Great America Insurance Company et al v. Chang et al

Filing 117

ORDER by Judge Samuel Conti granting 99 Motion for Indicative Ruling (sclc1, COURT STAFF) (Filed on 7/1/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

For the Northern District of California

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GREAT AMERICAN INSURANCE CO.,
) Case No. 12-cv-00833-SC
and GREAT AMERICAN INSURANCE CO. )
OF NEW YORK,
) ORDER ON MOTION FOR INDICATIVE
) RULING
Plaintiffs,
)
)
v.
)
)
)
MICHAEL CHANG and ROXANNE CHANG, )
)
Defendants.
)
)
)
)
)

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I. INTRODUCTION

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Now before the Court is plaintiffs Great American Insurance

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Company and Great American Insurance Company of New York's

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(collectively "Great American") motion for an indicative ruling on

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a motion to enforce the parties' settlement agreement.

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is fully briefed 1 and suitable for decision without oral argument,

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per Civil Local Rule 7-1(b).

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Court GRANTS Plaintiffs' motion.

For the reasons set forth below, the

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The motion

ECF Nos. 99 ("Mot."), 107 ("Opp'n"), 109 ("Reply").

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Defendants' opposition to the motion was due on May 13.

On

to the motion.

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week later, on May 21.

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tardiness.

They had two weeks from the date the motion was filed

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to respond.

Plaintiffs filed their notice only a day after that

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deadline passed, but Defendants still took another week to file

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United States District Court

May 14, Plaintiffs filed a notice of Defendants' failure to respond

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For the Northern District of California

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their opposition.

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a short document explaining that they attached, as their opposition

ECF No. 106.

Defendants filed their opposition a

Defendants give no explanation for their

Even with the extra time, Defendants filed only

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to Plaintiffs' motion, an opposition to a motion to enforce the

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same settlement in a related case in San Mateo Superior Court.

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Changs have previously violated the Civil Local Rules.

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occasion, the Court instructed the Changs to comply with the Civil

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Local Rules and warned that future violations might carry

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consequences.

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Court will disregard Defendants' opposition and treat Plaintiffs'

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motion as unopposed.

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ECF No. 77 ("SJ Order") at 2 n.1.

The

On that

Accordingly, the

The Changs have also filed a document purporting to be a sur-

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reply.

ECF No. 112.

Their filing does not specify any reason that

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a sur-reply is necessary or appropriate.

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merely attach a sur-reply they filed in the proceedings before the

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Superior Court.

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Local Rules, which prohibit additional filings after a reply has

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been filed without Court approval (there are narrow exceptions that

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do not apply here).

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objected to the filing and moved to strike it.

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believed a sur-reply was necessary, they should have moved for the

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Court's leave to file one and stated the reasons for it.

Once more, the Changs

The Court again directs the Changs to the Civil

Civ. L. R. 7-3(d).

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Great American has
If the Changs

They did

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not do so.

Thus the Court SUSTAINS Great American's objection and

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STRIKES the sur-reply.
The Court notes, however, that if it were to consider the sur-

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Changs' notice of their sur-reply asks the Court to postpone ruling

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on Great American's motion pending resolution of a motion to

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enforce the same settlement agreement in San Mateo County Superior

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United States District Court

reply, it would not alter the Court's decision.

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For the Northern District of California

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Indeed, the

Court.

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"presumably have a controlling effect on Great American's motion."

The Changs argue that the state court's ruling would

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Id.

Great American has submitted and requested judicial notice of

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the minute orders on the motion to enforce the settlement in San

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Mateo County Superior Court.

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American's request, as the facts for which it requests judicial

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notice can be readily determined from sources whose accuracy cannot

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reasonably be questioned.

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notice of matters of record in related court proceedings.

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e.g., Holder v. Holder, 305 F.3d 854, 866 (9th Cir. 2002).

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the Court takes judicial notice of the fact that the motion to

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enforce the settlement in San Mateo Superior Court has been

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granted.

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effect, then Great American's motion should be granted in this

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Court as well.

ECF No. 116.

The Court GRANTS Great

Additionally, courts may take judicial
See,
Thus

If, as the Changs argue, that ruling has controlling

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II. BACKGROUND
This case involves an insurance coverage dispute.

Great

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American sued for a declaration that they do not owe a duty to

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defend or indemnify defendants Michael and Roxanne Chang

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(collectively the "Changs") in underlying state court actions

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favor Great American.

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against the Changs and in favor of Great American on December 13,

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2013.

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judgment, ECF No. 92, but simultaneously pursued settlement

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discussions in this action as well as in two other lawsuits: the

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United States District Court

regarding the contamination of the Changs' property.

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For the Northern District of California

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SJ Order at

underlying lawsuit (Kartal v. Chang, San Mateo County Superior

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Court Case No. CIV 458146) and insurance coverage litigation

One year ago, the Court granted partial summary judgment in

ECF No. 91.

SJ Order.

The Court entered judgment

The Changs filed a notice of appeal from the

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against Farmers Insurance Exchange and Truck Insurance Exchange

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(collectively "Farmers") (Chang v. Farmers Insurance Exchange, San

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Mateo County Superior Court Case No. CIV 489065).

Mot. at 3.

In January 2014, the San Mateo County Superior Court held a

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status conference jointly for the Kartal and Farmers cases.

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attendance were Michael Chang, the other parties to the Kartal

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case, Farmers, and Great American.

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5-7; 100 ("Baron Decl.") ¶¶ 4-5.

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Insurance Company ("Fireman's Fund") participated by telephone.

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ECF No. 104 ("Plevin Decl.") ¶¶ 6-8.

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the Changs, Great American, Farmers, and Fireman's Fund agreed to a

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settlement that resolved all claims between the Changs and Great

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American in this case and the pending appeal.

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Scher Decl. ¶¶ 5-9; ECF No. 103 ("Schwartz Decl.") ¶¶ 8-9.

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January 27, Mr. Chang appeared in the Kartal case before the San

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Mateo County Superior Court.

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testified that he had agreed to the basic terms of the settlement

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and had no questions about it.

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///

ECF Nos. 102 ("Scher Decl.") ¶¶
Counsel for Fireman's Fund

At the settlement conference,

Baron Decl. ¶¶ 6-7;
On

He was sworn as a witness and

ECF No. 105 ("RJN I") Ex. 1 at

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6:22-7:12. 2

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expressed in a written document, which would be drafted initially

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by Great American's counsel. The Changs' counsel hoped the

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settlement document could be formalized quickly because the Changs

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needed it to obtain a refinancing loan.

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Decl. ¶¶ 11-12; Schwartz Decl. ¶¶ 10-11.

The parties agreed that the settlement terms would be

Baron Decl. ¶¶ 9-10, Scher

On January 31, Great American's counsel sent a draft

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United States District Court

For the Northern District of California

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settlement document to counsel for the Changs, Farmers, and

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Fireman's Fund.

Baron Decl. Exs. 2-3.

On February 4, 2014, the

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Changs' counsel returned a copy of the signature page signed by

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both Michael and Roxanne Chang.

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counsel followed up with another email on February 12 stating that,

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with regard to the Farmers and Great American cases, "The facts are

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simple.

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Baron Decl. Ex. 6.

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have all executed the same settlement document signed by the

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Changs.

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by the parties contained blank spaces for certain details (such as

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the policy numbers of the insurance policies at issue).

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Decl. Exs. 5, 7.

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to the wording of the settlement agreement, which were proposed by

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the Changs' attorney.

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master overseeing the settlement negotiations in San Mateo County

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Superior Court informed counsel for Great American that the Changs

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stated that they do not agree to the January 27 settlement and that

Baron Decl. Exs. 4-5.

The Changs'

We met and agreed and settled on January 27, 2014 . . . ."
Great American, Farmers, and Fireman's Fund

Baron Decl. Ex. 7.

The version of the document executed

Baron

The parties also agreed to make certain changes

Baron Decl. ¶ 16.

Subsequently, the special

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The Court GRANTS Great American's request for judicial notice
with respect to Exhibit 1 of its request for judicial notice in
support of its motion, ECF No. 105.

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they refused to sign the finalized document.

Id. ¶ 17.

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III. LEGAL STANDARD
Great American, recognizing that the Court may lack

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pending, moves for an indicative ruling under Federal Rule of Civil

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Procedure 62.1.

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United States District Court

jurisdiction to enforce the settlement while the Changs' appeal is

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For the Northern District of California

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is made but the court lacks authority to grant it because an appeal

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is pending, the court may do one of three things: (1) defer

Under Rule 62.1, when a timely motion for relief

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consideration of the motion, (2) deny the motion, or (3) state

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either that it would grant the motion if the court of appeals were

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to remand for that purpose or that the motion raises substantial

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issues.

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grant a motion to enforce the settlement, were the Ninth Circuit to

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remand for that purpose.

Great American requests that the Court state that it would

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IV. DISCUSSION
"[I]t is well settled that a court has inherent power to

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enforce summarily a settlement agreement involving an action

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pending before it."

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1985).

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parties have agreed, if one of them "later refuse[s] to execute a

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formal agreement to dismiss the action and failed to file a timely

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response to defendant's motion to enforce the settlement

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agreement."

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701, 702 (9th Cir. 2011).

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here.

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settlement, and Michael also by testifying in open court -- to the

In re Suchy, 786 F.2d 900, 903 (9th Cir.

A district court may enforce a settlement to which the

Henderson v. Yard House Glendale, LLC, 456 F. App'x
That is precisely the situation we face

The Changs agreed -- both of them by signing the draft

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the final document.

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response to the motion to enforce the settlement.

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not dispute their assent to the settlement terms, nor do they

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provide any reason that the Court should disregard it.

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Mateo Superior Court, which they argue controls enforcement of the

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settlement, has also decided to enforce it.

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United States District Court

material terms of the settlement, but they now refuse to execute

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For the Northern District of California

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willingness to enforce the settlement may help the Ninth Circuit to

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streamline, or perhaps dismiss entirely, the Changs' appeal, the

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They have also failed to file a timely
The Changs do

The San

Because indicating its

Court finds it appropriate to issue an indicative ruling.

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V. CONCLUSION
For the reasons set forth above, Defendant Great American's

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motion for an indicative ruling is GRANTED.

If the Court of

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Appeals were to remand this case for consideration of enforcement

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of the settlement, the Court would enforce the settlement to which

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the parties have agreed.

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IT IS SO ORDERED.

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Dated: July 1, 2014

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UNITED STATES DISTRICT JUDGE

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