United States District Court, E.D. California
KIMBERLY J. MUELLER, District Judge.
On cross motions, plaintiffs Michael Vasile and Sally Ann Burt Kelsch and defendant Flagship Financial Group, LLC move to enforce a settlement agreement. Pls.' Mot. Enforce Settlement ("Pls.' Mot.") at 1, ECF No. 66; Def.'s Mot. Enforce Settlement ("Def.'s Mot.") at 1, ECF No. 70. Plaintiffs also move for attorneys' fees and costs. Pls.' Mot. Att'y Fees & Costs at 1, ECF No. 67. The court heard argument on May 23, 2014, with Anthony A. Gorman appearing for plaintiffs and Jere B. Reneer appearing pro hac vice for defendant. Plaintiff Kelsch was present at counsel's table.
For the reasons below, the court GRANTS IN PART and DENIES IN PART both motions to enforce settlement. Plaintiffs' motion for attorneys' fees and costs is DENIED.
Plaintiffs filed suit in November 2012, alleging several state and federal employment and whistleblowing claims. Compl. ¶¶ 3-148, ECF No. 1. After minimal motion practice, the parties successfully participated in the court's Voluntary Dispute Resolution Program and filed a notice of settlement. Notice of Settlement at 1, ECF No. 63. The court directed the parties to file dispositional documents by February 27, 2014. Minute Order, ECF No. 64.
On February 24, 2014, three days before the court-imposed deadline, plaintiffs informed the court that defendant was "already in breach of the settlement agreement" and that they therefore intended to file a motion to enforce settlement, including an award of attorneys' fees. Pls.' Notice of Status at 2, ECF No. 65. Plaintiffs then filed the instant motions. Defendant opposed, Def.'s Opp'n at 1, ECF No. 68, and simultaneously filed the instant countermotion, Def.'s Mot. at 1. Both parties filed replies, Pls.' Reply at 1, ECF No. 77; Def.'s Reply at 1, ECF No. 76, with plaintiffs' reply also serving as their opposition. Defendant did not separately brief the motion for fees.
"[A] district court has the equitable power to enforce summarily an agreement to settle a case pending before it." Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987) (citations omitted). "[A] motion to enforce [a] settlement agreement essentially is an action to specifically enforce a contract, " Adams v. Johns-Manville Corp., 876 F.2d 702, 709 (9th Cir. 1989), and the "court's enforcement power include[s] authority to award damages... [or] specific performance, " T.N.T. Mktg., Inc. v. Agresti, 796 F.2d 276, 278 (9th Cir. 1986).
"[T]he district court may[, however, ] enforce only complete settlement agreements." Callie, 829 F.2d at 890 (emphasis in original) (citations omitted). A complete agreement requires: (1) accord on all " material terms "; and (2) "the intent of the parties to bind themselves." Id. at 891 (emphasis in original). Intent is established "[i]f the record... show[s] that the [parties] had agreed to the settlement, or that the attorneys had authority to settle the suit and dismiss the action." See Harrop v. W. Airlines, Inc., 550 F.2d 1143, 1144 (9th Cir. 1977).
A. MOTIONS TO ENFORCE SETTLEMENT
Plaintiffs argue defendant materially breached the agreement by failing to pay the agreed-upon sum by March 20, 2014. Pls.' Mot. at 2. At present, plaintiffs have received no payment, and they thus move the court to either enforce the settlement or rescind it and permit the case to go to trial. Id. at 1. Defendant responds that by failing to comply with the dismissal, non-disparagement and non-disclosure provisions, it was in fact plaintiffs who breached the agreement. Def.'s Mot. at 5. It moves the court for "[a]n order dismissing the case pursuant to the parties' Settlement Agreement" or "[a]n order granting Defendant... damages, liquidated damages, and attorney fees pursuant to the Agreement." Id. at 2.
The court may properly exercise jurisdiction over the instant motions to enforce settlement. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); see also Facebook, Inc. v. P. Nw. Software, Inc., 640 F.3d 1034, 1042 (9th Cir. 2011) (affirming district court's grant of motion to enforce settlement). Although "[a] claim for breach of... a settlement agreement, even if part of the consideration was dismissal of a federal case, will not provide the basis for federal jurisdiction, " this principle has no application where an action is already properly before the court and has not been dismissed. Glass v. Beer, No. 1:04-cv-05466-OWW-SMS PC, 2011 WL 1528471, at *1 (E.D. Cal. Apr. 20, 2011) (citing Kokkonen, 511 U.S. at 377). Here, the court's original jurisdiction has not been challenged, and the case has not been dismissed. Thus, the court may properly address the motions under its ancillary jurisdiction. See Kokkonen, 511 U.S. at 380-82.
The instant settlement agreement includes the following pertinent provisions:
1. [P]ayment [from defendant to plaintiffs] will be made within thirty (30) business days after the date on which the fully executed Agreement has been delivered ...