Invalidation of Settlement Failure to Execute Release Unreasonableness
Hatchigian v. Carrier Corp., PICS Case No. 17-1072 (C.P. Philadelphia July 5, 2017) Cohen, J. (5 pages).
A party who agreed to a settlement on the record was not entitled to invalidation of the settlement where that party unreasonably refused to sign a release to effectuate the settlement.
Plaintiff was the owner of an apartment building. He purchased an air conditioning system for the building from Peirce-Phelps, Inc. The unit was manufactured by Carrier Corp. Plaintiff claimed the air conditioning unit was defective and caused mold to grow in the building. The tenants of the building allegedly became sick due to the mold and the subsequently vacated the premises, resulting in plaintiff's loss of rental income. Plaintiff sued Peirce-Phelps for breach of contract in failing to deliver a working air conditioning system and by failing to repair it once notified of its defective condition. Plaintiff also sued Carrier Corp. for negligent design of the air conditioning system. On the day of trial, the parties entered into a settlement agreement, the terms of which were placed on the record. Plaintiff was sworn and stated on the record that he accepted the terms of the settlement. Plaintiff was represented by counsel at the time of the settlement.
Subsequently, plaintiff filed a pro se motion to invalidate the settlement, claiming that defendants wrongfully withheld the settlement funds. Defendants contended that plaintiff refused to execute the release provided to him, so the settlement funds were withheld for that reason. The court found plaintiff's conduct in refusing to execute the release was unreasonable, so it denied his motion to invalidate the settlement. Plaintiff appealed and timely filed his statement of errors.
The court concluded the appeal was without merit. The settlement was agreed to by the parties and plaintiff approved it on the record. Plaintiff claimed defendants failed to comply with Pa.R.C.P. 229.1(c) by not providing the settlement funds within 20 days, but the court held plaintiff could not invalidate the settlement under that rule because plaintiff himself emphatically refused to execute the release. Plaintiff maintained he would not sign a release and would only sign an order marking the case settled after first receiving the settlement funds. Under the circumstances, the court properly found plaintiff's behavior was unreasonable.
Plaintiff argued for the first time on appeal that the attorney who represented him on the day of trial did not have authority to settle this case. This issue was never presented to the trial court and plaintiff was not permitted to raise it for the first time on appeal. The court held the matter was moot, because plaintiff previously testified he agreed to the settlement. Additionally, the court held that plaintiff's right to a jury trial was not abridged, because he agreed to settle the case and acted unreasonably in failing to effectuate the settlement.