Miles v. Unified School District No. 500, Kansas City, Kansas, et al

Filing 16

MEMORANDUM AND ORDER denying 6 Motion to Enforce; denying 13 Motion for Sanctions. Signed by District Judge Daniel D. Crabtree on 06/06/2018. (mig)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

SUSAN M. MILES,
Plaintiff,
v.

Case No. 17-2685-DDC-TJJ

UNIFIED SCHOOL DISTRICT NO. 500,
KANSAS CITY, KANSAS and
VALERIE CASTILLO,
Defendants.
____________________________________

MEMORANDUM AND ORDER
The court commends parties who can resolve their litigated differences by settlement.
But settlements must be the product of the parties knowingly and voluntarily agreeing to resolve
their dispute. Here, plaintiff Susan M. Miles has filed a lawsuit in our court. She has sued her
former employer—defendant Unified School District No. 500, Kansas City, Kansas (“School
District”)—and her former supervisor—defendant Valerie Castillo. She asserts claims under the
Family Medical Leave Act (“FMLA”), the Americans with Disabilities Act (“ADA”), the
Employee Retirement Income Security Act (“ERISA”), and certain Kansas state employment
laws. See Doc. 1.
In response, defendants have filed a Motion to Enforce Settlement (Doc. 6). It asks the
court to enforce a putative settlement agreement the parties supposedly agreed to before plaintiff
filed this case. Defendants’ motion also asks the court to dismiss this case. In a separate motion,
defendants contend that plaintiff failed to honor Federal Rule of Civil Procedure 11(b)(2) and
thus the court should sanction her. See Doc. 13.

For reasons explained below, the court denies both motions. In part I, the court explains
why it denies defendants’ Motion to Enforce Settlement. And, in part II, the court explains why
it denies the sanctions motion.
I.

Motion to Enforce Settlement
In their Motion to Enforce Settlement, defendants ask the court to enter an order

enforcing a purported settlement agreement. On January 9, 2017, defendants assert, plaintiff and
the School District entered a Mutual Release and Separation Agreement (“Settlement
Agreement”). As part of this agreement, plaintiff voluntarily resigned her position with the
School District and released all claims against the School District and any of its employees—
including Ms. Castillo—for any claims arising from her employment.
Defendants argue that the court “has the power to summarily enforce a settlement
agreement while a case is pending before the court.” Doc. 7 at 4 (citing United States v.
Hardage, 982 F.2d 1491, 1496 (10th Cir. 1993)). But United States v. Hardage involves a
different set of facts than presents itself here. In that case, the United States sued several waste
generators and transporters seeking to require them to clean up a Superfund Site. Id. at 1493.
The waste generators and transporters, in turn, asserted a Third-Party Complaint against a variety
of third-party defendants. Id. While the case was pending before the court, the government
settled with the waste generators and transporters and, likewise, the waste generators and
transporters settled with the third-party defendants. Id. The parties asked the court to enter a
consent decree but one third-party defendant claimed that the settlement between the waste
generators and transporters and it did not bind it because the third-party defendant liaison
counsel—who was the person who agreed to the settlement—did not have the power to negotiate
on that third-party defendant’s behalf. Id. The district court disagreed and entered an order

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approving the consent decree without holding an evidentiary hearing to determine whether the
third-party defendant liaison counsel had the authority to agree to a settlement agreement on
behalf of a third-party defendant. Id. at 1494.
The Tenth Circuit then reversed the district court’s decision, holding that the district court
should have held an evidentiary hearing to determine whether the settlement agreement was
enforceable. Id. at 1497. The Circuit explained, “A trial court has the power to summarily
enforce a settlement agreement entered into by the litigants while the litigation is pending before
it.” Id. (emphasis added). In contrast, defendants, here, assert that the parties entered the
Settlement Agreement before this litigation began. Doc. 7 at 1 (“Accordingly, Defendants
respectfully request an order from this Court enforcing the settlement which Plaintiff and
Defendants entered prior to this litigation . . . .” (emphasis added)).
A Supreme Court case explains why the court cannot enforce the settlement agreement
alleged here. In Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375 (1994), the
parties settled a lawsuit arising from the termination of an agency agreement while that suit was
pending before the district court. Id. at 376. The parties then submitted a Stipulation and Order
of Dismissal with prejudice under Fed. R. Civ. P. 41, and the district judge approved it. Id. at
376–77. So, the case was closed. Id. at 377. Shortly afterward, a dispute arose over the
settlement agreement and the defendant filed a motion to enforce the settlement agreement with
the district court where the case was pending. Id. Plaintiff opposed the motion, arguing that the
district court lacked subject matter jurisdiction. Id. The district court granted the motion to
enforce, explaining that it had “ʻinherent power’” to enter such an order. Id. (quoting district
court decision). The Ninth Circuit affirmed the ruling because the “ʻdistrict court has

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jurisdiction to decide the enforcement motion under its inherent supervisory power.’” Id.
(alterations omitted) (quoting Ninth Circuit opinion).
The Supreme Court granted certiorari and reversed the Ninth Circuit. Id. The Court
explained its reason for reversing the Circuit, beginning with this well-established principle:
“Federal courts are courts of limited jurisdiction. They possess only that power authorized by
Constitution and statute.” Id. The Court held that no Federal Rule of Civil Procedure, federal
statute, or constitutional provision authorizes a court to enforce a settlement agreement after the
parties to the case have dismissed it. Id. at 378.
But defendant argued that the district court had “ancillary jurisdiction” to enforce the
settlement agreement—that is, jurisdiction over matters that are incidental to matters properly
before the court. Id. The Supreme Court disagreed, holding that “ancillary jurisdiction”
provides no basis for the court to enforce the settlement agreement at issue in Kokkonen. Id. at
379. Earlier Supreme Court cases, Kokkonen explained, limited federal courts’ ancillary
jurisdiction to two situations: (1) permitting a court to dispose of claims that are
“interdependent;” and (2) allowing a court to manage its own proceedings, defend its authority,
and enforce its orders. Id. at 379–80. Kokkonen did not qualify for the first scenario because the
dispute over the settlement agreement involved completely different facts than those relied on by
the underlying claim. Id. at 380. Specifically, the original dispute arose from the termination of
the agency agreement; the settlement dispute arose from obligations purportedly imposed by a
settlement agreement. Id.
Kokkonen didn’t qualify under the second scenario either because the settlement
agreement did not invoke or affect the district court’s authority in any way. Id. at 380–81. The
parties already had dismissed the case, so the court lacked any need to manage its own

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proceedings. Id. at 380. And because the court never had referenced or incorporated the
settlement agreement in an order, plaintiff’s alleged breach of the settlement agreement did not
implicate the court’s need to defend its authority or enforce one of its orders. Id. at 381. So, the
Supreme Court concluded, the district court lacked subject matter jurisdiction to enforce the
settlement agreement.
Here, the court finds itself in a situation much like the court in Kokkonen. In both cases,
the party seeking to enforce the settlement claims the court may use its inherent power to enforce
the settlement. And neither party claimed that the Federal Rules of Civil Procedure, a statute in
the United States Code, or any provision in the Constitution authorizes enforcement. The court
concludes, as did Kokkonen, that it cannot use its inherent power to enforce the Settlement
Agreement because failing to enforce it would not invoke or affect the court’s authority in any
way. Nor is the dispute over the Settlement Agreement interdependent with any claim already
pending before the court. The Settlement Agreement claimed by defendants was not formed
while the parties’ case was pending before our court. So, to enforce it would not help the court
manage the proceedings pending before the court. Nor will declining to enforce the purported
agreement threaten the court’s capacity to manage its proceedings. Likewise, not even
defendants claim that the Settlement Agreement is part of some order entered by the court, much
like the agreement in Kokkonen. Finally, the parties’ dispute about enforcing the purported
agreement is unrelated to plaintiff’s underlying claims in the case. In short, the court lacks
subject matter jurisdiction to enforce the purported settlement.
Plaintiff’s response to defendants’ motion suggests a different route. She argues that the
court should treat defendants’ motion as a motion for summary judgment because defendants’
motion asks the court, in effect, to dismiss the case. But, she observes, it relies on materials

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outside the Complaint. Doc. 8 at 4. In their Reply, defendants merely assert that they haven’t
made a motion for summary judgment and simply reiterate that the court has the power to
enforce a settlement agreement summarily. Doc. 12 at 2. Alternatively, defendants suggest, the
court should hold an evidentiary hearing to determine if the settlement agreement is enforceable.
Id. at 10.
While the court readily acknowledges that the “law favors agreements to compromise and
settle disputes,” Lowery v. Cty. of Riley, 738 F. Supp. 2d 1159, 1168 (D. Kan. 2010), that policy
is no substitute for subject matter jurisdiction. See Kokkonen, 511 U.S. at 378. And though
defendants might assert an affirmative defense that would enable them to present this issue by a
properly supported summary judgment motion, the court cannot decide on the current record
whether the parties reached an agreement barring plaintiff from recovering on her claims.
In short, the court denies defendants’ Motion to Enforce Settlement (Doc. 6) and directs
the parties to notify Magistrate Judge James that the case is ready for development of pretrial
procedures.
II.

Motion for Sanctions
This leaves defendants’ motion for sanctions under Fed. R. Civ. P. 11. It contends,

generally, that plaintiff filed this suit frivolously because she released defendants from any
liability before she sued. See Doc. 13 at 2.
The court cannot possibly conclude that defendants deserve sanctions without deciding
the merits of their claim that plaintiff agreed to a settlement. As Part I explained, the court
cannot decide that threshold question on the current record. It thus denies defendants’ Motion
for Sanctions (Doc. 13) without prejudice.

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III.

Conclusion
For reasons explained above, the court denies defendants’ Motion to Enforce Settlement

(Doc. 6) and their Motion for Sanctions (Doc. 13).
IT IS THEREFORE ORDERED BY THE COURT THAT defendants’ Motion to
Enforce Settlement (Doc. 6) is denied.
IT IS FURTHER ORDERED THAT defendants’ Motion for Sanctions (Doc. 13) is
denied.
IT IS SO ORDERED.
Dated this 6th day of June, 2018, at Topeka, Kansas.

s/ Daniel D. Crabtree______
Daniel D. Crabtree
United States District Judge

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