KMI Zeolite, Inc. v. United States Department of the Interior, et al.

Filing 195

ORDER denying 188 Motion to void the settlement agreement and lift the stay; ORDER granting 194 Motion to continue the stay; This case shall remain administratively stayed until August 31, 2023. Signed by Judge James C. Mahan on 5/31/2022. (Copies have been distributed pursuant to the NEF - HAM)

Case 2:15-cv-02038-JCM-NJK Document 195 Filed 05/31/22 Page 1 of 4

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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KMI ZEOLITE, INC.,

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Plaintiff,
ORDER

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Case No. 2:15-cv-2038-JCM-NJK

v.
UNITED STATES DEPARTMENT of the
INTERIOR, et al.,
Defendants.

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Presently before the court is consolidated plaintiff ABC Recycling Industries, LLC’s

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(“ABC”) motion to void the parties’ settlement and lift the stay in this case. (ECF No. 188).

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Fellow plaintiff KMI Zeolite, Inc. (“KMI”), third party defendant R.A.M.M. Corp.

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(“RAMM”), and federal defendants all filed responses in opposition (ECF Nos. 189, 190, and

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191, respectively), to which ABC replied (ECF Nos. 192 and 193).
Also before the court is KMI, RAMM, and federal defendants’ joint motion to request

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to continue the stay in this case. (ECF No. 194)

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I.

Background

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This case involves an action initially filed on October 22, 2015, by Plaintiffs KMI and

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Robert Ford against federal defendants United States Department of the Interior. (ECF No. 1).

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After the initial case was filed, ABC filed a separate case in state court with an action seeking

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to quiet title to the same property against the federal defendant United States Department of

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Interior. Plaintiff KMI was not a party to the second action. On January 21, 2016, the federal

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defendant moved to consolidate the ABC case with the KMI case. (ECF No. 19). That motion

Case 2:15-cv-02038-JCM-NJK Document 195 Filed 05/31/22 Page 2 of 4

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was granted on February 29, 2016. (ECF No. 29).

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On December 9, 2016, plaintiff ABC filed an amended complaint against the federal

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defendants. (ECF No. 55). Thereafter the parties in the consolidated cases entered into

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settlement discussions mediated by Magistrate Judge Cam Ferenbach. On May 8, 2019, the

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parties reached a settlement agreement and the case was administratively stayed pending

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performance of the settlement agreement. (ECF No. 174).

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Since that time, plaintiff KMI, third party defendant RAMM, and the federal defendants

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(the “staying parties”) submitted multiple joint motions and requests to continue the stay, (see

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ECF Nos. 179, 181, 183, and 185), to which no oppositions were ever filed. Until now.

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On the eve of the expiration of the court’s most recent extension of the administrative

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stay, consolidated plaintiff ABC brought the instant motion to void the parties’ settlement

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agreement and lift the stay of the case based on alleged undue delay in performance of the

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settlement agreement. (ECF No. 188).

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II.

Discussion

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This consolidated action has a complex history stretching over 15 years. The relevant

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facts are that ABC seeks to quiet title to the same property at issue in the original KMI action.

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Since consolidation, however, ABC cannot move forward on its own action until the original

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KMI action is resolved. ABC argues that “the longer the delay, the chances that evidence will

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be lost or memories will cloud” for its own litigation. (ECF No. 192). Therefore, ABC argues,

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the court should render the settlement agreement null and void, lift the stay, and allow the

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parties to resume litigation.

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Public policy wisely encourages settlements and strongly favors enforcement of

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settlement agreements. McDermott, Inc. v. AmClyde, 511 U.S. 202, 215 (1994). Accordingly,

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courts construe settlement agreements in favor of enforcement. Jeff D. v. Andrus, 899 F.2d

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753, 759 (9th Cir. 1989). And courts will “not rewrite contract provisions that are otherwise

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unambiguous.” Farmers Ins. Gr. V. Stonik, 110 Nev. 64, 67 (1994).

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Upon closer look at the record, the parties appear to be diligently working towards

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completion of the settlement agreement. For example, per the terms of the agreement (see
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ECF No. 188-1), the settlement amount of $605,000 has already been paid, and the

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administrative process to determine whether the property can be sold pursuant to statutory

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regulations has been initiated. (ECF No. 191 at 4).

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The administrative process and the unexpected impact of the global pandemic appear

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to be the main culprits for the long delay. For instance, while the Nevada State Director

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approved the direct sale of the property in September 2020, that approval merely began a multi-

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step process that could take up to 32 months to complete, and includes requesting a formal

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survey (which can take approximately 18-24 months alone to complete), a national

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environmental policy act analysis, an endangered species act review, a national historic

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preservation act consultation, a tribal consultation, an appraisal, and finally the conducting of

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the sale. (Id.).

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While this process seems extensive and complex, it does not appear to be dilatory.

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Pandemic-induced staffing shortages have further exacerbated delays within the relevant

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government agencies, which is beyond the control of the parties.

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Importantly, the settlement agreement does not impose a specific timeline for this

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process to be completed. In fact, the agreement includes an explicit provision stipulating that

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the parties will stay proceedings “pending consummation” of the agreement. (ECF No. 188-

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1, § 3(a)) (“The Parties shall jointly request the court to stay the Consolidated Cases until the

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purchase described in Paragraph 2 and its subparagraphs has been consummated, or until this

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Agreement becomes null and void as provided herein.”)

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ABC concedes that the settlement agreement is a valid contract between the parties but

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argues that (a) it took the parties “well over two years…to obtain [Bureau of Land

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Management] approval of the sale settlement property,” (b) “[t]hey do not appear to be any

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closer today than they were in May of 2019 of getting the requisite approval,” and (c) “there

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is simply no end in sight.” (ECF No. 188 at 5). Thus, in ABC’s view, since it is “clear” the

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sale of the property will not be completed, the settlement agreement should be rendered null

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and void and the stay lifted. The court disagrees.

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It is far from “clear” that a sale of the property will not be completed. By all accounts,

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the parties are proceeding in the order of required steps to consummate the provisions of the

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settlement agreement. ABC is bound by this agreement, which includes an absence of a

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performance timeline, and the court is not inclined to render it null and void simply because

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one party did not foresee how long it might take to perform the contract in full.

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The federal defendants inform the court that it anticipates the necessary fieldwork for

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the formal survey of the property to be completed in the first quarter of calendar year 2022 and

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that the final survey will be approved and filed in Spring 2023, followed by an anticipated

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direct sale in spring or early summer 2023.

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Therefore, the court DENIES consolidated plaintiff ABC’s motion to void the

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settlement agreement and lift the stay and GRANTS the staying parties’ joint motion to

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continue the stay in this case in order to allow for complete performance of the settlement

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agreement.

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III.

Conclusion

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, and DECREED that consolidated plaintiff

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ABC’s motion to void the settlement agreement and lift the stay in this case (ECF No. 188)

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be, and the same hereby is, DENIED.

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IT IS FURTHER ORDERED that KMI, RAMM, and federal defendants’ joint motion

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to continue the stay in this case is GRANTED. This case shall remain administratively stayed

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until August 31, 2023.

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IT IS FURTHER ORDERED that the parties shall file a motion to lift the stay and a
notice of dismissal within 14 days of performance of the settlement agreement.
DATED THIS 31st day of May 2022.

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JAMES C. MAHAN
UNITED STATES DISTRICT JUDGE

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