Hoey et al v. Sunrise Senior Living et al

Filing 55

ORDER Granting Plaintiff's Motion for Enforcement of Settlement Agreement 48 . Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DENISE HOEY, Attorney in Fact and
Next Friend of DELPHINE KAISER,
Plaintiff,
V.

Case No. 11-CV-13740
Honorable Denise Page Hood

SUNRISE SENIOR LIVING MANAGEMENT,
INC.,
Defendant.
/
ORDER GRANTING PLAINTIFF’S MOTION FOR ENFORCEMENT OF
SETTLEMENT AGREEMENT
I.

INTRODUCTION
Plaintiff contends that Defendant has not complied with the terms of their settlement

agreement. Now before the Court is Plaintiff’s Motion for Enforcement of Settlement Agreement,
Entry of Judgment in Full, and Sanctions, filed October 25, 2012. For the reasons stated below,
Plaintiff’s Motion to Enforce Settlement Agreement is GRANTED.
II.

BACKGROUND
On August 8, 2012, the parties appeared before Magistrate Judge Laurie J. Michelson.

Plaintiff asserts that the only terms discussed at the settlement conference were that Defendant
would pay a $225,000.00 settlement in six monthly installments, beginning September 30, 2012.
Defendant claims that “[s]pecific concerns and conditions were communicated [during the
settlement conference] including, but not limited to, Defendant’s expectation that a Release would
be signed by Plaintiff regarding confidentiality and a possible Medicare lien.” [Docket No. 50, Pg
ID 908]. Defendants further note that “implicit” in these communications was the expectation that

the parties would memorialize the settlement with standard and necessary terms. The parties
accepted the settlement terms on September 10, 2012.
Apparently this implication that a confidentiality provision and a Medicare lien provision
would be included in a release was not shared by both parties. On August 14, 2012, Defendant sent
a proposed settlement agreement that included additions such as Medicare hold-backs, indemnity
and hold harmless provisions, and a confidentiality agreement enforced by liquidated damages.
Payment was conditioned on Plaintiff’s assent to these terms. Plaintiff did not agree to these terms.
Plaintiff notes that she attempted to cooperate with Defendant by providing a second proposed
settlement agreement that provided for full release, indemnity, and a hold harmless agreement.
Defendant did not accept the terms of this agreement. To date, Defendant has not made the
September 30, October 30, or November 30 payments under the settlement agreement.
III.

ANALYSIS
Plaintiff argues that Defendant cannot unilaterally add terms to the settlement agreement

after the parties have already agreed to the essential terms. Defendant agrees that the parties reached
an agreement before the Magistrate Judge, but believes that the parties were left to memorialize their
agreement. Defendant concedes that the parties agree as to the confidentiality provision, but
disagree as to Medicare liens, Plaintiff’s authority to execute the agreement, that the settlement
reflects a compromise, and application of Michigan law. Defendant argues that the payment
schedule is rendered impossible given the parties’ dispute and asks the Court to modify it.
“Agreements settling litigation are solemn undertakings, invoking a duty upon the involved
lawyers, as officers of the court, to make every reasonable effort to see that the agreed terms are
fully and timely carried out.” Aro Corp. v. Allied Witan Co., 531 F.2d 1368, 1372 (6th Cir. 1976).

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The Court has power to summarily enforce a settlement agreement; however, when material facts
are in dispute, such as whether an agreement even existed, the court should hold an evidentiary
hearing. Kukla v. National Distillers Products Co., 483 F.2d 619, 621–22 (6th Cir.1973).
Therefore, the initial inquiry for the Court is whether an agreement has been reached on all material
terms. RE/MAX Int'l, Inc. v. Realty One, Inc., 271 F.3d 633, 645–46 (6th Cir. 2001) (citing Brock
v. Scheuner Corp., 841 F.2d 151, 154 (6th Cir. 1988)).
“[S]ummary enforcement of a settlement agreement [is] appropriate where no substantial
dispute exists regarding the entry into and terms of an agreement.” Id. (citing Kukla, 483 F.2d at
621). A settlement is not deemed unenforceable simply because the parties have not memorialized
it. Id. at 646; see also Scholnick's Importers-Clothiers, Inc. v. Lent, 130 Mich. App. 104, 109 (1983)
(“where agreement has been expressed on all the essential terms of the contract, the mere fact that
the parties manifest an intention to prepare a written memorial of their agreement does not render
the oral contract unenforceable merely because the writing is never prepared.”). The parties are
bound to the settlement agreement once they have agreed to all the material terms. Id. The Court
“must enforce the settlement as agreed to by the parties and is not permitted to alter the terms of the
agreement.” Brock v. Scheuner Corp., 841 F.2d 151, 154 (6th Cir. 1988). The Court may only
reform a settlement agreement if the one attacking it bears the burden of “showing that the contract
he had made is tainted with invalidity, either by fraud . . . or by a mutual mistake . . . .” Brown v.
County of Genesee, 872 F.2d 169, 174 (6th Cir. 1989) (quoting Callen v. Pennsylvania R.R. Co., 332
U.S. 625, 630 (1948)) (emphasis in original). The intent of the parties to enter into a settlement
agreement is a question of fact. Id.
Neither party has requested an evidentiary hearing. Nor do the parties dispute that an

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agreement was reached as to the amount of the settlement or the pay schedule. Defendant notes that
it communicated Defendant’s expectation that Plaintiff would sign a confidentiality release and
possible Medicare lien. Defendant does not argue that this was part of the parties’ agreement.
Defendant simply contends that it implied that these “necessary terms” would be memorialized into
the settlement agreement in order to protect Defendant’s regarding the Medicare lien and position
contesting liability. Defendant’s belief that these terms would be included in the settlement
agreement does not support its argument that both parties agreed to these terms when the agreement
was made. The transcript is not before the Court so it only has the parties’ conflicting statements
on which to rely.
Defendant does not argue that the additional terms were discussed and accepted by both
parties. The parties only discussed and agreed on two terms. A provision regarding a Medicare lien
and a provision that the settlement is contingent on Plaintiff’s assent to certain terms are not
incidental parts memorializing the settlement agreement.1 Rather, these additions are material
changes to an agreement that has already been reached by the parties. Although the Court
contemplates that the parties are free to memorialize their agreement after reaching a settlement on
the record, Defendant cannot use this time as opportunity to change the essential terms of the
settlement. “[T]he time to [incorporate additional terms and conditions] was in court when the
agreement was placed on the record, not days or weeks thereafter.” Mikonczyk v. Detroit
Newspapers, Inc., 238 Mich. App. 347, 350 (1999). At the settlement conference, Defendant should

1

It does appear that the parties agree on the confidentiality clause and any statements as
to release, indemnification, and that the parties’ agreement reflects a compromise. These
additions appear to only be standard clauses that would not materially change the agreement.
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have made certain that the conditions it now seeks to include were in fact made part of the settlement
agreement. The Court is not in a position to change the parties’ agreement based on Defendant’s
unilateral belief that these terms would somehow be included later. “Once concluded, a settlement
agreement is as binding, conclusive, and final as if it had been incorporated into a judgment.”
Genesis Props. v. Crown Life Ins. Co., No. 98-2370, 2000 U.S. App. LEXIS 1929, *16 (6th Cir. Feb.
8, 2000) (unpublished) (citing Clinton Street Greater Bethlehem Church v. City of Detroit, 484 F.2d
185, 189 (6th Cir.1973)).
Citing only Michigan law, Plaintiff notes that the Court has inherent authority to impose
sanctions and requests that sanctions be awarded against Defendant for its breach of the settlement
agreement. The Supreme Court has recognized the trial court’s inherent authority to impose
independent sanctions for “conduct before the court and . . . beyond the court’s confines.”
Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991). Such authority is derived from the Court’s
equitable power to control the litigants and ensure the integrity of court proceedings. Dell, Inc. v.
Elles, 2008 U.S. App. LEXIS 27866, *6 (6th Cir. June 10, 2008) (unpublished)(citing Chambers,
501 U.S. at 43). To impose such sanctions requires a finding of bad faith. However, these “powers
must be exercised with restraint and discretion.” Chambers, 501 U.S. at 44.
Plaintiff should not be required to bear the burden of paying attorney fees for Defendant’s
failure to comply with the settlement agreement. The consequences of Defendant’s belief that the
terms would later be included should be borne by Defendant alone. In order to restore Plaintiff to
the same position as she would have been if Defendant had complied with the settlement agreement,
the Court will award the costs and fees of bringing and defending this motion.
IV.

CONCLUSION

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Accordingly,
IT IS ORDERED that Plaintiff’s Motion for Enforcement of the Settlement Agreement is
GRANTED. The parties shall execute a standard and simple release.
IT IS FURTHER ORDERED that any outstanding payments must be made current within
thirty (30) days of this order.
IT IS SO ORDERED.

S/Denise Page Hood
Denise Page Hood
United States District Judge
Dated: February 28, 2013
I hereby certify that a copy of the foregoing document was served upon counsel of record on
February 28, 2013, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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