Peter Szanto v. Joseph M. Bistritz

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 17-11634
Non-Argument Calendar
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D.C. Docket No. 1:15-cv-24749-KMW
PETER SZANTO,
Plaintiff-Appellant,
versus
JOSEPH M. BISTRITZ,
Defendant-Appellee.
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Appeal from the United States District Court
for the Southern District of Florida
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(July 26, 2018)
Before TJOFLAT, NEWSOM, and EDMONDSON, Circuit Judges.
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PER CURIAM:
Plaintiff Peter Szanto, proceeding pro se, appeals the district court’s sua
sponte dismissal with prejudice of his complaint against Defendant Joseph Bistritz.
Reversible error has been shown; we vacate the dismissal and remand for further
proceedings.
Briefly stated, this civil diversity action arises from a dispute over a
residential lease for real property owned by Defendant. Plaintiff asserted against
Defendant state law claims for breach of contract, fraud, and conversion/civil theft.
On 25 January 2017, the parties entered into a mediated settlement agreement;
pursuant to the agreement, Defendant agreed to pay Plaintiff $10,750 in exchange
for a general release of all claims and dismissal of this case.
On 27 January, the district court ordered the parties to file a joint stipulation
of dismissal on or before 13 February 2017. When the parties failed to do so, the
district court ordered the parties to show cause “as to why sanctions should not be
imposed and the case should not be dismissed with prejudice for failure to comply
with a Court Order.”
Plaintiff thereafter moved for entry of judgment and for sanctions, asserting
that Defendant breached the settlement agreement by failing to pay timely the
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agreed-upon settlement amount. Defendant responded that he had attempted to
disburse the settlement funds via both wire transfer and mail but that his attempts
were unsuccessful because Plaintiff had failed to provide a valid bank account
number or physical mailing address. Defendant also sought sanctions for costs
incurred.
On 21 February 2017, the district court issued an order (1) denying the
parties’ motions for sanctions and for costs; (2) directing Plaintiff to provide
Defendant with either a mailing address or a valid bank account number to
facilitate delivery of the settlement funds; and (3) requiring the parties to file a
joint stipulation of dismissal on or before 8 March. The district court warned that
failure to comply with the order “will result in dismissal of this case.”
Plaintiff then filed a second motion for entry of judgment and for sanctions;
Defendant also moved a second time for sanctions for costs.
On 7 March 2017, the district court denied again the parties’ motions and
prohibited the parties from filing additional motions for sanctions. The district
court also ordered (1) Defendant, on or before 9 March, to file a copy of the
settlement check and proof of mailing the check to Plaintiff; (2) Defendant, on or
before 14 March, to file proof of Plaintiff’s receipt of the check; and (3) the parties,
on or before 17 March, to file a joint stipulation of dismissal. The district court
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warned that failure to comply with the court’s order “will result in monetary
sanctions . . . and immediate dismissal of this case.”
On 9 March 2017, Defendant filed a notice of compliance, stating he had
mailed a settlement check to Plaintiff’s address-of-record and attached copies of
the check and proof of mailing. On 14 March, Defendant filed a second notice of
compliance, stating Plaintiff had signed for the check on 14 March. On 17 March,
Defendant filed a “unilateral stipulation” for dismissal, explaining that Plaintiff had
been unresponsive to attempts to communicate about a joint stipulation.
Meanwhile, Plaintiff filed a third motion for entry of judgment, asserting
that, although he received and signed for a letter on 14 March, the enveloped
contained no settlement check.
On 27 March 2017, the district court issued an order dismissing the case.
The district court explained its ruling this way:
The Court has twice attempted to help the Parties successfully
complete the transfer of the settlement funds, and has twice warned
the Parties that failure to adhere to the Court’s instructions would
result in dismissal of this case. It is not clear to the Court why
completing the transfer has been so difficult or why its orders have
been so consistently ignored. Nevertheless, and in light of the fact
that the settlement agreement contains no language about retention of
jurisdiction, the Court finds that litigation of all claims properly
before it have concluded, and therefore finds that dismissal is
appropriate. Though the Parties are free to enforce their rights under
the settlement agreement in whatever way they deem appropriate, any
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disputes regarding a purported breach of the settlement agreement is
not a part of this litigation.
Whether the district court dismissed this case for lack of jurisdiction or as a
sanction for failure to comply with the court’s orders is unclear; so we address both
grounds.
We review de novo questions about the district court’s subject matter
jurisdiction. Miccosukee Tribe of Indians of Fla. v. United States Army Corps of
Eng’rs, 619 F.3d 1289, 1296 (11th Cir. 2010). A district court retains “jurisdiction
to enforce a settlement agreement when . . . a party claims a breach of the
settlement agreement before the court has dismissed the action.” Kent v. Baker,
815 F.2d 1395, 1396 (11th Cir. 1987) (vacating the district court’s dismissal for
lack of jurisdiction to enforce a settlement agreement). Under the circumstances of
this case -- where the parties entered into a settlement agreement and then alleged a
breach of the agreement before dismissal -- the district court retained jurisdiction
to enforce the terms of the settlement agreement. The district court thus erred to
the extent it dismissed the case for lack of jurisdiction.
We next address whether dismissal was proper for failure to comply with the
district court’s orders. We often write that we review the district court’s dismissal
for failure to comply with court orders under an abuse-of-discretion standard.
Betty K Agencies, Ltd. v. M/V MONADA, 432 F.3d 1333, 1337 (11th Cir. 2005).
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And we say we will affirm unless we conclude that the district court made a clear
error of judgment or misapplied the law. Guideone Elite Ins. Co. v. Old Cutler
Presbyterian Church, Inc., 420 F.3d 1317, 1325 (11th Cir. 2005). Nevertheless,
our decisions do not favor the sanction of dismissal.
A district court may dismiss sua sponte an action for failure to comply with
a court order either under Federal Rule of Civil Procedure 41(b) or under the
court’s inherent authority. Betty K Agencies, Ltd., 432 F.3d at 1337. Unless the
court’s dismissal order says otherwise, such a dismissal operates as an adjudication
on the merits. Fed. R. Civ. P. 41(b); see Costello v. United States, 365 U.S. 265,
286-87 (1961).
Dismissal with prejudice “is an extreme sanction that may be properly
imposed only when: (1) a party engages in a clear pattern of delay or willful
contempt (contumacious conduct); and (2) the district court specifically finds that
lesser sanctions would not suffice.” Betty K Agencies, Ltd., 432 F.3d at 1337-38(emphasis in original) (quotations omitted).
Although the district court failed to specify whether dismissal was with or
without prejudice, the sua sponte dismissal for failure to comply with the court’s
orders operated as an adjudication on the merits. The district court was thus
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required to make findings that the parties had engaged in a clear pattern of delay or
willful contempt and that lesser sanctions would not suffice.
In its order of dismissal, the district court made no express finding that the
parties had engaged in a clear pattern of delay or willful contempt. The district
court did, however, summarize the timeline of events leading up to the dismissal,
including the parties’ repeated failure to comply with the court’s orders. The
district court also described the parties’ ongoing communication issues and
motions for sanctions. We thus conclude that the district court did make an
implicit finding that the parties, at the least, engaged in a clear pattern of delay.
The district court, however, made no findings -- either explicit or implicit --
that lesser sanctions were inadequate to correct the parties’ conduct. Nor does the
record demonstrate that lesser sanctions (such as monetary sanctions or dismissal
without prejudice) would not have sufficed. Although the district court mentioned
the possibility of monetary sanctions in its 7 March order, it imposed no monetary
sanctions or other less drastic sanctions before dismissing the case with prejudice.
Our precedent is not loose when it comes to these dismissals. Under the
precedent, we conclude that the district court committed a clear abuse of discretion
in dismissing the case with prejudice without first making the necessary findings to
support that dismissal. See Betty K Agencies, Ltd., 432 F.3d at 1338-40 (“Our
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case law has articulated with crystalline clarity the outer boundary of the district
court’s discretion in these matters: dismissal with prejudice is plainly improper
unless and until the district court finds a clear record of delay or willful conduct
and that lesser sanctions are inadequate to correct such conduct.”). Overcome by
precedent, we vacate the dismissal order and remand for further proceedings.
Plaintiff requests this case be reassigned to a different district court judge on
remand. Although we have the authority to reassign cases on remand, we consider
doing so a “severe remedy.” Stargel v. SunTrust Banks., Inc., 791 F.3d 1309,
1311(11th Cir. 2015). In deciding whether reassignment is necessary, we consider
three factors: “(1) whether the original judge would have difficulty putting his
previous views and findings aside; (2) whether reassignment is appropriate to
preserve the appearance of justice; [and] (3) whether reassignment would entail
waste and duplication out of proportion to the gains realized from reassignment.”
Id. at 1311-12 (quotations omitted). Having considered these factors, we are
unpersuaded that reassignment is warranted in this case.
VACATED AND REMANDED.
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