Metke v. Bank Of New York Mellon et al

Filing 97

Opinion and Order: Defendants' agreement, is strictly enforced and plaintiff's proposed agreement is rejected. Further, defendants' promise to keep plaintiff's account open for sixty days after the completion of the settlement and to provide plaintiff with fresh payoff and reinstatement calculations during that time period is also strictly enforced. Ordered by Magistrate Judge Thomas M. Coffin. (plb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

BRIAN METKE,
Plaintiff,

Civ. No. 3:12-cv-00384-MC
OPINION AND ORDER

V.

BANK OF NEW YORK MELLON, et al.,
Defendants.

COFFIN, Magistrate Judge:
This case arises out of a pair of mortgages from 2006 and 2007 on real property owned
by plaintiff, Brian Metke, in Camp Sherman, Oregon. Plaintiff alleges that payments that were
intended to be applied to the 2006 loan were misapplied to the 2007 junior loan, resulting in the
default of the 2006 loan. (See Pl.'s Second Am. Compl. i-!i-1 21-23). The parties engaged in
settlement discussions and on April 25, 2014, advised the court that the action had been settled,
resulting in a Sixty-Day Order of Dismissal with prejudice being entered by the court. #38.
Plaintiff later repudiated this agreement and defendants' resulting Motion to Enforce the
Settlement Agreement (#4 7) was denied. #63.
1 - OPINION AND ORDER

On August 14, 2015, following a settlement conference before this court, the parties
again informed the court that the case had settled (#83) and entered the terms of their agreement
on the record in open court. #92. Thereafter, while retaining jurisdiction to enforce the terms of
the agreement, this court entered a Sixty-Day Order of Dismissal with prejudice. #84.

On

September 10, 2015, upon order of this court, defendants provided a draft Settlement Agreement
and Release ("Agreement") to plaintiffs then counsel, Michael Cox ("Cox"), and after
incorporating several proposed edits provided by Cox, defendants delivered the final draft of the
Agreement to plaintiff on January 5, 2016.

Deel. of Brian Kiolbasa in Supp. of Defs.'

Confidential Mem. Supp. Enforcement of Settlement Agreement ("Kiolbasa Deel.")

iii!

8-1 O;

Defs.' Confidential Mem. Supp. Enforcement of Settlement Agreement 3.
The parties attempt to memorialize the settlement agreement ultimately failed, however,
because plaintiff disagreed with several terms in defendants' final draft of the Agreement.
Kiolbasa Deel.

iii!

8-14.

Plaintiff, thereafter, submitted his own version of a settlement

agreement that he alleges is consistent with the agreed upon terms that were put on the record
and differs in only "three material ways" from defendants' proposed Agreement.

Pl. 's

Confidential Settlement Mem. 2-4. Specifically, plaintiff argues that pursuant to the agreement
that was put on the record on August 14, 2015: (1) no payment is owed to Specialized Loan
Servicing LLC ("SLS") for the alleged arrears on the senior mortgage; (2) his credit report must
be "unconditionally cleared by all defendants"; and (3) because the outstanding balance of the
loans are key terms to the settlement agreement, the "principal balance of both loans must be
expressly set forth" in the settlement agreement.

Id.

Plaintiff asserts that his proposed

agreement is the only agreement consistent with the above mentioned criteria and is, therefore,
"the only settlement that will avoid future litigation and bring all matters to a close." Id.

2 - OPINION AND ORDER

Defendants argue that plaintiffs version of the agreement adds substantial consideration
they never agreed to, most notably, that plaintiff could "ignore $87,000 outstanding on the senior
loan and avoid foreclosure altogether" and that a mutual release, rather than the unilateral release
the parties agreed upon, would be granted. Defs.' Confidential Mem. Supp. Enforcement of
Settlement Agreement 4. Moreover, defendants assert that although plaintiff demands that the
Agreement include a loan payoff amount, "such calculations typically go stale within 30 days,"
and, therefore, it is "not feasible for them to promise that the loans w[ill] have constant balances
into the future." Id. at 3. Defendants assert, however, that when requested, they have provided
plaintiff with "fresh payoff calculations" and that the final draft of the Agreement provided to
Cox on January 5, 2016, was accompanied by a promise that counsel for defendants would keep
the file open for 60 days after completion of the settlement to facilitate obtaining fresh payoff
and reinstatement calculations if needed by plaintiff. Id. at 3-4.
Defendants, therefore, argue that because they have agreed to provide plaintiff with fresh
payoff and reinstatement calculations after the completion of the settlement, and because it was
never the intention of the parties that plaintiff be permitted to ignore the loan arrears outstanding
on the senior loan or that he be able to avoid foreclosure indefinitely regardless of whether he is
complying with the terms of the underlying loan agreements, this court should enforce the
settlement agreement put on the record on August 14, 2015, as memorialized in the Agreement
crafted by defendants and Cox and attached as Exhibit 1 to Brian Kiolbasa' s Declaration. Id.
A district court has the power to summarily enforce an agreement to settle a case pending
before it.

Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987).

Summary enforcement of a

settlement agreement is not appropriate "where material facts concerning the existence or terms
in a settlement were in dispute, or where a settlement agreement was apparently procured by

3 - OPINION AND ORDER

fraud." In re City Equities Anaheim, Ltd., 22 F.3d 954, 957 (9th Cir. 1994) (internal citation
omitted). If no material facts are in dispute, a court may enforce the settlement agreement when
the agreement is complete, Callie, 829 F.2d at 890, and both parties have either agreed to the
terms of the settlement or authorized their counsel to settle the dispute.

See Harrop v. W

Airlines, Inc., 550 F.2d 1143, 1144-45 (9th Cir. 1977) (holding that it was not an abuse of
discretion for a court to enforce a settlement agreement after the parties entered the material
terms of the agreement on the record).
Here, the parties unambiguously agreed on the record to the key terms of the settlement
agreement, as well as to this court's continuing jurisdiction to resolve any disputes in the
settlement process and enforce the settlement agreement that was reached and put on the record.
#92 at 2-3. Specifically, the parties agreed, in pertinent part, 1 that defendants would "clear up"
plaintiffs credit record with the credit reporting agencies that were impacted by any previous
reporting and in exchange for that consideration, plaintiff would execute a "global release"
dismissing all claims against all defendants, as well as against Mortgage Electronic Registration
Systems, Inc. ("MERS"). Id.
Defendant's proposed Agreement satisfies the terms of the above mentioned agreement
by requiring defendants to notify the credit reporting agencies that they furnished negative
information to, that plaintiffs credit report should be modified to "NR," "not reporting,"
"current," or the equivalent. Kiolbasa Deel. Ex. 1 at 3. In exchange for this consideration,
defendants' Agreement provides for a unilateral release by plaintiff of all claims against them
and MERS. Id. at 4-5. Finally, although it was not expressly agreed to on the record, at the

1

Defendants agreed to certain additional terms in consideration for plaintiffs promise to dismiss
all claims. However, due to the confidential nature of the agreement, the court does not discuss
the other terms that are not directly disputed here.
4 - OPINION AND ORDER

request of Cox, defendants also agreed to keep plaintiffs account open for sixty days after the
completion of the settlement and, if needed, to provide plaintiff with fresh payoff and
reinstatement calculations. Accordingly, this court finds that defendants' memorialization of the
Agreement addresses all the key terms agreed upon by the parties on the record. Although
plaintiff now repudiates the Agreement that defendants created with input from his former
counsel, because plaintiff has not shown that any of the terms of defendants' Agreement were
inconsistent with the terms of the agreement made on the record in open court, this court orders
the strict enforcement of defendants' Agreement and rejects plaintiffs proposed alternate
agreement.
CONCLUSION

For the reasons stated, defendants' Agreement, which was submitted as Exhibit 1 to
Brian Kiolbasa's Declaration, is strictly enforced and plaintiffs proposed agreement is rejected.
Further, defendants' promise to keep plaintiffs account open for sixty days after the completion
of the settlement and to provide plaintiff with fresh payoff and reinstatement calculations during
that time period, is also strictly enforced.
IT IS SO ORDERED.

DATED this )-°lcit;;;f April, 2016.

THOMAS M. COF

5 - OPINION AND ORDER