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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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA United States District Court For the Northern District of California 8 9 10 11 12 13 14 15 16 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. ) ) ) ) ) 17 18 I. INTRODUCTION 19 Now before the Court is plaintiffs Great American Insurance 20 21 Company and Great American Insurance Company of New York's 22 (collectively "Great American") motion for an indicative ruling on 23 a motion to enforce the parties' settlement agreement. 24 is fully briefed 1 and suitable for decision without oral argument, 25 per Civil Local Rule 7-1(b). 26 Court GRANTS Plaintiffs' motion. For the reasons set forth below, the 27 1 28 The motion ECF Nos. 99 ("Mot."), 107 ("Opp'n"), 109 ("Reply"). 1 Defendants' opposition to the motion was due on May 13. On to the motion. 4 week later, on May 21. 5 tardiness. They had two weeks from the date the motion was filed 6 to respond. Plaintiffs filed their notice only a day after that 7 deadline passed, but Defendants still took another week to file 8 United States District Court May 14, Plaintiffs filed a notice of Defendants' failure to respond 3 For the Northern District of California 2 their opposition. 9 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 10 to Plaintiffs' motion, an opposition to a motion to enforce the 11 same settlement in a related case in San Mateo Superior Court. 12 Changs have previously violated the Civil Local Rules. 13 occasion, the Court instructed the Changs to comply with the Civil 14 Local Rules and warned that future violations might carry 15 consequences. 16 Court will disregard Defendants' opposition and treat Plaintiffs' 17 motion as unopposed. 18 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- 19 reply. ECF No. 112. Their filing does not specify any reason that 20 a sur-reply is necessary or appropriate. 21 merely attach a sur-reply they filed in the proceedings before the 22 Superior Court. 23 Local Rules, which prohibit additional filings after a reply has 24 been filed without Court approval (there are narrow exceptions that 25 do not apply here). 26 objected to the filing and moved to strike it. 27 believed a sur-reply was necessary, they should have moved for the 28 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). 2 Great American has If the Changs They did 1 not do so. Thus the Court SUSTAINS Great American's objection and 2 STRIKES the sur-reply. The Court notes, however, that if it were to consider the sur- 3 Changs' notice of their sur-reply asks the Court to postpone ruling 6 on Great American's motion pending resolution of a motion to 7 enforce the same settlement agreement in San Mateo County Superior 8 United States District Court reply, it would not alter the Court's decision. 5 For the Northern District of California 4 Indeed, the Court. 9 "presumably have a controlling effect on Great American's motion." The Changs argue that the state court's ruling would 10 Id. Great American has submitted and requested judicial notice of 11 the minute orders on the motion to enforce the settlement in San 12 Mateo County Superior Court. 13 American's request, as the facts for which it requests judicial 14 notice can be readily determined from sources whose accuracy cannot 15 reasonably be questioned. 16 notice of matters of record in related court proceedings. 17 e.g., Holder v. Holder, 305 F.3d 854, 866 (9th Cir. 2002). 18 the Court takes judicial notice of the fact that the motion to 19 enforce the settlement in San Mateo Superior Court has been 20 granted. 21 effect, then Great American's motion should be granted in this 22 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 23 24 25 II. BACKGROUND This case involves an insurance coverage dispute. Great 26 American sued for a declaration that they do not owe a duty to 27 defend or indemnify defendants Michael and Roxanne Chang 28 (collectively the "Changs") in underlying state court actions 3 1-2. 3 favor Great American. 4 against the Changs and in favor of Great American on December 13, 5 2013. 6 judgment, ECF No. 92, but simultaneously pursued settlement 7 discussions in this action as well as in two other lawsuits: the 8 United States District Court regarding the contamination of the Changs' property. 2 For the Northern District of California 1 SJ Order at underlying lawsuit (Kartal v. Chang, San Mateo County Superior 9 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 10 against Farmers Insurance Exchange and Truck Insurance Exchange 11 (collectively "Farmers") (Chang v. Farmers Insurance Exchange, San 12 Mateo County Superior Court Case No. CIV 489065). Mot. at 3. In January 2014, the San Mateo County Superior Court held a 13 14 status conference jointly for the Kartal and Farmers cases. In 15 attendance were Michael Chang, the other parties to the Kartal 16 case, Farmers, and Great American. 17 5-7; 100 ("Baron Decl.") ¶¶ 4-5. 18 Insurance Company ("Fireman's Fund") participated by telephone. 19 ECF No. 104 ("Plevin Decl.") ¶¶ 6-8. 20 the Changs, Great American, Farmers, and Fireman's Fund agreed to a 21 settlement that resolved all claims between the Changs and Great 22 American in this case and the pending appeal. 23 Scher Decl. ¶¶ 5-9; ECF No. 103 ("Schwartz Decl.") ¶¶ 8-9. 24 January 27, Mr. Chang appeared in the Kartal case before the San 25 Mateo County Superior Court. 26 testified that he had agreed to the basic terms of the settlement 27 and had no questions about it. 28 /// 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 4 1 6:22-7:12. 2 2 expressed in a written document, which would be drafted initially 3 by Great American's counsel. The Changs' counsel hoped the 4 settlement document could be formalized quickly because the Changs 5 needed it to obtain a refinancing loan. 6 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 7 United States District Court For the Northern District of California 8 settlement document to counsel for the Changs, Farmers, and 9 Fireman's Fund. Baron Decl. Exs. 2-3. On February 4, 2014, the 10 Changs' counsel returned a copy of the signature page signed by 11 both Michael and Roxanne Chang. 12 counsel followed up with another email on February 12 stating that, 13 with regard to the Farmers and Great American cases, "The facts are 14 simple. 15 Baron Decl. Ex. 6. 16 have all executed the same settlement document signed by the 17 Changs. 18 by the parties contained blank spaces for certain details (such as 19 the policy numbers of the insurance policies at issue). 20 Decl. Exs. 5, 7. 21 to the wording of the settlement agreement, which were proposed by 22 the Changs' attorney. 23 master overseeing the settlement negotiations in San Mateo County 24 Superior Court informed counsel for Great American that the Changs 25 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 26 2 27 28 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. 5 1 they refused to sign the finalized document. Id. ¶ 17. 2 3 III. LEGAL STANDARD Great American, recognizing that the Court may lack 4 pending, moves for an indicative ruling under Federal Rule of Civil 7 Procedure 62.1. 8 United States District Court jurisdiction to enforce the settlement while the Changs' appeal is 6 For the Northern District of California 5 is made but the court lacks authority to grant it because an appeal 9 is pending, the court may do one of three things: (1) defer Under Rule 62.1, when a timely motion for relief 10 consideration of the motion, (2) deny the motion, or (3) state 11 either that it would grant the motion if the court of appeals were 12 to remand for that purpose or that the motion raises substantial 13 issues. 14 grant a motion to enforce the settlement, were the Ninth Circuit to 15 remand for that purpose. Great American requests that the Court state that it would 16 17 IV. DISCUSSION "[I]t is well settled that a court has inherent power to 18 19 enforce summarily a settlement agreement involving an action 20 pending before it." 21 1985). 22 parties have agreed, if one of them "later refuse[s] to execute a 23 formal agreement to dismiss the action and failed to file a timely 24 response to defendant's motion to enforce the settlement 25 agreement." 26 701, 702 (9th Cir. 2011). 27 here. 28 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 6 the final document. 3 response to the motion to enforce the settlement. 4 not dispute their assent to the settlement terms, nor do they 5 provide any reason that the Court should disregard it. 6 Mateo Superior Court, which they argue controls enforcement of the 7 settlement, has also decided to enforce it. 8 United States District Court material terms of the settlement, but they now refuse to execute 2 For the Northern District of California 1 willingness to enforce the settlement may help the Ninth Circuit to 9 streamline, or perhaps dismiss entirely, the Changs' appeal, the 10 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. 11 12 13 V. CONCLUSION For the reasons set forth above, Defendant Great American's 14 motion for an indicative ruling is GRANTED. If the Court of 15 Appeals were to remand this case for consideration of enforcement 16 of the settlement, the Court would enforce the settlement to which 17 the parties have agreed. 18 19 IT IS SO ORDERED. 20 21 Dated: July 1, 2014 22 UNITED STATES DISTRICT JUDGE 23 24 25 26 27 28 7

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