United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION TO ENFORCE SETTLEMENT
(Re: Docket No. 129)
PAUL S. GREWAL, Magistrate Judge.
"Settlement agreements are designed to, and usually do, end litigation, not create it." Nevertheless, as this court has previously noted, "[t]he settlement of any case rarely comes without mixed feelings" which can sometimes cause "one party or the other to try to unsettle' the case, or resettle' it on different terms."
That appears to be the case here. Plaintiff Alan Brinker brought suit against Defendants JPMorgan Chase Bank, N.A. and California Conveyance Company after foreclosure proceedings were initiated against Brinker's property in Sunnyvale, California. Although they disagreed about the number of loan payments Brinker had skipped, Chase agreed that Brinker would reinstate his loan by paying Chase the current reinstatement amount minus a $10, 000 loan reinstatement credit Chase would provide to Brinker in exchange for his agreement to release all of his claims and dismiss his case against Chase with prejudice.
But rather than paying the $16, 338 that Defendants claim was due based upon the $26, 338.16 reinstatement quote they provided to Brinker shortly after he signed the settlement agreement, Brinker paid Chase $8, 473 "based on the amounts due according to his records."
Because the parties intended the current reinstatement amount to be based upon the reinstatement quote Defendants provided to Brinker-not the amount Brinker calculated based upon his own records-the court GRANTS Defendants' motion to enforce the settlement agreement.
"It is well settled that a district court has the equitable power to enforce summarily an agreement to settle a case pending before it." "The authority of a trial court to enter a judgment enforcing a settlement agreement has as its foundation the policy favoring the amicable adjustment of disputes and the concomitant avoidance of costly and time consuming litigation." "The construction and enforcement of settlement agreements are governed by principles of local law which apply to interpretation of contracts generally." California law therefore applies to a determination regarding the construction and enforcement of a settlement agreement even if "one of the underlying causes of action is federal."
In 1997, Brinker refinanced his mortgage, making a loan with Headlands Mortgage Company which was secured by a deed of trust against real property located in Sunnyvale, California. The servicing of this loan was transferred to Chase in 2008. Believing that Brinker had skipped several payments on this loan, Chase began foreclosure proceedings on Brinker's property.
Brinker responded by filing a complaint challenging the foreclosure proceedings, alleging, among other claims, that Defendants had violated the Federal Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Real Estate Settlement Procedures Act. Although the parties disagreed about the number of loan payments Brinker had skipped, Chase and Brinker came close to resolving their dispute during an all-day mediation in August 2014.
The parties held a second mediation on November 3, 2014, at which Defendants and the mediator told Brinker that "the total reinstatement amount would be approximately $28, 000" and that "they would provide an exact reinstatement quote for November." They also explained that the amount would not change too much from the $28, 000 figure" because Brinker had been making payments on the loan.
After eight hours of mediation, Brinker and Chase signed a settlement term sheet that provided that Brinker would reinstate the loan secured by his property by paying Chase "the current reinstatement amount minus [a] $10, 000 [loan reinstatement] credit by no later than November 28, 2104." The parties then filed a joint notice stating that they had "reached a settlement... which will resolve all causes of action against all remaining defendants" and would file a stipulation of dismissal "[u]pon execution and completion" of a settlement agreement.
On November 20, the Defendants sent Brinker a reinstatement quote of $26, 338.16. Brinker challenged the amount of corporate advances fees included in this quote but agreed to reinstate the loan by the date provided in the settlement agreement if Defendants would provide a further breakdown of these fees by December 1, 2014. Defendants agreed to do so if Brinker reinstated the loan by November 28, 2014.
But Brinker did not pay the $16, 338 that Defendants contend he must pay to reinstate his loan after the $10, 000 credit is subtracted from the $26, 338.16 November reinstatement quote. Instead, Brinker wired $8, 473 to Chase, explaining that this payment was "based on the amounts due according to his records." Contending that Brinker must pay $7, ...