Nancy Higgins v. I. Heller Construction Co.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3918-24 A-3919-24 NANCY HIGGINS, an individual, Plaintiff-Respondent, v. I. HELLER CONSTRUCTION CO./HELLER INDUSTRIAL PARK, INC., a business entity, HELLER XIII & XIV PARTNERSHIPS, L.P., a business entity,1 Defendants-Respondents, and KREILKAMP TRUCKING, INC., Third-Party Defendant- Appellant. ______________________________ ARCH INSURANCE COMPANY, Intervenor-Respondent. 1 According to Heller's brief, plaintiff's complaint improperly pled the names of these Heller entities. ______________________________ NANCY HIGGINS, an individual, Plaintiff-Respondent, v. I. HELLER CONSTRUCTION CO./HELLER INDUSTRIAL PARK, INC., a business entity, HELLER XIII & XIV PARTNERSHIPS, L.P., a business entity, POWER-TEK PERFORMANCE GEAR, LLC, a business entity, Defendants-Respondents, and HELLER XIII PARTNERSHIP, L.P. and HELLER XIV PARTNERSHIP, L.P., Defendants/Third Party Plaintiffs-Respondents, v. KREILKAMP TRUCKING, INC., Third Party Defendant- Respondent. ______________________________ ARCH INSURANCE COMPANY, Intervenor-Appellant. ______________________________ A-3918-24 2 Submitted September 21, 2026 – Decided September 29, 2026 Before Judges Sabatino and Berdote Byrne. On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2319-21. Bressler, Amery & Ross, attorneys for Kreilkamp Trucking, Inc., appellant in A-3918-24 and respondent in A-3919-24 (Loren L. Pierce and Taylor L. Oxley, on the briefs in A-3918-24) and join in the briefs of appellant Arch Insurance in A-3919-24. Tressler, LLP, attorneys for Arch Insurance Co., appellant in A-3919-24 and respondent in A-3918-24 (Timothy M. Jabbour and Matthew S. Oorbeek, on the briefs in A-3919-24) and join in the briefs of appellant Kreilkamp Trucking, Inc. in A-3918-24. Law Offices of James H. Rohlfing, attorneys for respondent I. Heller Construction Co., Inc., Heller Industrial Parks, Inc., Heller XIII Partnership, L.P., and Heller XIV Partnership, L.P. (Nancy B. Appel, on the brief). Stathis & Leonardis, attorneys for respondent Nancy Higgins, join in part the brief of respondent I. Heller Construction Co., Inc. in A-3918-24. PER CURIAM These two consolidated appeals stem from a civil settlement that was placed on the record in the presence, and with the oral and written assent, of all counsel. A-3918-24 3 After the settlement was presented and memorialized in writing, one of the defendants and its claims administrator submitted unrefuted certifications attesting that they had never authorized counsel to enter into the settlement and were unaware settlement negotiations were even occurring. Meanwhile, the designated trial counsel for that defendant abruptly left his law firm and provided no explanation for his actions in having previously represented to the court orally and in writing that he had the client's authority to settle. Plaintiff and a co-defendant moved to enforce the settlement. Defendant opposed the motions, along with its insurer which intervened in the matter. The trial court enforced the settlement despite the opposition, and thereafter denied reconsideration and declined to hold a plenary hearing on the question of counsel's authority to bind defendant. The present appeals by defendant and the insurer ensued. For the reasons that follow, we vacate the trial court's orders and remand for an evidentiary hearing, in accordance with Amatuzzo v. Kozmiuk, 305 N.J. Super. 469 (App. Div. 1997), to develop the record more fully as to whether the defense attorney had actual or apparent authority to settle. A-3918-24 4 I. The pertinent background is as follows. On or about May 20, 2020, plaintiff Nancy Higgins, a business invitee, tripped and fell in a depression or hole in a commercial parking lot, and was injured. In April 2021, Higgins filed a negligence complaint in the Law Division against the owner of the premises, I. Heller Construction Co., Inc., Heller Industrial Parks, Inc., Heller XIII Partnership, L.P. and Heller XIV Partnership ("Heller")2, as well as various unnamed individuals and entities. Heller denied liability and filed a third-party complaint for contribution and indemnity against Higgins's employer, Kreilkamp Trucking, Inc. ("Kreilkamp"), alleging that Kreilkamp was the corporate tenant responsible for the maintenance of the parking lot. According to case docket entries in the appendix, default was entered against Kreilkamp on July 12, 2021. Kreilkamp had liability insurance with Arch Insurance Company ("Arch").3 At some point after Heller filed the third-party complaint against 2 According to Heller's brief, plaintiff improperly pled incorrect names for these Heller entities. 3 In a separate federal complaint, Heller's own liability insurer, Charter Oak Fire Insurance Company ("Charter Oak"), brought suit in August 2024 against Arch. Charter Oak sought a declaration that Arch is obligated to defend and A-3918-24 5 Kreilkamp, a law firm was appointed by Arch via its third-party administrator Cottingham & Butler Claims Services ("CBCS") to represent Kreilkamp in connection with the claims asserted in this lawsuit. 4 That law firm, through one of its attorneys ("Kreilkamp's initial attorney"), submitted a consent order on August 30, 2021 vacating the default, which the court approved. The following day, August 31, 2021, that same initial attorney filed an answer and jury demand on behalf of Kreilkamp. The limited information presented in the docket entries reflects that discovery was first extended by stipulation in February 2022 and again by order in May 2022, although we cannot tell which attorney at Kreilkamp's initial law firm signed the order. Discovery was further extended by order in January 2023. The court issued a first trial notice for June 12, 2023. The trial date was rescheduled again several times. The case was placed on the trial list for July 29, 2024. Another attorney with Kreilkamp's initial law firm submitted an adjournment request on July 24, indemnify Heller in connection with the Higgins litigation. The status of that federal action is not revealed by this record, nor does it affect our analysis of the issues before us. 4 We hereafter refer to that law firm as "Kreilkamp's initial law firm." A-3918-24 6 which the court denied solely because he was not at that time the lawyer who was then listed as Kreilkamp's designated trial counsel under Rule 4:25-4.5 That prompted that attorney 6 to file on July 26, 2024 a notice pursuant to Rule 4:25- 4 that he was now serving as Kreilkamp's designated trial counsel. He also submitted a certification that same day, confirming that notice had been sent to opposing counsel for Higgins and Heller. However, Kreilkamp and Arch maintain they were unaware of the designation. The case was adjourned again several times, ultimately to January 27, 2025. The docket entries reflect that pretrial memoranda were submitted on behalf of Higgins and Heller, but apparently none on behalf of Kreilkamp. Shortly before the scheduled trial was to begin, the attorneys for Higgins, Heller, and Kreilkamp "participated in four days of in-court negotiations" regarding a potential settlement. The trial court described this as "extensive negotiation over a period of time, a lengthy period of time; several days. " According to the court, twice during this period, on January 28 and again on 5 The stated purpose of the Rule is to "notify the court that the [so] designated trial counsel is to try the case," and accordingly affects trial scheduling. R. 4:25- 4. 6 We hereafter refer to the attorney as "Kreilkamp's second trial attorney." A-3918-24 7 January 29, 2025, Kreilkamp's second designated trial attorney "requested and received two separate adjournments to obtain authority [to settle] from Kreilkamp." On February 3, 2025, counsel for the parties returned to court and placed a global settlement on the record. The judge stated his understanding that the case had been resolved for a total sum of $600,000, and all counsel expressly agreed. Higgins was sworn in and confirmed that she understood the case had settled for a gross amount of $600,000, and that she was giving up her right to proceed to trial in accepting that amount. After Higgins's testimony, Heller's counsel placed additional settlement terms on the record. Specifically, Heller's counsel stated that Heller would pay the full $600,000 sum to plaintiff, but that Kreilkamp would contribute half of that amount, i.e., $300,000, to Heller. Heller's counsel further noted on the record that Kreilkamp would stipulate that Kreilkamp was at least one percent liable7 for plaintiff's injuries, that the settlement amount was fair and reasonable and would not be disputed in any related actions, and that the federal declaratory judgment action would remain open. The judge then asked whether that was 7 We presume the one percent proviso could bear upon indemnification issues. A-3918-24 8 correct, and Kreilkamp's second trial attorney specifically responded, "Yes, your Honor." That same day, two consent orders of dismissal were filed, signed by the trial judge and each of the three attorneys of record, including Kreilkamp 's second trial attorney. One of those consent orders contains the following handwritten language: "Settled for $600,000. Third Party Defendant will pay Heller Defendants $300,000 back. Third [P]arty [D]efendant and Arch Insur. Co. stipulates [sic] that TPD Kreilkamp Trucking, Inc. is at least 1% liable and that the settlement is fair and reasonable and will not be disputed in any other related actions. [Federal] DJ action remains open." The other order simply contained an "X" notation on the comment line. After the case was dismissed, uncertainty arose regarding whether Kreilkamp and Arch had authorized the settlement terms that had been placed on the record. Notably, on February 18, 2025, two weeks after the settlement was placed on the record and the case was dismissed, the initial attorney with Kreilkamp's A-3918-24 9 initial law firm emailed a letter to Monte Richards of CBSC, Arch's third-party claims administrator, enclosing a copy of the dismissal order.8 The letter read: Please find enclosed herein a copy of the order of dismissal advising the case has been settled. We remind you settlement was accomplished without any contribution from Kreilkamp. We will now close our file. [(Emphasis added).] The letter copied a representative of Arch. The letter does not explain what previous communication(s) the author was "reminding" the recipients about. Nor does the letter explain the characterization that no "contribution from Kreilkamp" to the settlement was needed, unless the author was assuming that its $300,000 share would be paid by Arch. Three days later, on February 21, 2025, Heller's counsel contacted Kreilkamp's initial law firm about facilitating Kreilkamp's payment. Later that day, an automatic reply announced that Kreilkamp's second trial attorney was "no longer with" the law firm. 8 It is unclear from the record whether the copy attached to the email was the version with the settlement details in the comments section, or the version with only the "X" in the comments section. A-3918-24 10 According to Heller's motion papers, after speaking with Kreilkamp's initial attorney at the initial law firm, Heller still had no confirmation of Kreilkamp's position concerning the settlement. Kreilkamp and CBSC thereafter submitted certifications disputing that Kreilkamp's second trial attorney had the authority to negotiate or enter into settlement. Timothy Kreilkamp, President and CEO of Kreilkamp, certified that his last contact with the initial law firm regarding the case had been in connection with his deposition in or around January 2024, and that he learned only around March 20, 2025 that the firm may have agreed to settle the case in January 2025 without Kreilkamp's "knowledge, consent, or authority." He further certified that no one at Kreilkamp had been advised that the firm was even participating in settlement discussions, no one had been asked to authorize settlement negotiations or proposals, and that Kreilkamp would not have authorized settlement without first consulting CBCS. Monte Richards of CBCS similarly certified that he first learned on or about February 18, 2025 that Kreilkamp's initial law firm may have agreed to a settlement without CBCS's, Arch's, or Kreilkamp's knowledge or authority. Meanwhile, on March 7, 2025, Heller moved to enforce the global settlement. Heller's supporting certifications asserted that the case had settled A-3918-24 11 globally for $600,000, with Kreilkamp's designated counsel agreeing that Kreilkamp would contribute $300,000 to Heller and agree to the related stipulations regarding liability and the declaratory judgment action. On March 11, 2025, Higgins filed a cross-motion to enforce her settlement with Heller and to compel payment of $600,000 to her and her counsel. Higgins's counsel expressly stated that Higgins had settled only with Heller, that Kreilkamp was not a direct defendant in her complaint, that Higgins "has not and will not" settle any claim with Kreilkamp, and that instead "she is entitled to re-open her workers' compensation claim [against Kreilkamp] if she seeks further treatment." Arch moved to intervene on the settlement issue and filed the aforementioned certifications of Mr. Kreilkamp and Richards. On April 11, 2025, Kreilkamp substituted a different law firm as its counsel. Through that successor law firm, Kreilkamp filed opposition to enforcement, attaching, among other things, the earlier certification of Timothy Kreilkamp and arguing that Kreilkamp's second trial attorney lacked authority to bind Kreilkamp. The trial court heard oral argument on the enforcement motions on May 9, 2025. Counsel for Arch and Kreilkamp argued that neither Kreilkamp nor Arch had knowledge of the negotiations or had authorized Kreilkamp's second A-3918-24 12 trial attorney to settle, and both requested a plenary hearing on the authority question. On May 27, 2025, the trial court entered orders granting Arch's motion to intervene for purposes of the motion, granting Heller's and plaintiff's motions to enforce their settlement, and granting Higgins's motion to enforce her settlement. As to Heller's motion, the court ordered Kreilkamp to issue a $300,000 check to Charter Oak within two weeks and held that Kreilkamp was at least 1% liable and that the settlement amount was reasonable for purposes of the pending declaratory judgment action. As to Higgins's motion, the court ordered Heller to pay Higgins $600,000 within seven days. In its written statement of reasons, the court reasoned that Kreilkamp's second trial attorney had apparent authority to settle because "Kreilkamp's placement of Kreilkamp's [second trial] attorney in the lead litigation role, and [that attorney's] undisputed participation in the formal resolution of the matter, created a clear presumption of authority." After entry of the May 27 orders, Heller, Kreilkamp, and Arch all sought reconsideration and/or a stay. The trial court heard argument on those motions on July 3, 2025. During that argument, Heller stipulated that it had already paid the $600,000 to Higgins and maintained that the settlement had always A-3918-24 13 contemplated a $300,000 reimbursement from Kreilkamp. Kreilkamp and Arch renewed their arguments that Kreilkamp's second trial attorney had lacked authority and that, at a minimum, a plenary hearing on the issue was required. On July 11, 2025, the trial court entered orders denying the reconsideration motions and the stay applications, thereby also rejecting the request for a plenary hearing. In the order concerning Kreilkamp, the court again directed that Kreilkamp issue a $300,000 check to Charter Oak within seven days.9 In its written statement of reasons, the court stated that Kreilkamp and Arch were rearguing issues that had been already adjudicated and had not shown that the May 27, 2025 order rested on an irrational basis or overlooked material evidence. After these orders, Kreilkamp and Arch each pursued separate appeals before this court, which were later consolidated. Both Kreilkamp and Arch contend that the second trial attorney did not have either actual authority, nor apparent authority, to bind them to a settlement they attest they knew nothing about. They emphasize that the certifications supplied to the trial court to 9 Eventually Kreilkamp issued the $300,000 check to Charter Oak in November 2025. A-3918-24 14 substantiate their contentions are unrefuted, as no contrary certifications from their initial trial counsel or law firm were submitted, and neither Higgins nor Heller presented evidence demonstrating that Kreilkamp or Arch themselves had done anything to confer authority on their second trial counsel. They also argue the February 18, 2025 email from the initial attorney, "reminding" CBCS and Arch that the matter had been settled without contribution from Kreilkamp, indicates that they could not have approved the settlement. Appellants request that, at the very least, the matter should be remanded for a plenary hearing. In opposition, Heller argues that the trial court's finding of apparent authority was sound, and that Heller and the court had the right to rely on the representations made in court by Kreilkamp's designated trial counsel that he possessed client authority to settle at the specified terms. Plaintiff has filed a letter joining in Heller's briefs only to the extent Heller asserts that a proper settlement had been entered. II. The relevant legal principles that inform our review are well established. "A settlement agreement between parties to a lawsuit is a contract." Nolan by Nolan v. Lee Ho, 120 N.J. 465, 472 (1990). Whether or not a contract exists in the first place is a question of law subject to de novo review. See Fazio v. Altice A-3918-24 15 USA, 261 N.J. 90 , 103 (2025). Specifically, appellate "review of a motion to enforce settlement is de novo and considers whether the 'available competent evidence, considered in a light most favorable to the non-moving party, is insufficient to permit the judge . . . to resolve the disputed factual issues in favor of the non-moving party.'" Gold Tree Spa, Inc. v. PD Nail Corp., 475 N.J. Super. 240 , 245 (App. Div. 2023) (quoting Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 474-75 (App. Div. 1997)). The essential required elements for contract formation are "mutual assent, offer and acceptance, [and] consideration." Fazio, 261 N.J. at 103 (quoting Comprehensive Neurosurgical, P.C. v. Valley Hosp., 257 N.J. 33 , 65 (2024)). Mutual assent, in particular, requires that "the parties have an understanding of the terms to which they have agreed." Ibid. (quoting Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 442 (2014)). However, mutual assent may be constructively implied when a party is bound by an agent acting with actual or apparent authority. See Blaisdell Lumber Co., Inc. v. Horton, 242 N.J. Super. 98, 102-03 (App. Div. 1990). To the extent that a trial court's finding of actual or apparent authority is a determination of fact, we conduct our appellate review with substantial deference. Generally, "[t]he scope of appellate review of a trial court's fact- A-3918-24 16 finding function is limited." Cesare v. Cesare, 154 N.J. 394, 411 (1998). Accordingly, factual findings will not be disturbed on appeal unless they are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Id. at 412 . However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995). Legal issues and conclusions are subject to de novo plenary appellate review. See New Jersey Transit Corp. v. Certain Underwriters at Lloyd's London, 461 N.J. Super. 440 , 452 (App. Div. 2019). Our case law recognizes that "[i]n New Jersey, an attorney for a private party may settle a lawsuit based on actual or apparent authority to do so." Seacoast Realty Co. v. West Long Branch Borough, 14 N.J. Tax 197, 202-3 (Tax 1994). A lawyer who acts in a case generally is presumed to have been authorized to do so. Long ago, our Supreme Court observed where counsel "approved a settlement agreement, he presumptively had his client's authority to take that action." United States Plywood Corp. v. Neidlinger, 41 N.J. 66, 74 (1963). More recent appellate cases have put it more broadly: acts by attorneys A-3918-24 17 are "presumptively authorized" and a client who denies authority carries "a heavy burden." Jennings v. Reed, 381 N.J. Super. 217, 231 (App. Div. 2005). But that presumption yields to evidence. For instance, in United States Plywood, the Court recognized the presumption may be rebutted "by testimony from [counsel] and others indicating that no authority had been granted," 41 N.J. at 74 . In such instances where actual authority was not granted, a factual question can still remain "as to whether the circumstances [give] rise to an apparent authority sufficient to protect" the other parties to the putative settlement. Ibid. Here, the trial court rested its decisions on a finding that Kreilkamp 's second trial attorney had apparent, if not actual, authority, to settle the case. The court essentially based that determination on Kreilkamp's attorney's status as designated trial counsel, plus his representations, both on the record in open court and in signing the two dismissal orders, that he had the authority to bind Kreilkamp to the settlement terms. However, agency law principles instruct that apparent authority must be evidentially grounded—at least to some extent--on the acts of a principal, not just on the acts of the alleged agent; "'[a]pparent authority arises when a principal "acts in such a manner as to convey the impression to a third party that A-3918-24 18 the agent has certain power which he may or may not possess."'" See Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 497 (App. Div. 2003) (quoting Rodriguez v. Hudson County Collision Co., 296 N.J. Super. 213, 200 (App. Div. 1997)); see also Gayles v. Sky Zone Trampoline Park, 468 N.J. Super. 17 , 25 (App. Div. 2021); Restatement (Third) of Agency § 3.03 cmt. b ("Apparent authority is present only when a third party's belief is traceable to manifestations of the principal"). Otherwise, a rogue agent could bind a principal to onerous obligations without any proof that the principal made statements or engaged in conduct that led others to reasonably rely on the agent's proclaimed authority. The leading case applying these principles in a civil settlement setting is Amatuzzo, 305 N.J. Super. 469 . In that case, we reversed an order enforcing a purported settlement because the defendant's certification raised "a material and substantial issue as to whether he granted his attorney actual authority to settle, " holding that "the factual issues surrounding the motion to enforce the settlement required the Chancery judge to conduct a hearing." Id. at 474, 476 . We instructed in Amatuzzo that, "[o]n a disputed motion to enforce a settlement, as on a motion for summary judgment, a hearing is to be held to establish the facts unless the available competent evidence, considered in a light most favorable to the non-moving party, is insufficient to permit the judge, as a A-3918-24 19 rational factfinder, to resolve the disputed factual issues in favor of the non - moving party." Id. at 474-75 . We reaffirmed that "unless an attorney is specifically authorized by the client to settle a case, the consent of the client is necessary," and that an attorney's negotiations are not binding unless the client "has expressly authorized the settlement" or the client's own conduct placed the attorney in a position where "a person of ordinary prudence would be justified in presuming that the attorney had authority to enter into a settlement." Id. at 475 . We emphasized that, although a settlement may be enforced where the client's words or conduct create apparent authority, "the attorney's words or acts alone are insufficient to cloak the attorney with apparent authority." Id. at 476 . We conclude that a remand for an evidentiary hearing is likewise warranted in the circumstances presented here. The certifications of Mr. Kreilkamp and Richards attesting that they were never told about the second trial attorney's designation as Kreilkamp's trial counsel, nor the scheduled trial date, nor the settlement conference with the court, nor the terms of the settlement (including the $300,000 contribution and an admission of at least 1% liability) are completely unrefuted. In addition, the record is bereft of any evidence that explains the February 18, 2025 email from Kreilkamp's initial law firm "reminding" CBCS and Arch of the settlement, and any substantiation of the A-3918-24 20 timing and content of any previous communications. The abrupt departure of the second trial attorney from the initial law firm, with no explanation to opposing counsel or the court, is also concerning. We appreciate the very practical need for busy trial courts to have the ability to rely in general on the settlement authority of the lawyers who appear before them. We recognize the court twice extended the settlement proceeding at designated counsel's request for the stated purpose of securing Kreilkamp's authority. The court also went through the formality of placing the settlement on the record with testimony from the plaintiff, asking each lawyer to attest agreement to the settlement terms, and having each of their signatures on the two consent orders of dismissal. But, at least on the present record, no statements or acts by the client—apart from Arch's initial retention of the law firm and possibly Mr. Kreilkamp's attendance at a deposition—have been identified to support the finding of apparent authority in the face of the strong evidence presently weighing in the other direction. We consequently vacate, without prejudice, the trial court's orders dated May 27, 2025 and July 11, 2025 enforcing the settlement as its concerns Kreilkamp, and remand for an evidentiary hearing to develop the record more fully concerning the issues of actual and apparent authority. The trial court in A-3918-24 21 its discretion may permit limited discovery relevant to these issues. We deny appellants' unpersuasive request to have the remand assigned to a different judge, as we trust the judge will reexamine these issues with an open mind. In the meantime, and subject to the remand, settlement payments that have already been made shall not be rescinded. The trial court shall convene a case management conference within thirty days to plan the remand proceeding. We do not retain jurisdiction. Vacated and remanded for a plenary hearing. A-3918-24 22