When Is a Settlement Binding?

On April 5, 2007, the Court of Appeals voided a decade-old court-ordered stipulation that had settled a contested litigation over a rent-stabilized apartment. The landlord in Riverside Syndicate Inc. v. Munroe, et al. 10 N.Y.3d 18, was allowed to renege on a settlement on the theory that the stipulation violated public policy and unlawfully waived the tenant's rights. The ramifications of this ruling are extraordinary. A party to a court ordered settlement can reap the benefits for as long as is opportune (the court ruled that there is no applicable statute of limitations). The abiding party is left to try to recoup those benefits that it gave under the agreement ' in the Riverside case a decade of rent and substantial improvements to the apartment. And both parties will be left to undo all that occurred based on a now voided settlement.