Yogendranath Papagari and Chandra Shekhar Mamidi v. Vasu Talluri ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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-3743-22
YOGENDRANATH PAPAGARI
and CHANDRA SHEKHAR
MAMIDI,
Plaintiffs-Appellants,
v.
VASU TALLURI, SRINIVAS
NARNE, VASU BABU DIVI,
SARANSH, INC., NARTAL
SYSTEMS, INC., I28
TECHNOLOGIES CORPORATION,
TRISYNC TECHNOLOGIES, INC.,
BLUE PLANET, INC., and GLOBAL
DATA MART, INC.,
Defendants-Respondents,
and
AKP TECHNOLOGIES INDIA
PRIVATE LIMTED, DUMPA
NARASIMHA REDDY,
KATAMAREDDY GEETHANJALI,
CHIMIRI SATEESH, KONURU
DATTATREYA KUMAR, and
RAGHAVA KATAMREDDY,
Defendants.
_______________________________
Argued September 17, 2024 – Decided November 22, 2024
Before Judges Firko and Bishop-Thompson.
On appeal from the Superior Court of New Jersey,
Chancery Division, Middlesex County, Docket No C-
000148-17.
Susheela Verma argued the cause for appellant.
Thomas Kamvosoulis argued the cause for respondents
(Brach Eichler, LLC, attorneys; Thomas Kamvosoulis,
of counsel and on the brief; John Simeone, on the brief).
PER CURIAM
Plaintiffs Yogendranath Papagari and Chandra Shekhar Mamidi appeal
from the June 23, 2023 trial court's order, granting defendants Vasu Talluri,
Srinivas Narne, and Global Data Mart, Inc.'s (GDM) motion to enforce a
settlement agreement and denying plaintiffs' motion for additional
compensation, damages, and counsel fees. We affirm.
I.
Plaintiffs owned GDM, a New Jersey entity, and its affiliated entity,
Global DataMart Systems India Pvt Ltd. (GDM India), located in India. On
January 12, 2017, Talluri and plaintiffs entered into a stock purchase agreement
for GDM and selected assets of GDM India. The stock purchase agreement
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contained a transition period and a six-month installment plan for defendants to
purchase the stocks and assets. Narne executed an unconditional guaranty and
a promissory note in favor of Papagari. Before remitting the final payment,
defendants raised several issues related to representations made by plaintiffs in
the stock purchase agreement. The parties disputed the assumption of liability
for plaintiffs' existing $693,140.45 loan. Plaintiffs also failed to deliver and
relinquish control over multiple GDM assets. Accordingly, defendants objected
to and did not make the final payment required by the stock purchase agreement.
Thereafter, plaintiffs filed a complaint to regain control over GDM assets
that were previously transferred to defendants. Plaintiffs filed an answer and
counterclaim, asserting breach of contract and related claims. Plaintiff then
amended their complaint, asserting additional claims of conversion,
misappropriation, unjust enrichment, and related causes of action against
defendants.
The matter proceeded to trial. On March 29, 2023, the second day of the
trial, the parties negotiated a settlement that was memorialized in a handwritten
agreement. The settlement was recited on the record; however, the settlement
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amount was not disclosed. 1 When voir dired, the parties testified they
understood and assented to those settlement terms. Relevant to this appeal, the
agreement required $625,000.00 be deposited in the Bendit Weinstock attorney
trust account no later than Wednesday, April 5, 2023, to be held in escrow while
the parties drafted and signed a confidential settlement and release agreement.2
Bendit Weinstock was required to provide proof of receipt of the settlement
funds to plaintiffs' counsel. In the event the settlement funds were not deposited
in the attorney trust account by April 5 and five days passed without curing,
plaintiffs would be entitled to an additional $100,000.00 and the entry of
judgment in the total amount of $725,000.00. The agreement also included a
waiver of all monetary and other claims. Lastly, the final settlement and release
agreement would include a "confidentiality provision" and "a provision that if
1
The settlement hearing transcript shows the handwritten agreement was
submitted as a joint exhibit to the trial court. On appeal, plaintiffs submitted a
redacted handwritten settlement agreement and an unredacted settlement
agreement in a confidential appendix. A signed final confidential settlement
agreement and release is not part of the record on appeal. Plaintiffs did not move
to seal the handwritten settlement agreement nor offer a compelling reason for
the agreement to be cloaked in confidentiality in their merits brief.
2
Defendants Talluri, Narne, GDM, and Blue Planet, Inc. were represented by
Bendit Weinstock during the litigation before the trial court.
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either party breached the agreement and obtains an award of damages, the
prevailing party shall be entitled to counsel fees and costs."
Pursuant to the settlement terms, $625,000.00 was deposited into the
Bendit Weinstock trust account on April 5, 2023. That same day, plaintiffs'
counsel received confirmation of the deposit. Between April 5 and May 15,
several iterations of a draft settlement agreement were exchanged between the
parties; however, finalization of the agreement was stalled concerning an
outstanding line of credit secured by plaintiffs. Unable to finalize the settlement
agreement, plaintiffs moved to enforce the handwritten agreement, seeking
$100,000.00 plus interest, counsel fees, and costs. Defendants opposed
plaintiffs' motion and cross-moved to enforce the handwritten agreement in its
entirety.
Following oral argument on June 23, 2023, the trial court denied plaintiffs'
motion and granted defendants' cross-motion in its entirety, finding the
handwritten agreement did not expressly "mandate" payment of the settlement
funds by a date certain. The trial court further found defendants did not act in
bad faith by "wanting to get clarity in terms of the settlement" prior to the release
of the settlement funds from the trust account. This appeal followed.
II.
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Plaintiffs present two arguments on appeal. First, the trial court erred in
denying their motion because defendants breached the settlement agreement.
Second, the trial court erred in finding defendants did not act in bad faith. We
disagree with both these arguments because they are not supported by the record.
"Interpretation and construction of a contract is a matter of law for the
court subject to de novo review." Fastenberg v. Prudential Ins. Co. of Am., 309
N.J. Super. 415, 420 (App. Div. 1998). "Accordingly, we pay no special
deference to the trial court's interpretation and look at the contract with fresh
eyes." Kieffer v. Best Buy, 205 N.J. 213, 223 (2011). A court's task is not to
"torture the language of [a contract] to create ambiguity." Schor v. FMS Fin.
Corp., 357 N.J. Super. 185, 191 (App. Div. 2002) (alteration in original)
(quoting Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997)).
Rather, courts look to the plain terms of the contract and declare the meaning of
what is already written, not what, in hindsight, may have been written. See
Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001) (explaining a court's task
is not to rewrite a contract for the parties better than or different from the one
they wrote for themselves).
We are guided by the well-established legal principles governing
settlements. There is a strong public policy in favor of enforcing settlement
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agreements, which is "based upon 'the notion that the parties to a dispute are in
the best position to determine how to resolve a contested matter in a way which
is least disadvantageous to everyone.'" Brundage v. Est. of Carambio, 195 N.J.
575, 601 (2008) (quoting Peskin v. Peskin, 271 N.J. Super. 261, 275 (App. Div.
1994)).
Generally, settlements are enforced "absent compelling circumstances."
Ibid. (internal quotation marks omitted) (quoting Nolan v. Lee Ho, 120 N.J. 465,
472 (1990)). "Consequently, courts 'strain to give effect to the terms of a
settlement wherever possible.'" Jennings v. Reed, 381 N.J. Super. 217, 227
(App. Div. 2005) (quoting Dep't of Pub. Advoc., Div. of Rate Couns. v. N.J. Bd.
of Pub. Utils., 206 N.J. Super. 523, 528 (App. Div. 1985)).
Essentially, a settlement agreement is a contract. Nolan, 120 N.J. at 472
(citing Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App. Div. 1983)). "An
agreement to settle a lawsuit is a contract which, like all contracts, may be freely
entered into and which a court, absent a demonstration of 'fraud or other
compelling circumstances,' should honor and enforce as it does other contracts."
Pascarella, 190 N.J. Super. at 124-25 (quoting Honeywell v. Bubb, 130 N.J.
Super. 130, 136 (App. Div. 1974)). Therefore, a settlement agreement is
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governed by principles of contract law. Brundage, 195 N.J. at 600-01 (citing
Thompson v. City of Atl. City, 190 N.J. 359, 379 (2007)).
Essential terms are those that go to the "heart of the alleged agreement."
Satellite Ent Ctr., Inc. v. Keaton, 347 N.J. Super. 268, 277 (App. Div. 2002).
Alternatively, if the parties do not agree to one or more essential terms, their
contract is ordinarily unenforceable. See ibid. Where parties have agreed to the
essential terms of a settlement, "second thoughts are entitled to absolutely no
weight as against our policy in favor of settlement." Dep't of Pub. Advoc., 206
N.J. Super at 530.
Here, the settlement language is clear, the $625,000.00 settlement funds
were to be deposited in Bendit Weinstock's attorney trust account and notice
provided to plaintiffs' counsel by April 5. Plaintiffs were only entitled to the
additional $100,000.00 if defendants did not timely deposit the funds and failed
to cure the breach within five days. See Hardy ex rel. Dowdell v. Abdul-Matin,
198 N.J. 95, 103 (2009) (recognizing "a basic principle of contract interpretation
is to read the document as a whole in a fair and common-sense manner").
Despite plaintiffs' contentions, the record shows defendants timely complied
with the settlement agreement.
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We reject plaintiff's contention that "[t]he quick payment to [p]laintiffs,
and not to the [d]efendants' attorneys, was the material term understood by
everyone" and "the intent [was] well demonstrated by the settlement agreement."
Based on the clear language of the settlement agreement, there is no confusion
regarding when the settlement funds were to be deposited and held until a final
agreement was executed. The agreement did not contain any language
specifying the release of the settlement funds to plaintiffs. Moreover, the parties
are sophisticated in business dealings and were represented by experienced
counsel during settlement negotiations; and as such, plaintiffs had the
opportunity to negotiate and reduce to writing a definitive date for the release
of the settlement funds to plaintiff. This was not done.
Nor are we persuaded defendants acted in bad faith given the express and
unambiguous language of the handwritten settlement agreement, and conclude
it lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E).
Affirmed.
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