inc. v. National Union Fire Insurance Company of Pittsburgh confirms the importance of strictly following the notice requirements of a claims-made policy and the relevance of the parties’ course of prior and subsequent performance on the ultimate interpretation of allegedly ambiguous policy terms and conditions. In this case, the failure to strictly comply with the notice requirements resulted in AHS retaining liability for more than $2 million of defense costs and settlement payments.

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