Opinion
Case No.: 3:18-cv-00317-BEN-KSC
12-21-2018
SKAZZI3 CAPITAL LIMITED, Plaintiff, v. PATHWAY GENOMICS CORPORATION, Defendant.
ORDER GRANTING MOTION TO REOPEN ACTION AND ENTER JUDGMENT
[Doc. No. 15]
Presently before the Court is Plaintiff SKAZZI3 CAPITAL LIMITED ("Plaintiff") Motion to Reopen Action and Enter Judgment against Defendant PATHWAY GENOMICS CORPORATION ("Defendant"). (Doc. No. 15.) To date, Defendant has not filed an opposition to Plaintiff's motion. In accordance with Civil Local Rule 7.1.d.1, the Court finds the motion suitable for determination on the papers and without oral argument.
BACKGROUND
Plaintiff alleges Defendant defaulted on the Settlement Agreement, made repeated, false assurances of payment consistent with its past evasive conduct, and ignored Plaintiff's repeated efforts to resolve its default without court intervention. (Doc. No. 15 at 1.) Plaintiff originally brought the action to enforce an arbitral award which it obtained against Defendant after nearly two years of proceedings. Id. After the action was filed, Defendant sought to resolve the matter with Plaintiff without judicial intervention. Id. The aforementioned discussions led to a good faith Settlement Agreement between the parties which required Defendant to pay a total settlement amount of $482,913.00 by way of twelve equal monthly installments of $40,242.75. Id. To secure Plaintiff's rights to settlement payments under the agreement, the parties executed a Stipulated Judgment which stipulated entry of judgment for the full balance of the Settlement Amount owed should Defendant fail to make any scheduled settlement payment by the due date and fail to cure its payment default within seven days thereafter. Id. at 1-2. Defendant defaulted on the second settlement payment and failed to cure its default after receiving proper notice. Id. Plaintiff made numerous unsuccessful attempts to resolve Defendant's default based off Defendants assertions that it desired to do so. Id.
Plaintiff now seeks this Court to reopen the action and enter judgment against Defendant in the amount of $482,913.00, less $40,242.75 paid, for a total of $442,670.25. Id. Plaintiff further seeks an attachment to secure its recovery, given Defendants alleged pattern of dishonest conduct that began during the parties initial dispute and continued during the arbitration proceedings and into the current dispute. Id.
LEGAL STANDARD
"[I]t is ... well settled in the usual litigation context that courts have inherent power summarily to enforce a settlement agreement with respect to an action pending before it; the actual merits of the controversy become inconsequential." Dacanay v. Mendoza, 573 F.2d 1075, 1078 (9th Cir. 1978) (citations omitted); see also Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987) ("It is well settled that a district court has the equitable power to enforce summarily an agreement to settle a case pending before it."); In re City Equities Anaheim, Ltd., 22 F.3d 954, 957 (9th Cir. 1994) (affirming summary enforcement of settlement agreement by bankruptcy court where there was no dispute about the formation or consummation of the agreement). "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." Dacanay, 573 F.2d at 1078 (citation omitted). To be enforced, a settlement agreement must be complete and both parties must have agreed to the terms of the settlement. See Maynard v. City of San Jose, 37 F.3d 1396, 1401 (9th Cir. 1994).
"Enforcement of a settlement agreement ... is more than just a continuation or renewal of the dismissed suit, and hence requires its own basis for jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 378, 114 S. Ct. 1673, 128 L. Ed. 2d 391 (1994). A district court lacks jurisdiction to enforce a settlement agreement following dismissal of the action unless the district judge either: (1) expressly in the dismissal order, retains jurisdiction over the settlement agreement; or (2) incorporates the terms of the settlement agreement in the dismissal order. Id. at 381. If the court does not retain jurisdiction to enforce the settlement agreement, the vehicle for the enforcement of the settlement agreement is a breach of contract claim in another proceeding, where "part of the consideration [for the contract] was dismissal of an earlier federal suit." Id.
"[W]here material facts concerning the existence or terms of an agreement to settle are in dispute, the parties must be allowed an evidentiary hearing." Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987) (holding that district court erred in granting entry of judgment without first holding requested evidentiary hearing after plaintiffs requested evidentiary hearing challenging the existence and validity of the settlement agreement). However, an evidentiary hearing is not required where the settlement agreement itself is not disputed. See, e.g., Calcor Space Facility, Inc. v. McDonnell Douglas Corp., 5 F. App'x 787, 789 (9th Cir. 2001) (district court did not err in enforcing settlement agreement where no party requested evidentiary hearing, court held hour-long hearing on motion to enforce the settlement agreement and considered detailed memoranda and declarations from several people, and no parties requested cross-examination of any of the declarants); Situ v. Northrop Grumman Corp., 49 F. App'x 185 (9th Cir. 2002).
DISCUSSION
Plaintiff's Motion seeks to enforce the Settlement Agreement pursuant to Paragraph 7 of the agreement, which states that the United States District Court, Southern District of California would retain jurisdiction over any and all claims based upon the Stipulated Judgment. (Doc. No. 15 at 5.) Since Defendant failed to make or cure its May 15, 2018 payment, Plaintiff now seeks a court order requiring Defendant to pay Plaintiff $442,670.25, representing the Stipulated Judgment amount of $482,913.00 minus the $40,242.75 which Plaintiff received pursuant to Defendant's remittance of the first settlement payment. Id. at 9. Defendant has not opposed this Court's continued jurisdiction to enforce the Settlement Agreement or the total amount requested by Plaintiff.
As the parties expressly provided for the Court's continuing jurisdiction over any claims and disputes arising from the Settlement Agreement, and there is no dispute as to the material facts concerning the formation, existence, or terms of the Settlement Agreement, the Court finds it has jurisdictionover the motion and may enter the requested judgment to the extent provided for in the Agreement. See, e.g., Tranquilli v. VSB Investments, Inc., No. 07-cv-433 LJO, 2008 WL 1788022, at *2 (E.D. Cal. Apr. 18, 2008) (granting motion to enforce settlement agreement where parties stipulated to the court's jurisdiction to enforce the agreement, defendants failed to make monthly payments under agreement, such failure accelerated the total sum owed, and defenants did not oppose motion); U.A. Local 342 Joint Labor-Mgmt. Comm. v. City Refrigeration, Inc., No. 09-cv-3219 JCS, 2010 WL 1293522, at *2-4 (N.D. Cal. Mar. 31, 2010) (granting motion to reopen case and enter judgment against defaulting defendant where stipulated entry of judgment provided that judgment shall be entered against defendant if it defaulted under the settlement agreement).
Pursuant to Paragraph 1 of the Settlement Agreement, Defendant was required to pay Plaintiff $482,913.00, in twelve equal monthly payments of $40,242.75, beginning April 15, 2018. (Doc. No. 15-2 at 2.) In the event Defendant was unable to make any scheduled payment, Defendant was required to notify Plaintiff's general counsel and its own duly appointed attorney. (Doc. No. 15 at 4.) Defendant would then have seven ("7") calendar days from the date of the notice to cure the default. Id. Per the settlement terms, the parties, through counsel, jointly executed a Stipulation for Entry of Final Judgment dated April 5, 2018, to provide Plaintiff with security over Defendants payment obligations under the Settlement Agreement. Id.
The Settlement Agreement provided that in the event of an uncured default, per the Stipulated Judgment, reopening of the action and entry of judgment against Defendant in the amount of $482,913.00, with credit for any payments actually made under the terms of the Settlement Agreement. Id. at 5.
In light of the above, the Court finds Defendant in breach of the Settlement Agreement, entitling Plaintiff to judgment in the amount of $442,670.25. Id. at 2. Accordingly, the Court GRANTS Plaintiff's Motion to reopen the case and enforce the Settlement Agreement. The Court Orders judgment be entered in favor of Plaintiff in the amount of $442,670,25. The Court further Orders that Plaintiff is entitled to seek attorneys' fees and costs incurred in pursuing to enforce the judgment.
This amount accounts for Defendants April 5, 2018 payment of $40,242.75 already received by Plaintiff. Id. at 2. --------
CONCLUSION
For the reasons set forth above, IT IS ORDERED THAT:
1. This action is reopened;/// /// ///
2. Plaintiff's Motion to enter judgment on behalf of Plaintiff against Defendant in the amount of $442,670.25 as the accelerated amount presently due and owning under the Settlement Agreement is GRANTED;
3. Plaintiff's application for right to attach order and writ of attachment in the amount of $442,670.25 is GRANTED; and
4. Plaintiff is entitled to seek costs, including attorneys' fees, incurred in connection with enforcement of this judgment.
IT IS SO ORDERED. Dated: December 21, 2018
/s/_________
HON. ROGER T. BENITEZ
United States District Judge