HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY VS. SPEECH & LANGUAGE CENTER, LLC (L-0281-15, SOMERSET COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1353-19T2
HORIZON BLUE CROSS
BLUE SHIELD OF NEW JERSEY,
Plaintiff-Respondent,
v.
SPEECH & LANGUAGE CENTER,
LLC, and CHRYSSOULA
MARINOS-ARSENIS,
Defendants-Appellants.
________________________________
Argued November 17, 2020 – Decided December 16, 2020
Before Judges Fisher and Gilson.
On appeal from the Superior Court of New Jersey, Law
Division, Somerset County, Docket No. L-0281-15.
Michael Confusione argued the cause for appellants
(Hegge & Confusione, LLC, attorneys; Michael
Confusione, of counsel and on the briefs).
Patricia A. Lee argued the cause for respondent
(Connell Foley LLP, attorneys; Patricia A. Lee, of
counsel and on the brief; Jaimee A. Glinn, on the brief).
PER CURIAM
Defendants appeal an order that compelled them to execute a settlement
agreement. Because we agree with the trial judge that defendants freely and
voluntarily entered into the agreement and then failed to execute it, we affirm.
The record reveals that defendant Chryssoula Marinos-Arsenis is a
licensed speech-language pathologist and owner of defendant Speech &
Language Center, LLC, which provides speech-related therapy to patients.
Plaintiff Horizon Blue Cross Blue Shield filed suit against defendants in 2014,
alleging a "scheme to submit false and fraudulent insurance claims," and seeking
a significant amount of damages on claims based on the New Jersey Insurance
Fraud Prevention Act, N.J.S.A. 17:33A-1 to -34, as well as fraud, negligent
misrepresentation, breach of contract, and unjust enrichment.
After years of litigation, the parties earnestly engaged in settlement
negotiations the month prior to their September 2019 trial date. In a proceeding
in open court on August 30, 2019, the parties advised the trial judge that they
had settled the case, that the material terms of their agreement were contained
in a term sheet referred to throughout the proceeding, 1 and that the parties would
1
That document was not marked as an exhibit, an oversight defendants have
attempted to take advantage of. See n. 3, below.
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thereafter draft and sign a formal agreement based on the term sheet. The judge
placed defendant Arsenis under oath and questioned her about her willingness
to settle:
THE COURT: Okay. Ma'am, you've heard . . . both
counsel put on the record that you've reached an
amicable resolution of this matter, is that true?
MS. ARSENIS: Yes.
THE COURT: And you understand the terms of that
settlement are memorialized in the agreement [2] that
was referenced by counsel, correct?
MS. ARSENIS: Yes.
THE COURT: You've had a chance to see that?
MS. ARSENIS: Yes.
THE COURT: Okay. You've had a chance to go over
it [the term sheet] with your counsel, correct?
THE WITNESS: Yes.
THE COURT: And that includes [defense counsel]
who's seated with you today?
MS. ARSENIS: Yes.
THE COURT: And your son, who is not an attorney of
record, but he is an attorney, and he's seated next to you
at counsel table, correct?
2
Referring to the term sheet.
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MS. ARSENIS: Yes.
THE COURT: Okay. Do you understand the terms?
MS. ARSENIS: Yes.
THE COURT: Have you voluntarily agreed to them?
MS. ARSENIS: Yes.
THE COURT: You understand that it resolves this
matter in full, correct?
MS. ARSENIS: Yes.
THE COURT: And that, of course, you had the
opportunity to have a trial in this matter heard by a jury,
you do you understand that?
MS. ARSENIS: Yes.
THE COURT: You could have done better than what
you've done in that agreement, or you could have done
worse, do you understand that?
MS. ARSENIS: Yes.
THE COURT: With a jury it's always a possibility,
correct?
MS. ARSENIS: Yes.
THE COURT: By settling the matter, you understand
you're waiving your right to a jury trial and accepting
those settlement terms as an amicable resolution of the
matter, do you understand that?
MS. ARSENIS: Yes.
A-1353-19T2
4
Despite confirming under oath that the parties had reached a settlement
that would be memorialized in a formal agreement consisting of all the
provisions contained in the term sheet, defendants later refused to execute the
more formal settlement agreement, causing plaintiff to move in the trial court
for relief. As revealed by the motion papers, defendants' recalcitrance was based
on the inclusion of a clause that would ostensibly govern the parties' agreement
if defendant Arsenis filed a bankruptcy petition. The formal settlement
agreement that defendants refused to sign declared that "[i]n the event"
defendant Arsenis filed a bankruptcy petition prior to the full payment of her
obligation to plaintiff, she agreed "not to contest the non-dischargeability of any
remaining settlement payment obligation." This identical phrase appears in the
term sheet. The bankruptcy clause in the unsigned settlement agreement also
expressed that defendant Arsenis
agrees and intends that the judgment debt will be a non-
dischargeable debt, pursuant to 11 U.S.C. § 523(a)(2)
in the event of a bankruptcy, or in any similar
proceeding.
The term sheet contains an identical provision.
The trial judge granted plaintiff's motion for reasons discussed in a written
opinion, and defendants appeal. Defendants contend that the judge erred
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because: (1) defendant Arsenis "agreed to settle plaintiff's claims to avoid
further legal expense and stop the bleeding – not to acknowledge 'fraud' as the
Final Settlement Agreement provides"; (2) "[t]he record does not show that the
actual party, [defendant] Arsenis, agreed to a reference [in the settlement
agreement] to fraud"; and (3) the judge "should have struck the offending non-
dischargeability terms as unenforceable and void." We reject these arguments
and affirm.
In explaining our disposition, we should start with an understanding of
what plaintiff was after when moving in the trial court. Plaintiff entitled its
motion as one seeking to "enforce" a settlement. While that label is not
inaccurate, it is capable of being misunderstood. What plaintiff sought, despite
the motion's moniker, was simply to have defendants do what they promised to
do: sign an agreement that was faithful to the term sheet. The motion did not
seek, and this appeal does not require us to decide, whether the settlement
agreement should or will be "enforced" if the bankruptcy clause should be
triggered in the future.
In a solemn proceeding at which both parties were represented by counsel,
defendant Arsenis took the oath and swore to a superior court judge that she
freely and voluntarily entered into a settlement that obligated her execution of a
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written agreement that included the provisions in the term sheet, including the
bankruptcy provision. There's no dispute about that. And there's no dispute that
the drafted settlement agreement adhered to the term sheet. As for those
provisions that provoked defendants' failure to sign, the settlement agreement
contains – word for word – what was contained in the term sheet. So, there was
no legitimate impediment to the entry of an order compelling execution of the
settlement agreement; defendants' first and second arguments are, therefore,
without sufficient merit to warrant further discussion in a written opinion. R.
2:11-3(e)(2).3
We do not reach defendants' third argument because our courts "do not
render advisory opinions or function in the abstract." Crescent Park Tenants
Ass'n v. Realty Equities Corp., 58 N.J. 98, 107 (1971). Defendant Arsenis's
agreement about the debt's non-dischargeability has no significance until she
files a bankruptcy petition. If, at that time – should it ever occur – the parties
3
We make note of two other aspects of these arguments falling within the first
two points. First, defendants contend that plaintiff did not demonstrate that the
term sheet included in the appendix is the same term sheet referred to during the
August 30, 2019 proceeding. We find this contention frivolous, particularly
when defendants never filed an opposing certification in the trial court claiming
there was some other term sheet. Second, defendants argue that, in resolving
the controversy, the judge should have conducted an evidentiary hearing. There
was, however, no genuine dispute about what defendants agreed to sign, so this
argument is also without merit.
A-1353-19T2
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dispute whether the debt is dischargeable, a bankruptcy court will have to
consider whether federal policies and legal principles preclude the enforcement
of what defendant Arsenis "agree[d] and intend[ed]" in executing the settlement
agreement about dischargeability. This appeal does not require that we opine
on this interesting but unripe issue. 4
To summarize, the only real issue in controversy is whether plaintiff was
entitled to an order compelling defendants to sign what they had agreed to sign.
We hold that plaintiff is entitled to that relief without deciding whether the
settlement agreement's non-dischargeability provisions may ultimately be
enforced by a bankruptcy court should defendant Arsenis ever file a bankruptcy
petition.
4
Mindful of the limitations imposed by Rule 1:36-3, we note only for historical
purposes, and not for precedential purposes, that the Court of Appeals for the
Third Circuit considered the issue nearly thirty years ago but neither reached a
consensus nor published their opinions. Judge Cowen wrote an opinion, in which
Chief Judge Sloviter joined, that affirmed a bankruptcy court determination that
a party could not consent, in an earlier action in another court, to the non-
dischargeability of a debt or judgment, while Judge Weis disagreed for reasons
expressed in his dissent. Cheripka v. Republic Ins. Co., 1991 U.S. App. LEXIS
30343 (3d Cir. 1991). Thereafter, a majority of the Third Circuit's active judges
voted to rehear the matter in banc and, in doing so, vacated the three-judge
panel's opinions and its judgment. Cheripka v. Republic Ins. Co., 1992 U.S.
App. LEXIS 898 (3d Cir. 1992). Later, because the court's twelve judges were
"equally divided" on the question, the bankruptcy court order was affirmed.
Cheripka v. Republic Life Ins. Co., 1992 U.S. App. LEXIS 38449 (3d Cir. 1992).
The court seems not to have taken up the issue since.
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The order under review is affirmed.
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