Epps v. Midvale Indemnity Company

Filing 101

ORDER RULING ON REPORT AND RECOMMENDATION: It is hereby ORDERED that the Magistrate Judge's Report (ECF No. 90 ) is adopted in full and incorporated herein; Defendant's motion to enforce settlement (ECF No. 37 ) is granted; Plaintiff's motion for U.S. Marshal Service (ECF No. 94 ) is denied; Defendant Midvale's objections (ECF No. 98 ) are overruled, Plaintiff's objections (ECF No. 99 ) are overruled; and this matter is ended. Th e terms of the parties' mediated settlement agreement shall be enforced in full, and Plaintiff shall sign the proposed general release in order to receive her settlement check. The $30,000.00 settlement amount shall be reduced (1) by � 36;9.932.99 in attorney's fees and costs payable to Plaintiff's former attorneys, Evans Moore, LLC, and (2) by $3,977.00 in attorney's fees awarded to Defendant, leaving Plaintiff a final settlement amount of $16,090.01. IT IS SO ORDERED. Signed by Honorable Bruce Howe Hendricks on 12/21/2017. (prou, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION

Sherye Epps d/b/a Sunshine Shoes,

)
)
Plaintiff,
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v.
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Midvale Indemnity Company,
)
)
Defendant.
)
________________________________)

Civil Action No. 4:16-cv-2747-BHH
ORDER

This matter is before the Court upon the Magistrate Judge’s Report and
Recommendation (“Report”), which was filed on December 4, 2017, in accordance with 28
U.S.C. § 636(b)(1)(B) and Local Civil Rule 73.02(B)(2)(d) (D.S.C.).

In her Report,

Magistrate Judge Kaymani D. West recommends that the Court grant Defendant Midvale
Indemnity Company’s (“Midvale”) motion to enforce the parties’ mediated settlement
agreement (ECF No. 37). Magistrate Judge West also recommends that the Court require
Plaintiff to sign the proposed general release before she may receive the settlement
proceeds. According to the Report, pursuant to the terms of the parties’ mediated
settlement agreement and the fee contract between Plaintiff and her former attorneys,
Evans Moore, LLC, the $30,000.00 settlement amount to be paid by Midvale should be
reduced by $9,932.99 (for fees of $3,150.00 and costs of $6,782.99 payable to Evans
Moore, LLC), and Midvale also should receive $3,977.00 in attorney’s fees, leaving a total
amount payable to Plaintiff of $16,090.01.
Attached to the Magistrate Judge’s Report was a notice advising the parties of their
right to file written objections to the Report within fourteen days of being served with a

copy. On December 6, 2017, Plaintiff filed a motion for U.S. Marshal Service (ECF No. 94).
Then, on December 18, 2017, Plaintiff filed a number of other documents as attachments
to her motion for U.S. Marshal Service. On December 20, 2017, Plaintiff filed objections
to the Report along with 46 pages of supporting documents. Also, on December 18, 2017,
Defendant Midvale filed objections to the Magistrate Judge’s Report, urging the Court to
adopt the Magistrate Judge’s findings but asking the Court to assess sanctions in a greater
amount than that recommended by the Magistrate Judge based on Plaintiff’s most recent
conduct, including her pursuit of relief in the closed state court action which formed the
basis of this removed action and her filing of an incident report with the Florence County
Sheriff’s Office.
STANDARDS OF REVIEW
First, with respect to the Magistrate Judge’s Report, she makes only a
recommendation to the Court. The recommendation has no presumptive weight, and the
responsibility to make a final determination remains with the Court. Mathews v. Weber,
423 U.S. 261 (1976). The Court is charged with making a de novo determination only of
those portions of the Report to which specific objections are made, and the Court may
accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge,
or recommit the matter to the Magistrate Judge with instructions. 28 U.S.C. § 636(b)(1).
In the absence of specific objections, the Court reviews the matter only for clear error. See
Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (stating that
“in the absence of a timely filed objection, a district court need not conduct a de novo
review, but instead must ‘only satisfy itself that there is no clear error on the face of the
record in order to accept the recommendation.’”) (quoting Fed. R. Civ. P. 72 advisory
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committee’s note).
Next, as the Magistrate Judge noted in her report, with respect to the parties’
mediated settlement agreement, “district courts have inherent authority, deriving from their
equity power, to enforce settlement agreements.” Hensley v. Alcon Labs., Inc., 277 F.3d
535, 540 (4th Cir. 2002). To exercise this power, a district court “(1) must find that the
parties reached a complete agreement and (2) must be able to determine its terms and
conditions.” Id. at 540-41. In making these determinations, courts generally rely on
standard contract principles. Topiwala v. Wessell, 509 F. App’x 184, 186 (4th Cir. 2013).
The first step is to look to “the objectively manifested intentions of the parties” to determine
whether there was a meeting of the minds. Moore v. Beaufort Cnty., 936 F.2d 159, 162
(4th Cir. 1991).

To the extent “there is a factual dispute over the existence of an

agreement, over the authority of attorneys to enter into the agreement, or over the
agreement’s terms, the district court may not enforce a settlement agreement summarily.”
Hensley, 277 F.3d at 541 (emphasis in original) (footnote omitted). Instead, the district
court must hold a plenary evidentiary hearing to resolve the dispute. Id. (quoting Millner
v. Norfolk & W. Ry. Co., 643 F.2d 1005, 1009 (4th Cir.1981)). In the event a settlement
“has been reached and its terms and conditions can be determined, the court may enforce
the agreement summarily as long as the excuse for nonperformance of the agreement is
‘comparatively insubstantial.’” Id. at 540 (quoting Millner, 643 F.2d at 1009) (internal citation
omitted). “[H]aving second thoughts about the results of a settlement agreement does not
justify setting aside an otherwise valid agreement.” Young v. F.D.I.C., 103 F.3d 1180, 1195
(4th Cir. 1997).

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DISCUSSION
Plaintiff originally filed this action against Defendant in state court (case number
2016-CP-21-1243), alleging breach of contract and bad faith refusal to pay. Defendant
removed the case to this Court on the basis of diversity jurisdiction on August 5, 2016.
After removal, this Court ordered the parties to participate in mediation by August 7, 2017.
On June 29, 2017, with Karl A. Folkens serving as mediator, the parties mediated
the matter to a full resolution and advised the Court of their settlement on June 30, 2017.
On June 29, 2017, the parties executed a “mediated settlement agreement,” which includes
the caption of this litigation and sets out the complete terms of the parties’ agreement,
including information about the sum to be paid by Defendant, the release that Plaintiff must
sign, as well as information about the payment for mediation and the logistics of dismissing
the matter in court. Plaintiff, her then-attorneys (Moore and Evans), Plaintiff’s mother,
defense counsel J. Kull, and another party (whose signature is not legible) all signed the
settlement agreement. The Court issued a Rubin order on July 5, 2017.
On July 28, 2017, Plaintiff filed a pro se motion asking that the Court grant her a sixmonth release from all creditors. The motion was docketed as a motion for extension of
time. Thereafter, Plaintiff’s counsel filed a motion to be relieved as counsel based on a
breakdown in communication with Plaintiff, and Defendant filed a motion to enforce the
parties’ settlement agreement. Because the filings made it clear to the Court that the
parties had not consummated their settlement, the Court reopened this matter and held a
hearing on the pending motions on September 19, 2017.
After hearing the parties’ arguments, the Court granted Plaintiff’s counsel’s motion
to withdraw, and because Plaintiff would be proceeding pro se, the Court referred the
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remaining issues, including Defendant’s motion to enforce the settlement agreement, to
Magistrate Judge West for further proceedings.
The Magistrate Judge advised Plaintiff of the pleading and practice rules and
instructed her to file a written response to Defendant’s motion. Plaintiff filed voluminous
documents, totaling over 1500 pages, and on November 14, 2017, the Magistrate Judge
held a hearing on the pending matters.

After considering the documentary and

testamentary evidence, the Magistrate Judge issued a thorough, 23-page Report outlining
the issues and recommending that the Court enforce the parties’ mediated settlement
agreement. As the Magistrate Judge noted, the language in the mediated settlement
agreement, which was agreed to and signed by Plaintiff and her then-counsel, is not
ambiguous and represents a complete agreement with clear terms. As the Magistrate
Judge also noted, at the end of the hearing, after the Magistrate Judge discussed the
issues raised by Plaintiff (a thorough description of which is included in the Report), Plaintiff
indicated on the record that she agreed to the mediated settlement agreement and that she
would sign the proposed general release so this matter could be ended.
At the hearing, the Magistrate Judge specifically considered Plaintiff’s concerns
about the amount of the settlement. Specifically, Plaintiff believed she was entitled to more
than the agreed-to $30,000.00 and/or that an additional amount had been paid or agreed
to by Defendant. The Magistrate Judge rejected Plaintiff’s arguments and explained to her,
among other things, that just because Plaintiff was required to maintain a certain level of
liability insurance coverage did not transform the policy at issue into a policy that provides
more coverage than she actually purchased. In addition, the Magistrate Judge explained
that the requirement for liability insurance relates to insurance that Plaintiff might use if she
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was sued or found liable to another, which is not the case here.
The Magistrate Judge also considered Plaintiff’s concerns about the general release
and again rejected Plaintiff’s arguments, assuring Plaintiff that the only matter resolved in
the parties’ mediated settlement agreement and the only matter covered by the proposed
general release is this case against Midvale related to her October 2015 claims on the
Midvale policy at issue. The Magistrate Judge explained to Plaintiff that Midvale has
always maintained the legal position that the policy at issue does not cover Plaintiff’s claim
because of policy exclusions, and that if Plaintiff does not sign the general release, or if the
settlement agreement is not enforced, then Plaintiff would be required to establish that the
policy does cover her claim, and, if Plaintiff could not establish liability on the part of
Midvale, this case could end with her receiving nothing.
As to the final amount to be paid to Plaintiff, the Magistrate Judge outlined the fees
and costs incurred by Plaintiff’s former counsel, relying on the settlement statement
prepared by Plaintiff’s former counsel, which was provided to the Court at the hearing. This
amount ($3,150.00 in attorney’s fees and $6,782.99 in expenses in costs) deducted from
the $30,000.00 settlement amount left a remainder of $20,067.01 for Plaintiff.
Next, however, the Magistrate Judge considered Midvale’s requested sanctions.
Specifically, in its motion to enforce the settlement, Midvale asserted the Plaintiff violated
the terms of the agreement by refusing to sign the general release and by disclosing the
terms of the agreement in public court filings despite the agreement’s confidentiality
provision. Midvale requested that the Court sanction Plaintiff by reducing the amount of
the settlement from $30,000.00 to $15,000.00. In a subsequent filing, however, Midvale
asked that the Court reduce the $30,000.00 settlement amount by the amount Midvale
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incurred to enforce the settlement, which at the time was $3,977.00 in fees and costs. At
the November 14 hearing, counsel for Midvale advised the Court that although it does still
seek sanctions, it would be willing to accept the amount of fees set out in its reply rather
than having to update the figure with additional fees incurred. The Magistrate Judge
ultimately agreed with Midvale’s latter request and recommended that the Court award
Midvale $3,977.00 out of the settlement proceeds, leaving Plaintiff with a final payment of
$16,090.01.
Here, the Court has thoroughly reviewed the record as a whole, including the most
recent filings by Plaintiff and Defendant. As an initial matter, the Court notes that the
documents filed by Plaintiff on December 6 and 18 do not specifically object to any portion
of the Magistrate Judge’s Report. In addition, the Court notes that Plaintiff’s objections,
which she filed on December 20, are untimely. The Magistrate Judge’s Report was filed
on December 4, 2014, and objections were due on December 18, 2017. Although a party
receives an additional three days to file objections if served by mail or otherwise allowed
under Rule 6 of the Federal Rules of Civil Procedure, here, Plaintiff was personally served
with a copy of the Report on December 4, making her objections due December 18. (See
ECF No. 93 (noting that Plaintiff was in the office when the Report was filed and that she
wanted copies given to her personally rather than being mailed).) Nevertheless, even
considering Plaintiff’s objections (along with her other post-Report filings), the Court finds
them wholly without merit. Plaintiff simply rehashes incorrect and irrelevant arguments and
many of her assertions simply make no sense. Most importantly, nowhere does Plaintiff
point to any legal or factual error in the Magistrate Judge’s Report sufficient to alter the
outcome of this matter.
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Next, with respect to Defendant Midvale’s objections, Midvale agrees with the
Magistrate Judge’s findings and recommendations as to the enforcement of the parties’
settlement agreement and only disagrees with the Report by asking the Court to assess
sanctions in an amount greater than that assessed by the Magistrate Judge. Specifically,
Midvale asks the Court to award it at least $10,044.88, which Midvale asserts is the amount
of fees and expenses it has incurred since Plaintiff refused to comply with the mediated
settlement agreement. Defendant does not offer any additional documentation supporting
the requested amount but asserts in a footnote that it will provide a full accounting of its
time and fees incurred if the Court so directs.
After consideration, the Court finds that the Magistrate Judge fairly and accurately
summarized the facts and applied the correct principles of law, and the Court adopts the
Magistrate Judge’s Report in full. As such, the Court grants Defendant’s motion to enforce
settlement (ECF No. 37) and orders that the mediated settlement agreement be enforced
in full. As the Magistrate Judge recognized, it is plain from the record that the parties
reached a complete settlement with clear, enforceable terms. Plaintiff shall sign the
proposed general release in order to receive her settlement check.
Next, as to the amount of Plaintiff’s settlement check, the Court agrees with the
Magistrate Judge that the $30,000.00 settlement amount should be reduced by $9,932.99
in attorney’s fees and costs and expenses payable to Plaintiff’s former counsel. In addition,
although the Court appreciates the efforts Midvale has made in responding to Plaintiff’s
lengthy and largely frivolous filings, and the Court understands the frustration caused by
Plaintiff’s recent conduct, the Court declines to assess sanctions in an amount greater than
the Magistrate Judge recommended. Instead, the Court agrees with the Magistrate Judge
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that $3,977.00 is an appropriate award. Thus, the Court finds that in addition to the
attorneys’ fees and costs payable to Plaintiff’s former counsel, the settlement amount
should be reduced by $3,977.00 in attorney’s fees awarded to Midvale, leaving Plaintiff with
a final amount of $16,090.01.
CONCLUSION
For the foregoing reasons, it is hereby
ORDERED that the Magistrate Judge’s Report (ECF No. 90) is adopted in full and
incorporated herein; Defendant’s motion to enforce settlement (ECF No. 37) is granted;
Plaintiff’s motion for U.S. Marshal Service (ECF No. 94) is denied; Defendant Midvale’s
objections (ECF No. 98) are overruled, Plaintiff’s objections (ECF No. 99) are overruled;
and this matter is ended.
The terms of the parties’ mediated settlement agreement shall be enforced in full,
and Plaintiff shall sign the proposed general release in order to receive her settlement
check. The $30,000.00 settlement amount shall be reduced (1) by $9.932.99 in attorney’s
fees and costs payable to Plaintiff’s former attorneys, Evans Moore, LLC, and (2) by
$3,977.00 in attorney’s fees awarded to Defendant, leaving Plaintiff a final settlement
amount of $16,090.01.
IT IS SO ORDERED.
/s/Bruce H. Hendricks
The Honorable Bruce H. Hendricks
United States District Judge
December 21, 2017
Charleston, South Carolina

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NOTICE OF RIGHT TO APPEAL
The parties are hereby notified that any right to appeal this Order is governed by
Rules 3 and 4 of the Federal Rules of Appellate Procedure.

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