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Csaki v. Mocci

2005 WL 3500276 (N.J. Super. App. Div. 2005) (Unpublished)

CONTRACTS; ATTORNEYS FEES — A suit to compel compliance with a settlement agreement will be treated as a form of collection action and if the agreement allows for attorneys fees in connection with a collection action, the fees will be payable in connection with the compliance action.

A joint construction venture dispute was resolved by a settlement agreement. The agreement contained a provision that “[I]f the contractor shall fail to make the required payments hereunder and the [owner] shall retain counsel to collect such sums, then all other sums hereunder shall be accelerated and immediately due and payable and the defaulting party shall be required to pay in addition to all other sums due the legal fees and costs of such collection.” The lower court found that the contractor had materially breached the settlement agreement, but the Court would not treat the matter as a collection action. On appeal, the Appellate Division ruled that “[a] suit to compel compliance with a settlement agreement [was] a form of collection action.” It was satisfied that this was “indeed, a collection matter, as contemplated by the terms of the parties’ settlement agreement.” It also saw no rational basis to deny the owner “her right to force [the contractor] to pay the entire cost of financing the construction and sale of [certain] lots.” It thought that the language in the agreement was clear on the issue.

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