M.B. Barge Co., Inc. v. Kudzu Marine, Inc.
Order re: 149 Consent Motion to Alter or Amend Order Dismissing Case with Prejudice filed by M.B. Barge Co., Inc. is DENIED. Signed by Chief Judge William H. Steele on 12/29/2014. (srr)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
M.B. BARGE CO., INC.,
KUDZU MARINE, INC., et al.,
) CIVIL ACTION 12-0686-WS-N
This matter is before the Court on the plaintiff’s consent motion to alter or
amend. (Doc. 149). The Court has by previous order granted the motion in part
by extending by ten days the deadline for reinstating the action on the grounds the
settlement agreement documentation has not been consummated. (Doc. 151).
The motion states that the defendants have not yet made the payments
required by the settlement agreement (“the Agreement”) and that, pursuant to the
Agreement, the plaintiff retains the right to seek reinstatement of the action should
full payment not be made by approximately January 13, 2015. The Agreement
also provides that, should any defendant file for bankruptcy within the voidablepreference period of 11 U.S.C. § 547(b) (presumably, within 90 days after making
a payment to the plaintiff), the plaintiff may seek reinstatement. The plaintiff
seeks an order providing “that the Plaintiff shall have a right to reinstate this action
in accordance with the terms of the settlement agreement” as described above.
(Doc. 149 at 2).
There are at least three difficulties with the motion. The first is that it seeks
to expand the grounds for reinstating the action beyond those set forth in the
Court’s order entered on November 12, 2014. (Doc. 148). Pursuant to that order,
reinstatement is available only if the parties have not reduced their settlement to a
written, signed document. Before entering its order, the Court provided the parties
an opportunity to show cause why such an order, with such a provision, should not
be entered. (Doc. 146). The defendants filed no response, and the plaintiff’s only
response was the irrelevant observation that the settlement papers had not yet been
executed. (Doc. 147). Thus, the governing order was entered only after the
parties declined to object to it, and the instant motion is a post hoc effort to alter an
order to which the parties previously consented.
The second difficulty with the motion is that it runs counter to the purpose
and effect of a settlement, particularly one resulting in dismissal of the action.
Upon entering a settlement – especially once that settlement has been reduced to a
written, signed document – the parties’ rights in the controversy are transferred to
the agreement. If a party breaches the agreement, the non-breaching party has as
its recourse a civil action for breach of contract, with a remedy of damages or
specific performance. E.g., Keeling v. Sheet Metal Workers International
Association, Local Union 162, 937 F.2d 408, 410 (9th Cir. 1991) (“In the usual
course upon repudiation of a settlement agreement, the frustrated party may sue
anew for breach of the agreement and may not … reopen the underlying litigation
after dismissal.”). That the parties agreed among themselves to a reinstatement
option, without seeking or obtaining the Court’s consent, does not bind the Court.
The third difficulty with the motion is that granting it would potentially
embroil the Court in enforcing the parties’ settlement. Nominally, the parties seek
only the ability to reinstate the action, but the Agreement, although it identifies
events of default that would trigger a right to reinstate, does not specify when
reinstatement must be sought relative to the occurrence of a triggering event. Any
dispute concerning the timeliness of a reinstatement effort would thus require the
Court to determine the intent and effect of the Agreement and enforce the
Agreement according to such determination. (Although less likely, much the same
can be said of any dispute concerning whether an event of default has occurred.)
The Court has intentionally avoided retaining jurisdiction for the purpose of
enforcing the parties’ settlement agreement,1 and it has been offered no reason it
should retreat from that position now.
For the reasons set forth above, the motion to alter or amend is denied.
DONE and ORDERED this 29th day of December, 2014.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
See generally Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S.
375, 381 (1994) (identifying means by which a trial court may retain jurisdiction for that
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