Settlement in Chambers

An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.

Matrimonial Courts routinely accept that oral settlements dictated on the record in open courts are valid and binding. Many times, these settlements are hastily agreed upon on the proverbial courthouse steps, moments before the start of a hearing. At other times, the settlements are reached with the help of a judge or clerk. When a judge or clerk participates in settlement discussions, these discussions frequently occur in an informal setting, such as in the judge's robing room, or in the courtroom, but off the record.

The question arises as to whether a settlement that is fully agreed upon in such an informal setting, without formally dictating the terms into the record in open court, is enforceable. This issue can arise when the parties reach an agreement and adjourn to memorialize the agreement in writing, or when the parties believe they are dictating the settlement into the record, but the reporter or recording device does not actually capture the colloquy, and then one party objects to the purported settlement.

Is It Enforceable?

Orally agreeing upon terms in a court, but without dictating the terms into the record in open court, is likely insufficient to satisfy CPLR 2104 or DRL ' 236(B)(3). The seminal case on the meaning of “open court” is Dolgin Eldert Corp. v. Dolgin, 31 NY2d 1 (1972). There, the parties entered into an oral agreement relating to the division of real estate. There was no record or writing to evidence the agreement. One of the parties then sought to set aside the agreement as oral and non-binding, the other party sought to enforce the agreement pursuant to CPLR section 2104.

Because the dispute in Dolgin related to real property, the agreement was required to be in writing or to fall within the section 2104 exception to satisfy the statute of frauds, which imposes the same requirements as matrimonial agreements. As an initial matter, the court defined the term “open court” to mean “a judicial proceeding in a court ' in an institutional sense, a court convened ' to do judicial business ' [t]ypically in attendance a clerk who makes entries of judicial events in a docket, register, or minute book, and in modern times there is a court reporter, who makes a record of all the proceedings.” Dolgin Eldert Corp., 31 NY2d at 4.

The court said that an “open court is not a 'judge in chambers' ' .” Id. at 5. It traced the history of the open-court exception and explained that there has always been a record in court; initially, the record was limited to a clerk's minutes, but in modern times “it has also meant an available full transcript beyond dispute and the fallibility of memory.” Id. at 10. The Dolgin court held that section 2104 was inapplicable there because the agreement was not placed on the record and therefore was not made in “open court.”

Next month, we will discuss several cases interpreting the “open court” exception to the writing requirement, as well as alternative means to getting an agreement recognized even if it is not in the record.

Adam W. Schneid is an attorney with Carol W. Most & Associates, P.C., whose practice is devoted primarily to family and matrimonial law. Mr. Schneid is a member of the New York State, American, Westchester and White Plains Bar Associations and is admitted to practice in the Southern District of New York, the Eastern District of New York, and the District of New Jersey.

Most matrimonial matters end in a settlement. Under the Equitable Distribution Law, a matrimonial agreement made before or during marriage must be in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded. See Domestic Relations Law (DRL) ' 236(B)(3). Domestic Relations Law ' 170(6) sets forth a similar requirement for separation agreements used for a conversion divorce. In addition to the requirements of the DRL, settlement agreements that involve the transfer of real property, such as the transfer of title to the marital residence, must also comply with the statute of frauds.'

An Exception to the 'Writing' Requirement

Notwithstanding the specific procedure identified in the Domestic Relations Law for executing an enforceable written agreement, there is a common practice whereby a settlement is dictated in open court and the agreement placed on the record. The Appellate Division, Second Department, interprets the open court exception in Civil Practice Law & Rules (CPLR) section 2104 as an
exception to the DRL requirement' that settlement agreements be in writing. Section 2104 provides:

An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.

Matrimonial Courts routinely accept that oral settlements dictated on the record in open courts are valid and binding. Many times, these settlements are hastily agreed upon on the proverbial courthouse steps, moments before the start of a hearing. At other times, the settlements are reached with the help of a judge or clerk. When a judge or clerk participates in settlement discussions, these discussions frequently occur in an informal setting, such as in the judge's robing room, or in the courtroom, but off the record.

The question arises as to whether a settlement that is fully agreed upon in such an informal setting, without formally dictating the terms into the record in open court, is enforceable. This issue can arise when the parties reach an agreement and adjourn to memorialize the agreement in writing, or when the parties believe they are dictating the settlement into the record, but the reporter or recording device does not actually capture the colloquy, and then one party objects to the purported settlement.

Is It Enforceable?

Orally agreeing upon terms in a court, but without dictating the terms into the record in open court, is likely insufficient to satisfy CPLR 2104 or DRL ' 236(B)(3). The seminal case on the meaning of “open court” is Dolgin Eldert Corp. v. Dolgin , 31 NY2d 1 (1972). There, the parties entered into an oral agreement relating to the division of real estate. There was no record or writing to evidence the agreement. One of the parties then sought to set aside the agreement as oral and non-binding, the other party sought to enforce the agreement pursuant to CPLR section 2104.

Because the dispute in Dolgin related to real property, the agreement was required to be in writing or to fall within the section 2104 exception to satisfy the statute of frauds, which imposes the same requirements as matrimonial agreements. As an initial matter, the court defined the term “open court” to mean “a judicial proceeding in a court ' in an institutional sense, a court convened ' to do judicial business ' [t]ypically in attendance a clerk who makes entries of judicial events in a docket, register, or minute book, and in modern times there is a court reporter, who makes a record of all the proceedings.” Dolgin Eldert Corp., 31 NY2d at 4.

The court said that an “open court is not a 'judge in chambers' ' .” Id. at 5. It traced the history of the open-court exception and explained that there has always been a record in court; initially, the record was limited to a clerk's minutes, but in modern times “it has also meant an available full transcript beyond dispute and the fallibility of memory.” Id. at 10. The Dolgin court held that section 2104 was inapplicable there because the agreement was not placed on the record and therefore was not made in “open court.”

Next month, we will discuss several cases interpreting the “open court” exception to the writing requirement, as well as alternative means to getting an agreement recognized even if it is not in the record.

Adam W. Schneid is an attorney with Carol W. Most & Associates, P.C., whose practice is devoted primarily to family and matrimonial law. Mr. Schneid is a member of the New York State, American, Westchester and White Plains Bar Associations and is admitted to practice in the Southern District of New York, the Eastern District of New York, and the District of New Jersey.