Larson Manufacturing et al v. Western Showcase Homes et al

Filing 213

ORDER granting plaintiffs' 190 Motion for Entry of Partial Judgment Pursuant to Fed. R. Civ. P. 54(b); and denying defendants' 206 Motion for Reconsideration. Signed by US Magistrate Judge Veronica L. Duffy on 04/25/19. (Duffy, Veronica)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION

LARSON MANUFACTURING COMPANY
OF SOUTH DAKOTA, INC., SUPERIOR
HOMES, LLC,
Plaintiffs,

vs.

4:16-CV-04118-VLD

ORDER GRANTING PLAINTIFFS’
MOTION FOR ENTRY OF FINAL
JUDGMENT AND RULE 54(B)
CERTIFICATION [DOCKET NO. 190]
AND

WESTERN SHOWCASE HOMES, INC.,
AMERICAN MODULAR HOUSING
GROUP, LLC, AMERICAN MODULAR
HOUSING GROUP, INC., PAUL
THOMAS,

ORDER DENYING DEFENDANTS’
MOTION TO RECONSIDER ORDER
ENFORCING SETTLEMENT
AGREEMENT [DOCKET NO. 206]

Defendants.

Plaintiffs Larson Manufacturing Company of South Dakota, Inc. and
Superior Homes, LLC (“plaintiffs”) have moved the court for entry of final
partial judgment pursuant to Fed. R. Civ. P. 54(b). See Docket No. 190. The
parties reached a final resolution of 13 of the original claims initially pleaded
by plaintiffs in this action. Resolution was obtained through a partial
settlement agreement and mutual release entered into by the parties on
November 22, 2017. See Docket No. 191-2.

The claims that the parties have settled arise out of transactions
separate and apart from the remaining claims scheduled for trial in this action.
Under the terms of the partial settlement agreement, defendants Western
Showcase Homes, Inc., American Modular Housing Group, LLC, American
Modular Housing Group, Inc., and Paul Thomas had until April 12, 2019, to
make payment prescribed by the agreement. Each of these defendants
executed a confession of judgment in favor of plaintiffs which plaintiffs had the
unrestricted right to file as of April 12, 2019, if defendants had not made the
payments required by the partial settlement agreement. Defendants have not
made any payments under the agreement. The court finds that plaintiffs
efforts to collect on the confessions of judgment executed by all four defendants
would be hampered by any further delay.
Defendants attempt to prevent the entry of judgment on their confessions
of judgment and seek to reopen the court’s prior order enforcing the partial
settlement agreement. See Docket No. 206. Defendants argue this court lacks
subject matter jurisdiction to entertain plaintiffs’ motion due to a forum
selection clause in the settlement agreement. First, defendants themselves
invoked this court’s jurisdiction by removing this case to federal court. The
court found at the time, and finds today, that it has proper subject matter
jurisdiction under 28 U.S.C. § 1332. A forum selection clause does not deprive
this court of the power to hear this matter.
Second, the forum selection clause applies only to disputes under the
agreement. Defendants have not disputed that they have made no payments
2

under the settlement agreement, have not disputed the deadline for doing so
was April 12, 2019, or that they validly executed the confessions of judgment to
be entered as of the deadline in the event payment was not made. None of the
facts or arguments asserted by defendants in their motion, even if true,
invalidate the contract nor do they represent a breach of the contract by
plaintiffs. So neither plaintiffs’ motion nor defendants’ motion constitute a
“dispute” under the agreement as contemplated by the forum-selection clause.
The forum-selection clause is not applicable to plaintiffs’ motion for entry of
judgment.
Third, the parties have already litigated the validity of the settlement
agreement and the court ordered that it be enforced. See Docket No. 50. The
parties’ memorandum of understanding (on which the settlement agreement
was based) was in existence prior to the time of this earlier litigation over the
agreement, and the memorandum of understanding contained the same forum
selection clause. See Docket No. 33-1 at p. 3. Even if the parties’ arguments
regarding the agreement can be characterized as a “dispute arising under the
agreement,” the court finds defendants waived their right to insist on the
forum-selection clause by not asserting this clause in the earlier litigation.
Finally, defendants assert copious facts in their motion regarding
payments they were expecting to realize under the “consulting agreement” but
which never materialized. Plaintiffs were never parties to the consulting
agreement—the parties to the consulting agreement were defendant Paul

3

Thomas, T & T Developments (owned by Mr. Thomas), and a third party,
1013660 B.C.
Under the terms of the settlement agreement, plaintiffs accepted an
assignment of any proceeds defendants might receive under the consulting
agreement. See Docket No. 191-2 at p. 3, ¶4(a) and (b). However, plaintiffs did
not accept any assignment of any obligations under the consulting agreement.
Id. Furthermore, although plaintiffs agreed to subtract any consulting fees
they received under the consulting-fees-assignment from defendants’ total
obligation under the settlement agreement, the assignment did not affect
defendants’ own obligations to pay under the terms of the settlement
agreement and confessions of judgment. Id. If no consulting fees were paid to
plaintiffs pursuant to the assignment, all four defendants remained liable to
pay the full amount required by the settlement agreement. Id. Therefore, what
happened to Mr. Thomas and T & T Developments with regard to the
consulting agreement they had with the third party is irrelevant to defendants’
ultimate obligations to pay plaintiffs the sums they promised to pay under the
terms of the settlement agreement.
Based on the foregoing discussion, it is hereby
ORDERED that plaintiff’s motion for entry of judgment [Docket No. 190]
is granted; it is further
ORDERED that defendants’ motion to reconsider this court’s prior order
enforcing the partial settlement agreement [Docket No. 206] is denied; it is
further
4

ORDERED that the Clerk of Court enter Final Judgment in favor of
plaintiffs that they have and recover from defendants Western Showcase
Homes, Inc., American Modular Housing Group, LLC, American Modular
Housing Group, Inc., and Paul Thomas, jointly and severally, in the amount of
$1,402,407, plus prejudgment interest in the amount of $188,155.10, for a
total sum of $1,590,562.10, plus post-judgment interest at the rate of 5% per
annum; and, finally, it is
ORDERED that the above judgment is certified as a final judgment under
Federal Rule of Civil Procedure 54(b).
DATED this 25th day of April, 2019.
BY THE COURT:

VERONICA L. DUFFY
United States Magistrate Judge

5