Demetria Guiuan v. Theresa Villaflor

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 13-1814
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DEMETRIA GUIUAN,
Appellant
v.
THERESA VILLAFLOR; MARK VILLAFLOR;
ADELAIDA S. SUA; REYNALDO A. SUA; BPI
FAMILY SAVINGS BANK, INC.; JEWELYN JACINTO
____________________________________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 2-08-cv-00363)
District Judge: Honorable Mark Falk, Magistrate Judge
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Submitted Pursuant to Third Circuit LAR 34.1(a)
October 24, 2013
Before: SMITH, GARTH and ROTH, Circuit Judges
(Opinion filed: October 25, 2013)
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OPINION
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PER CURIAM
Demetria Guiuan appeals from the District Court’s order denying her motions to
hold certain defendants in contempt for violating a settlement agreement. We will affirm.
I.
Guiuan filed pro se a complaint against multiple defendants asserting state-law
claims arising from her alleged purchase of a home in the Philippines from Theresa and
Mark Villaflor. The District Court, which had diversity jurisdiction, resolved Guiuan’s
claims against most defendants on various motions and ultimately permitted only two of
her claims against the Villaflors to proceed. The parties then consented to the jurisdiction
of a Magistrate Judge (whom we refer to as the “District Court” hereafter). Before trial,
the parties reached a settlement under which the Villaflors agreed to pay Guiuan $36,500
in monthly installments, and the parties recited the agreement on the record. The District
Court then dismissed the action with an order reading in full: “IT APPEARING that this
matter has been settled and the same having been confirmed on the record by the parties
and counsel; IT IS on this 12th day of October 2012, ORDERED that, this matter be and
hereby is dismissed with prejudice and without costs.”
Guiuan later filed the two motions at issue here asserting that the Villaflors had
breached the settlement agreement by failing to make monthly payments. Guiuan
requested that the District Court (1) hold the Villaflors in contempt for breaching the
settlement agreement, (2) order them to comply with that agreement, and (3) retain
jurisdiction to enforce its order. The District Court, applying Kokkonen v. Guardian Life
Insurance Co. of America, 511 U.S. 375 (1994), denied the motions for lack of
jurisdiction. Guiuan appeals, and we have jurisdiction under 28 U.S.C. § 1291.
II.
We agree that the District Court lacked jurisdiction over Guiuan’s motions. In
2
Kokkonen, the Supreme Court held that a district court lacks jurisdiction to enforce a
settlement agreement following the dismissal of an action unless (1) the court retains
jurisdiction, either by expressly doing so or by incorporating the terms of the settlement
into its dismissal order, or (2) there is an independent basis for federal jurisdiction. See
Kokkonen, 511 U.S. at 381-82. We reached much the same conclusion before Kokkonen
was decided. See Sawka v. Healtheast, Inc., 989 F.2d 138, 141 (3d Cir. 1993).
Neither ground for jurisdiction exists here. The District Court did not retain
jurisdiction to enforce the settlement agreement or incorporate its terms merely by
referencing the settlement in its order of dismissal. See Shaffer v. GTE North, Inc., 284
F.3d 500, 503 (3d Cir. 2002); Sawka, 989 F.2d at 141. Nor did it do so by permitting the
parties to recite the settlement agreement on the record. See Kokkonen, 511 U.S. at 376,
381-82 (holding that a district court lacked jurisdiction to enforce a settlement that was
“recited, on the record, before the District Judge”). 1 The District Court also lacked an
independent jurisdictional basis to enforce the settlement because it does not involve a
federal question or more than $75,000. See 28 U.S.C. § 1332(a). Thus, the District
1
We previously suggested that the recital of a settlement on the record might permit its
enforcement, see Sawka, 989 F.2d at 141 n.3 (citing Kelly v. Greer, 334 F.2d 434 (3d Cir.
1964)), but those decisions predated Kokkonen. See also Shaffer, 284 F.3d at 501-02,
504 (holding, post-Kokkonen, that a district court lacked jurisdiction to enforce a
settlement whose terms had been recited of record). To the extent that the recital of a
settlement on the record might remain relevant, the recital in this case did not “evidenc[e]
an intent that the court continue to actively supervise performance.” Sawka, 989 F.2d at
141 n.3. To the contrary, it was the Villafors’ counsel who requested placement of the
settlement on the record for evidentiary purposes (ECF No. 84 at 6), and the District
Court thereafter clearly disassociated itself from the case (id. at 9-10).
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Court lacked jurisdiction to enforce the parties’ settlement agreement. Because the
District Court lacked jurisdiction to enforce the agreement, it also lacked the authority to
hold the Villaflors in contempt for their alleged violation of that agreement. See Sawka,
989 F.2d at 141 (citing Gardiner v. A.H. Robins Co., 747 F.2d 1180, 1190 n.13 (8th Cir.
1984)). As the District Court explained, Guiuan’s remedy is to file an action for breach
of the agreement in state court. See Kokkonen, 511 U.S. at 382.
We will briefly address three of Guiuan’s arguments on appeal. First, she argues
that the District Court had diversity jurisdiction to enforce the settlement because she
sought to recover more than $75,000 from the Villaflors in her complaint. The District
Court’s jurisdiction over the underlying suit, however, does not constitute an independent
jurisdictional basis to enforce the parties’ subsequent agreement. To the contrary, such
enforcement “is more than just a continuation or renewal of the dismissed suit, and hence
requires its own basis for jurisdiction.” Id. at 378. As explained above, there was no
such basis here.
Second, Guiuan argues that Kokkonen is inapposite because that case involved a
stipulated order of dismissal under Rule 41(a)(1)(A)(ii). The decision in Kokkonen,
however, turned on the fact that the underlying suit had been dismissed and not on the
particular rule that produced the dismissal. See Kokkonen, 511 U.S. at 378. Indeed, we
have held both before and after Kokkonen that district courts lacked jurisdiction to
enforce settlements in cases like this one that were dismissed by court order rather than
stipulation. See, e.g., Shaffer, 284 F.3d at 502-03; Sawka, 989 F.2d at 139, 141.
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Finally, Guiuan raises arguments addressed to the order of dismissal itself. She
argues, for example, that she “was not happy about” the order because it did not contain
the terms of the settlement or retain jurisdiction to enforce it as she “expected” it would.
(Appellant’s Br. at 10, 12.) But Guiuan neither sought reconsideration of nor appealed
from the dismissal order while she still had time to do so. Nor has she sought relief from
the dismissal order under Rule 60(b). Thus, no challenge to the dismissal order is
properly before us. 2 In light of that dismissal order, the District Court lacked jurisdiction
to enforce the settlement agreement. We are cognizant of Guiuan’s pro se status and the
fact that she has fallen into what we described even in a counseled case as “a trap for the
unwary,” Shaffer, 284 F.3d at 501, but we are not permitted to overlook jurisdictional
requirements. Guiuan also is not without a remedy because she may seek enforcement of
the settlement agreement in state court. That remedy may be less convenient than
enforcement in the District Court, but it is the one to which Kokkonen limits her.
For these reasons, we will affirm the order of the District Court. We express no
opinion on the merits of Guiuan’s contention that the Villaflors have breached the
settlement agreement or on any action she might file in state court.
2
We nevertheless note that any alleged deficiencies in the dismissal order that were
apparent when the order was entered would not constitute grounds for Rule 60(b) relief
because a Rule 60(b) motion “may not be used as a substitute for an appeal.” United
States v. Fiorelli, 337 F.3d 282, 288 (3d Cir. 2003) (quotation marks omitted). We
further note that a party’s mere breach of a settlement agreement generally does not state
a basis to set aside a judgment of dismissal under Rule 60(b) and reinstate the underlying
suit. See Shaffer, 284 F.3d at 503-04 & n.4 (citing, inter alia, Sawka, 989 F.2d at 140-
41).
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