Olick v. City of Easton (In re Olick)

Olick v. City of Easton (In re Olick), Case No. 13-4109 (3d Cir. July 3, 2014)
The Third Circuit Court of Appeals affirmed the lower courts decision that a global settlement regarding the collection of real estate taxes that was reached amongst several parties also bound the Debtor;s family trust, despite the Debtor assertion that the trust was not intended to be a party to the global settlement and should not be bound by the release provision. Upon review of the record, the Third Circuit found that because the trust was a party to the state court litigation, the inclusion of the trust in the settlement effectuates the parties intent to settle all disputes.
Procedural context:
The Bankruptcy Court denied a motion for reconsideration of a settlement agreement under Bankruptcy Rule 9019 filed by the Debtor and the District Court affirmed.
The Debtor filed for bankruptcy in 2007. Thereafter, in 2012 the Debtor filed three adversary proceedings against the city of Easton and other defendants alleging that the defendants were improperly seeking to collect certain real estate taxes. The Bankruptcy Court held a settlement conference and the parties were able to reach a global settlement. The terms of the settlement were stated on the record but a proposed settlement agreement was to be submitted afterwards to the court by the parties. However, because the parties were unable to reach an agreement on a stipulation encompassing the terms of the settlement agreement, the court issued an order setting forth the terms of the settlement, which included a provision of a waiver of all claims. The Debtor filed a motion for reconsideration asserting that the Bankruptcy Court should not have included the Olick Family Trust in the release provision of the settlement agreement, even though the trust was a party to the state court litigation and the Debtor was the trustee of the trust. The Debtor argued that the trust had not appeared in Bankruptcy Court and was not a party to settlement agreement, and therefore, should not be bound by the releases.
Fisher, Vanaskie, and Aldisert

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