Sanctions for Refusing to Finalize an Enforced Settlement: No Separate Sanctions Hearing Required Under 22 NYCRR 130-1.1 When Parties Had Notice and an Opportunity to Oppose

1. Introduction

Guliyev v Han (2026 NY Slip Op 04283 [App Div, 2d Dept July 8, 2026]) arises from a personal injury action in which the parties reached a modest settlement ($1,500) that the Supreme Court had already enforced under CPLR 2104. After that enforcement order (from which no appeal was taken), the plaintiff’s new counsel, the Law Offices of William Pager (a nonparty-appellant as to the sanctions orders), returned the settlement check and sent back an unsigned release and stipulation of discontinuance without explanation.

The defendants moved to (i) enforce the settlement and compel execution of the release and stipulation and dismissal of the complaint, and (ii) obtain attorneys’ fees and costs as sanctions under 22 NYCRR 130-1.1. The Supreme Court granted relief, held a hearing on the amount of fees, and awarded $4,297.50 jointly and severally against the plaintiff and Pager. On appeal, the Second Department largely affirmed, dismissed one appeal for lack of aggrievement, and—significantly—issued an order to show cause why appellate sanctions should not be imposed for a potentially frivolous appeal.

Key issues

  • Whether a court may compel execution of settlement papers and dismiss an action after a prior, unappealed order enforced the settlement.
  • Whether refusing to execute settlement documents and returning settlement proceeds without explanation constitutes “frivolous conduct” warranting sanctions under 22 NYCRR 130-1.1.
  • Whether a separate hearing on the propriety of sanctions is required where the sanctioned parties had notice and an opportunity to be heard in motion practice.
  • Whether and when appellate sanctions may be considered for arguments “completely without merit in law.”

2. Summary of the Opinion

The Second Department:

  • Affirmed the August 16, 2021 order enforcing the settlement and granting sanctions relief (with a hearing directed on the amount of fees).
  • Affirmed the November 8, 2021 order awarding $4,297.50 in attorneys’ fees and costs, payable jointly and severally by the plaintiff and Pager.
  • Dismissed the plaintiff’s appeal from the June 2, 2022 order because the plaintiff was “not aggrieved” by that order (CPLR 5511), while affirming the June 2, 2022 order on Pager’s appeal.
  • On its own motion, directed the parties to show cause why appellate sanctions and/or costs (including appellate counsel fees) should not be imposed under 22 NYCRR 130-1.1 due to potentially frivolous appellate arguments.

3. Analysis

A. Precedents Cited

1) Enforcing settlements “with rigor”

The court quoted the settlement-enforcement principle from Riesenburger Props., LLLP v Pi Assoc., LLC, which in turn quoted Herz v Transamerica Life Ins. Co. for the proposition that “Stipulations of settlement are judicially favored” and will be enforced “with rigor” when “clear, final and the product of mutual accord.” This framing set the tone: once a settlement has been found enforceable, a party cannot lightly evade performance through post-settlement maneuvering.

2) The settlement-performance sequence under CPLR 5003-a

Citing Levine v American Multi-Cinema, Inc., the court referenced CPLR 5003-a(a), which requires the settling defendant to pay within 21 days after the plaintiff tenders a duly executed release and discontinuance. In this case, the plaintiff’s side did the opposite—returning the check and withholding execution—underscoring why the court viewed the conduct as obstructive rather than a good-faith dispute about settlement mechanics.

3) Enforcing a settlement after prior enforcement order

Relying on Anghel v Utica Mut. Ins. Co., the Second Department held that where the Supreme Court had already granted a prior motion enforcing the settlement (and no appeal was taken), it was proper to enforce compliance (execute release/discontinuance) and dismiss the complaint. Anghel supplied the doctrinal bridge from “settlement is enforceable” to “court may compel the paperwork and end the case.”

4) Sanctions for frivolous conduct; standards and discretion

The court cited Madigan v Berkeley Capital, LLC for the rule that courts may award costs/fees when an opposing party engages in frivolous conduct, and it applied the regulatory definitions in 22 NYCRR 130-1.1(c)(1), (2). Madigan was used both for the court’s discretion and for the definition of frivolous conduct as conduct either (i) “completely without merit in law” or (ii) undertaken primarily to delay, prolong, harass, or maliciously injure.

5) Process due before sanctions: notice and opportunity to be heard

For procedure, the court relied on Matter of South Beach Area-Stage 2 to support the conclusion that a hearing on whether to impose sanctions was not required because the appellants had notice (moving papers placed counsel’s conduct at issue) and an opportunity to oppose the sanctions motion, satisfying 22 NYCRR 130-1.1(d). This is a key practical holding: motion practice can satisfy the “opportunity to be heard” requirement.

6) Frivolous appeals and appellate sanctions

The court cited Caplan v Tofel when noting that the appellate arguments “appear to be” completely without merit under 22 NYCRR 130-1.1(c)(1), and therefore the appeals “may be frivolous.” This supported the court’s decision to order submissions on whether appellate sanctions should be imposed.

7) Appellate standing/aggrievement

The appeal from the June 2, 2022 order was dismissed as to the plaintiff for lack of aggrievement under CPLR 5511, citing Mixon v TBV, Inc.. The court also included a related “decision & order on motion” denying a motion to dismiss a different appeal (from the November 8, 2021 order) on aggrievement grounds—highlighting that aggrievement is order-specific and fact-dependent.

B. Legal Reasoning

  1. Settlement enforcement had already been adjudicated and became effectively final. The Supreme Court previously enforced the settlement under CPLR 2104, including a finding that former counsel had apparent authority to accept the offer. Because no appeal was taken from that enforcement order, the defendants were entitled to insist on performance of the settlement’s routine closing steps (release, discontinuance) and dismissal.
  2. Withholding execution and returning the check—without explanation—constituted frivolous conduct. The court treated the refusal to sign and the unexplained return of the settlement proceeds, months after the enforcement order, as conduct “completely without merit in law” under 22 NYCRR 130-1.1(c)(1). The opinion implicitly emphasizes that post-enforcement obstruction (as opposed to a timely, colorable challenge) is sanctionable.
  3. Due process for sanctions was satisfied through motion practice. The court rejected the argument that an evidentiary hearing was required to decide whether sanctions should be imposed. Under 22 NYCRR 130-1.1(d), it was enough that the moving papers put Pager’s conduct at issue and the appellants had the opportunity to oppose; the hearing that did occur was properly limited to the amount of fees.
  4. Joint and several fee liability can extend to counsel. The fee award was imposed against both the plaintiff and Pager, jointly and severally—reflecting the court’s view that counsel’s litigation choices were a material driver of the frivolous conduct.
  5. Appellate deterrence. By ordering a show-cause submission on appellate sanctions, the Second Department signaled that repeating meritless positions on appeal—especially after clear trial-court enforcement and sanctions findings—may trigger additional consequences.

C. Impact

  • Post-enforcement “paperwork resistance” is risky. After a settlement is judicially enforced, refusal to execute customary closing documents (release and discontinuance) without a legitimate, articulated basis may be treated as frivolous and sanctionable.
  • Sanctions can be imposed without a separate evidentiary hearing. Practitioners should treat a sanctions motion itself as the critical procedural moment: written opposition must fully address both merit and culpability because courts may find that satisfies 22 NYCRR 130-1.1(d).
  • Exposure for counsel, not just clients. The joint-and-several assessment against counsel underscores that attorneys may personally bear fee awards when their conduct drives frivolous delay in settlement finalization.
  • Appellate sanctions are a live possibility. The court’s sua sponte show-cause order highlights an enforcement trend: frivolous-appeal review is not purely party-driven; the court may initiate it and require proof of fees incurred on appeal.

4. Complex Concepts Simplified

CPLR 2104 (settlement enforcement)
A New York rule that allows courts to enforce settlement agreements that meet required formalities. Once enforced, the settlement operates like a binding contract that ends the dispute on agreed terms.
Apparent authority
Even if a client later disputes counsel’s authority, a settlement may be enforced when the attorney appeared authorized to the other side and the reliance was reasonable—here established by a referee’s finding adopted by the court.
CPLR 5003-a(a) (timing of payment)
After settlement, a defendant generally must pay within 21 days after receiving the plaintiff’s signed release and discontinuance. If the plaintiff refuses to sign, that statutory payment clock never properly starts.
22 NYCRR 130-1.1 (frivolous conduct sanctions)
A court may award attorneys’ fees/costs when a party (or attorney) engages in frivolous conduct—e.g., legal positions with no reasonable basis or conduct aimed at delay/harassment. The sanctioned person must have notice and an opportunity to be heard, which can occur through motion papers.
Joint and several liability
The defendants may collect the full sanctioned amount from either the plaintiff or counsel (or both), leaving them to sort out any allocation between themselves.
“Aggrieved” under CPLR 5511
Only a party harmed by an order can appeal it. Here, the plaintiff was not aggrieved by the June 2, 2022 order addressing Pager’s attempt to vacate sanctions as to Pager.

5. Conclusion

Guliyev v Han reinforces that New York courts will enforce settlements “with rigor,” particularly after a prior enforcement order under CPLR 2104 becomes unappealed and final in practical effect. The decision’s most consequential doctrinal takeaway is procedural and deterrent: under 22 NYCRR 130-1.1, a court may impose sanctions for frivolous post-settlement obstruction (including against counsel) without holding a separate evidentiary hearing on whether sanctions are warranted, so long as the targeted parties had notice and an opportunity to be heard in motion practice. The Second Department’s additional show-cause order on possible appellate sanctions underscores that meritless continuation of such disputes on appeal may compound exposure.