General Council of v. Fraternidad de Igl, et al

Filing 149

ORDER: Denying 140 Motion for Reconsideration. Signed by Judge Gustavo A. Gelpi on 4/1/14. (CL) Modified Order type on 4/2/2014 (su).

Civil No. 02-2360 (SEC/GAG)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

GENERAL COUNCIL OF THE
ASSEMBLIES OF GOD,
Plaintiff,
v.

Civil No. 02-2360 (SEC/GAG)

FRATERNIDAD DE IGLESIA
ASAMBLEA DE DIOS AUTONOMA
HISPANA, INCORPORATED, et al.,
Defendants.

MEMORANDUM OPINION
The issue here is whether the court can enforce a settlement agreement between the
parties. (Docket No. 140.) The Honorable Salvador Casellas of the U.S. District Court for the
District of Puerto Rico entered judgment pursuant to a settlement agreement several years ago.
The case was subsequently reassigned to the undersigned. (Docket No. 135.) A dispute ensued
over whether the terms of the settlement agreement were being followed. (Docket No. 113.)
The parties asked the court to resolve that dispute because Judge Casellas entered judgment
pursuant to the settlement agreement, which included a term stating that the court would retain
enforcement jurisdiction. (See Docket No. 108.) The question the court must first answer is
whether it has jurisdiction to enforce the settlement agreement. It does not under First Circuit
precedent, though the court has some concerns. See F.A.C., Inc. v. Cooperativa de Seguros de
Vida, 449 F.3d 185 (1st Cir. 2006) (“FAC”).

1

Civil No. 02-2360 (SEC/GAG)
In FAC, the First Circuit considered whether the district court’s original entry of
judgment “pursuant to” a settlement agreement and amended entry of judgment “as per the terms
of” a settlement agreement kept jurisdiction to enforce the agreement with the district court. The
First Circuit found that the district court’s original judgment did not call for retention of
jurisdiction. That judgment stated, “All parties have come to a settlement agreement,” and,
“Pursuant to that agreement . . . .” the case is dismissed. Id. at 190. The First Circuit deemed this
insufficient to retain jurisdiction because “the ‘pursuant to’ language [wa]s not enough to
‘incorporate the terms’ of the unwritten settlement agreement into the judgment.” Id.
The district court, however, issued an amended judgment. Id. In that judgment, “the
court set forth its understanding of the main terms of the settlement, proceeded to ‘adjudicate’
the dispute as to whether FAC had to dismiss its claims in the local-court action, ‘ordered’ that
claims be dismissed, and gave some further directions before reentering the dismissal . . . .” Id.
The First Circuit found that this was sufficient to retain jurisdiction.
The court based its assessment on the Supreme Court’s decision in Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994). The First Circuit interpreted Kokkonen to
mean, “The federal court ‘has’ ancillary jurisdiction to enforce only if ‘the parties’ obligation to
comply with the terms of the settlement agreement had been made part of the order of dismissal”
by 1) “separate provision (such as a provision “retaining jurisdiction” over the settlement
agreement) or” 2) “by incorporating the terms of the settlement agreement in the order.” Id. at
189-90. The first avenue is irrelevant because the court did not include a separate provision to
retain jurisdiction, such as a clause stating “the court retains jurisdiction to enforce the
settlement.”

Whether the court incorporated the terms of the settlement agreement in its

judgment is for the court to determine today.

2

Civil No. 02-2360 (SEC/GAG)
The judgment states, “Pursuant to the parties’ Settlement Agreement [and] Plaintiff’s
notice of voluntary dismissal . . . the above-captioned action against the Defendant is
DISMISSED WITH PREJUDICE.” (Docket No. 108.) This judgment strongly parallels the
original judgment in FAC. See 449 F.3d at 189-90. If the “‘pursuant to’ language [was] not
enough to incorporate the terms’ of the” settlement agreement into the judgment in that case, the
court sees no reason why the same result should not lie here. Id.
The First Circuit outlined a framework for determining when the terms of a settlement
agreement are incorporated into a judgment when it assessed the amended judgment. Id. If a
court sets forth its understanding of the main terms of the settlement, proceeds to adjudicate the
dispute, orders that claims are dismissed, and provides further directions before reentering
dismissal, then that judgment incorporates the terms of the settlement agreement. Id. Such is not
the case here. Judge Casellas’s judgment mirrors the original judgment in FAC, and styling a
judgment in that manner denotes a district court judge’s intention not to retain jurisdiction.
The court is duty-bound to follow First Circuit precedent and does so in this case.1
However, the undersigned respectfully raises a point of concern. The court entered judgment
“[p]ursuant to the parties’ settlement agreement,” which states, in relevant part, “The Court
retains jurisdiction to enforce the terms and conditions of this agreement.” (Docket No. 105-1 at
2.) While the First Circuit interpreted Kokkonen to mean that the words “pursuant to the
settlement agreement” in a judgment are insufficient to retain jurisdiction to enforce such
agreement, the distinction between FAC and this case lies in the settlement agreements in the
1

The court notes that the underlying dismissal was issued pursuant to Rule 41(a)(1)(A)(ii) and that dismissal in FAC
was issued pursuant to Rule 41(a)(2). Several circuits have followed the First Circuit’s rationale when assessing
“pursuant to” language under both Rules 41(a)(1) and 41(a)(2). See In re Phar-Mor, Inc., 172 F.3d 270, 274-75 (3d
Cir. 1999) (“The phrase ‘pursuant to the terms of the settlement’ fails to incorporate the terms of the Settlement
Agreement into the order . . . .”) (citing cases supporting similar or identical holdings from Second, Seventh, Eighth,
and Ninth Circuits); see also Caudill v. North Am. Media Corp., 200 F.3d 914, 917 (6th Cir. 2000) (adopting
holding that, “The phrase ‘pursuant to the terms of the Settlement’ fails to incorporate the terms of the Settlement
agreement . . . .” in case where Rule 41(a)(1)(A)(ii) was invoked).

3

Civil No. 02-2360 (SEC/GAG)
respective cases. Here, the parties’ expressed intention was to keep jurisdiction in the federal
court. That did not happen in FAC. The court then entered judgment “pursuant to” that
agreement.
“Pursuant” means “in accordance with.” WEBSTER’S NEW WORLD COLLEGE DICTIONARY
4th ed. 1166. The court therefore entered judgment meant to be carried out in conformity with
the settlement agreement.
The court reads FAC’s interpretation of the “pursuant to” language as binding but notes
that the First Circuit counseled, “Hard and fast rules may be unwise because of variations in
language and context . . . .” FAC, 449 F.3d at 190. While the court believes that the context of
the terms of the settlement agreement and judgment in this case merits retention of jurisdiction,
FAC nonetheless makes clear that the terms are not to be considered because they are not
incorporated: when a district court dismisses a case “pursuant to” a settlement agreement, such
judgment does not incorporate the terms of the agreement. FAC, 449 F.3d at 190. This case is
DISMISSED, as jurisdiction does not lie with the court. While it would perhaps be important
for the First Circuit to review this matter on appeal, the quicker route is to file a new
enforcement action.
SO ORDERED.
In San Juan, Puerto Rico this 1st day of April, 2014.

/S/ Gustavo A. Gelpí
GUSTAVO A. GELPI
United States District Judge

4