Brantley et al v. Boyd et al

Filing 323

Order by Magistrate Judge Nathanael M. Cousins denying 320 Motion to disclose settlment amounts. (nclc1S, COURT STAFF) (Filed on 4/25/2013)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN FRANCISCO DIVISION 10 LARRY TYRONE BRANTLEY, SR., and 11 ELLEN BRANTLEY 12 13 ORDER DENYING MOTION TO DISCLOSE TERMS OF CONFIDENTIAL SETTLEMENT AGREEMENTS Plaintiffs, v. 14 GARRETT BOYD, SERGEI KLYAZMIN, 15 16 17 Case No. 07-cv-06139 NC Re: Dkt. No. 320 MODO REALTY, INC., ROYAL CROWN MORTGAGE, INC., PRAVEEN CHANDRA, ACADEMY ESCROW, and SCHWARTZ & FENSTER P.C. Defendants. 18 19 Third parties Jennine Grigsby and Janay Kennedy ask this Court to order plaintiffs 20 Larry Tyrone Brantley and Ellen Brantley to disclose the terms and amount of the 21 confidential settlement agreements the Brantleys entered into with defendants in this case. 22 The Brantleys oppose the motion. The issue is whether Grigsby and Kennedy have 23 demonstrated a sufficiently compelling need for the Court to abrogate the parties’ 24 expectation of confidentiality. Because they have not, the Court DENIES the motion. 25 26 I. BACKGROUND The Brantleys are husband and wife and owners of the property at 3120 San Andreas 27 Drive, Union City, California. Brantleys’ First Amended Complaint (“FAC”) ¶ 1, Dkt. No. 28 125 at 2. They brought suit in state court alleging that defendant Garrett Boyd had Case No. 07-cv-06139 NC ORDER DENYING MOTION TO DISCLOSE SETTLEMENT AMOUNTS 1 orchestrated a fraudulent real estate scheme, stolen $180,000 from them, and forced them 2 into non-judicial foreclosure. See generally Dkt. No. 125. Defendants Sergie Klyazmin, 3 ModoRealty, Inc., Royal Crown Mortgage, Inc., Academy Escrow, Praveen Chandra, and 4 Schwartz & Fenster, P.C., were also named in the action for their roles in the transaction. 5 Id. On December 6, 2007, Chandra removed the action to federal court because the 6 Brantleys claimed violations of federal laws over which federal courts would have original 7 jurisdiction. Dkt. No. 1. Judge Conti reassigned the case to this Court on May 24, 2012. 8 Dkt. No. 277. The Brantleys settled with all defendants except Boyd. Dkt. No. 311 at 1. On 9 10 January 29, 2013, the Brantleys moved for default judgment against Boyd. Dkt. No. 311. Grigsby and Kennedy are plaintiffs in a state court action against the Brantleys 11 12 arising out of a landlord-tenant relationship. Dkt. No. 320 at 3. They allege that their 13 action is related to the property at 3120 San Andreas Drive in Union City, which was the 14 property underlying the fraudulent real estate transaction in this case. Id. Grigsby and 15 Kennedy seek punitive damages against Ellen Brantley in their state court action, and thus 16 seek to learn the amount of the settlements the Brantleys entered into with defendants in 17 this suit. Id. The Brantleys oppose the motion arguing that it undermines the strong public policy 18 19 in favor of promoting settlement through confidentiality and that Grigsby and Kennedy 1 20 have not identified a justifiable reason to abandon this policy. Dkt. No. 321 at 4. II. DISCUSSION 21 The settlements at issue were not filed with the Court, and thus there is no 22 23 presumption of public access as there is with other court documents and records. See Nixon 24 v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978). Unlike a party to litigation seeking 25 1 Defendants and cross-claimants Sergei Klyazmin, Modo Realty, Inc., and Royal Crown Mortgage, 26 Inc., have disclosed the amount of the settlement they paid to the Brantleys in their motion for 27 default judgment against defendant Garrett Boyd. Because the Brantleys settled with three other defendants, however, the Court determines that they have not waived their right to maintain the 28 confidentiality of the other settlement agreements. Case No. 07-cv-06139 NC ORDER DENYING MOTION TO DISCLOSE SETTLEMENT AMOUNTS 2 1 discovery, who would have to meet the relevance threshold under Federal Rule of Civil 2 Procedure 26, or a party to litigation seeking to seal a confidential agreement, who would 3 have to demonstrate good cause or compelling reasons, Grigsby and Kennedy are not 4 parties to this dispute. Moreover, this Court has no power over the discovery mechanisms 5 of the action to which they are parties and in which they seek to use the settlement 6 agreement. In fact, Grigsby and Kennedy cite no authority that would authorize this Court 7 to compel disclosure of a privately settled, confidential settlement agreement to be used in 8 another proceeding in another court. 9 In Flynn v. Portland Gen. Elec. Corp., plaintiffs in an age discrimination suit sought 10 to compel discovery of a settlement of another age discrimination case brought against the 11 defendant. Case No. 88-cv-455 FR, 1989 WL 112802, *1 (D. Or. Sept. 21, 1989). The 12 district court found that “the strong public policy favoring settlement of disputed claims 13 dictates that confidentiality agreements regarding such settlements not be lightly 14 abrogated.” Id. *2. In analyzing the plaintiffs’ claims, the court concluded that plaintiffs 15 had failed to show a sufficient need for the settlement agreement and that the facts of the 16 instant case were sufficiently distinguishable from the case that settled. Id. The plaintiff in 17 the settling case had worked in a different department and was terminated in a different 18 year. Id. at *1. Other district courts have similarly adopted this reasoning and denied 19 subpoenas of confidential settlement agreements where the requesting party has not made a 20 sufficient showing of relevance and need. See Kalinauskas v. Wong, 151 F.R.D. 363, 36621 67 (D. Nev. 1993) (requiring showing of “compelling need to obtain discovery applies to 22 discovery of the specific terms the settlement agreement (i.e., the amount and conditions of 23 the agreement),” but allowing deposition of settlor regarding underlying facts of claim and 24 settlement where lawsuits were near duplicates, deposition would likely lead to relevant 25 evidence of similar conduct, no prejudice or injury likely to result from disclosure, and the 26 agreement provided that a court could order disclosure); Barbine v. Keystone Quality 27 Transp., Case No. 03-cv-3426, 2004 WL 834709, *1 (E.D. Pa. Apr. 16, 2004) (citing Flynn 28 and denying subpoena of confidential settlement agreement absent compelling justification Case No. 07-cv-06139 NC ORDER DENYING MOTION TO DISCLOSE SETTLEMENT AMOUNTS 3 1 where terms of agreement had “no bearing” on requesting party’s claims, employer’s 2 decision-making process, or employee experience); Hasbrouck v. BankAmerica Hous. 3 Servs., 187 F.R.D. 453, 461-62 aff'd sub nom. Hasbrouck v. BankAmerica Hous. Servs., 4 Inc., 190 F.R.D. 42 (N.D.N.Y. 1999) (denying defendants’ motion to compel discovery of 5 the terms and circumstances surrounding settlement “[b]ased upon the strong showing of 6 good cause made by settling parties plaintiff and third party, substantial public interest in 7 maintaining confidentiality of settlements, and the slight, if any, relevance demonstrated by 8 [defendants]”). 9 Here, Grigsby and Kennedy have not shown how the circumstances underlying the 10 Brantleys’ settlements with defendants in this case are relevant to their landlord-tenant 11 dispute with the Brantleys. Grigsby and Kennedy assert that they seek the total amount of 12 the settlements in order to calculate punitive damages against Ellen Brantley, but the 13 specific terms and amount of a settlement agreement have been denied by other district 14 courts even where the requesting party has shown that the facts of the cases are similar and 15 disclosure is warranted by the terms of the agreement. In the absence of any compelling 16 reason proffered by Grigsby and Kennedy to order confidential terms of a private agreement 17 disclosed, and in light of the Brantleys’ objection, the Court DENIES the motion. 18 IT IS SO ORDERED. 19 Date: April 25, 2013 _________________________ Nathanael M. Cousins United States Magistrate Judge 20 21 22 23 24 25 26 27 28 Case No. 07-cv-06139 NC ORDER DENYING MOTION TO DISCLOSE SETTLEMENT AMOUNTS 4

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