Ridino v. Sovereign Bank

Filing 33

Magistrate Judge Marianne B. Bowler: ORDER entered. MEMORANDUM AND ORDER RE:DEFENDANTS MOTION TO ENFORCE SETTLEMENT DOCKET ENTRY # 26) is ALLOWED; PLAINTIFFS MOTION TO DECLARE TERMS OF MEDIATION VOID(DOCKET ENTRY # 27)is DENIED.(Feeney, Eileen)

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS
ANTONIO RIDINO,
Plaintiff,
v.
CIVIL ACTION NO.
10-10700-MBB
SOVEREIGN BANK,
Defendant.
MEMORANDUM AND ORDER RE:
DEFENDANT’S MOTION TO ENFORCE SETTLEMENT
(DOCKET ENTRY # 26); PLAINTIFF’S MOTION
TO DECLARE TERMS OF MEDIATION VOID
(DOCKET ENTRY # 27)

August 3, 2011

BOWLER, U.S.M.J.
Defendant Sovereign Bank (“defendant”) seeks to enforce a
settlement agreement with plaintiff Antonio Ridino (“plaintiff”).
(Docket Entry # 26).

The parties agreed to participate in the

court’s Alternative Dispute Resolution program.

As set forth in

the transcript of the February 16, 2011 proceeding, plaintiff and
his counsel agreed to the settlement in open court.
Entry # 23).

(Docket

On February 28, 2011, plaintiff filed objections to

the settlement agreement.

(Docket Entry # 25).

On April 1,

2011, plaintiff filed a more detailed motion seeking to declare
the terms of the settlement void.

(Docket Entry # 27).

PROCEDURAL BACKGROUND
Plaintiff filed this action in Massachusetts Superior Court
(Suffolk County) in March 2010.

(Docket Entry # 9).

In April

2010, defendant filed a timely notice of removal to federal court
on the basis of diversity jurisdiction.
Plaintiff seeks damages for:

(Docket Entry # 1).

breach of contract of a mortgage

(Count I); defendant’s negligence that damaged plaintiff’s credit
(Count II); emotional distress caused by defendant’s misconduct
(Count III); and defendant’s violation of Massachusetts General
Law Chapter 93A (Count V).

(Docket Entry # 9).

Plaintiff also

seeks a preliminary injunction to prevent defendant from
assessing late fees when plaintiff paid the amount that he
believed was due (Count IV).
The case was referred for Alternative Dispute Resolution on
October 28, 2010.

(Docket Entry # 14).

The matter was assigned

to a magistrate judge and the mediation took place on February
16, 2011.
reached.

After a successful mediation, a settlement was
(Docket Entry # 21).

The terms were recorded in open

court and a transcript was prepared.

(Docket Entry # 23).

STANDARD OF REVIEW
If one side refuses to honor the terms of a valid settlement
before a case is dismissed, the nonbreaching party may file a
motion to enforce the settlement.

See Fidelity & Guaranty Ins.

Co. v. Star Equip. Corp., 541 F.3d 1, 5 (1st Cir. 2008).

2

If

there is no dispute of material fact relating to the existence or
material terms of the settlement, then the court may summarily
enforce the agreement.

See Bistany v. PNC Bank, NA, 585

F.Supp.2d 179, 182 (D.Mass. 2008).

“When a genuinely disputed

question of material fact does exist, the court should hold a
hearing and resolve the contested factual issues.”

See Fidelity

& Guaranty Ins. Co. v. Star Equip. Corp., 541 F.3d at 5.

As set

out below, there is no material factual dispute regarding the
existence of the material terms of the settlement.
FACTUAL BACKGROUND
In order to raise capital to develop a water purification
system, plaintiff applied for and received a mortgage from
Compass Bank on his property in East Falmouth (“the property”).
(Docket Entry # 9, Complaint, ¶ 7; Docket Entry # 7, ¶ 7).

The

loan had a fixed interest rate and repayment term of 15 years.
(Docket Entry # 9, Complaint, ¶ 8, Docket Entry # 7, ¶ 8).
Defendant later acquired Compass Bank and assumed the loan;
however, the terms and payment policies remained the same.
(Docket Entry # 9, Complaint, ¶ 10, Docket Entry # 7, ¶ 10).
In 2008, defendant informed plaintiff that it had not
received proof of insurance on the property.
Complaint, ¶ 13; Docket Entry # 7, ¶ 13).

(Docket Entry # 9,

In 2009, defendant

obtained a policy for the property and raised plaintiff’s monthly
bill to cover the expense.

(Docket Entry # 9, Complaint ¶ 17;

3

Docket Entry # 7, ¶ 17).

The dispute continued for the next two

years, culminating on December 7, 2009, when defendant sent
plaintiff a letter stating that he was in default and that
continued nonpayment could lead to foreclosure.

(Docket Entry #

27, Ex. C).
At the request of the parties, the case was referred for
Alternative Dispute Resolution on October 28, 2010.
Entry # 14).

(Docket

On February 16, 2011, a mediation occurred between

plaintiff and defendant before a magistrate judge.
represented by his counsel of record.1

Plaintiff was

(Docket Entry # 26, p.

7).
A settlement was reached that was agreed to by all parties,
including both plaintiff and his counsel of record.
Entry # 23).

(Docket

The settlement was agreed to in open court and

included the following terms:

the mortgage would be rewritten in

a loan modification with a fixed interest rate of 4% for the 15
year term of the loan; plaintiff would complete the requisite
loan modification paperwork; defendant would pay plaintiff $5,000
in attorney’s fees; and defendant would provide a letter on its
stationery stating that the loan modification was not due to any

1

According to defendant, another attorney was also present on
plaintiff’s behalf. Whether or not there was an additional
attorney present however is not material to the resolution of the
pending motions and, in any event, is resolved in plaintiff’s
favor.
4

lack of ability to pay on the part of plaintiff.
23).

(Docket Entry #

The transcript reads as follows:
[Defense counsel]: The mortgage loan for the property in
East Falmouth and the outstanding balance will be rewritten
in a loan modification refinance. There will be no closing
costs to the borrower associated with that.
The new loan terms are as follows: there will be a fixed
interest rate of four percent for the life of the loan.
There will be a 15 year amortization period. The
modification will be rewritten at the principle [sic]
balance outstanding at the time of modification . . .
The terms of the settlement and the loan modification
refinancing are subject to underwriting review and those
loan modification criteria that Sovereign Bank has for this
type of settlement, and in order for Sovereign to undertake
that review, the plaintiff will need to fill out and
complete and sign a loan modification application that I
will provide to plaintiff’s counsel, and that may include
backup information, as called for in the application
document.
The bank has agreed to make a payment to reimburse
attorney’s fees to the plaintiff in the amount of $5,000,
and the bank, Sovereign Bank, has also agreed to provide a
letter on its letterhead that is a letter of explanation
regarding any late reporting that it made on the plaintiff’s
mortgage account, and will also address the loan
modification status of this loan, if desired by the
plaintiff.
The Court: Just to expand on that a little bit, the letter
will provide a mutually-agreeable language that the
reporting of late payments was not due to the failure of the
plaintiff to make timely payments, it was because
information crossed in the mail or some other mutuallyagreeable explanation. The letter will provide that it can
be used by the plaintiff for any purpose, and that the loan
modification was made to resolve the dispute, not due to any
lack of ability to pay . . .
The Court: Mr. Ridino, do you agree with the terms of the
settlement? . . .

5

Plaintiff:

Yes, your Honor

The Court:

All right.

And counsel?

[Plaintiff’s counsel]: Yes. On behalf of Mr. Ridino, I
also agree with the terms of the settlement, and I’ll work
with Attorney Kennedy to effectuate the settlement agreement
and file the stipulation of dismissal in due coursel
(Docket Entry # 23).

On February 16, 2011, the magistrate judge

entered a Report of Alternative Dispute Resolution Provider
checking the appropriate box that a settlement had been reached.
(Docket Entry # 21).
On February 28, 2011, plaintiff filed the aforementioned
objections to the settlement pro se.

(Docket Entry # 25).

On

the same date, plaintiff’s counsel of record filed a notice of
withdrawal.

(Docket Entry # 22).

On March 29, 2011, defendant

filed the motion to enforce the settlement agreement.
Entry # 26).

(Docket

On April 1, 2011, plaintiff filed the motion to

void the terms of the settlement.

(Docket Entry # 27).

Defendant filed an opposition to plaintiff’s motion on April 14,
2011.

(Docket Entry # 30).

Plaintiff filed a pro se opposition

to defendant’s opposition on May 4, 2011.

On May 5, 2011, this

court held a hearing and took the motions (Docket Entry ## 26 and
27) under advisement.

6

DISCUSSION
I.

Law Governing Settlement Agreements
Public policy favors the enforcement of settlement

agreements to avoid the time and cost associated with litigation.
See Bistany v. PNC Bank, NA, 585 F.Supp.2d at 182.

“An

enforceable settlement agreement arises in Massachusetts when all
of the parties to be bound mutually assent to all material terms,
even if those terms are not memorialized in a final writing.”
Id.

While it is conceivable that a settlement might be against

public policy and therefore unenforceable, cases where it might
occur are rare.

See Bandera v. City of Quincy, 344 F.3d 47, 52

(1st Cir. 2003) (stating public policy exceptions rare but
conceivable); see, e.g., EEOC v. Astra USA, 94 F.3d 738, 744-45
(1st Cir. 1996) (clause barring the plaintiffs from assisting
EEOC in sexual harassment case unenforceable due to public
policy).

Agreements may also be unenforceable if the settlement

was entered into under coercion or where the authority of the
attorney to enter into the agreement is disputed.

See Bistany v.

PNC Bank, NA, 585 F.Supp.2d at 182.
“Settlement agreements enjoy great favor with the courts as
a preferred alternative to costly, time-consuming litigation.”
Fidelity & Guaranty Ins. Co. v. Star Equip. Corp., 541 F.3d at 5.
Absent coercion or a lack of authority on the part of the
attorney to act on his client’s behalf, “[a]n enforceable

7

settlement agreement arises in Massachusetts when all of the
parties to be bound mutually assent to all material terms, even
if those terms are not memorialized in a final writing.”

Bistany

v. PNC Bank, NA, 585 F.Supp.2d at 182.
II.

Enforceability of the February 16, 2011 Agreement
Defendant seeks to have the terms of the February 16, 2011

settlement agreement enforced while plaintiff seeks to have the
settlement voided.

Throughout the mediation, plaintiff was

represented by counsel.

(Docket Entry # 26, p. 7).

The material

terms of the settlement, including the 4% fixed interest rate,
the 15 year term and the safeguards designed to protect
plaintiff’s creditworthiness were agreed to by both plaintiff and
plaintiff’s counsel in open court.

(Docket Entry # 23).

Plaintiff nevertheless alleges that his representation at
the mediation was inadequate because his attorney did not object
to the terms of the settlement.

(Docket Entry # 27, 3).

Where a

party, directly or indirectly through an authorized attorney,
enters into a settlement voluntarily, he cannot attack the
integrity of the settlement.
Supp. 635, 640 (D.Mass. 1995).

In re Mal de Mer Fisheries, 884 F.
Therefore, even if the

representation were inadequate, which there is no evidence that
it was, it would not void the settlement because plaintiff
entered into it voluntarily.

8

Plaintiff also suggests that both his attorney and
defendant’s attorney misled him about the loan modification.
(Docket Entry # 32, p. 2).

There is no evidence that either

attorney intentionally or negligently misled plaintiff; rather,
it appears that plaintiff is misinformed.

Plaintiff believes

that loan modifications are only available for borrowers in
financial distress and therefore create a negative impression on
his creditworthiness.

(Docket Entry # 25, p. 3).

To support

this assertion, plaintiff points to recent media coverage of loan
modifications and by the standardized form that he received from
defendant.

(Docket Entry # 32, pp. 1-2).

Plaintiff’s concern that receiving a loan modification will
negatively impact his credit however is misguided.2

Defendant

simply requires the completed application to satisfy its own
regulatory and audit requirements.

(Docket Entry # 26, p. 7).

In accordance with defendant’s instructions, plaintiff can
indicate on the application that the modification is due to a
settlement as opposed to plaintiff’s inability to pay, thus
negating any negative impression engendered by the application
for the loan modification.

(Docket Entry # 26, p. 7).

Furthermore, defendant will provide a letter on its stationery
stating that the loan modification was made to resolve a dispute,
2

The concern of any negative impact does not provide a means to
void the settlement. Plaintiff, represented by counsel, and
defendant agreed to all material terms.
9

not due to a lack of ability to pay.

(Docket Entry # 26, Ex. A,

pp. 3-4).
Plaintiff next advances several arguments related to his
dissatisfaction with the terms of the settlement, including his
history of disputes with defendant, the lack of financial benefit
due to the lowering of the interest rate and the lack of full
compensation for attorney’s fees.
7).

(Docket Entry # 27, pp. 3, 5-

Where, as here, the parties have agreed to all material

terms and there is no dispute of material fact, then under
Massachusetts law, there is an enforceable settlement.
PNC Bank, NA, 585 F.Supp.2d at 182.

Bisany v.

As plaintiff voluntarily

entered into the material terms of the settlement, he is bound by
its terms.
CONCLUSION
In accordance with the forgoing discussion, the motion to
enforce the settlement terms filed by the defendant (Docket Entry
# 26) is ALLOWED and the motion to void the settlement filed by
the plaintiff (Docket Entry # 27) is DENIED.
/s/ Marianne B. Bowler
MARIANNE B. BOWLER
United States Magistrate Judge

10