McCaffery v. Alternative Learning Center ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA and No. 2:12-cv-01156-KJM-DB STATE OF CALIFORNIA ex rel. 12 BEVERLY MCCAFFERY 13 Plaintiffs, ORDER v. 14 ALTERNATIVE LEARNING CENTER, 15 et al., 16 Defendants. 17 18 This matter is before the court on a motion by Hirst Law Group, P.C. (HLG) for 19 entry of judgment based on a settlement agreement reached between Relator Beverly McCaffery 20 and defendants. HLG seeks a $114,728.65 judgment against defendants Alternative Learning 21 Center (ALC) and Alice Soard plus per diem interest of $31.43 per day after November 1, 2019 22 until the date judgment is entered. HLG also seeks additional attorneys’ fees, incurred in 23 obtaining this judgment, in the amount of $1,317.50. For the following reasons, the court 24 GRANTS the motion. 25 //// 26 //// 27 //// 28 1 I. BACKGROUND 2 On April 30, 2012, Relator Beverly McCaffery filed a qui tam action on behalf of 3 the United States under the False Claims Act, 31 U.S.C. § 3729 et seq. Compl., ECF No. 1. She 4 also raised state claims on behalf of the State of California under the California False Claims Act, 5 Cal. Gov’t Code § 12651. Id. On October 18, 2016, the State of California and the United States 6 of America (collectively the “Government Entities”) filed a joint notice of election to intervene 7 for settlement purposes. Notice, ECF No. 46. 8 After intervention, the parties settled the case, and Relator and her counsel entered 9 a separate settlement agreement with defendants ALC and Soard under which ALC and Soard 10 agreed to pay attorney’s fees, costs, and expenses associated with the qui tam action. SeeHirst 11 Decl., Ex. A , ECF No. 58-4, at 4–14 (Settlement Agreement). This court retained jurisdiction 12 over Relator’s claims for reasonable expenses, attorneys’ fees, and costs against defendants under 13 31 U.S.C. § 3730(d)(1) and jurisdiction to enforce the terms of the settlement agreement. Order, 14 ECF No. 5, at 2 (sealed); Hirst Decl. ¶ 3. The terms of the agreement provide that “ALC and 15 Soard shall be jointly and severally liable and shall pay to HLG the total sum of two hundred and 16 twenty-five thousand dollars[.]” Settlement Agreement ¶ 1. The amortization schedule set forth 17 in the promissory note accompanying the agreement required defendants to make nine monthly 18 payments of $2000.00 beginning on July 1, 2017 followed by 31 monthly payments of $7000.00 19 and a final payment of $109.00 on November 1, 2020. Id. at 9–11. The agreement also entitles 20 HLG to an immediate entry of judgment against defendants for the full amount of fees owed to 21 HLG, less any amount already paid by defendants, in the event of default and a failure to cure 22 after ten days. Id. at 12. The agreement also entitles HLG to “all reasonable costs of collection, 23 including reasonable attorneys’ fees, costs and expenses, in obtaining entry of judgment” in the 24 event of default. Id. 25 According to HLG’s record of payments, ALC and Soard made somewhat regular 26 payments until mid-2019, when they failed to timely submit their payments for April, May and 27 June. Hirst Decl. ¶ 4; id., Ex. B–C, at 15–17 (Notice of Default & Payment Tracker). After 28 sending a letter to counsel for defendants requesting payment, plaintiff’s counsel, Michael A. 1 Hirst, received a late payment for April 2019 and two late payments in June and July 2019. Hirst 2 Decl. ¶ 4. It appears no payment was ever made for May 2019. Id. Additionally, it appears ALC 3 and Soard made no payment in August 2019, and the payments received for September and 4 October 2019 were late. Notice of Default & Payment Tracker at 17. After several attempts by 5 Hirst to communicate with counsel for defendants regarding the late or missed payments, Soard’s 6 attorney indicated only that ALC was in a “deteriorating financial situation.” Hirst Decl., Exs. D 7 & E, at 23. The record indicates HLG has provided defendants with at least one, if not three, 8 notices of default, the most recent sent on June 11, 2019, but has not received payment. See 9 Notice of Default & Payment Tracker (titled “Notice of Third Event of Default”). On 10 November 19, 2019, plaintiffs filed the instant motion for an entry of judgment. SeeMot., ECF 11 No. 58. No opposition has been filed. 12 II. LEGAL STANDARD 13 “It is well settled that a district court has the equitable power to enforce summarily 14 an agreement to settle a case pending before it.” Callie v. Near, 829 F.2d 888, 890 (9th Cir. 15 1987). “A settlement agreement is treated as a contract and a party may file a motion to enforce a 16 settlement agreement to obtain an order for damages or specific performance.” Walter v. Western 17 Indus., Inc., SACV 13-1503-JLS (ANx), 2015 WL 12765552, at *2 (C.D. Cal. Mar. 25, 2015) 18 (citation omitted). State contract law governs the construction and enforceability of settlement 19 agreements. Wilcox v. Arpaio, 753 F.3d 872, 876 (9th Cir. 2014) (citing Botefur v. City of Eagle 20 Point, Or., 7 F.3d 152, 156 (9th Cir. 1993)). An enforceable settlement agreement must be a 21 complete agreement, meaning the parties agreed on all material terms. Callie, 829 F.2d at 890-91 22 (citingOzyagcilar v. Davis, 701 F.2d 306, 308 (4th Cir. 1983) (“Where there has been no meeting 23 of the minds sufficient to form a complete settlement agreement, any partial performance of the 24 settlement agreement must be rescinded and the case restored to the docket for trial.”)). Further, 25 both parties must have agreed to the settlement terms or authorized their respective counsel to 26 ///// 27 ///// 28 ///// 1 settle the dispute. Marks-Foreman v. Reporter Pub. Co., 12 F. Supp. 2d 1089, 1092 (S.D. Cal. 2 1998) (citing Harrop v. W. Airlines, Inc., 550 F.2d 1143, 1145 (9th Cir. 1977)).1 3 III. DISCUSSION 4 The record before the court shows a settlement agreement regarding attorney’s 5 fees was reached in this action on July 17, 2017. See, Hirst Decl., Ex. A. Both Relator Beverly 6 McCaffery and defendant Alice Soard signed the settlement agreement, which included the terms 7 and conditions of the agreement and a promissory note detailing the terms of the required 8 payments. Id. The court has no reason to doubt the validity of the signed contract, and the email 9 correspondence between HLG and defendants’ counsel indicates defendants had, indeed, agreed 10 to the settlement and were aware of its terms. See id. Exs. D & E. 11 Under the terms of the agreement, ALC and Soard were required to pay $7,000 on 12 the first day of each month beginning July 2019, and had ten days from the date of notice of any 13 default to cure any default. Id. After defendants defaulted on these terms, they also failed to 14 respond to HLG’s attempt to meet and confer to resolve the default on the note. Serlin Decl. ¶ 5, 15 ECF No. 58-3. Defendant’s counsel also failed to respond to email correspondence from HLG 16 regarding defendants’ default. Id. ¶ 6. 17 Plaintiff has demonstrated that a valid settlement agreement exists and that 18 defendants have failed to comply with its terms by failing to make the payments required by the 19 promissory note included in the agreement. This court periodically retained jurisdiction to 20 enforce the payment of the agreement. Order, ECF No. 5, at 2 (sealed); Hirst Decl. ¶ 3. 21 Therefore, in the absence of a dispute over the settlement agreement or the requested judgment, 22 entry of judgment is proper. 23 ///// 24 1 California law provides an alternative procedure allowing parties to pending litigation to 25 move for an entry of judgment pursuant to the terms of a writing signed by the parties. See 26 Walter, 2015 WL 12765552, at *2; Cal. Civ. Proc. Code § 664.6 (“If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court…, for settlement of 27 the case…, the court, upon motion may enter judgment pursuant to terms of the settlement.”). The parties do not move under this statute, and so the court does not address it here. 28 1} IV. CONCLUSION 2 For the reasons stated above, the motion to enter judgment pursuant to the 3 | settlement agreement is GRANTED. Judgment SHALL be entered for plaintiff in the amount of 4 | $114,728.65 as the accelerated amount presently due under the Settlement Agreement, plus 5 | $31.43 per diem interest for every day from November 1, 2019 to the date this judgment is 6 | entered on the court’s docket, and an additional $1,317.50 for attorneys’ fees associated with the 7 | instant motion. 8 IT IS SO ORDERED. / 9 | DATED: March 24, 2020. 10 CHIEF STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28