Hatteras Enterprises Inc v. Art Brands LLC et al

Filing 121

MINUTES (IN CHAMBERS): Order DENYING Ex Parte Application for Motion to Enforce Settlement Agreement and for Sanctions by Judge Philip S. Gutierrez: Having considered the papers submitted in support of and opposition to the motion, the Court DENIES the motion 115 (bp) .

O
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 11-5604 PSG (JCGx)

Title

Hatteras Enterprises, Inc. v. Art Brands, LLC

Present:

Date

November 21,
2012

The Honorable Philip S. Gutierrez, United States District Judge

Wendy K. Hernandez
Deputy Clerk

Not Present
Court Reporter

Attorneys Present for Plaintiff(s):

Attorneys Present for Defendant(s):

Not Present
Proceedings:

n/a
Tape No.

Not Present

(In Chambers) Order DENYING Ex Parte Application for Motion to
Enforce Settlement Agreement and for Sanctions

Before the Court is Plaintiff Hatteras Enterprises, Inc.’s ex parte application for a motion
to enforce a settlement agreement and for sanctions. Dkt. # 115. The Court finds the matter
appropriate for decision without oral argument. See Fed. R. Civ. P. 78(b); L.R. 7-15. Having
considered the papers submitted in support of and opposition to the motion, the Court DENIES
the motion.
I.

Background

Plaintiff Hatteras Enterprises, Inc. (“Plaintiff”) designs, manufactures, and distributes
technology and finished goods that change color in the sunlight, including, inter alia, inks, nail
polishes, toys, and beads. Compl. ¶ 19. Defendant Art Brands, LLC (“Defendant”)
manufactures heat applied “transfer” graphics for apparel and allegedly entered into an exclusive
contract with Plaintiff to purchase screen printing ink, pay Plaintiff royalties, and provide
branding credit to Plaintiff on apparel and printed material related to Plaintiff’s color changing
ink. Compl. ¶¶ 23-29. The alleged breach of that contract led to Plaintiff filing this action.
On September 13, 2012, Defendant filed a motion to enforce the parties’ settlement
agreement, alleging that a settlement agreement had been reached through various email
communications. See Dkt. # 59. On October 25, 2012, Plaintiff filed an opposition to the
motion, contending that the parties had never reached a formal settlement agreement. See Dkt. #
77. In its November 5, 2012 Reply Brief, Defendant requested that the Court enforce a separate
CV-90 (06/04)

CIVIL MINUTES - GENERAL

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O
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 11-5604 PSG (JCGx)

Title

Date

November 21,
2012

Hatteras Enterprises, Inc. v. Art Brands, LLC

agreement (the “Agreement”), dated October 6, 2012. See Dkt. # 106. The Court denied
Defendant’s motion, explaining that the Agreement post-dated the filing of Defendant’s motion.
See Dkt. # 110. The Court noted that the prior negotiations could only be categorized as
preliminary negotiations.
II.

Legal Standard

The law on ex parte applications is well-settled in this circuit. In order to justify ex parte
relief, the moving party must establish (1) that its cause will be irreparably prejudiced if the
underlying motion is heard according to regular noticed motion procedures, and (2) that it is
without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a
result of excusable neglect. See Mission Power Eng’g Co. v. Cont’l Cas. Co., 883 F. Supp. 488,
492 (C.D. Cal. 1995).
III.

Discussion

Plaintiff’s motion is premised on the grounds that it was improper for Defendant to seek
to enforce a settlement agreement and then fail to agree to the terms of that agreement.
Mot. 2:19-27. However, Plaintiff knew as of the filing of its Opposition on October 25, 2012
that the parties had entered into an Agreement, as Plaintiff signed the Agreement. Dkt. # 77. If
Plaintiff wished to enforce that Agreement, it should have so stated in its Opposition. Instead,
Plaintiff maintained the position that no settlement had been reached. Yet now, Plaintiff seeks to
enforce the Agreement. Plaintiff wholly fails to plead facts demonstrating that its change in
position was due to excusable neglect. Accordingly, Plaintiff’s self-made crisis does not entitle
it to ex parte relief. See Mission Power, 883 F. Supp. at 492.
For the foregoing reasons, the Court DENIES Plaintiff’s ex parte application to enforce
the parties’ settlement agreement without prejudice.
IT IS SO ORDERED.

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CIVIL MINUTES - GENERAL

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