BERGERON v. BENTON ENERGY SERVICE COMPANY

Filing 45

MEMORANDUM & ORDER. For the reasons stated in the Memorandum & Order filed herewith, Plaintiff's Motion to Enforce Settlement Agreement (Doc. 40 ) is GRANTED. Defendant is ORDERED to issue payment to class members and Plaintiff's counsel, as required by the Settlement Agreement (Doc. 35-3), on or before February 14, 2017. Signed by Judge Cathy Bissoon on 2/7/2017. (kg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MICKEY J. BERGERON, individually
and on behalf of all others similarly
situated,
Plaintiff,
v.
BENTON ENERGY SERVICE
COMPANY,
Defendant.

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Civil Action No. 15-1006
Judge Cathy Bissoon

MEMORANDUM AND ORDER
Pending before the Court is Plaintiff Mickey J. Bergeron (Plaintiff)’s Motion to Enforce
Court Approved Settlement. (Doc. 40). For the following reasons, Plaintiff’s Motion will be
GRANTED.
I.

MEMORANDUM

A. Background
On August 3, 2015, Plaintiff filed a Complaint against Defendant Benton Energy Service
Company (“Defendant”), on behalf of himself and others similarly situated, alleging violations of
the Fair Labor Standards Act (FLSA). (Doc. 1). On August 26, 2016, Plaintiff and Defendant
filed a Joint Motion for Preliminary Approval of Proposed Collective Action Settlement and a
Joint Stipulation and Settlement Agreement of Collective Action Claims (“Settlement
Agreement”). (Doc. 35). The Settlement Agreement provides that Defendant will pay a gross
settlement amount of $260,523 to class members and Plaintiff’s counsel in exchange for a
release of all claims asserted in the lawsuit. (Doc. 35-3 ¶¶ 2(a), 2(b) and 2(c)). The Settlement

Agreement further provides that Defendant will issue such payments “within 10 days after
Plaintiff’s Counsel . . . file[s] a notice with the Court setting forth a listing of Settlement Class
members who have returned a timely Notice of Consent . . . .” (Doc. 35-3 ¶¶ 5(b), 6).
On August 30, 2016, this Court granted the Motion to Settle and approved the Settlement
Agreement. (Doc. 36). In its August 30, 2016 Order, the Court dismissed the case with prejudice
but retained jurisdiction to enforce the Settlement Agreement. (See id). On December 22, 2016,
Plaintiff’s counsel filed a Notice of Settlement Class Members. (Doc. 37). According to the
parties, 13 days later, on January 4, 2017, Plaintiff’s counsel, Attorney Richard Burch, emailed
Defendant’s counsel, Attorney Phillip J. Binotto, Jr. and Attorney Zachary D. Bombatch,
regarding the status of Defendant’s payments under the Settlement Agreement. (Doc. 44 at 1).
On January 5, 2017, during a telephone conversation, Attorney Bombatch told Attorney Burch
that Defendant was experiencing financial difficulties in light of the downturn in the energy
industry, and that it would not be able to make the agreed-upon payments in the time frame set
out in the Settlement Agreement. (Id. at 2). The parties agreed that Defendant could make
several installment payments to Plaintiff’s counsel throughout the month of January 2017. (Id.;
Doc. 40-1). Defendant, however, has failed to make these payments. (Doc. 44 at 2-3).
Plaintiff filed the instant Motion to Enforce Court Approved Settlement on January 23,
2017. (Doc. 40). In response to Plaintiff’s Motion, Defendant claims that it is financially unable
to make any payments to Plaintiff’s counsel under the terms of the Settlement Agreement. (Doc.
44). Specifically, Defendant claims that, currently, “demand for [its] services is low, and its
revenue stream and cash flow are likewise low.” (Doc. 44 at 2). Defendant further claims that it
is “awaiting substantial payment from its various customers,” stating that “the accounts
receivable total is a six-figure amount.” (Doc. 44 at 3). Defendant requests, therefore, that the

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Court allow it to “make payments according to its receipt of accounts receivable upon which
time it will be positioned to furnish said payments.” (Doc. 44 at 6).
B. Analysis
The Court has subject matter jurisdiction over Plaintiff’s Motion because it expressly
retained jurisdiction to enforce the Settlement Agreement in its Order of Dismissal. Shaffer v.
GTE North, Inc., 284 F.3d 500, 503 (3d Cir.2002) (district courts may exercise ancillary
jurisdiction to enforce a settlement agreement if they retained jurisdiction to do so in the order of
dismissal); see also In re Phar-mor, Inc. Sec. Litig., 172 F.3d 270, 274 (3d Cir.1999).
“The validity and enforceability of settlement agreements is governed by state contract
law.” Shell’s Disposal & Recycling, Inc. v. City of Lancaster, 504 Fed.Appx. 194, 200 (3d Cir.
2012). “It is by now axiomatic under Pennsylvania law that ‘the test for enforceability of [a
settlement] agreement is whether both parties have manifested an intention to be bound by its
terms and whether the terms are sufficiently definite to be specifically enforced.’” Calif. Sun
Tanning USA, Inc. v. Elec. Beach, Inc., 369 Fed.Appx. 340, 346 (3d Cir. 2010) (quoting
Channel Home Ctrs. v. Grossman, 795 F.2d 291, 298–99 (3d Cir. 1986)). “Where a settlement
agreement contains all of the requisites for a valid contract, a court must enforce the terms of the
agreement.” Step Plan Servs., Inc. v. Koresko, 12 A.3d 401, 408–09 (Pa. Super. Ct. 2010).
Applying the above principles, it is clear that Plaintiff is entitled to an order compelling
Defendant to pay the settlement amount. The Settlement Agreement clearly provides for this
payment, obligating Defendant to pay class members and Plaintiff’s counsel a total of $260,523,
as set forth in Paragraphs 2(a), (b) and (c) of the agreement. (Doc. 35-3 ¶¶ 2(a), 2(b) and 2(c)).
Indeed, Defendant does not dispute this obligation. (Doc. 44). Rather, Defendant merely asserts
that, at this time, it is financially unable to fulfill its contractual obligation. (Id.).

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While this Court does not question Defendant’s purported inability to fulfill its settlement
obligations, this does not justify modification or vacation of those obligations. A business’s
economic hardship is insufficient to excuse it from fulfilling its contractual obligations. See
McDonough v. Toys R Us, Inc., 795 F. Supp. 2d 329, 336 (E.D. Pa. 2011) (“It is well settled that
the financial inability of a party to complete obligations under a settlement is not a basis for
voiding the settlement.”) (citing Felix v. Giuseppe Kitchens & Baths, Inc., 848 A.2d 943, 948
(Pa. Super. Ct. 2004)). Likewise, the Court will not, as Defendant requests, modify the terms of
the Settlement Agreement to allow Defendant to “make payments according to its receipt of
accounts receivable upon which time it will be positioned to furnish said payments.” (Doc. 44 at
6). Defendant misunderstands the role of courts in the settlement process. Contrary to
Defendant’s belief, “[a] court must enforce the settlement as agreed to by the parties and is not
permitted to alter the terms of the agreement.” See In re Sulzer Orthopedics & Knee Prosthesis
Prod. Liab. Litig., 398 F.3d 782, 783 (6th Cir. 2005); see also Brokers Title Co. v. St. Paul Fire
& Marine Ins. Co., 610 F.2d 1174, 1181 (3d Cir. 1979) (“The essence of contract law is the
objective intent of the parties and when there has been no allegation of mistake, fraud,
overreaching or the like, it is not the function of the court to redraft a contract to be more
favorable to a given party than the agreement he chose to enter.”).

Accordingly, the Court will

enforce the terms of the Settlement Agreement, as agreed to by the parties and memorialized in
Doc. 35-3.
II.

ORDER

For the foregoing reasons, Plaintiff’s Motion to Enforce Settlement Agreement (Doc. 40)
is GRANTED. Defendant is ORDERED to issue payment to class members and Plaintiff’s
counsel, as required by the Settlement Agreement (Doc. 35-3), on or before February 14, 2017.

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IT IS SO ORDERED.

February 7, 2017

s/Cathy Bissoon
Cathy Bissoon
United States District Judge

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