Dominion Development Group, LLC v. Beyerlein et al
MEMORANDUM (Order to follow as separate docket entry) re 109 MOTION to Enforce Settlement and Impose Sanctions filed by Boenning & Scattergood.Signed by Honorable Malachy E Mannion on 9/28/17. (bs)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
CIVIL ACTION NO. 3:15-0961
CINDY BEYERLEIN and
BOENNING & SCATTERGOOD,
Presently before the court is the motion of defendant Boenning &
Scattergood, (“Boenning”), to enforce settlement and impose sanctions. (Doc.
109). Based upon the court’s review of the motion and related materials, the
motion will be granted in part and denied in part.
By way of relevant background, a settlement conference was held in the
above-captioned matter on October 21, 2016. (Doc. 99). Appearing at the
settlement conference for the plaintiff was Larry Masi on behalf of his
company, Dominion Development Group, LLC, (“Dominion”), along with his
counsel, Angelo Perrucci and Jeffrey Katz. The defendants, Cindy Beyerlein
and Boenning, were also represented by counsel at the conference.
After over four hours of discussions and settlement negotiations, the
parties orally agreed to settle the action. The court placed the salient terms of
the settlement on the record and, by order dated the same day, dismissed the
case subject to possible reinstatement within 60 days upon good cause shown
by any party. (Doc. 101).
On December 21, 2016, defendant Boenning filed the instant motion to
enforce the settlement and impose sanctions, (Doc. 109), along with a brief
and exhibits in support thereof, (Doc. 110). The plaintiff filed a brief in
opposition to the motion on January 12, 2017. (Doc. 113). On January 18,
2017, Boenning filed a reply brief in support of it’s motion. (Doc. 115). After
having been granted permission to do so, on February 9, 2017, the plaintiff
filed a sur-reply in opposition to the motion. (Doc. 121). The court held a
hearing on the motion on July 17, 2017.
In its motion to enforce the settlement, Boenning provides that, after the
settlement conference, counsel for Boenning prepared a draft settlement
agreement based on the terms set forth at the conference and circulated the
draft to opposing counsel on October 27, 2016. One day later, the plaintiff’s
counsel approved the language of the draft without any edits. Following this
approval, the plaintiff’s counsel contacted the defendants’ counsel on
November 10, 2016, and November 16, 2016, to inquire about finalizing the
written settlement agreement.
In the meantime, Boenning received feedback from defendant
Beyerlein’s counsel on the written agreement, after which it circulated an
annotated version of the settlement agreement on November 18, 2016. The
plaintiff’s counsel then responded on November 21, 2016, with two proposed
edits. Later that day, counsel for Boenning circulated a revised draft to the
plaintiff’s counsel and defendant Beyerlein’s counsel.
On November 28, 2016, defendant Beyerlein consented to the written
settlement agreement as drafted. This was communicated to the plaintiff’s
counsel. Counsel for the plaintiff indicated that an endorsed settlement
document would be forthcoming within the hour, after receipt from Mr. Masi on
behalf of Dominion. When no endorsed agreement was received from the
plaintiff, counsel for Boenning informed the court and requested sanctions.
(Doc. 102). On December 12, 2016, the court issued an order to show cause
why sanctions should not be imposed for the plaintiff’s failure to execute the
settlement agreement. (Doc. 103). On December 20, 2016, attorney Matthew
Weisberg entered his appearance on behalf of the plaintiff as new counsel.
Boenning now moves to enforce the settlement reached by the parties
at the settlement conference on October 21, 2016. Motions to enforce
settlement agreements are subject to the same standard applicable to motions
for summary judgment. See Tiernan v. Devoe, 923 F.2d 1024, 1031 (3d Cir.
1991). To this extent, the court “must treat all of the non-movant’s assertions
as true, and when these assertions conflict with those of the movant, the
former must receive the benefit of the doubt.” Id. at 1032 (internal citation and
quotation marks omitted). In order to prevail on a motion to enforce a
settlement, the movant must demonstrate that there are no disputed material
facts regarding the terms and existence of a contract. Long v. EquiCross, Inc.,
2014 WL 1391041, at *2 (W.D.Pa. Feb. 27, 2014) (citing Tiernan, 923 F.2d at
“Settlement agreements are essentially contracts, and basic contract
principles apply to their interpretation.” Williams v. Patterson-UTI Drilling Co.
LLC, 2013 WL 5274860, *1 (M.D.Pa. Sept. 17, 2013). Under Pennsylvania
law, “[t]he essential elements of a contract are an offer, acceptance, and
consideration or a mutual meeting of the minds.” Riviello v. First Nat’l Cmty.
Bank, 2013 WL 1348259, at *1 (M.D.Pa. Apr. 3, 2013). “A settlement
agreement is binding once the parties express mutual assent to its terms and
conditions, see Main Line Theatres, Inc. v. Paramount Film Distrib. Corp., 298
F.2d 801, 802 & n.1 (3d Cir. 1962), and need not be reduced to writing to be
enforceable. See Green v. John H. Lewis & Co., 436 F.2d 389, 390 (3d Cir.
1970) (per curiam).” Kelly v. Boeing, Inc., 513 Fed.Appx. 131, 134 (3d Cir.
2013). It is well-settled in Pennsylvania that where the parties have settled
upon the essential terms and the only remaining act to be done is the
formalization of the agreement, the latter is not inconsistent with the present
contract.” Melo-Sonics Corp. v. Cropp, 342 F.2d 856, 859-60 (3d Cir. 1965).
See also Compu Forms Control, Inc. v. Altus Group, Inc., 574 A.2d 618, 623
(Pa.Super. 1990). Where an agreement to settle a lawsuit is voluntarily
entered into, it is binding upon the parties, whether or not it is made in the
presence of the court or even in the absence of a writing. See Gross v. Penn
Mut. Life Ins. Co., 396 F.Supp. 373, 374 (E.D.Pa. 1975) (quoting Green v.
John H. Lewis & Co., 436 F.2d 389, 390 (3d Cir. 1970)).
Under Pennsylvania law, it is required that an attorney possess express
authority in order to settle a client’s claim. See Polier v. Allegheny Cnty., 599
Fed.Appx. 425, 426 (3d Cir. 2015). “Express authority empowering an attorney
to settle a client’s claim ‘must be the result of explicit instructions regarding
settlement.’” Tiernan, 923 F.2d at 1033. An attorney is expressly authorized
to settle a client’s case “if he is reasonable in drawing an inference that the
[client] intended him to so act although that was not the [client’s] intent.” See
Pisarz v. PPL Corp., 2014 WL 220778 at *4 (M.D.Pa., Jan. 21, 2014) (citing
Restatement (Second) of Agency §7 cmt. b).
In opposing Boenning’s motion, it is argued that Dominion’s counsel did
not have express authority to settle the matter. In support of this claim, Mr.
Masi has submitted an affidavit in which he indicates that, prior to the
settlement conference, he refused to authorize his attorney to enter into a
mutual general release. Mr. Masi further provides that he did not object to the
settlement agreement placed on the record by the court and stood silent
during the settlement colloquy “because he was not given an opportunity to
speak by this Honorable Court or his counsel.” After entry of the settlement on
the record, it is argued that the plaintiff “immediately and then again upon
retention of successor counsel - repudiated the settlement entered into without
authority of Plaintiff’s counsel.”
Despite the statements of Mr. Masi and the argument of his current
counsel, the record puts a different light on the settlement proceedings in this
action. Initially, Mr. Masi was present with his former counsel, Angelo M.
Perrucci, Jr., during the entire settlement conference in this matter. There was
much back and forth between all counsel and their clients throughout the
conference. Every indication was that Mr. Masi participated with his attorney
in the negotiation and finalization of the terms of the settlement. There was no
indication, at any time throughout the four plus hours of the conference, that
Mr. Masi expressed that he did not want to settle the matter or that his counsel
did not have authority to do such.
Attorney Perrucci testified at the hearing on this matter that he and
Attorney Stoviak, counsel for Boenning and Scattergood, had a telephone
conversation on October 21, 2016, prior to the final pre-trial conference, during
which settlement discussions were had. At that time, Attorney Stoviak
indicated that Boenning and Scattergood would be willing to settle this case
and would only agree to a dismissal with prejudice with no payment of monies.
Attorney Perrucci testified that, at that time, he did not have authority from Mr.
Masi to settle the matter and expressed this to Attorney Stoviak. As such, the
matter proceeded to the final pre-trial conference. After three to four hours of
negotiations between the parties at the final pre-trial conference, it was
counsels’ understanding that the matter was heading toward an agreement to
settle with a dismissal with prejudice with no money to be exchanged between
the parties. Attorney Stoviak inquired of Mr. Perrucci as to whether he had
received authority to settle on those terms from Mr. Masi. Attorney Perrucci
testified that, at that time, he did have authority to settle the matter from Mr.
Masi. Specifically, Attorney Perrucci testified that, just prior to the settlement
conference, he and his co-counsel, Jeffrey S. Katz, sat and talked with Mr.
Masi. Attorney Perrucci testified that Mr. Masi indicated that he understood
that his case had “fallen apart” and that counsel had his authority to settle the
case for no money. Attorney Perrucci testified that he was careful to make sure
that Mr. Masi understood the implications of what was going on and answered
the many questions which Mr. Masi had as to the proceedings and settlement
of the matter. Attorney Perrucci testified that he had unequivocal full authority
from Mr. Masi to settle with no money at the time of the final pre-trial
Mr. Masi denied this at the hearing to enforce the settlement.
Attorney Perrucci testified that it was not until approximately one month
after the final pre-trial conference and settlement agreement that Mr. Masi
Once all parties indicated that they were satisfied that terms had been
reached upon which this matter could be settled, the court took the parties and
their counsel into the courtroom to put the salient factors of the settlement on
the record. In part, the court stated:
THE COURT: This is the matter of Dominion Development
Group, LLC against Cindy Beyerlein, Boenning and Scattergood,
and there is a cross claim in the case by Boenning and
Scattergood against Cindy Beyerlein. The civil number in the case
We have had a rather extensive settlement conference
today, and based upon that, it appears that we have come to a
resolution of the case.
The resolution is that the case will be dismissed by all
parties against all other parties, including direct claims and cross
claims. Each party, all parties are to pay their own costs, and the
dismissal will be with prejudice.
Now, that being said, there are a couple carve-outs that
have been agreed to by the parties in this case. For example, Ms.
Beyerlein is reserving the right, if she has a cause of action
against the insurance company from Boenning and Scattergood
for, either, a declaratory judgment action, bad faith action or any
other kind of action related to whether or not they should have
defended or indemnified her for her being part of this suit.
Additionally, Ms. Beyerlein is withholding or carving out from
the settlement any potential action against - - what’s the name of
MR. CHADA: Richard Kirkpatrick. K-I-R-K-P-A-T-R-I-C-K.
THE COURT: All right, Mr. Kirkpatrick is not here, I don’t
know if there is any such suit against Mr. Kirkpatrick, but he’s not
a party to this action, and so, as a result of that, the release in this
action would really have no effect on Mr. Kirkpatrick and any
contacted him and indicated he had a change of heart with respect to a carve
out provision in the agreement which allowed for a potential action by
defendant Beyerlein against Mr. Kirkpatrick, a friend of Mr. Masi’s.
particular potential suits he may or may not have against him.3
All parties are in agreement that, in the case of Dominion
Development Group, LLC, as well as Boenning and Scattergood,
that the release includes all of their principles, shareholders,
although, they’re named in a corporate fashion, it involves all the
people that are actually shareholders, partners, managers in those
particular entities, so it’s clear that since, obviously, corporations
can’t act on their own, they’ve got to act through people, that the
people’s actions and the officer’s actions or shareholder’s actions
are those of the company, so, therefore, they’re included in this
dismissal with prejudice.
So that’s my summary of particulars. What I intend to do is
enter a 60-day order that gives the parties 60 days to exchange
their releases, and it’s my understanding that Mr. Stoviak has
agreed to, on behalf of Boenning, to draft the original release and
exchange it with counsel for all of their input, comments and
requested changes, until a document is agreed to by everybody
that memorializes this settlement.
(Doc. 110, Ex. 1).
After this recitation, the court proceeded to inquire as to each of the
parties as to whether the court’s recitation of the salient factors was their
understanding of the settlement agreement and whether there were any other
salient factors that they wished to place on the record. Attorney Perrucci, Mr.
Masi’s attorney, indicated that this was their understanding of the agreement
and went on to state that the term “subsidiaries” should be put in the
Mr. Masi testified at the hearing to enforce the settlement that he
“literally blurted out” at this point that he was “not accepting [zero dollars] or
the carve out [provision]”. In fact, this protestation is not reflected on the record
and the court certainly would not have proceeded if this had happened.
agreement to ensure that all of the different entities would be covered under
the agreement. Attorney Chada also indicated that the court’s recitation of the
salient factors was his understanding of the settlement agreement and clarified
that, if there was a FINRA claim in defendant Beyerlein’s favor not related to
the subject matter of the instant action, that would be excluded from the
release. The court noted that, while all counsel were trying to be careful to
protect their clients, it was understood that anything unrelated to the instant
action would not be effected by the release. Finally, the court inquired as to
counsel for Boenning as to whether the recitation of the terms was their
understanding of the agreement and whether there were any additional salient
factors they would like to put on the record. Attorney Stoviak indicated that it
was his understanding of the terms of the agreement and added that he would
include language in the release relating to not only the principals, officers, and
shareholders, but also members, and not only subsidiaries, but affiliates. With
respect to any FINRA matter, Attorney Stoviak indicated that he would reserve
rights to raise any defenses to that claim.
At this point, despite the statements made in Mr. Masi’s affidavit, Mr.
Masi indicated that he wanted to inquire of the court. The extent of this was as
THE COURT: Do you have something?
MR. LARRY MASI: All limited partners are included in this?
All limited partners are included in this. I’ll
discuss this with Mr. Masi off the record, Your Honor.
THE COURT: Okay. Are there any other questions, comments
or concerns from counsel before we adjourn for today?
(Doc. 110, Ex. 1, pp. 7-8). With the exception of a concern raised by Attorney
Chada, no other issues were raised and the proceedings were adjourned.
Thus, the record demonstrates that Mr. Masi was neither “silent” nor was
he denied “an opportunity to speak by this Honorable Court”. In fact, Mr. Masi
was given an opportunity to speak by the court when he exhibited a desire to
do so. Rather than express any desire to not enter into the settlement
agreement placed on the record or to inform the court that his counsel had no
authority to enter into such an agreement on his behalf, Mr. Masi simply
inquired as whether the agreement would include all limited partners. This type
of inquiry does not exhibit a desire not to enter into an agreement, but an
attempt to clarify the parameters of the agreement being entered into.
Mr. Perrucci testified that, after the final pre-trial conference, a draft
settlement agreement was circulated, as were a number of amendments to the
language of the agreement. Mr. Perrucci testified that Mr. Masi was made
aware of these of these and never contacted Attorney Perrucci to indicate his
dissension with such. Mr. Masi testified that he, in fact, sent Mr. Perrucci an
e-mail indicating that Mr. Perrucci had no authority to approve the settlement
agreement without his consent; however, no such e-mail was produced to the
To the extent that Mr. Masi argues that his prior counsel had no authority
to settle this matter, again, his actions belie his claim. Attorney Perrucci
testified that, just prior to the pre-trial conference, Mr. Masi had given him
unequivocal full authority to settle this matter. Mr. Masi appeared for the
settlement conference and actively engaged for four hours in settlement
discussions and negotiations with the other parties. Upon completion of these
discussions, Mr. Masi was present in court for the placement of the salient
terms of the settlement on the record. At no time during the settlement
colloquy did Mr. Masi express any dissatisfaction with the settlement or his
counsel despite having ample opportunity to do so. Instead, as indicated, the
only inquiry by Mr. Masi was whether the settlement agreement would include
all limited partners. After the final pre-trial conference, a draft settlement
agreement and a number of amendments to the wording of the agreement
were exchanged between counsel with Mr. Masi’s knowledge. Although Mr.
Masi testified that he sent an e-mail objecting to Mr. Perrucci’s acquiescence
to the terms of the agreement, no such e-mail has been produced to the court.
These are not the actions of one who is adamantly opposed to settlement.
Thus, the court will grant Boenning’s motion to enforce the settlement reached
in this case.
As to Boenning’s request for sanctions against Mr. Masi and his current
counsel, the court has review the arguments with respect to the same and
finds, at this point, sanctions are not warranted. Thus, Boenning’s motion will
be denied on this basis.
An appropriate order shall issue.
s/ Malachy E. Mannion
MALACHY E. MANNION
United States District Judge
Date: September 28, 2017
O:\Mannion\shared\MEMORANDA - DJ\CIVIL MEMORANDA\2015 MEMORANDA\15-0961-01.wpd
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