Hardin v. Mendocino Coast District Hospital et al

Filing 325

ORDER GRANTING IN PART AND DENYING IN PART 295 MOTION TO ENFORCE SETTLEMENT by Judge Jon S. Tigar.(Entered by Judge Jon S. Tigar)(Filed on 12/20/2019)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
ELLEN HARDIN,

7

Plaintiff,

8
v.

9

MENDOCINO COAST DISTRICT
HOSPITAL, et al.,

10
11

United States District Court
Northern District of California

Case No. 17-cv-05554-JST

Defendants.

ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFF’S
MOTION TO ENFORCE
SETTLEMENT AGREEMENT
Re: ECF No. 295

12
13

Before the Court is Plaintiff Ellen Hardin’s motion to enforce settlement agreement. ECF

14

No. 295. As discussed below, the Court concludes that the parties have an enforceable settlement

15

agreement, but that the terms of the agreement are contrary to the position set forth in Hardin’s

16

motion. The Court will therefore grant the motion in part and deny it in part.

17

I.

18

BACKGROUND
Plaintiff Ellen Hardin brings this employment case, including allegations of retaliation

19

under the federal False Claims Act, against her former employer, Mendocino Coast District

20

Hospital (“MCDH”). She has also named the following individuals as defendants: Bob Edwards,

21

MCDH’s chief executive officer; Steve Lund, the president of MCDH’s board of directors; and

22

Wade Sturgeon, MCDH’s chief financial officer.

23

The parties attended a mediation session with a private mediator, Lynn Frank, on

24

September 22, 2019. ECF No. 295 at 10; ECF No. 313-1 ¶ 2; ECF No. 313-2 ¶ 2. The mediator

25

circulated a mediator’s proposal on September 23, 2019.1 ECF No. 313-3; ECF No. 312 ¶ 3.

26

Among other terms, the proposal stated that:

27
28

1

The proposal is erroneously dated September 20, 2019. ECF No. 313-3 at 2.

1

1. Defendant shall pay to Plaintiff the sum of $2,750,000.

2

...

3

3. The payment will be made for personal injury damages to
attorney Twila White’s Client Trust Account pursuant to a Form
1099. Plaintiff or plaintiff’s attorney reserve the option to
structure all or a portion of the settlement proceeds and
defendant shall coordinate with [a] structured annuity planner
with respect to ensuring proper IRS language is included in the
release and assignment not to void using a structured settlement.

4
5
6
7

ECF No. 313-3 at 2 (emphasis added). The remaining terms are not in dispute.

8

On September 27, 2019, Defendants and their counsel signed a revised memorandum of

9

understanding that they sent to the mediator. ECF No. 313-1 ¶ 6; ECF No. 313-2 ¶ 4; ECF No.

10

United States District Court
Northern District of California

11

313-4. The MOU revised paragraphs 1 and 3 as follows:

12

1. MCDH and/or its insurer, BETA Healthcare Group, a California
joint powers agreement (hereinafter “BETA”) shall pay to
Plaintiff the sum of $2,750,000.00 (“Settlement Sum”).

13

...

14

16

3. The Settlement Sum will be paid by check made payable to
“Ellen Hardin and the Trust Account of the Law Office of Twila
S. White.” Appropriate IRS Forms 1099 shall be issued[.]
Plaintiff reserves the option to structure all or a portion of the
settlement proceeds into an annuity.

17

ECF No. 313-4 at 2-3. Notably, Defendants did not include in the revised MOU any reference to

18

their coordination with a structured annuity planner or any other obligations with respect to

19

potentially structuring the settlement.

15

20
21
22
23
24
25
26

Defendants’ counsel state in declarations that, after they sent the revised MOU to the
mediator, they:
explained to her by telephone that meant that Plaintiff was free to
purchase an annuity on her own after receipt of the Settlement Sum
but that Defendants were not interested in taking on the risk of
entering into an Assignment Agreement with a third party because
this was not a personal injury case and the Settlement Sum is fully
taxable. Ms. Frank said she would communicate this to Plaintiff’s
counsel.
ECF No. 313-2 ¶ 5; see also ECF No. 313-1 ¶ 6.

27

Hardin and her counsel signed the revised MOU on October 11, 2019. ECF No. 295 at

28

14-15. The agreement provides for execution of a long-form settlement agreement but further
2

1

provides that, “[u]ntil such time that a long-form settlement agreement is executed by the parties,

2

this executed and accepted short-form settlement agreement shall be treated as an enforceable,

3

binding settlement agreement pursuant to California Code of Civil Procedure Section 664.6 and

4

shall be admissible as evidence for the purpose of enforcing this binding agreement.” Id. at 13-14.
Hardin now “requests that this Court compel compliance with the settlement agreement

5
6

and compel Defendants to properly participate in permitting Plaintiff and her attorney to structure

7

all or part of the settlement proceeds as the agreement requires.” ECF No. 295 at 3. Defendants

8

counter that the “settlement should be enforced without structured payments.” ECF No. 313 at 10.

9

II.

This Court has jurisdiction pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1367.

10

United States District Court
Northern District of California

11

JURISDICTION

III.

LEGAL STANDARD

12

A district court may “enforce summarily an agreement to settle a case pending before it.

13

However, the district court may enforce only complete settlement agreements. Where material

14

facts concerning the existence or terms of an agreement to settle are in dispute, the parties must be

15

allowed an evidentiary hearing.” Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987) (citations and

16

emphasis omitted). “The construction and enforcement of settlement agreements are governed by

17

principles of local law which apply to interpretation of contracts generally.” Jeff D. v. Andrus, 899

18

F.2d 753, 759 (9th Cir. 1989). “Under California law, the intent of the parties determines the

19

meaning of the contract. The relevant intent is ‘objective’ ‒ that is, the intent manifested in the

20

agreement and by surrounding conduct ‒ rather than the subjective beliefs of the parties.” United

21

Commercial Ins. Serv., Inc. v. Paymaster Corp., 962 F.2d 853, 856 (9th Cir. 1992) (citations

22

omitted).

23

IV.

24

DISCUSSION
The parties do not dispute that they all signed the revised MOU containing the language

25

excerpted above. No party has requested an evidentiary hearing, and the Court concludes that

26

there is “no need for an evidentiary hearing on whether an agreement existed, or what its terms

27

were.” Doi v. Halekulani Corp., 276 F.3d 1131, 1139 (9th Cir. 2002).

28

There is also no dispute that the agreement allows Hardin “the option to structure all or a
3

1

portion of the settlement proceedings into an annuity.” ECF No. 295 at 13. The question is

2

whether the agreement requires Defendants to participate in that structuring. The Court concludes

3

that it does not.
The mediator circulated a draft agreement that would have required Defendants to

4
5

“coordinate with [a] structured annuity planner with respect to ensuring proper IRS language is

6

included in the release and assignment not to void using a structured settlement.” ECF No. 313-3

7

at 2. Defendants removed that language when they drafted the revised MOU, essentially making a

8

counteroffer that Hardin could reserve the option to structure the settlement proceeds into an

9

annuity, but that Defendants were not required to participate in that structuring. When Hardin

10

signed Defendants’ revised MOU, she agreed to those terms.
The Court does not reach Hardin’s arguments regarding how to construe an ambiguous

United States District Court
Northern District of California

11
12

contract because the agreement in this case is not ambiguous. It clearly states that the settlement

13

funds would be “paid by check made payable to ‘Ellen Hardin and the Trust Account of the Law

14

Office of Twila S. White.’” ECF No. 295 at 13. Likewise, Defendants clearly rejected the

15

mediator’s proposal that they be required to coordinate with a structured annuity planner. It would

16

be unreasonable to construe the agreement as requiring such coordination.
The parties dispute whether the structured settlement proposed by Hardin is permissible

17
18

under the United States Tax Code, but the Court need not and does not decide that question.2
CONCLUSION

19

Hardin’s motion to enforce the settlement agreement is granted in part and denied in part.

20
21

The parties have an enforceable settlement agreement, but that agreement does not require

22

Defendants to participate in structuring the settlement. To the contrary, the agreement requires

23

only that Defendants “pay to Plaintiff the sum of $2,750,000.00 . . . by check made payable to

24

‘Ellen Hardin and the Trust Account of the Law Office of Twila White.’” ECF No. 313-5 at 9-10.
By January 31, 2019, the parties shall file either a stipulation of dismissal or a one-page

25
26
27
28

2

The Court therefore need not consider the exhibits that Hardin attempted to attach to the
declaration of Traci Kaas, a settlement consultant. The Court notes, however, that the record does
not contain these exhibits despite three efforts by Hardin to file her reply brief. See ECF Nos.
314-16.
4

1

joint statement explaining why they were unable to file such a stipulation. The Court also hereby

2

sets a case management conference on February 11, 2020. That conference will be vacated

3

automatically if a stipulation of dismissal is timely filed. Any continuance of either of these

4

deadlines requires a showing of good cause. All other deadlines and hearings are vacated.

5
6
7
8

IT IS SO ORDERED.
Dated: December 20, 2019
______________________________________
JON S. TIGAR
United States District Judge

9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5