Opinion
No. 99 C 0082
June 8, 2000
MEMORANDUM OPINION AND ORDER
Javier Leal, by his mother and next friend, Maria Miranda ("Plaintiffs") brought suit against the Town of Cicero, Officers Auriemma and Richert, and unknown Cicero police officers ("Defendants"). Counts II through VII of Plaintiffs' seven-count complaint were dismissed by this court pursuant to a settlement agreement reached by the parties. Plaintiffs now present two motions before this court: a motion to enforce the settlement agreement and, in the alternative, a Rule 60(b) motion to vacate this court's previous judgment dismissing counts II through VII.
I. Factual Background
Leal's complaint was brought in seven counts. Count I challenged the constitutionality of the Cicero loitering ordinance. Counts II through VII sought relief on a variety of tort claims arising from Leal's arrest by a Cicero police officer for alleged violations of the loitering ordinance. At a settlement conference held on May 10, 1999, defense counsel represented to Plaintiffs and this court that he was authorized to settle the case for $50,000. Plaintiff was willing to settle for that amount on the tort claims, but would not agree to settle Count I without an injunction as to the loitering ordinance. The settlement conference was continued from May 10 to May 12 to allow defense counsel to obtain approval under these terms.
When the parties reconvened before this court on May 12, Defendants confirmed the settlement of the tort claims (Counts II-VII) and agreed to litigate Count I separately. This court entered judgment pursuant to Federal Rule of Civil Procedure 54(b) on the tort claims. A Minute Order issued on May 12, 1999 provided: "Counts II through and including VII settled, enter Rule 54(b) judgment. There being no just reason for delay, Rule 54(b) judgment is hereby entered as to Counts II, III, IV, V, VI, [and] VII." The constitutional claim alleged in Count I proceeded to the summary judgment stage and the parties filed cross-motions.
Beginning June 11, 1999, the parties exchanged correspondence concerning a written agreement. Defendants first submitted language to implement the settlement agreement, then by letter dated June 15, 1999, the Plaintiffs submitted revisions to that language. In a letter dated June 18, 1999, Defendants submitted another revised agreement, noting that this particular version took into account Plaintiffs' changes and `our clients' comments." That letter also stated, "If it is acceptable to you and your client, I will arrange to deliver a copy signed by our clients in exchange for a counterpart signed by your client." In a letter dated June 22, 1999, Defendants submitted a final draft of the agreement with a few final revisions. By letter dated July 21, 1999, Plaintiffs submitted to Defendants the settlement agreement signed by the minor plaintiffs mother. Throughout this correspondence, there was no indication that the terms of the settlement were not final.
Thereafter, Plaintiffs' counsel called Defendants' counsel every few weeks to monitor the progress of the settlement. Plaintiffs' counsel was assured by defendants that the check was forthcoming, and defendants even inquired as to which names should appear as payees on the settlement check. Defendants also requested that Plaintiffs cooperate in any contribution or disciplinary action against the officer alleged to have beaten Leal, which Plaintiffs readily agreed to do.
On October 27, 1999. Defendants informed Plaintiff that they wanted to settle Count I. Plaintiffs relayed to Defendants the terms under which they were willing to settle the constitutional claim, and also insisted on the issuance of the settlement check without further delay. Only then did Defendants notify Plaintiffs that the settlement check was conditioned on Plaintiffs' agreement to settle Count I. Plaintiffs threatened to file a motion to enforce the settlement agreement if the matter was not resolved by November 3, 1999. In a letter dated November 2, 1999, Defendants informed Plaintiffs and the court that the Cicero Town Board refused to approve the settlement agreement without settling the entire complaint. True to their word, on November 3, 1999, the Plaintiffs filed in this court a motion to enforce the settlement agreement.
Meanwhile, the pates' cross-motions for summary judgment as to Count I were pending. A Stipulation of Facts submitted to this court on July 1, 1999 stated that the parties were proceeding with their motions after "having agreed on May 12, 1999 to settle all issues in this case with the exception of the Count I claim for declaratory and injunctive relief against continued enforcement of the Cicero loitering ordinance at issue." This court's March 31, 2000, Memorandum Opinion and Order granted summary judgment to plaintiffs on Count I and enjoined defendants from enforcing the loitering ordinance.
A status hearing was held in this case on April 13, 2000. During that hearing, this court questioned whether it retained proper jurisdiction to enforce the settlement agreement. The next day, Plaintiffs filed a Rule 60(b) motion to vacate the dismissal of counts II through VII.
II. Analysis
Plaintiffs urge this court to enforce the terms of the settlement reached by the parties. Because this court lacks jurisdiction over this matter, Plaintiffs' motion is denied.
It is well-settled that a district court is not empowered to enforce a settlement agreement without an independent basis of federal jurisdiction. See Kokkonen v. Guardian Life Insur. Co. of America, 511 U.S. 375, 382, 114 S.Ct. 1673, 1677, 128 L.Ed.2d 391 (1994); Lucille v. City of Chicago, 31 F.3d 546, 548 (7th Cir. 1994); McCall-Bey v. Franzen, 777 F.2d 1178, 1185-86 (7th Cir. 1985). The breach of an agreement to settle a federal suit "does not, despite its origin, arise under federal law." Unelko Corp v. Prestone Prod. Corp., 116 F.3d 237, 238 (7th Cir. 1997). The court may retain jurisdiction to enforce the terms of a settlement by explicitly incorporating the agreement into the judgment or expressly reserving authority to enforce the settlement. See Lucille, 31 F.3d at 548. In the case, however, this court did not reserve power to enforce the parties' agreement. See Id. (declining to equate a judgment's recognition of a settlement with reservation of jurisdictional authority). Moreover, Plaintiffs have not demonstrated that diversity jurisdiction applies, nor is such a basis for jurisdiction apparent to this court. This court lacks jurisdiction to enforce the parties' settlement agreement.
In the alternative, Plaintiffs seek to set aside this court's order dismissing Counts II through VII of their complaint. Plaintiffs rely on Federal Rule of Civil Procedure 60(b)(6), which permits the court to grant relief from judgment where appropriate to achieve justice. See Kalpprott v. United States, 335 U.S. 601, 615, 69 S.Ct. 384, 93 L.Ed. 266 (1949). Rule 60(b) confers this court with jurisdiction to entertain this motion and vacate a previous judgment. See McCall-Bey, 777 F.2d at, 1186; Brummerstedt v. American Airlines, Inc., No. 91 C 8382, 1994 WL 530807, at *1 (ND. Ill. Sep. 29, 1994).
Rule 60(b)(6) provides in relevant part:
On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from final judgment, order or proceeding for . . . any other reason justifying relief from the operation of judgment.
Relief from final judgment under Rule 60(b) is an "extraordinary remedy [which] is granted only in exceptional circumstances." Dickerson v. Board of Educ. of Ford Heights, 32 F.3d 1114, 1116 (7th Cir. 1994). The moving party bears the burden of establishing that such relief is warranted. See Industrial Assoc., Inc. v. Goff Corp., 787 F.2d 268, 269 (7th Cir. 1986). A Rule 60(b)(6) determination is committed to the sound discretion of this court. Neuberg v. Michael Reese Hosp. Foundation, 123 F.3d 951, 954 (7th Cir. 1997).
In many jurisdictions, a party's "repudiation of a settlement agreement that terminated litigation pending before a court constitutes an extraordinary circumstance, and it justifies vacating the court's prior dismissal order." Keeling v. Sheet Metal Workers Int'l Assoc., 937 F.2d 408, 410 (9th Cir. 1991); Neuberg v. Michael Reese Hosp. and Med. Center, 166 F.R.D. 398, 400 (N.D. Ill. 1996), aff'd, 123 F.3d 951 (7th Cir. 1997) (listing cases). See also Kokkonen, 511 U.S. at 377, 114 S.Ct. at 1675 (indicating that circuits permit parties under Rule 60 (b)(6) to "reopen a dismissed suit by reasons of breach of the agreement that was the basis for dismissal"). Although the Seventh Circuit has not squarely addressed this issue, see, e.g, Lucille, 31 F.3d at 548;Neuberg, 123 F.3d at 954, district courts in this circuit have interpreted the case law as permitting parties to revive a suit under Rule 60(b)(6) when a settlement agreement has been breached. See McCall-Bey, 777 F.2d at 1186; Neuberg, 166 F.R.D. at 400; Brummerstedt, 1994 WL 530807, at *3 (announcing that "we do have the discretion to vacate an order where repudiation [of a settlement agreement] occurs").
Defendants effectively concede that Plaintiffs correctly portrayed the events leading up to this motion. See Resp. to Mot. to Enforce at 1. Yet Defendants proffer what they construe to be a salient fact absent from Plaintiff's version: that any settlement agreement required the consent of the Cicero Town Board and that Plaintiffs were advised of this precondition. In effect, Defendants argue that no definitive and binding settlement was reached by the parties. Thus, their argument goes, there was no agreement for them to breach.
The court does not find Defendants' position to be credible. It is highly implausible that Plaintiffs would allow their state claims to be dismissed under such illusory terms, and that this court would accept such terms as sufficiently definitive to warrant a final judgment. In fact, the events as they transpired in this case refute Defendants' position. Defendants, together with Plaintiffs, stipulated to this court on July 1 that a settlement had been reached. The correspondence between the parties also suggests that the agreement was finalized. See. e.g., Pl. Mot. to Enforce Exh. E (June 18, 1999 letter from defense counsel promising to "arrange to deliver a copy [of the written agreement] signed by our clients in exchange for a counterpart signed by plaintiffs"). The court finds that an agreement was reached whereby Defendants were required to pay Plaintiffs $50,000 in exchange for the dismissal of the state claims. When Defendants refused to make the settlement payment, then, they repudiated the agreement.
Even if this court takes Defendants' contentions as true, Plaintiff is still entitled to relief from judgment. After all, this court entered a Rule 54 judgment upon the understanding that "Counts II through and including VII [were] settled." See May 12, 1999 Minute Order. If there was no settlement agreement, as Defendants' maintain, the grounds for the dismissal of Counts II through VII — that is, the reaching of a settlement — no longer stand. Absent the fulfillment of this predicate condition, the judgment entered on such basis must be vacated.
Plaintiffs also seek relief under Rule 60(b)(3), which allows for the vacation of a judgment where the adverse party has engaged in "fraud, misrepresentation or other misconduct." Because of the disposition of this matter under Rule 60(b)(6), the court need not address this alternate basis for relief.
The court also finds that this motion was filed within a reasonable time, as required by Rule 60(b)(6). From May until November, 1999. Plaintiffs were led to believe that the settlement payment was forthcoming. When Defendants formally declared that they were repudiating the settlement on November 2, 1999, Plaintiffs filed a motion to enforce the settlement on the next day. Plaintiffs could have concurrently filed the Rule 60(b) motion, but they appear to have rested their hopes on the motion for enforcement. That motion was taken under advisement in later December and summary judgment was rendered in March 2000. Only when this court noted at an April 13, 2000 status hearing that the enforcement motion might suffer from a jurisdictional problem did Plaintiffs resort to the Rule 60(b) motion, which they filed the very next day. In light of the ongoing activity in this case throughout the entire period under consideration, the court finds that the five month period intervening the express repudiation of the settlement agreement and the filing of the Rule 60(b) motion did not constitute an unreasonable delay.
The court notes that Plaintiffs brought their Rule 60(b) motion within the one-year time limit set forth in Rule 60(b)(1)-(3). Thus, if this case were being decided under Rule 60(b)(3), Plaintiffs would qualify under that clause.
III. Conclusion
For the foregoing reasons, Plaintiffs' motion to enforce settlement agreement is DENIED and Plaintiffs' Rule 60(b) motion is GRANTED. The clerk shall vacate this court's Rule 54(b) judgment entered on May 12, 1999 as to Counts II through VII of Plaintiffs' complaint. Counts II through VII of Plaintiffs' complaint are hereby reinstated.