Background
Plaintiffs Ashley Julia and Rachel Anthonson sued Inspira Medical Centers, Inc. in Cumberland County alleging discrimination, harassment, and retaliation under the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -50. The parties participated in a formal mediation before a retired judge and reached a settlement agreement, which plaintiffs signed on August 8, 2025. Before the settlement funds were disbursed, on August 26, 2025, both sides filed a stipulation of dismissal with prejudice, formally ending the litigation. Critically, neither the dismissal order nor the settlement agreement contained any provision for the court to retain jurisdiction over the matter.
When Inspira allegedly failed to pay the settlement proceeds within the agreed timeframe, plaintiffs moved in the Law Division to enforce the settlement agreement. They also sought pre-judgment interest, mediation costs, and the attorney’s fees and costs associated with filing the enforcement motion. On October 10, 2025, the trial court granted the motion, ordering Inspira to pay the settlement amount and directing defendant to reimburse plaintiffs for their fees and costs within ten days of receiving counsel’s certification of services. The court’s oral decision stated simply that there was no excuse for plaintiffs not having received a settlement check two months later, but it did not address the jurisdictional question or identify any legal basis for the fee award. Inspira appealed, arguing that the court lacked jurisdiction to enforce the settlement after dismissal with prejudice and that the fee award was improper under the American Rule.
Notably, plaintiffs did not file opposition to the appeal, and the record suggested the settlement payment may have already been made by the time the matter reached the Appellate Division.
The Court’s Holding
The Appellate Division vacated the October 10, 2025 enforcement order and remanded for further proceedings. The panel acknowledged the general principle — drawn from Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375 (1994) — that a court ordinarily loses jurisdiction to enforce a settlement once it has dismissed the case with prejudice without expressly retaining jurisdiction. The court also noted that certain circumstances may permit post-dismissal jurisdiction, such as where the settlement is incorporated into the dismissal order, or the court otherwise manifests an intent to retain jurisdiction. Because the trial court made no findings on this threshold question, a remand was required to determine both whether a live controversy remained and, if so, whether jurisdiction could properly be exercised.
On the attorney’s fee issue, the panel applied New Jersey’s American Rule, which requires parties to bear their own litigation costs absent a contractual, statutory, or court rule basis for fee shifting. The settlement agreement contained no fee-shifting provision, plaintiffs cited no applicable statute or rule, and the trial court’s oral decision provided no legal rationale for departing from the American Rule. The panel directed the trial court on remand to first determine whether the fee issue was still justiciable given the apparent payment of the settlement, and if so, to issue supplemental findings of fact and conclusions of law under Rule 1:7-4 addressing the jurisdictional question and any legal basis for a fee award. Any final judgment must also specify the dollar amount of recoverable fees and costs, as no certification of services had been submitted to the record.
Key Takeaways
- When a case is dismissed with prejudice and neither the order nor the settlement agreement expressly retains the court’s jurisdiction, a trial court must identify a recognized legal basis for exercising post-dismissal enforcement authority before reaching the merits of an enforcement motion.
- New Jersey’s American Rule requires a contractual, statutory, or court rule basis for fee shifting; a court cannot award enforcement-motion attorney’s fees simply because the opposing party delayed settlement payment, and the legal basis must be articulated on the record.
- Trial courts must issue findings of fact and conclusions of law under Rule 1:7-4 when granting enforcement motions and fee awards; conclusory oral rulings that fail to address the opposing party’s legal objections are vulnerable to vacatur on appeal.
Why It Matters
This decision is a practical reminder for employment and civil litigators that the mechanics of settlement documentation matter as much as the deal itself. When a case is dismissed with prejudice — often a routine step taken before settlement funds clear — counsel should ensure the dismissal order or the settlement agreement expressly addresses the court’s continuing jurisdiction to enforce any breach. Failing to do so can create expensive procedural detours, as the plaintiffs discovered here: rather than a straightforward enforcement, the parties now face another round of trial-level litigation over threshold legal questions that could have been avoided with careful drafting.
The fee award issue is equally instructive. Practitioners seeking to recover enforcement-motion fees should build that entitlement directly into the settlement agreement with clear language, or identify a specific statutory hook such as fee-shifting provisions under NJLAD before filing the motion. A court’s understandable frustration with a non-paying party is not a substitute for a proper legal basis under New Jersey’s fee-shifting framework, and appellate courts will not supply that basis retroactively.