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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: July 27, 2016

Complaint Dismissed, Fees Awarded, for Disclosing Confidential Settlement Negotiations

On July 12, 2016, Justice Ramos of the New York County Commercial issued a decision in Board of Managers of 823 Park Avenue Condominium v. 823 Park Avenue LLC, 2016 NY Slip Op. 31328(U), sanctioning a plaintiff for disclosing confidential settlement negotiations.

In Board of Managers of 823 Park Avenue Condominium, the parties to a dispute entered into a confidentiality agreement regarding their settlement negotiations. Nonetheless, when the plaintiff sued the defendants, it disclosed some of those settlement communications. The court sanctioned the plaintiff, explaining:

This Court finds that the improper inclusion of the obvious settlement communications constitutes bad faith, and is sufficient to warrant the imposition of attorney’s fees incurred by 823 Park in moving to strike those paragraphs (22 NYCRR 130-1.2).

The inclusion of settlement communications is clearly barred by the pre-negotiation agreement executed by the parties, which states that all statements, communications, correspondence, etc. exchanged between the parties during these discussions constitute settlement communications and may not be used in any manner for any purpose.

(Internal quotations and citations omitted).

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