Dhaliwal v. MHM Solutions, LLC ( 2021 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 DISTRICT OF NEVADA 9 * * * 10 Navdeep Dhaliwal, Case No. 2:21-cv-00568-GMN-BNW 11 Plaintiff, Order re ECF Nos. 49 and 51 12 v. 13 MHM Solutions, LLC, et al., 14 Defendants. 15 16 Before the Court are Defendant MHM Solutions, LLC’s motion to enforce settlement 17 (ECF No. 49) and Defendant Nevada Bureau of Disability Adjudication’s motion to enforce 18 settlement (ECF No. 51). The Court extended Plaintiff’s deadline to December 23, 2021 to 19 respond to these motions. See ECF No. 53. Plaintiff has failed to respond by this new deadline. 20 I. Background 21 On April 7, 2021, this case was assigned to the Early Neutral Evaluation Program and J. 22 Youchah was assigned to the case as the settlement judge. ECF No. 3. Upon Defendants’ 23 appearance a few months later, J. Youchah set the Early Neutral Evaluation. ECF No. 18. At the 24 conclusion of the Early Neutral Evaluation, the parties placed the settlement agreement, including 25 all material terms, on the record. ECF No. 44 (sealed). 26 A few days later, Plaintiff’s attorney filed a notice of attorney’s lien and sought to 27 withdraw from the case. ECF Nos. 37 and 38. J. Youchah held a hearing on October 27, 2021, 1 if they wished to do so. ECF No. 42; see also ECF No. 50 (sealed). Defendants have done so, 2 bringing this matter before the Court. 3 II. Parties’ Arguments 4 Both motions recite similar backgrounds and arguments. Specifically, that Plaintiff 5 Navdeep Dhaliwal and Defendants MHM Solutions, LLC and State of Nevada Bureau of 6 Disability Adjudication reached a settlement as to all material terms during the Court’s Early 7 Neutral Evaluation on October 5, 2021. The parties memorialized the settlement on the Court’s 8 record and Plaintiff expressly stated that he understood and agreed with the settlement terms.1 9 III. Legal Standard 10 Federal courts have inherent authority to enforce settlement agreements in pending cases. 11 See, e.g., In re City Equities Anaheim, Ltd., 22 F.3d 954, 958 (9th Cir. 1994). Even when the case 12 involves a federal cause of action, the construction and enforcement of settlement agreements are 13 governed by state law. Jones v. McDaniel, 717 F.3d 1062, 1067 (9th Cir. 2013). Nevada law 14 requires an offer and acceptance, meeting of the minds, and consideration to constitute an 15 enforceable contract. May v. Anderson, 121 Nev. 668, 672 (2005). A contract is formed when the 16 parties have agreed to the material terms of the agreement, even if the contract’s exact language is 17 not final. Id. “A meeting of the minds exists when the parties have agreed upon the contract’s 18 essential terms.” Certified Fire Prot. Inc. v. Precision Constr., 283 P.3d 250, 255 (Nev. 2012). 19 Despite the fact that a formal settlement agreement has not yet been signed, the Nevada 20 Supreme Court has held that a settlement contract can be formed when the parties have agreed to 21 its material terms, even though the contract’s exact language is finalized at a later time. See May, 22 121 Nev. 668; see also Singh v. Reed, 551 Fed. Appx. 927 (9th Cir. 2014). Moreover, “where the 23 parties represent in open court that a settlement was reached and place the terms of the settlement 24 on the record, courts are empowered to summarily require the parties to comply with those 25 terms.” Harper v. Nevada Property 1, LLC, Case. No. 2:19- cv-02069-GMN-VCF, 2021 WL 26 3418350 (D. Nev. 2021). 27 1 1 IV. Analysis 2 First, the Court notes that the motion can be granted as unopposed under LR 7-2(d). 3 Nevertheless, the Court provides its rationale for granting these motions below. 4 After reaching a settlement during the Early Neutral Evaluation, the parties placed the 5 essential terms of that settlement on the record. See ECF No. 44 (sealed). Plaintiff expressly 6 agreed to the essential terms of the settlement with each Defendant. Id. There is no dispute as to 7 the substance of the agreed-upon terms. Id. Plaintiff simply appears to have had a change of heart. 8 However, “‘[a]n agreement announced on the record becomes binding even if a party has a 9 change of heart after [he] agreed to its terms but before the terms are reduced to writing.’” Doi v. 10 Halekulani Corp., 276 F.3d 1131, 1138 (9th Cir. 2002) (quoting In re Christie, 173 B.R. 890, 891 11 (Bankr. E.D. Tex. 1994)). 12 Accordingly, the undersigned will order that Defendants’ motions to enforce settlement be 13 granted. 14 V. Sanctions 15 A court has inherent power to sanction a party if it acts in “willful disobedience of a court 16 order . . . or when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive 17 reasons” as well as for “willful[] abuse [of the] judicial processes.” Gomez v. Vernon, 255 F.3d 18 1118, 1133–34 (9th Cir. 2001) (internal quotation marks and citation omitted). The Ninth Circuit 19 has affirmed the imposition of sanctions under inherent authority when a party attempts to renege 20 on a valid settlement agreement. See Doi, 276 F.3d at 1141 (affirming sanctions when the terms 21 of a settlement agreement were placed on the record and the party attempting to withdraw had 22 refused to sign the agreement.) 23 Here, Plaintiff was represented by counsel when he entered into the settlement agreement. 24 When Plaintiff attempted to renege, counsel moved to withdraw. J. Youchah warned Plaintiff that 25 it was highly likely that the agreement would be enforced and that the Court would also likely 26 award the parties seeking to enforce the settlement attorney fees for having to file such motions. 27 ECF No. 50 (sealed). After Defendants filed the instant motion, Plaintiff asked the Court for an 1 || circumstances at play, the Court finds Plaintiff has acted vexatiously and in bad faith. As a result, 2 || the request for fees will be granted. The parties are to meet and confer on the issue of fees within 3 || 10 days of this Order. 4 IT IS THEREFORE ORDERED that ECF Nos. 49 and 51 are GRANTED. 5 6 DATED: December 28, 2021. 7 x Lea WORN BRENDA WEKSLER 8 UNITED STATES MAGISTRATE JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28