Escobar v. Credit Card Receivables Fund Incorporated, et al

Filing 26

*ORDER Setting Evidentiary Hearing on Defendant's Ore Tenus Motion to Set Aside Oral Settlement Agreement Between Counsel Based Upon Alleged Fraud. Signed by Magistrate Judge Jonathan Goodman on 10/19/2011. (dkc)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-22313-CIV-GRAHAM/GOODMAN

JAIME ESCOBAR,
Plaintiff,
v.
CREDIT CARD RECEIVABLES FUND INC., et al.,
Defendants.
__________________________/
ORDER SETTING EVIDENTIARY HEARING ON ORE
TENUS MOTION TO SET ASIDE ORAL SETTLEMENT
AGREEMENT BETWEEN COUNSEL BASED UPON ALLEGED FRAUD
This matter is before me on Defendant’s Ore Tenus Motion to Set Aside Oral
Settlement Agreement Between Counsel Based Upon Alleged Fraud. 1 For the reasons
below, it is hereby ORDERED and ADJUDGED that an evidentiary hearing on the
motion is set before the Undersigned for Tuesday, November 1, 2011 at 10:00 a.m. at the
C. Clyde Atkins Building and United States Courthouse, 301 North Miami Avenue,
Miami, Florida. The parties are directed to review and adhere to the requirements below,
which were originally announced during a telephonic conference held by the
Undersigned on Tuesday, October 18, 2011. (DE# 24.)

1

The Honorable Donald L. Graham, United States District Judge, referred this
matter to me for a settlement conference on October 5, 2011. (DE# 15.) As will be
explained in additional detail below, this motion arose out of related settlement
negotiations.

I.

BACKGROUND
The following basic facts are taken from the parties’ filings and counsel’s

representations at the October 18, 2011 telephonic status conference. This case involves
Plaintiff’s Fair Debt Collection Practices Act claims again Defendant, a debt collection
agency. (DE# 1.) Plaintiff alleges that Defendant violated the FDCPA by garnishing his
bank account in an attempt to collect on a state court default judgment. The judgment
was obtained against “Jaime E. Escobar” 2 in connection with a defaulted Shell credit card
account originally held by Citibank. Plaintiff claims that he has no middle initial and
therefore the judgment is not enforceable against him and that, in fact, he did not incur
the debt in question.
This matter was originally referred to me by the District Court to conduct a
settlement conference. (DE# 15.) Pursuant to the order of reference, the Undersigned
scheduled a settlement conference for Tuesday, October 18, 2011. (DE# 17.) The
Undersigned subsequently cancelled the settlement conference at the request of the
parties. (DE# 22.)
On Monday, October 17, 2011, counsel jointly phoned Chambers twice. During
the first phone call, the parties informed the Undersigned’s law clerk that the parties were
“about 85% settled,” believed they would shortly be completely settled, and asked if the
hearing could be cancelled. Counsel also offered to make an appropriate settlement filing
in support of their request, if necessary. The Undersigned’s law clerk requested that
2

Plaintiff’s complaint identifies the name on the judgment and writ of garnishment
as “Jaimie E. Escobar,” while Defendant’s answer contains the name “Jaime A. Escobar.”
(DE# 1; DE# 7.) Neither the judgment nor the writ of garnishment appear to be in the
Court file and therefore it is unclear which middle initial was on either document.
Because Plaintiff contends that he does not have a middle name, the exact middle initial
used does not appear to be important.
2

counsel call again, if and when they are able to report that the parties are 100% settled
(a.k.a. actually settled).
Shortly thereafter, counsel again jointly phoned chambers to report that they had
settled the case and were now merely waiting for their clients to sign the settlement
agreement. Counsel reported to the law clerk that they would affirmatively recommend
to their clients that they sign the agreement. At the Undersigned’s instruction, the law
clerk informed the parties that the hearing would be cancelled and the Undersigned
issued a notice cancelling the hearing immediately after. (DE# 22.)
The next day – the day originally set aside for the settlement conference – counsel
again jointly phoned Chambers at around 2:00 p.m. Counsel informed the Court’s law
clerk that, as of that point, Plaintiff’s counsel took the position that the case was settled
while Defendant’s counsel adopted a contrary position. The Undersigned immediately
scheduled a telephonic status conference regarding settlement for later that day at 4:00
p.m. to discuss this issue. (DE# 23.)
At the hearing, Defendant’s counsel conceded that he and Plaintiff’s counsel had
reached an oral settlement agreement on October 17, 2011.

But, according to

Defendant’s counsel, the agreement should be set aside because it was obtained by fraud.
Defendant’s counsel explained that, after reaching the settlement agreement, his client
obtained copies of two documents which demonstrate that Plaintiff did, in fact, incur the
original debt and had falsely claimed otherwise in this lawsuit.
The first document is a copy of the original signed Shell credit card application.
The second document is a copy of a signed warranty deed involving property formerly
owned by Plaintiff. Defendant contends that the signatures on these documents match,

3

thus demonstrating that Plaintiff was the individual who originally applied for, received,
and then defaulted on the Shell credit card account. It is on that basis – that Plaintiff
fraudulently induced Defendant to settle based upon a misrepresentation that Plaintiff
never incurred the original debt – that Defendant argues the settlement should be set
aside.
Plaintiff’s counsel stated that his client had not seen the documents in question as
of the time of the hearing, but that his client remained steadfast in his position that he
never applied for the Shell credit card. Plaintiff’s counsel offered to make his client
available at the hearing to testify to this fact. Defendant’s counsel agreed an evidentiary
hearing was appropriate and that, as the moving party, it is Defendant’s burden to prove
that the settlement should be set aside due to fraud. 3
II.

NECESSITY FOR AN EVIDENTIARY HEARING
At the telephonic status conference, the Undersigned concluded that an

evidentiary hearing on Defendant’s ore tenus motion was necessary. After consulting
with counsel (who both appeared to strongly prefer this option instead of settlement), the
Undersigned ORDERED the following:
(1) The Undersigned will hold an evidentiary hearing on Defendant’s ore tenus
motion to set aside the settlement due to fraud on Tuesday, November 1,
2011 at 10:00 a.m. at the C. Clyde Atkins Building and United States
Courthouse, 301 North Miami Avenue, Miami, Florida.

3

The Court noted at the hearing that Defendant could submit a brief appropriate
memorandum if it concluded that the burden to enforce the oral settlement agreement
belonged to Plaintiff. Defendant, however, must do so no later than 5 days before the
hearing date so that Plaintiff can then respond no later than 2 days before the hearing
date.
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(2) At this hearing 4, the Court will hear from the parties’ witnesses and, if
admissible, receive into evidence appropriate documentary evidence.
(3) The parties must exchange any documentary evidence which they intend to
introduce into evidence at the hearing no later than 5 days before the hearing
date.
(4) The parties must meet at least 3 days before the hearing date and consider
whether they can stipulate to the authenticity and admissibility of any
proposed documentary evidence.

The parties may, of course, insist on

objecting to admission of a particular document where there is a genuine
dispute as to the document’s authenticity. However, the Court expects that the
parties will exercise appropriate professional discretion if no such genuine
dispute exists.
(5) The parties must discuss the continued possibility of settlement when they
meet and confer regarding document authenticity.

4

The hearing will address, among other issues, what representations Plaintiff made
about whether he signed the Shell credit card application, whether he ever received any
bills for charges on the credit card, whether he offered any evidence (documentary or
otherwise) to support his position that he never applied for the Shell credit card. In
addition, the Court wants to hear evidence on whether Defendant ever conditioned the
oral settlement agreement on its understanding that Plaintiff did not sign the credit card
application.
5

In addition, if the parties settle this case before the evidentiary hearing, they are
directed to immediately alert the Undersigned’s Chambers by telephone.
DONE AND ORDERED in Chambers, at Miami, Florida, October 19, 2011.

Copies furnished to:
The Honorable Donald Graham
All counsel of record

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