Qingdao Tang-Buy International Import & Export Company, Limited v. Preferred Secured Agents, Inc., No. 3:2015cv00624 - Document 324 (N.D. Cal. 2017)
Court Description: ORDER denying (308) Defendants' Motion for Settlement; granting (309) Plaintif's Motion for Settlement in case 3:15-cv-00624-LB. The court grants the plaintiff's motion and orders the defendants to dismiss the cross-complaint pend ing in the Alameda Superior Court, captioned Retail Business Associates, LLC v. Preferred Secured Agents, Inc., No. HG14751249, within seven days. The court denies the defendants' motion. The parties must file their stipulated dismissal w ithin seven days of this order. The court reminds the parties that they must include in their stipulation that the court retains jurisdiction to enforce the settlement. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 378, 38182 (1994); K.C. ex rel. Erica C. v. Torlakson, 762 F.3d 963, 967 (9th Cir. 2014). See the attached order for a fuller explanation of the court's ruling. (Beeler, Laurel) (Filed on 12/21/2017)
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Qingdao Tang-Buy International Import & Export Company, Limited v. Preferred Secured Agents, Inc. Doc. 324 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division United States District Court Northern District of California 11 QINGDAO TANG-BUY INTERNATIONAL IMPORT & EXPORT COMPANY, LIMITED, 12 Plaintiff, 13 v. 14 15 Case No. 15-cv-00624-LB ORDER ENFORCING SETTLEMENT AGREEMENT Re: ECF Nos. 508, 509 PREFERRED SECURED AGENTS, INC., et al., 16 Defendants. 17 18 INTRODUCTION 19 The parties settled this lawsuit pursuant to an oral settlement that the parties reached on June 20 29, 2017 at a settlement conference with Chief Magistrate Judge Joseph C. Spero. The parties 21 placed the settlement on the record.1 The parties filed two crossing motions to enforce the 22 settlement. Plaintiff Qingdao Tang-Buy (“Tang-Buy”) asserts that the defendants breached the 23 settlement agreement because they have not dismissed an active cross-complaint pending in 24 Alameda Superior Court: Retail Business Associates, LLC v. Preferred Secured Agents, Inc., Case 25 No. HG14751249.2 The defendants counter that (1) Tang Buy’s counsel breached the settlement 26 27 28 1 See Transcript – ECF No. 295. Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of documents. 2 Motion – ECF No. 309. ORDER – No. 15-cv-00624-LB Dockets.Justia.com 1 release by filing a complaint against the defendants’ counsel with the California state bar, and (2) 2 third-party Michael Kule breached the agreement by his late payment of the settlement amount to 3 Tang-Buy. They thus want to pursue this lawsuit and the state case.3 4 The court enforces the settlement agreement, grants the plaintiff’s motion, denies the 5 defendants’ motion, and directs the defendants to comply with the settlement agreement and 6 dismiss the state lawsuit. 7 STATEMENT 8 The court’s prior orders describe the parties’ contract disputes and allegations of fraud.4 The 9 court assumes familiarity with them. The parties settled their state and federal lawsuits in a settlement that they achieved with Judge Spero, who read all terms into the record. He first listed 11 United States District Court Northern District of California 10 the parties: 12 The parties are Qingdao Tang Buy International Import and Export Company and Mike Tian, Preferred Secured Agents, Inc., and Mark Cardinale, and Hal Reiland, and Glenn Hartman, as well as Retail Business Associates, LLC. 13 14 In addition, the other parties to the settlement are Galaxy Custom House, Inc., Great Central Transport, Inc., Silvano Mizrahi and Mizrahi Enterprises, Inc., as well. Mike Kule is also a party to the settlement, as is non-party AFA Sourcing limited.5 15 16 He then recited the parties’ agreement that they would pay individual settlement amounts within 17 60 days of the settlement date to the Mark Fang trust account in the following amounts:6 Mr. 18 Hartman: $40,000; Mr. Kule: $30,000; Galaxy: $7,500; Great Central: $15,000; Mr. Mizrahi: 19 $15,000; and Mr. Reiland and Mr. Cardinale (jointly and severally): $10,000.7 The court stated: 20 Okay. The other payments are each individual, are separate payments. 21 That is to say, if you make one of the payments that you’re assigned, then you are not in breach of the settlement. If you don’t make the payment, then you are in breach of the settlement, but no one else is in breach of the settlement just because you did. So if one person pays and the other doesn’t, the only person that’s in breach is the person who does not pay. They’re separate payments. 22 23 24 25 26 27 28 3 Motion – ECF No. 308. 4 Orders – ECF Nos. 73, 130, 186–89, 210, 240. 5 Transcript – ECF No. 295 at 6. 6 Id. at 7. 7 Id. at 7–8. ORDER – No. 15-cv-00624-LB 2 1 The parties agreed that Good Central could keep the goods that it possessed.8 Judge Spero recited the parties’ agreement about dismissal of the state and federal cases and 2 3 the release: 4 This case will be dismissed in its entirety with prejudice. Each side will bear their own attorneys’ fees and costs. In addition, the Alameda County case styled RBA v. Preferred, number HG-14751249 will be dismissed in its entirety with prejudice. Each side will bear their own attorneys’ fees and costs. 5 6 10 For the release, all parties and non-party AFA Sourcing Limited, on behalf of themselves, their lawyers, their employers, their affiliate and related companies, their officers, their directors, their employees, their agents, all release each other and all of their lawyers, employers and affiliates, and related companies and their officers, directors, employees and agents, from all claims, known or unknown, arising out of any events occurring through today other than the settlement agreement, and they all waive California Civil Code section 1542, which otherwise would prohibit the release of unknown claims. 11 All attorneys and parties agreed on the record to the terms of the settlement.9 They also agreed that 12 the undersigned would retain jurisdiction to enforce the agreement.10 7 8 United States District Court Northern District of California 9 13 After their settlement, Tang-Buy dismissed its state lawsuit,11 but Retail Business 14 Associates (“RBA”) did not dismiss its cross-complaint against Tang-Buy, Michael Kule, 15 GCT, and the Mizrahi defendants.12 In 2015, Tang-Buy’s counsel Mark Fang apparently filed a complaint against the defendants’ 16 17 counsel (Messieurs Miller and Reiland) with the California State Bar.13 At the hearing on the 18 instant motions, Tang-Buy’s counsel William Short said that after the June 29, 2017 settlement 19 conference, Mr. Fang had further communications with the state bar about the complaint. Mr. 20 Short also allegedly threatened to file a criminal complaint against the defendants’ counsel at a 21 meet-and-confer regarding the motions to enforce the settlement. 22 23 24 25 26 27 28 8 Id. at 8. 9 Transcript – ECF No. 295 at 8. 10 Id. at 8. 11 Motion – ECF No. 308 at 9. 12 Motion – ECF No. 309 at 10; Short Decl. – ECF No. 309-1 at 2 (¶ 3). 13 Motion – ECF No. 308 at 2. ORDER – No. 15-cv-00624-LB 3 All parties made timely payments to the Mark Fang trust account except Mr. Kule, who made 1 2 his payment late.14 According to Mr. Kule, it “is undisputed that counsel for Tang-Buy agreed to a 3 payment plan and that Mr. Kule made a payment within the extended time frame the parties 4 agreed to.”15 The plaintiff and defendants then filed crossing motions to enforce the settlement-agreement.16 5 6 The court held a hearing on December 14, 2017.17 7 GOVERNING LAW 8 “[I]n the usual litigation context . . . courts have inherent power summarily to enforce a 9 settlement agreement with respect to an action pending before it; the actual merits of the 11 United States District Court Northern District of California 10 controversy become inconsequential.” Dacanay v. Mendoza, 573 F.2d 1075, 1078 (9th Cir. 1978); 12 accord In re City Equities Anaheim, Ltd. v. Lincoln Plaza Dev. Co., 22 F.3d 954, 957 (9th Cir. 13 1994) (Because of “the high judicial favor accorded the voluntary settlement of disputes,” a “trial 14 court has power to summarily enforce on motion a settlement agreement entered into by the 15 litigants while the litigation is pending before it.”) (quotations omitted); see also Callie v. Near, 16 829 F.2d 888, 890 (9th Cir. 1987). This power extends to oral agreements reached in open court. 17 Doe v. Halekulani Corp., 276 F.3d 1131, 1138 (9th Cir. 2002). To be enforced, a settlement agreement must meet two requirements. First, it must be a 18 19 “complete agreement.” Maynard v. City of San Jose, 37 F.3d 1396, 1401 (9th Cir. 1994); see 20 Callie, 829 F.2d at 890. Second, both parties must have either agreed to the terms of the settlement 21 or authorized their respective counsel to settle the dispute. Harrop v. Western Airlines, Inc., 550 22 F.2d 1143, 1144–45 (9th Cir. 1977). “A settlement agreement is treated as any other contract for purposes of interpretation.” United 23 24 Commercial Ins. Serv., Inc. v. Paymaster Corp., 962 F.2d 853, 856 (9th Cir. 1992). Accordingly, 25 26 27 28 14 Motion – ECF No. 309 at 9. 15 Opp. – ECF No. 310 at 2. 16 Motions – ECF No. 308, 309. 17 Minute Entry – ECF No. 323. ORDER – No. 15-cv-00624-LB 4 1 “[t]he construction and enforcement of settlement agreements are governed by principles of local 2 law which apply to interpretation of contracts generally.” Id. (quotation omitted). “This is true 3 even though the underlying cause of action is federal.” Id. (citations omitted). “Under California 4 law, the intent of the parties determines the meaning of the contract. The relevant intent is 5 ‘objective’ — that is, the intent manifested in the agreement and by surrounding conduct — rather 6 than the subjective beliefs of the parties. For this reason, the true intent of a party is irrelevant if it 7 is unexpressed.” Id. (citations omitted). ANALYSIS 8 9 The case is still pending. The court has jurisdiction to enforce the settlement agreement. 10 The court grants Tang-Buy’s motion and orders RBA to dismiss the state lawsuit. It is a United States District Court Northern District of California 11 material term of the settlement. The court denies the defendants’ motion to release it from the 12 settlement terms based on Mr. Kule’s late payment. The late payment is not material, and Tang- 13 Buy worked out a different payment schedule. See Troyk v. Farmers Group, 171 Cal. App. 4th 14 1305, 1352 (2009) (“[a]n essential element of a breach of contract are damages resulting from the 15 breach”). Also, under the settlement’s terms, it is Tang-Buy who would declare a breach, and then 16 only against Mr. Kule. The court denies the defendants’ motion to the extent that it is based on the 17 claims to the state bar. The release cannot fairly be construed to cover a state-bar complaint: 18 unlike RBA state lawsuit, the parties did not reference the state-bar complaint. In any event, the 19 complaint is privileged. 20 The “litigation privilege,” codified at California Civil Code § 47(b), provides that “[a] 21 privileged publication or broadcast is one made . . . [i]n any . . . judicial proceeding . . . .” “The 22 usual formulation is that the privilege applies to any communication (1) made in judicial or quasi- 23 judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the 24 objects of the litigation; and (4) that have some connection or logical relation to the action.” 25 Silberg v. Anderson, 50 Cal.3d 205, 212 (Cal. 1990). The privilege is “absolute and applies 26 regardless of malice.” Jacob B. v. County of Shasta, 40 Cal. 4th 948, 955–56 (Cal. 2007) (citations 27 omitted). “The privilege ‘applies to any publication required or permitted by law in the course of a 28 judicial proceeding to achieve the objects of the litigation, even [if] the publication is made outside ORDER – No. 15-cv-00624-LB 5 1 the courtroom and no function of the court or its officers is involved.’” Id. at 955 (quoting Silberg, 2 50 Cal. 3d at 212). The litigation privilege extends to quasi-judicial proceedings. Ascherman v. 3 Natanson, 23 Cal. App. 3d 861, 867 (1972). Accordingly, a complaint to the state bar association 4 “is as privileged as statements made during the course of formal discovery proceedings.” Chen v. 5 Fleming, 147 Cal. App. 3d 36, 40 (1983); see also Katz v. Rosen, 48 Cal. App. 3d 1032, 1036 6 (1975). “[W]hether the litigation privilege applies to an action for breach of contract turns on 7 whether its application furthers the policies underlying the privilege.” Wentland v. Wass, 126 Cal. 8 App. 4th 1484, 1492 (2005). The initial complaint preceded the settlement and is not referenced in the release. Regardless, 9 the complaint and responding to the Bar’s subsequent inquiries are privileged. The defendants 11 United States District Court Northern District of California 10 contend that the litigation privilege does not apply because Mr. Fang’s complaint “is based 12 untruthful and frivolous claims.”18 The ultimate merits of the complaint are not relevant. 13 14 CONCLUSION The court grants the plaintiff’s motion and orders the defendants to dismiss the cross- 15 16 complaint pending in the Alameda Superior Court, captioned Retail Business Associates, LLC v. 17 Preferred Secured Agents, Inc., No. HG14751249. The court denies the defendants’ motion. The 18 parties must file their stipulated dismissal within seven days of this order. The court reminds the 19 parties that they must include in their stipulation that the court retains jurisdiction to enforce the 20 settlement. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 378, 381–82 21 (1994); K.C. ex rel. Erica C. v. Torlakson, 762 F.3d 963, 967 (9th Cir. 2014). 22 IT IS SO ORDERED. 23 Dated: December 21, 2017 24 ______________________________________ LAUREL BEELER United States Magistrate Judge 25 26 27 28 18 Opp. – ECF No. 312 at 6. ORDER – No. 15-cv-00624-LB 6
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