Opinion
Case No. 1:04CV167DAK.
May 17, 2005
ORDER
This matter is before the court on Plaintiff's Motion for Order Enforcing Settlement and Granting Entry of Final Judgment for Permanent Injunction. Defendants have filed an opposition entitled "Defendant's Motion Against Order Enforcing Settlement or Granting Entry of Final Judgment for Permanent Injunction" and "Defendant's Motion for Recovery of Losses." The court concludes that a hearing on this motion is not necessary. After reviewing the materials submitted by the parties and the facts and law relevant to the motion, the court enters the following order.
BACKGROUND
Plaintiff seeks to enforce an oral settlement agreement the parties reached before Defendants' scheduled depositions were to take place on February 11, 2005. Because the agreement was reached at the place the depositions were to occur, the parties put the agreement on the record with the court reporter who was present. The transcript states:
Mr. Wellman: My name is Scott Wellman and I'm the attorney for the Master's Miracle. Here with me today is Mr. John Austin and Ms. Elsa Knowles. They are defendants and crosscomplainants in the action that the court reporter has the caption for. . . . We were scheduled to have depositions taken today and, instead, we've discussed and have come to a settlement of the entire case. The settlement will dispose of the entire matter, once it's implemented. I'm going to state it for the record. If there are any disagreements, then either of you two can tell me. If not, then I will get the proper paperwork drafted up, submit it for signature, signed and we'll be done.
The settlement is as follows: Number one, the preliminary injunction issued in this case will become a permanent injunction. Number two, each party will waive any and all claims — any and all other claims for damages or other things known or unknown against each other. Each party will bear their own costs and attorney's fees in this matter. So, in essence, the only thing remaining will be the injunction.
In addition, we've had discussions of other former TMM distributors that apparently are sending out disparaging e-mails and may be attempting to cross-recruit TMM distributors. Mr. Austin has graciously agreed to use his best efforts to cooperate with the company to try to stop those activities. In particular, he has agreed to contact Ms. — what's her name? Jasmine Snyder?Mr. Austin: Uh-hmm.
Mr. Wellman: — to inform her that she should stop sending out her e-mails and attempting to cross-recruit. And he's also going to inform her that if she does not cease and desist, that she is being targeted as the next defendant for a lawsuit. Hopefully, it doesn't come to that.
The intent of this is for Ms. Knowles and Mr. Austin and their respective companies to go on with their lives. They can work for any other company they wish, and I personally hope they do very well, make lots of money and go on with their business.
The only thing we have been trying to prevent and this settlement will prevent is any further cross-recruiting and/or disparagement of the company's products and officers.
Have I fairly stated the terms of the settlement?Mr. Austin: Yeah, I think so.
Mr. Wellman: Ms. Knowles?
Ms. Knowles: I think so. The thing is — I want to — I will never deliberately go and cross-recruit Master's Miracle distributors, but I am going to be buying lists, you know, from people — from brokers, and I have no idea who is on those lists.
I don't even know — I don't know Master's Miracle's lists, you know. Everybody will send — even my downed — even people in my downed, they're in there by the thousands. I did not know all their names or know them personally or anything. Okay? So if I ever even saw their name or their e-mail address or whatever, I probably wouldn't even recognize it. I don't want you to think I'm doing it deliberately if I'm calling my lists that I just purchased and think I'm going after Master's Miracle's distributors. All right?
Mr. Wellman: The terms of the injunction specifically allow for general advertisements and general advertising, which would be, I believe, lists — public lists that you're talking about. But it's important that whatever you send to those people doesn't have disparaging remarks concerning The Master's Miracle.
Ms. Knowles: No. I just built this Uri (phonetic). I wouldn't — I've said good things about Uri (phonetic). You know, I would just sell, I would not —
. . . .
Mr. Wellman: Let's go back on the record. I think what I need to do now is put a stipulation together, which is a legal term for an agreement, to make the preliminary injunction permanent; to have a settlement agreement that says what I just said, that we waive any and all claims against each other. And I will prepare that in the next week. I'll circulate it for signature, I'll file it with the Court, and then we'll be done.Ms. Knowles: Okay.
Mr. Wellman: Fair enough?
Mr. Austin: Yeah.
Mr. Wellman: Fair enough?Ms. Knowles: Yeah.
Mr. Wellman: And this is on behalf of all of both your companies, IAM and — IAM — IAM and Austin and the Austin Foundation and yourselves individually.Ms. Knowles: Okay.
Mr. Wellman: Fair enough?
Mr. Austin: Fair enough.
Mr. Wellman: Okay. Thank you very much.
Mr. Austin: So we agree then that we can use lists from brokers?
Mr. Wellman: If you have general lists from brokers that you're sending out to — like, mass mailings and you're not targeting TMM people, then the injunction speaks for itself. That's the same as — in my mind, as putting an advertisement on the T.V.
Mr. Austin: Yeah. But the same thing happens, because the lists we have have names, phone numbers, addresses, e-mail addresses, and we use multiple means of contacting those people. Sometimes it's a phone call, sometimes it's an e-mail, sometimes it's a postcard but . . .Ms. Knowles: I just don't want you to think —
Mr. Wellman: Let's go off the record a second.
(A brief discussion was held off the record.)
Mr. Wellman: Let's go back on the record so we're clear on this.
There has been some conversation off the record as to mass emails from public e-mail brokers.
Mr. Austin: And phone — phone solicitation from public brokers.
Mr. Wellman: And these, I've been assured, are not a compilation of lists of TMM distributors, these are public. You pay — I don't know what you pay — a few cents to 50 cents or whatever for a name.
Mr. Austin: It depends. Some are a couple bucks a name and some are several names for a penny.
Mr. Wellman: And I think the Court said that that type of mass media advertisement is okay, as long as it mentions your company, your product, and does not mention TMM or does not say disparaging things about TMM, its management or its products. Fair enough?Mr. Austin: Fair enough.
Ms. Knowles: Fair enough to me.
Mr. Wellman: We're done.
Plaintiff's counsel drafted a settlement agreement and circulated it to Defendants for signature. Plaintiff's counsel spoke with Defendant John Austin who stated that he thought that the written settlement agreement was too complicated and he wished to redraft the agreement. Plaintiff's counsel called a few days later and asked if Defendants would agree to sign something that merely stated that what was agreed upon on the transcript was the agreement. Defendants agreed that they could accept the transcript.
Plaintiff's counsel attempted to transmit the second written agreement to Defendants however they did not receive it because they were leaving on vacation. Because Plaintiff's counsel did not receive a response, Plaintiff brought this motion to enforce the settlement agreement.
DISCUSSION
In United States v. Hardage, 982 F.2d 1491 (10th Cir. 1993), the Tenth Circuit recognized that a trial court "has the power to summarily enforce a settlement agreement entered into by the litigants while the litigation is pending before it." Id. at 1496. "`Settlements are favored in the law, and should be encouraged, because of the obvious benefits accruing not only to the parties, but also to the judicial system.'" Murray v. State of Utah, 737 P.2d 1000, 1000 (Utah 1987) (quoting Tracy-Collins Bank Trust Co. v. Travelstead, 592 P.2d 605, 607 (Utah 1979)).
The Utah court have also recognized that an oral settlement agreement is enforceable even if it has not been reduced to writing: "The fact that plaintiffs had not yet signed a written agreement is of no legal consequence. It is a basic and long-established principle of contract law that agreements are enforceable even though there is neither a written memorialization of that agreement nor the signatures of the parties, unless specifically required by the statute of frauds." Murray, 737 P.2d at 1001. The statute of frauds is not an issue in this case. Therefore, the court need only determine whether the parties reached an enforceable agreement.
In Murray, the court stated that "[a] summary procedure to enforce such a settlement is `admirably suited to situations where, for example, a binding settlement bargain is conceded or shown, and the excuse for nonperformance is comparatively unsubstantial.'" Id. at 1000-01 (citation omitted). However, the Tenth Circuit has recognized that "the majority of our sister circuits agree that where material facts concerning the existence or terms of an agreement to settle are in dispute, the parties must be allowed an evidentiary hearing." Hardage, 982 F.2d at 1496.
In this case, the court concludes that an evidentiary hearing is not necessary because there is an adequate showing of the fact of an agreement and its terms in the court reporter's transcript of the settlement statement. Defendants admit that an agreement was reached. However, Defendants assert that the agreement was breached or became void at the moment Plaintiff breached it. Defendants allege that Plaintiff breached the agreement because individuals continued to make false and disparaging statements about Defendants. Defendants claim that they refused to sign the agreement until retractions were made. However, a few days after Defendants claim they made these demands, Defendants admit that they agreed with Plaintiff's counsel that the transcript of the agreement was sufficient. Defendants also agree that there was no mention in this subsequent conversation regarding a retraction of disparaging statements.
It is clear to the court that an enforceable settlement agreement was reached by the parties on the day the depositions were scheduled to occur and the parties entered their statement on the record before the court reporter. Defendant's subsequent statement that the transcript was sufficient supports this conclusion. If Defendants believe there was a breach of that agreement, it does not make the agreement void at its inception. If there was a breach, Defendants can pursue whatever legal actions are available to them. However, such recourse is not in the present action. Therefore, the court orders that the preliminary injunction entered in this case shall be considered and made a permanent injunction, and all pending motions to dismiss claims and counterclaims are denied as moot. Accordingly, the court dismisses this action in its entirety.