Hellenic Petroleum LLC v. Mansfield Oil Company of Gainsville, Inc. ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 HELLENIC PETROLEUM LLC, No. 1:19-cv-01071-DAD-SKO 12 Plaintiff/Counter- Defendant, 13 ORDER GRANTING MOTION TO REOPEN v. CASE AND ENTER FINAL JUDGMENT 14 MANSFIELD OIL COMPANY OF (Doc. No. 32) 15 GAINESVILLE, INC., et al., 16 Defendants/ Counterclaimants. 17 18 19 This matter is before the court on defendant Mansfield Oil Company of Gainesville’s 20 (“Mansfield” or “defendant”) motion to: reopen this case; set aside the parties’ voluntary 21 dismissal without prejudice, and enter final judgment in its favor in keeping with the parties’ 22 settlement agreement. (Doc. No. 32.) Pursuant to General Order No. 617 addressing the public 23 health emergency posed by the COVID-19 pandemic, defendant’s motion was taken under 24 submission to be decided on the papers. (Doc. No. 34.) For the reasons set forth below, the court 25 will grant defendant’s motion. 26 BACKGROUND 27 On August 5, 2019, plaintiff Hellenic Petroleum LLC (“Hellenic” or “plaintiff”) initiated 28 this action, asserting breach of contract and other state law claims against defendants Mansfield 1 and Margie Lang. (Doc. No. 1.) On October 16, 2019, defendants filed an answer, and defendant 2 Mansfield filed a counterclaim against plaintiff and filed a third-party complaint against third- 3 party defendant Panagiotis Kechagias. (Doc. No. 11.) On February 27, 2020, defendant 4 Mansfield filed its first amended counterclaim against plaintiff. (Doc. No. 24.) 5 Thereafter, the parties entered into a Settlement Agreement and Release (“Settlement”) 6 effective July 10, 2020, under which Hellenic would make payments totaling $950,000 to 7 Mansfield over the course of three years. (Doc. Nos. 32 at 4; 33-1 at 3.) The parties’ Settlement 8 specifically provided that, in the event of Hellenic’s default under the agreement, the court would 9 have jurisdiction to and would enter judgment in the amount of $1,200,000 against Hellenic less 10 the amount of any payments made by Hellenic pursuant to the Settlement prior to its default. 11 (Doc. No. 33-1 at 3.) In addition, pursuant to the terms of the Settlement, upon Hellenic’s 12 default, “Hellenic will not oppose the entry of Judgment . . . . [and] in the event of the entry of 13 Judgment in accordance with this provision, Hellenic waives all rights to seek judicial review or 14 otherwise challenge or contest the validity of the Judgment.” (Doc. No. 33-1 at 3; see also Doc. 15 No. 33-2 at 3.) 16 On July 15, 2020, the parties filed a stipulation of dismissal without prejudice pursuant to 17 Federal Rule of Civil Procedure 41(a)(1)(A)(ii), in which they requested that the court “retain 18 jurisdiction to reopen the case, set aside the dismissal, and enter a Final Judgment in the event of 19 a default under the terms of the Parties’ Settlement.” (Doc. No. 30 at 2.) On July 17, 2020, 20 Magistrate Judge Sheila K. Oberto entered an order recognizing the parties’ stipulation dismissing 21 the action without prejudice and directing the Clerk of Court to close this case. (Doc. No. 31.) 22 The magistrate judge, in the exercise of the court’s discretion, declined the parties’ request for the 23 court to retain jurisdiction over the action to enforce the terms of the Settlement. (Id. at 1.) 24 On January 12, 2022, defendant Mansfield filed the pending motion, requesting that the 25 court reopen the case, set aside the parties’ stipulated dismissal without prejudice, and enter final 26 judgment in their favor pursuant to the terms of the Settlement. (Doc. No. 32 at 3.) According to 27 defendant Mansfield, Hellenic missed making certain payments under the Settlement, and 28 subsequently, the parties then entered into an Addendum to the Settlement Agreement and 1 Release effective October 29, 2021 that modified the payment schedule under the parties’ 2 Settlement. (Id. at 4.) Although Hellenic initially complied with the revised payment schedule, 3 Mansfield asserts in their pending motion that Hellenic has not made any payments since 4 November 19, 2021. (Id.) As a result, Mansfield requests that this court enter a judgment against 5 Hellenic in the amount of $924,914.77, which represents the $1,200,000 judgment amount against 6 Hellenic in the event of default provided for by the Settlement, less the $275,085.23 in settlement 7 payments Hellenic has already paid. (Id.) Hellenic did not file either an opposition or a statement 8 of non-opposition to the pending motion.1 9 LEGAL STANDARD 10 In Kokkonen v. Guardian Life Ins. Co. of Am., the Supreme Court held that district courts 11 do not have inherent or ancillary jurisdiction to enforce the terms of a settlement agreement 12 simply because the case underlying a settlement agreement was litigated in federal court. 511 13 U.S. 375, 380–81 (1994). In particular, 14 Kokkonen expressly makes two legal principles clear: (1) when a district court expressly reserves or retains jurisdiction to enforce 15 violations of a settlement agreement that led to a stipulated order of dismissal, it has such enforcement jurisdiction; but (2) when the 16 district court’s consent judgment does not expressly reserve enforcement jurisdiction, the district court will have jurisdiction to 17 enforce the settlement agreement only if it incorporated the settlement agreement into the judgment. 18 19 TI Beverage Gro. Ltd. v. S.C. Cramele Recas SA, No. 2:06-cv-07793-VBF-JWJ, 2014 WL 20 1795042, at *6 (C.D. Cal. Apr. 1, 2014). If these conditions are not met, “enforcement of the 21 settlement agreement is for state courts, unless there is some independent basis for federal 22 jurisdiction.” Kokkonen, 511 U.S. at 382; see also O’Connor v. Colvin, 70 F.3d 530, 532 (9th 23 24 1 Pursuant to Local Rule 230(c), a “failure to file a timely opposition may also be construed by the Court as a non-opposition to the motion.” Nonetheless, chambers staff has contacted 25 Hellenic’s counsel of record to inquire regarding the lack of a response to the pending motion. Chambers staff was advised that Hellenic had instructed its counsel in December 2021 not to 26 respond to the anticipated motion, that counsel believes Hellenic is no longer in operation, 27 counsel has been unable to have any further communication with Hellenic and, under these circumstances, counsel did not believe they had been authorized to file even a statement of non- 28 opposition to the granting of the pending motion. 1 Cir. 1995) (“When the initial action is dismissed, federal jurisdiction terminates. A motion to 2 enforce the settlement agreement, then, is a separate contract dispute requiring its own 3 independent basis for jurisdiction.”) (internal citation omitted). 4 ANALYSIS 5 Defendant argues that although this court did not retain jurisdiction to enforce the 6 settlement agreement, the court nonetheless has an independent basis to exercise jurisdiction over 7 this matter: diversity jurisdiction pursuant to 28 U.S.C. § 1332. (Doc. No. 32 at 5.) Defendant 8 represents that it is a “Georgia corporation with its principal place of business in Georgia” and 9 that plaintiff is a “Florida limited liability company (with all members domiciled in Florida).” 10 (Id.) In addition, defendant specifies an amount in controversy of $924,914.77. (Id. at 4.) 11 It is evident that the court does not have ancillary jurisdiction to enforce the terms of the 12 settlement agreement in this case. In the order acknowledging the parties’ stipulated dismissal of 13 this action and directing the Clerk of the Court to close the case, the assigned magistrate judge 14 declined to retain jurisdiction to reopen the case, set aside the voluntary dismissal, and enter a 15 final judgment. (Doc. No. 31 at 1.) Nor did the magistrate judge incorporate the parties’ 16 settlement agreement into that order. (Id.); see Covves, LLC v. Target Brands, Inc., No. 21- 17 55077, 2022 WL 193208, at *1 (9th Cir. Jan. 21, 2022) (“Because the district court did not issue 18 an order that reserved jurisdiction over the case or incorporated the settlement terms, it did not 19 retain [ancillary] jurisdiction after the dismissal.”) 20 Nonetheless, the court agrees with defendant that diversity jurisdiction serves as an 21 independent basis for the court to exercise jurisdiction over the pending motion, since the pending 22 motion concerns a dispute between diverse parties over an amount in excess of $75,000.2 See 28 23 2 In finding that the requirements for diversity jurisdiction are met here, the court finds that these 24 requirements are met as to the alleged breach of the settlement agreement described in defendant’s pending motion. It is irrelevant that the action underlying the pending motion 25 initially proceeded in federal court pursuant to diversity jurisdiction. “[T]he jurisdictional basis of the prior action does not provide the jurisdictional basis of the present case; rather, the present 26 case is aimed at effectuating the court’s inherent authority to enforce an order, regardless of 27 whether that order arose in the context of a diversity case, a federal question case, etc.” Lite On It Corp. v. Toshiba Corp., No. 2:07-cv-04758-SGL-AJW, 2009 WL 10669760, at *5 (C.D. Cal. 28 Mar. 4, 2009). 1 U.S.C. § 1332(a) (“The district courts shall have original jurisdiction of all civil action where the 2 matter in controversy exceeds the sum or value of $75,000 . . . and is between . . . citizens of 3 different States”); Covves, LLC v. Dillard’s, Inc., No. 2:18-cv-08518-RGK-AFM, 2021 WL 4 342572, at *2–3 (C.D. Cal. Jan. 8, 2021) (finding that diversity “present[s] an independent basis 5 for jurisdiction to enforce the settlement agreement” but nonetheless exercising the court’s 6 discretion to not reopen the case); Murtaugh v. Star Scientific Ltd., No. 8:15-cv-00113-DOC- 7 RNB, 2018 WL 6136817, at *6 (C.D. Cal. May 11, 2018) (concluding that although the court 8 lacked ancillary jurisdiction over the post-dismissal motion, diversity jurisdiction served as an 9 independent basis on which the court had jurisdiction over the post-dismissal motion). Having 10 found that the court has jurisdiction over the pending motion, the court will now proceed to 11 address the merits of defendant’s pending motion.3 12 As stated above, defendant requests that the court reopen this case, set aside the parties’ 13 voluntary dismissal of the case, and enter final judgment against plaintiff. (Doc. No. 32 at 1.) 14 Pursuant to the parties’ Settlement, if Hellenic did not cure a failure to make a payment within ten 15 days, Mansfield is entitled to an entry of judgment in the amount of $1,200,000, less the amount 16 of any payments made by Hellenic prior to its default. (Doc. No. 33-1 at 3.) Here, defendant 17 Mansfield represents that Hellenic made payments to defendant under the Settlement totaling 18 $275,085.23, but has not made any further payments since November 19, 2021, yielding a total of 19 3 The court notes that, despite diversity jurisdiction serving as an independent basis for the court 20 to have jurisdiction to enforce the parties’ settlement agreement, the court could exercise its discretion to decline to reopen this case. See Covves, LLC v. Dillard’s, Inc., 2021 WL 342572, at 21 *3 (“Even though Plaintiff may have satisfied its jurisdictional hurdle, the Court declines to reopen the case. . . . Because courts control their docket, not the litigants, the Court is not 22 required—and declines to do so here—to reopen the case simply because the parties agreed to 23 that relief.”); see also Ahanachian v. Xenon Pictures, Inc., 624 F.3d 1253, 1255 (9th Cir. 2010) (“[D]istrict courts enjoy a wide latitude of discretion in case management.”); Keeling v. Sheet 24 Metal Workers Intern. Ass’n, Loc. Union 162, 937 F.2d 408, 410 (9th Cir. 1991) (“We review the district court’s decision to vacate the dismissal for abuse of discretion.”). Nonetheless, the court 25 will analyze the merits of defendant’s pending motion here in the interests of judicial economy. As defendant persuasively argues, “[t]he terms of the Final Judgment have already been 26 determined by the parties’ agreement,” “[t]he agreed Final Judgment will once and for all dispose 27 of all claims of all parties to this lawsuit,” and “simply entering the Final Judgment pursuant to the parties’ agreement is a far more efficient . . . result than requiring the filing and prosecution of 28 an entirely new lawsuit.” (Doc. No. 32 at 5–6.) 1 | $924,914.77 due to defendant under the terms of the parties’ Settlement. (Doc. No. 33 at 2-3.) 2 | On the evidence and argument before the court, and in the absence of any information or evidence 3 | from plaintiff contradicting or refuting defendant’s allegations, the court finds that defendant 4 | Mansfield is entitled to an entry of a final judgment in its favor in the amount of $924,914.77. 5 | See Tranquilli v. VSB Investments, Inc., No. 1:07-cv-0433-LJO-DLB, 2008 WL 1788022, at *2 6 | (E.D. Cal. Apr. 18, 2008) (granting plaintiffs motion to enforce a settlement agreement where 7 | defendants failed to make payments under agreement, the parties’ agreement provided for the 8 | acceleration of amounts owing upon default, and defendants did not oppose plaintiffs motion); 9 | Levin v. Sellers, No. 4:11-cv-04783-DMR, 2013 WL 3456681, at *4 (N.D. Cal. July 9, 2013) 10 | (granting a motion for an order enforcing a settlement agreement where the provisions of the 11 | settlement agreement were “clear and unambiguous” and there was “no dispute that [defendant] 12 | defaulted on its obligations under the Settlement Agreement”).* 13 CONCLUSION 14 Accordingly, 15 1. Defendant’s motion to reopen the case, set aside the parties’ voluntary dismissal 16 without prejudice, and enter final judgment (Doc. No. 32) is granted; 17 2. The Clerk of the Court is directed to enter judgment in favor of defendant 18 Mansfield in the amount of $924,914.77; and 19 3. The Clerk of the Court is directed to close this case. 20 | IT IS SO ORDERED. _ - Dated: _ April 21, 2022 Hen | ae 22 UNITED STATES DISTRICT JUDGE 23 24 25 | 4 Defendant also requests that the court provide for post-judgment interest accruing at a rate of 26 | ten percent per annum from the date of this order until the $924,914.77 amount is paid in full. (Doc. No. 32-1 at 3.) The Settlement does not provide for post-judgment interest in the event of 27 | default (or an interest rate for that matter), and defendant has presented no authority in support of such an award where interest is not provided for in the parties’ settlement agreement. Therefore, 28 | the court declines to award post-judgment interest in this case.