ABF Environmental, Inc. v. Capital One, N.A.

Filing 26

OPINION AND ORDER Denying 17 Plaintiffs' Motion to Enforce Settlement Agreement and for Entry of Judgment of Quiet Title. Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ABF ENVIRONMENTAL, INC.,
Plaintiff,

CASE NO. 17-14048
HON. DENISE PAGE HOOD

v.
CAPITAL ONE, N.A.,
Defendant.
/
OPINION AND ORDER DENYING PLAINTIFFS’ MOTION TO
ENFORCE SETTLEMENT AGREEMENT AND FOR ENTRY OF
JUDGMENT OF QUIET TITLE [#17]

I. BACKGROUND
On December 12, 2017, Plaintiff ABF Environmental, LLC (“ABF”)
commenced this action against Defendant Capital One, N.A. (“Capital One”)
in the Sixth Judicial Circuit Court for Oakland County, Michigan, to quiet
title to the real property located at 4180 Dabish Drive, Lake Orion, Michigan
48362 (the “Property”) pursuant to MCL 600.2932. (Doc # 3, Pg ID 3-4)
Capital One removed this action to federal court on December 15, 2017. Id.
On December 21, 2017, Capital One filed its Answer to ABF’s Complaint, a
Counterclaim against ABF, and a Third-Party Complaint against Tangible
Acquisitions, LLC (“Tangible Acquisitions”) and New York Capital
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Investments, LLC (“New York Capital Investments”) for declaratory
judgment and to quiet title to the Property. (Doc # 5) ABF and Tangible
Acquisitions (collectively, “Plaintiffs”) filed their Answer to Capital One’s
Counterclaim and Third-Party Complaint on March 9, 2018. (Doc # 8) On
March 21, 2018, having received no responsive pleading, Capital One
requested a Clerk’s Entry of Default against New York Capital Investments.
(Doc # 9) The Clerk entered Default against New York Capital Investments
on March 22, 2018. (Doc # 10) On July 3, 2018, Plaintiffs filed a Motion to
Enforce Settlement Agreement and for Entry of Judgment of Quiet Title.
(Doc # 17) This matter is currently before the Court.
According to Plaintiffs, prior to filing their Answer to Defendant’s
Counterclaim and Third-Party Complaint, settlement negotiations took place
between Plaintiffs and Capital One through their attorneys. (Doc # 17, Pg
ID 177) At that time, ABF and Tangible Acquisitions were both represented
by Attorney Paul Carthew, and Capital One was represented by Attorney
Matthew Stromquist. Id. On February 20, 2018, Capital One allegedly
agreed that upon the sale of the Property in the amount of $283,000, it would
pay ABF $75,000 from the proceeds of that transaction. (Doc # 17, Pg ID
177-78) Plaintiffs claim that Attorney Carthew accepted Capital One’s offer
on their behalf through email. Id.
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Capital One denies that a settlement agreement was reached between
the parties. (Doc # 19, Pg ID 254-255) Capital One admits that it attempted
to explore whether settlement was possible. Id. However, Capital One
alleges that it informed ABF that it was no longer interested in settlement
negotiations after discovering that fraudulent quit claim deeds had been
recorded purporting to transfer title to real property it owned. (Doc # 19, Pg
ID 255)
II. ANALYSIS
In order for a federal court to retain jurisdiction over a matter
following a settlement agreement, there must be a basis for jurisdiction.
Kokkonen v. Guardian Life Ins. Co., of America, 511 U.S. 375, 378 (1994).
A district court may retain jurisdiction over a matter that involves a
settlement agreement by: (1) conditioning dismissal, when it is pursuant to
Federal Rule of Civil Procedure 41(a)(2), on the parties’ compliance with
the terms of the settlement agreement; or (2) incorporating the settlement
agreement in the dismissal order or retaining jurisdiction over the settlement
agreement when it is pursuant to Federal Rule of Civil Procedure
41(a)(1)(ii). Id. at 381-82. Where a court retains jurisdiction, “a breach of
the agreement would be a violation of the order, and ancillary jurisdiction to
enforce the agreement would therefore exist.” Id. at 381. Where jurisdiction
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is not retained, “enforcement of the settlement is for state courts, unless
there is some independent basis for federal jurisdiction.” Id. at 383.
Here, Plaintiffs have not established a legitimate basis for this Court
to enforce a settlement agreement between the parties. This Court has not
dismissed an action involving these parties, and there is no indication that
this Court retains jurisdiction over the alleged settlement agreement.
Since the Court does not have the proper jurisdiction necessary to
enforce the alleged settlement agreement, it will not address the instant
Motion for Entry of Judgment of Quiet Title.
III.

CONCLUSION

Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion to Enforce
Settlement Agreement and for Entry of Judgment of Quiet Title (Doc # 17,
filed July 3, 2018) is DENIED.
S/Denise Page Hood
Denise Page Hood
United States District Judge
Dated: October 16, 2018
I hereby certify that a copy of the foregoing document was served upon counsel of record
on October 16, 2018, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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