The Appellate Division affirms a Law Division order enforcing a settlement agreement.

The Appellate Division affirmed a Law Division order enforcing a settlement agreement between the parties. Hartford Underwriters Insurance Co. provided workers’ compensation coverage to Arch-Concept from May 2012 through January 2016. Hartford filed a complaint against the defendants in November 2016 to recover unpaid premiums because Arch-Concept understated its payrolls and misclassified certain workers.

The parties agreed to settle in  May 31, 2018, by a written settlement agreement. In the event the defendants breached, they agreed to a consent judgment in favor of Hartford and against the defendants for $425,000, less any payments already issued. The defendants made payments until June 2020, then made the first of three consecutive requests for forbearances due to the COVID-19 pandemic. Hartford agreed with the first two requests, despite not being contractually obligated to do so, noting payment could be made the following quarter and adjusting the future payments.

Hartford denied the third request in December 2020, and the defendants only made a partial payment. In response, Hartford filed the motion to enforce the settlement for the $425,000 less the payments already issued. The defendants opposed, acknowledging they still owed money under the settlement agreement but arguing that Arch-Concept was unable to make the payments due to the pandemic.

After arguments, the judge entered an order to enforce the settlement agreement, noting the defendants failed to prove that the Doctrine of Impossibility excused their non-performance, that they could not change the terms of the agreement, and that damages were not an unenforceable penalty. The defendants appealed. The Appellate Division affirmed the judge’s order based upon the above reasoning by the judge.

_{What’s Hot in Workers’ Comp, Vol. 26, No. 9, September 2022 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2022 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}