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THE STIPULATION OF SETTLEMENT IN THIS LANDLORD-TENANT ACTION WAS NOT INVALIDATED BY A CHANGE IN THE LAW BASED UPON A COURT OF APPEALS DECISION ISSUED A MONTH AFTER THE STIPULATION; A “MISTAKE OF LAW” DOES NOT INVALIDATE A STIPULATION OF SETTLEMENT (FIRST DEPT).

The First Department determined that a stipulation of settlement in open court was valid, despite a Court of Appeals decision which ruled the Housing Stability and Tenant Protection Act (HSTPA) cannot be applied retroactively. The retroactive application of the HSTPA (to the stipulation) was deemed a “mistake of law” which is not a ground for invalidating a stipulation:

On … the date of trial, the court facilitated settlement negotiations and the parties placed the material terms of their settlement on the record. “The in-court oral stipulation made here . . . evidences [defendant]’s unconditional agreement, through authorized counsel, to settle” for a sum certain of $7.5 million, provide leases at specific monthly rents for plaintiffs still living in the building, and enter into a confidentiality agreement … . “[W]hen the transcript . . . is read in its entirety, it is clear that what was spread upon the record was an oral stipulation and not simply an agreement to agree” … . “The fact that it is necessary for the parties to exchange general releases and execute a confidentiality agreement does not render the agreement invalid”… , nor does the parties’ representation that they would “execute formal settlement papers” demonstrate that there was no agreement on material terms … . …

We reject defendant’s contention that the decision of the Court of Appeals … , issued one month afterwards, requires that the settlement be vacated. While that decision held that the retroactive application of the [HSTPA] would violate due process …, previous interpretations to the contrary constituted “a mistake as to the law,” which is insufficient grounds for vacating a stipulation … . Nieborak v W54-7 LLC, 2022 NY Slip Op 01397, First Dept 3-3-22

 

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