Willis v. Bulk Logistics Inc et al
Filing
72
MEMORANDUM RULING: The Court finds that the compromise is enforceable and grants the Defendants' motion to enforce the settlement. The Court will issue a separate judgment consistent with this ruling. Signed by Judge Elizabeth E Foote on 2/12/2013. (crt,Keifer, K)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
KEITH LENELL WILLIS
CIVIL ACTION NO. 11-cv-00534
VERSUS
JUDGE ELIZABETH ERNY FOOTE
BULK LOGISTICS, INC., ET AL.
MAGISTRATE JUDGE MARK HORNSBY
MEMORANDUM RULING
On October 5, 2012, the court issued a Provisional Order of Dismissal after being
notified the case had settled. [Record Document 64]. The order provided that the case
was administratively closed, but could be reopened upon good cause shown within
ninety days if the settlement was not consummated. Id. On December 18, 2012,
Plaintiff filed a motion to reopen, alleging that the settlement was unenforceable.
[Record Document 65].
On December 20, 2012, the court granted the motion to
reopen and set an evidentiary hearing to determine the enforceability of the settlement.
[Record Document 66]. Defendants subsequently filed a brief in which they moved for
enforcement of the settlement. [Record Document 67].
Plaintiff was not present at the evidentiary hearing despite having been
subpoenaed by his counsel. There were no disputed facts. Plaintiff argued that when
he consented to settle this matter, he was not aware of his obligation incurred in a
pending bankruptcy matter to surrender half of the settlement proceeds to the U.S.
Bankruptcy Trustee. He represents that he would not have agreed to the settlement
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had he been aware of this obligation. After considering the briefs and exhibits, the
Court finds that the settlement is valid and enforceable.
The Court has subject matter jurisdiction to summarily enforce a settlement in a
pending case. Bell v. Schexnayder, 36 F.3d 447, 449 (5th Cir. 1994). As this case was
still pending when Defendant moved to enforce the settlement, this Court has subject
matter jurisdiction. In a diversity case, a federal court applies the forum state’s law to
determine whether a settlement is enforceable.
Stipelcovich v. Sand Dollar Marine,
Inc., 805 F.2d 599, 603 (5th Cir. 1986). Under Louisiana law, the party seeking to
enforce a settlement bears the burden of proof. Suire v. Lafayette City-Parish Consol.
Gov’t, 907 So.2d 37, 55 (La. 2005).
Plaintiff does not dispute the existence of a written settlement agreement.
Accordingly, the Court finds that the e-mails exchanged between the parties satisfy the
writing requirement for a valid compromise.
La. Civ. Code art. 3072.
The only
contested issue is whether the settlement agreement should be rescinded because an
error vitiates Plaintiff's consent. La. Civ. Code art. 3082. A contract is formed by the
consent of the parties established through offer and acceptance. La. Civ. Code art.
1927. Consent may be vitiated by error. La. Civ. Code art. 1948. To vitiate consent, an
error must concern a cause without which the obligation would not have been incurred,
and the other party must have known or should have known about that cause. La. Civ.
Code arts. 1949, 1950.
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The court finds that the cause of Plaintiff’s obligation to dismiss the instant suit
was receipt of what he considered to be the value of the case, considering the risks of
continued litigation and the extent of his injuries. His lack of awareness of the amount
he owed to discharge his bankruptcy may have somehow impacted his subjective
motive to settle, but it does not involve the cause of the settlement. In exchange for
releasing Defendants from his claims in this suit, he bargained for receipt of a certain
sum of money. His valuation of the case would not be changed by an error regarding a
collateral obligation to pay half of that amount to a third party. Accordingly, the error
complained of by Plaintiff does not concern the cause of his obligation, and thus does
not vitiate his consent to settle.
Alternatively, even if his error did touch the cause of his obligation, a unilateral
mistake does not invalidate a settlement. La. Civ. Code art. 1949; Clover Contractors,
Inc., v. James H. Jones-1980, 453 So.2d 983, 985-86 (La. App. 1984).
The party
seeking to enforce the agreement must be aware that the cause with respect to which
the error was made was the principal cause of the contract. Even if Plaintiff’s receipt of
the settlement amount unencumbered by any third party obligations was the principal
cause of his obligation to dismiss the suit, there is no evidence that Defendants knew or
should have known of this cause. The evidence demonstrates that Defendants knew
that the settlement required bankruptcy court approval, but there is no evidence that
they knew or should have known that Plaintiff’s consent was premised on receiving the
settlement amount unencumbered.
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For the foregoing reasons, the Court finds that the compromise is enforceable,
and hereby GRANTS Defendants’ motion to enforce the settlement [Record Document
67].
The court will issue a separate judgment consistent with this ruling.
Done this 12th day of February, 2013 in Shreveport, Louisiana.
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