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Blackwell v. Taylor


March 27, 1985


Appeal from the United States District Court for the District of New Jersey Trenton (D.C. Civil No. 83-4645) District Judge: Honorable John W. Bissell

Author: Aldisert

Before: ALDISERT, Chief Judge, SLOVITER, Circuit Judge, and MANSMANN, District Judge.*fn*


ALDISERT, Chief Judge.

The question for decision in this diversity action is whether the district court erred in concluding that the parties had effectively settled their differences on May 22, 1984. Deborah Blackwell, a female companion of Arthur R. Taylor, appellant, filed a criminal complaint of aggravated assault and battery against him in New Jersey state court. She later filed a civil action in the United States District Court in diversity requesting compensatory and punitive damages. The predicate of the actions occurred on November 4-5, 1983, when Taylor assaulted Blackwell in his car and at his home in New Jersey.

On May 22, 1984, Daniel Rabinowitz, a member of the firm of McCarter & English and representative for Miss Blackwell, and William Wolf, a member of the firm Bathgate, Wegener, Wouters & Neumann and representative for Mr. Taylor, entered into pretrial negotiations. The negotiating session culminated in an understanding that Taylor would pay Miss Blackwell $40,000 over a one year period, and that Taylor would immediately forgive an indebtedness of $3,000 she owed him; in return Miss Blackwell agreed to dismiss the civil action in federal court. At no time during these negotiations did the subject of a confidentiality agreement arise.

Counsel subsequently exchanged letters. The letter from Mr. Taylor's attorney on May 30, 1984 to Miss Blackwell's lawyer is significant:

Dear Mr. Rabinowitz:

I am writing this letter, to you, in order to confirm the fact that the above captioned matter has, with the mutual consent of our respective clients, been settled. Simultaneously with sending this letter to you I will forward letters to the United States District Court for the District of New Jersey advising that Court that the above captioned matter should be marked as settled.

This letter shall also confirm the terms of the settlement, which are as follows:

A. Payment by Taylor to Blackwell of $40,000;

B. The aforesaid sum of $40,000 is payable; without interest, over a period of one (1) year in ten equal installments of $4,000, the first such installment will be due and payable within ten (10) days of the date on which I receive a fully executed Release and Stipulation of Settlement/Dismissal;

C. Taylor will execute a note evidencing the aforesaid obligation to pay $40,000;

D. Taylor will forgive a $3,000 note, dated September 8, 1982, that was executed by your client as the promissor;

E. Release to be executed by your' client and a Stipulation of Dismissal/ Settlement to be executed by you and the undersigned.

It is my belief that this letter accurately sets forth the mutual understandings of our respective clients. If this letter does not accurately set forth the understanding of your client, please advise me of that fact within five (5) days of the date of this letter. If I do not hear from you to the contrary, within five (5) days of the date of this letter, I will therefore assume that this letter does, in fact, accurately reflect the mutual understandings of our respective clients.


William J. Wolf

No advice to the contrary was received within the five days. Wolf also advised the district court and the magistrate that the case was settled.

On June 15, 1984, nearly a month after the settlement negotiations, Wolf called Rabinowitz and for the first time indicated that a confidentiality agreement was necessary to the settlement.

On May 24, 1984, the district court denied defendant's motion to dismiss the complaint for lack of subject matter jurisdiction. On the same day the court signed an order stating that it had been reported to the court that the action had been settled and that the action was dismissed "without prejudice to the right, upon good cause shown within sixty (60) days, to reopen the action if the settlement is not consummated." On July 6, 1984, the court issued a show cause order on taylor to demonstrate why an order enforcing settlement should not be entered according to the terms of the settlement agreement expressed by mr. Taylor's attorney in his letter of May 30, 1984, set forth verbatim above.

On August 14, 1984, "having read the papers submitted in support of and in opposition to this application and having heard the arguments of counsel, and for good cause appearing" the court entered an order enforcing settlement. Taylor appeals from this order.

Taylor argues that a settlement agreement is not binding upon the parties until all essential necessary terms have been "finalized" by the parties, that there were disputed issues of material fact which necessitated an evidentiary hearing, that the court erred in not sealing the record, and that there was a failure of subject matter jurisdiction. We are not impressed by any of these contentions.

The demand for compensatory and punitive damages under the facts asserted brought the claim within the minimum amount in controversy requirements of 28 U.S.C. § 1332. As stated by the Supreme Court, "[t]he rule governing dismissal for want of jurisdiction . . . is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith." St. Paul Mercury Co. v. Red Cab Company, 303 U.S. 283, 288 (1938) (footnotes omitted). Based upon the nature of the present action, we are in agreement with district judge that the sum claimed by the plaintiff, herein, constitutes a good faith claim in excess of the $10,000 minimum requirement of 28 U.S.C. § 1332.

Because we determine that the essential facts relating to the settlement negotiations of May 22, 1984, were not disputed, no evidentiary hearing was necessary. The court found that the meeting of the minds was reached on May 22, 1984 as evidenced by Mr. Taylor's attorney's letter of May 30, 1984. Inasmuch as the court found that the settlement was reached as of that date, the later attempt to insert a confidential agreement was at best an offer for a supplementary term which was rejected, thus disposing of appellant's contention that the contract was not "finalized." Consequently, appellant's assertion that the record should have been sealed is moot.

We have carefully considered all the contentions of the appellant.

The judgment of the district court will be affirmed in all respects.

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