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Workers\' Compensation Fraudster Settles Exposure & Find Failure to  Pay is Expensive 

Arch-Concept Construction, Inc. and its president Dusan Lazetic appealed  from the Law Division\'s April 1, 2021 order enforcing the parties\'  settlement agreement. Judge Linda Grasso Jones entered the order after  determining that defendants\' performance of its obligations under the  agreement was not excused by the doctrine of impossibility, that she  could not rewrite the parties\' agreement, and that the damages  stipulated in the agreement were enforceable liquidated damages.
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\\nIn  Hartford Underwriters Insurance Company v. Arch-Concept Construction,  Inc. and Dusan Lazetic, individually and as President of Arch-Concept  Construction, Inc., No. A-2430-20, Superior Court of New Jersey,  Appellate Division (June 29, 2022) the New Jersey appellate court  resolved the dispute.
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\\nThe defendants argued that the doctrine of  impossibility applies to its inability to perform under the settlement  agreement, that the judge should have extended a forbearance as a matter  of equity, and that the damages awarded under the parties\' agreement  and a consent judgment are an unenforceable penalty.

FACTS
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\\nPlaintiff Hartford Underwriters Insurance Company provided  worker\'s compensation insurance to Arch-Concept from May 2012 through  January 2016. On November 4, 2016, plaintiff filed a complaint against  defendants to recover what it alleged were unpaid premiums based upon  Arch-Concept understating its payrolls and misclassifying certain  workers. It also sought relief under the New Jersey Insurance Fraud  Prevention Act (IFPA), N.J.S.A. 17:33A-1 to -34. Plaintiff alleged that  audits estimated defendants owed plaintiff $583,665 in unpaid premiums  and that it was also entitled to treble damages for defendants\'  violation of the IFPA. Caught, without a defense, Arch-Concept and  Hartford, avoiding a lengthy trial, agreed to settle plaintiff\'s claims  pursuant to a written settlement agreement.
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\\nThe agreement  required plaintiff to accept and defendants to pay $275,000 (half of  what was obtained by fraud) over twelve quarterly installments. In the  event defendants breached the agreement, they agreed to the entry of a  consent judgment in favor of plaintiff and against defendants in the  amount of $425,000, less any payments made under the agreement. The  parties attached to the agreement a form of consent judgment signed by  defendants that reflected the default provision in their agreement. An  obviously great deal for the defendant who was exposed to a judgment  (with treble damages) of over $2 million.