Plaintiff Ronald Goldstein appealed from a trial court decision order denying his motion to enforce the terms of a settlement that was placed on the record. He also appealed from the trial court’s order granting defendants’ cross-motion to enforce the settlement in accordance with their written settlement agreement. The issue in Goldstein v. Prolong Pharmaceuticals, LLC, 2025 N.J. Super. Unpub. LEXIS 794 (App. Div. May 16, 2025) was whether the execution of a release was an essential term of the parties’ settlement.
This lawsuit involved a claim by the plaintiff, an intellectual property attorney, who sued the defendants for unpaid invoices for legal services rendered to Prolong pursuant to a consulting contract. After negotiations mediated by the trial court, the parties agree to resolve the case and placed the terms on the record. According to the terms placed on the record, in exchange for a release of all claims in favor of the defendants, the defendants agreed to pay $240,000 in full and final settlement of the fee claims. The payment was to be made within 30 days of the execution of the release. Further, defense counsel confirmed that all four defendants would be jointly and severally responsible for the settlement agreement.
Following the in-court settlement, the parties exchanged various drafts of proposed releases which did contain some different terms that the defendants provided to the plaintiff. Defendants’ drafts required plaintiff to forever release all claims in favor of defendants and “past, present, and future” parties associated with the defendants, “including but not limited to claims” arising out of the services agreement between plaintiff and Prolong. Further, defendants added a confidentiality and non-disparagement clause.
In response, plaintiffs submitted a revised draft of defendants’ release. Plaintiff objected to the defendants’ version, claiming that it was overreaching, one-sided, and well beyond the scope of the litigation. It also included a reciprocal release, requiring defendants to release all claims in favor of plaintiff. Finally, it removed the confidentiality and non-disparagement clause.
Thereafter, defendants accepted a few of the changes but retained the original language in the release and the confidentiality and non-disparagement clause. It also changed the draft to indicate that plaintiff would receive payment within 30 days of the execution of the settlement agreement. Plaintiff in turn advised defendants that the proposal made the document “fatally defective” because, pursuant to the terms, the case was to be dismissed and the $240,000 would be paid within 30 days of the settlement placed on the record. Plaintiff claimed that defendants improperly attempted to change the payment date and made the payment an uncertain event contingent on the execution of the agreement.
The exchange of drafts of the release was followed by a case management conference. After the case management conference, the parties continued to propose various drafts of the settlement agreement but never agreed on the finalized terms. A further conference between the parties did not resolve the remaining issues pertaining to the settlement.
Ultimately, plaintiff moved to enforce the settlement terms placed on the record. The defendants cross-moved to enforce their draft of the settlement agreement and sought attorney’s fees, costs, and sanctions.
The respective settlement terms differed with respect to the scope of the release, the definition of a disparaging statement, and the effective date. The court held oral argument on both motions. The trial court denied the plaintiff’s motion but granted the cross-motion. The trial court found that the defendants’ proposed release and confidentiality and non-disparagement clause contained “standard language.” It concluded that the settlement agreement proffered by the defendants contained the essential settlement terms placed on the record and contained “standard release language.” Also, the trial court noted that the plaintiff understood that it was only upon execution of the release that he would be due payment. However, the court denied the defendants’ motion for attorney’s fees.
Plaintiff appealed the court’s ruling, which compelled him to sign a settlement agreement which he considered to be unnecessary, unfair, and to include terms he had not agreed upon. He argued that defendants should have been required to make the $240,000 settlement payment because he had provided defendants with his own unilaterally signed release, claiming that it satisfied the terms of the settlement put on the record. Further, he argued that a release is a mere formality and, as a matter of law, a written release or settlement agreement “is not an essential element of settlement.”
The Appellate Division agreed with the defendants that the execution of a release in favor of defendants was an essential term of the settlement placed on the record. Further, the defendants’ payment of $240,000 was not due until 30 days after the execution of the release. Hence, the execution of a written release was not a mere formality but rather was a central component of the settlement.
As for the terms of the settlement, the Appellate Division agreed that plaintiff was not entitled to a reciprocal release according to the agreed-upon terms placed on the record. One of the essential terms of the settlement agreement was the execution of a written release in favor of defendants but there was no reference to a reciprocal release. Hence, defendants had no obligation to sign a reciprocal release.
As for the non-disparagement clause, plaintiff argued that this term was not a necessary term of the settlement, and the parties disagreed on its language. As for this provision, the Appellate Division disagreed with the trial court in enforcing the non-disparagement clause because the parties never expressed an intent on the record to include that term as part of the settlement. To the contrary, it was an additional, non-negotiated term.
Next, the Appellate Division addressed the plaintiff’s argument that the defendants’ proposed language in the release exceeded the scope of the parties’ agreement regarding the nature of the claims released and the time period for the release. The defendants’ proposed release was overly broad to the extent it included a release not only from the claims advanced in this case but also from other unknown and unidentified claims. The Court found that the release should be limited to plaintiff’s claims and should be further confined to the relevant time period when the dispute arose and the case was litigated.
As for the due date of the payment, the Appellate Division noted that the parties agreed on the record that defendants would make payment within 30 days of the execution of the release. This term suggested only that plaintiff’s signature was required in order for him to be paid by defendants and did not necessitate defendants’ signatures prior to payment. Thus, the payment should be made within 30 days of plaintiff executing the release, not from the date on which the last defendant signed the agreement. To the extent the trial court held otherwise, the Appellate Division found that it made a mistake in enforcing the effective date for payment as defined in defendants’ draft settlement agreement.
Hence, the Appellate Division remanded the matter back to the trial court. It ruled that the parties shall promptly exchange a release consistent with the essential and limited terms set forth on the record. The release should not include a reciprocal release for plaintiff or any non-disparagement clause or any other provision not specifically agreed to. The parties may include a confidentiality agreement consistent with the representations made during oral argument. Further, the Court found that defendants must pay plaintiff $240,000 within 30 days of plaintiff’s execution of the release.
Finally, the Appellate Division found that the trial court correctly ruled that plaintiff was not entitled to an award of statutory interests. Because he had not yet executed a release to satisfy his obligation, he had no right to payment. Therefore, he also had no right to interest from when he claimed the payment was due.