Ewing v. K2 Property Development, LLC et al, No. 3:2016cv00678 - Document 160 (S.D. Cal. 2018)
Court Description: ORDER Granting Defendant's Motion to Enforce Settlement Agreement (Dkt. 114 ). Defendant's Request for Judicial Notice is denied (Dkt. 115 ).The parties' remaining motions, including Ewing's Motion for Partial Summary Judgment ( Dkt. 132 ), Ewing's Motion for Default Judgment against K2 Properties (Dkt. 134 ), Klein's Motion for a Judgment on the Pleadings (Dkt. 135 ), and Ewing's Ex Parte Motion to Amend (Dkt. 141 ), are denied as moot. Signed by Judge Larry Alan Burns on 10/4/2018. (All non-registered users served via U.S. Mail Service)(jdt)
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Ewing v. K2 Property Development, LLC et al Doc. 160 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 ANTON EWING, CASE NO. 16cv678-LAB (AGS) 11 Plaintiff, 12 13 14 vs. ORDER GRANTING DEFENDANT’S MOTION TO ENFORCE SETTLEMENT AGREEMENT [Dkt. 114] K2 PROPERTY DEVELOPMENT, LLC and DANIEL KLEIN, Defendants. 15 16 Over the course of this litigation, the parties have entered into two separate 17 settlement agreements, the latter of which was agreed to on the record with Magistrate 18 Judge Andrew G. Schopler. The terms of the second agreement, which superseded the 19 first, required that Defendant Daniel Klein provide to Plaintiff, within one month, various 20 documents establishing a relationship between Defendants and other telemarketing 21 firms. Klein produced these documents, but he did so four days after the one-month 22 deadline. For the reasons set forth below, the Court finds that Klein substantially complied 23 with the terms of the settlement agreement and therefore GRANTS Defendants’ Motion 24 to Enforce the Settlement Agreement. INTRODUCTION 25 26 I. Background 27 Plaintiff Anton Ewing brought this Telephone Consumer Protection Act case 28 against Defendants, alleging that they used an automated telephone dialing system to -1Dockets.Justia.com 1 call Ewing and record the calls without his consent. Dkt. 1-2 at ¶¶17, 21. The parties 2 have twice attempted to settle this suit, both times at least somewhat unsuccessfully. The 3 terms of the original settlement agreement, which was entered out-of-court and failed for 4 reasons set out in the parties’ briefing, are not relevant here. On September 28, 2017, 5 the parties again attempted to settle their case, this time on the record in front of 6 Magistrate Judge Andrew G. Schopler. The terms of the agreement were recited on the 7 record, and the transcript of the hearing demonstrates that both parties explicitly agreed 8 to the terms. The agreement provided that Klein would produce to Ewing, within one 9 month, the following: (1) the “contact information” of the “third-party lead broker who was 10 used [in connection with the telemarketing calls that led to this case];” (2) “whatever 11 contracts, e-mails, or recordings exist between that third-party lead broker and Sungevity 12 [Inc.];” and (3) “a declaration or some other statement under oath saying that Defendant 13 has used that third-party lead broker and Sungevity for the improper telemarketing in this 14 case.” Dkt. 34. If those terms were met, the parties agreed, they would submit a joint 15 dismissal with prejudice as to all named Defendants. Id. at 3:17-4:5. The parties further 16 agreed that this new agreement would supersede the prior settlement agreement. Id. at 17 5:21-23. Finally, Judge Schopler noted that “if Defendant is not able to produce the items 18 . . . within one month, we would simply be back where we are today and this settlement 19 we’ve just described would not be operative unless . . . that contingency is taken care of.” 20 Id. at 5:9-14. 21 Defendant Daniel Klein did provide Ewing with the documents, but he did so on 22 November 2, 2017, four days after the expiration of the one-month deadline. Specifically, 23 on November 2, Klein sent copies of the following documents to Ewing via First-Class 24 U.S. Mail: 25 26 27 1. Conserva Solar Non Disclosure Agreement, signed by Shehzad Khan on behalf of Conserva Solar, with accompanying email dated October 9,2015 (3 pages); 2. All Star BPO Business Proposal email chain dated April 12, 2016 to April 18, 2016 with All Star BPO contact information (3 pages); 28 -2- 1 3. Lead Purchase Agreement between Planet Excellence BPO & Consultants and K2 Property Development, LLC, dba Conserva Solar, with Exhibits I & II; unsigned (9 pages); 4. Lead Purchase Agreement between Planet Excellence BPO & Consultants and K2 Property Development, LLC, dba Conserva Solar,with Exhibits I & II; signed by Usman Saeed, CEO of Planet Excellence BPO (9 pages); 5. Qualified Opportunity Purchase Agreement between K2 Property Development, LLC, dba Conserva Solar and Sungevity, Inc., with Exhibits I through III; signed by David Dunlap, Chief Development Officer Sungevity, Inc. (11 pages); 6. Verification of Daniel Klein re Production of Documents and Information pursuant to Contingent Settlement Agreement Entered into on September 28, 2017; and 7. Declaration of Daniel Klein Re Production of Documents and Information Pursuant to Contingent Settlement Agreement Entered into on September 28, 2018 authenticating each of the documents being produced and explaining the relationships between the parties dated November 2, 2017. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 See Dkt. 114-C, D. A courtesy copy of these documents was mailed to the Court on the same day. Klein’s declaration explains that “BPO” was the lead broker that generated sales leads for K2, his company. Dkt. 114-2 at 56. K2 in turn sold those leads to Sungevity, Inc. Id. As such, he argues that the produced documents satisfied the requirements set out in the agreement. 22 23 Klein also states that he misunderstood the timing and believed he was to provide the documents prior to the scheduled November 9, 2017 status conference in front of Judge Schopler. Dkt. 114-1. Ewing does not dispute that Klein sent him these documents. Although Ewing suggests Klein had additional documents that he withheld, he does not provide any evidence of this allegation. Dkt 125 at 12-13. 20 21 Dkt. 126 at 3. Following Klein’s failure to meet the deadline, Ewing filed a “Notice of NonCompliance by Defendant Daniel Klein” on November 1, 2017. The parties did not enter a joint dismissal, but instead continued to litigate for nearly another year. Now, represented by new counsel,1 Klein moves to enforce the terms of the September 28, 24 25 26 27 28 The Court is mindful that Klein’s previous counsel withdrew after being sanctioned for failing to appear and admonished for publicly filing confidential information. See Dkts. 40-42. Klein’s delayed production appears to be at least partly attributable to his rocky relationship with his previous counsel. See Dkt. 38. 1 -3- 1 2017 settlement agreement on grounds that he substantially performed his end of the 2 contract. 3 II. 4 The Court takes judicial notice of the September 28, 2017 transcript and finds that 5 the parties entered into a contingent settlement agreement that, if the terms were met, 6 would supersede the terms of any previous agreements. Dkt. 34. The Court finds that 7 the parties expressly agreed to the essential terms set out in that document, as 8 summarized above. See Doi v. Halekulani Cop., 276 F.3d 1131, 1139 (9th Cir. 2002) 9 (there is no need for an evidentiary hearing on the existence or terms of a settlement 10 agreement when it is entered into on the record in open court). The only question for the 11 Court is whether, as a matter of law, Defendants’ four-day delay in meeting the deadline 12 to produce documents constitutes substantial performance such that the Court should 13 enforce the terms of the agreement. 14 Factual Findings ANALYSIS Defendants’ Motion to Enforce the Settlement Agreement 15 I. 16 Under federal law, the Court has inherent authority to enforce a settlement 17 agreement in an action pending before it.2 See In re City Equities Anaheim, Ltd., 22 F.3d 18 954, 957 (9th Cir.1994). This inherent authority applies to settlement agreements entered 19 on the record but later reneged on by one party. 20 Glendale, LLC, 456 F. App'x 701, 702 (9th Cir. 2011) (“The district court did not abuse its 21 discretion in enforcing the settlement agreement after [Plaintiff] entered into it on the 22 record in open court, but later refused to execute a formal agreement to dismiss the 23 action. . . .”). To be enforced, a settlement agreement must meet two requirements. First, 24 it must be a complete agreement. See Maynard v. City of San Jose, 37 F.3d 1396, 1401 See. Henderson v. Yard House 25 26 27 28 2 This Court would ordinarily defer to Magistrate Judge Schopler regarding interpretation and enforcement of the settlement agreement, given that he presided over the proceedings that led to the agreement. However, Judge Schopler is currently out of district serving on active military duty, so it falls on this Court to resolve this dispute. -4- 1 (9th Cir.1994). 2 settlement or authorized their respective counsel to settle the dispute. See Harrop v. 3 Western Airlines, Inc., 550 F.2d 1143, 1144–45 (9th Cir.1977). Second, both parties must have either agreed to the terms of the 4 In California, a party is deemed to have substantially complied with an obligation 5 where the deviation is “unintentional and so minor or trivial as not ‘substantially to defeat 6 the object which the parties intend to accomplish.’” Wells Benz, Inc. v. United States, 333 7 F.2d 89, 92 (9th Cir. 1964) (quoting Connell v. Higgins, 170 Cal. 541, 150 P. 769, 775 8 (1915)). “This standard doesn't require perfection . . . [and] deviations are permitted so 9 long as they don’t defeat the object of the [agreement.]” Rouser v. White, 825 F.3d 1076, 10 1082 (9th Cir. 2016). 11 Given that the agreement is complete and was agreed to by both parties on the 12 record,3 the only question for the Court to answer here is whether Klein’s four-day delay 13 in providing the documents to Ewing constitutes substantial compliance, such that the 14 agreement should be enforced. The Court finds that it does. 15 As Williston on Contracts recognizes, “[u]nder the doctrine [of substantial 16 performance], minor or technical breaches of a contract are excused, not because the 17 breaching party could not have performed completely but because the performance that 18 was rendered was so similar or close to that required under the contract that the failure 19 to perform exactly results in an immaterial breach, the non-breaching party having gotten 20 substantially what it bargained for.” § 44:52. The doctrine of substantial performance, 15 21 Williston on Contracts § 44:52 (4th ed.) (emphasis in original). 22 performance is a material failure only if time is of the essence, i.e., if prompt performance 23 is, by the express language of the contract or by its very nature, a vital matter.” Edwards 24 v. Symbolic Int'l, Inc., 414 F. App'x 930, 931 (9th Cir. 2011) (quoting Johnson v. Further, “[d]elay in 25 26 27 28 3 The Court acknowledges that K2 and Klein are separate Defendants. But the settlement agreement, which was made between Klein and Ewing, contemplated that if Klein met the terms of the agreement, the case would be dismissed as to all defendants. Thus, K2 is in effect a third-party beneficiary and was not required to be a signatory. -5- 1 Alexander, 63 Cal.App.3d 806 (1976). 2 bargained for was two-fold: (1) for him to receive documents tying the Defendants to other 3 telemarketing firms, presumably so that Ewing could also sue those entities; and (2) for 4 him to receive a declaration stating that Klein had used these other telemarketing firms 5 for improper telemarketing in this case. He received both, albeit several days later than 6 anticipated. 7 permitting him to continue litigating against Klein and his company would be inequitable. 8 Id. Further, there is no indication that time was of the essence or that the specific time 9 period of 30 days was “a vital matter” to the parties. Indeed, given that there were 10 potential reasons Klein might be unable to produce the documents—contractual or 11 otherwise—the deadline is more reasonably read as the time at which the parties were to 12 determine whether Klein was able to produce the documents, but not as a hard deadline 13 that precluded performance after that date. Here, what the non-breaching party, Ewing, Allowing Ewing to receive “substantially what [he] bargained for” while 14 In his opposition, Ewing alleges that Klein failed to produce all the documents he 15 had in his possession tying K2 to the other telemarketing firms. See Dkt. 125 at 13. He 16 also alleges that Klein told him that these other telemarketing firms were “deep pocketed” 17 defendants. Id. Whether or not this is true—and the Court notes that Ewing has made, 18 and has been sanctioned for making, incorrect statements in this case (Dkt. 155)—the 19 essential terms of the agreement are all this Court may consider, and those terms do not 20 require that the telemarketing firms be deep-pocketed. Further, while Ewing claims Klein 21 has failed to produce all the documents he has, the terms of the agreement simply stated 22 that Klein would produce “whatever contracts, emails or recordings exist[ed].” Dkt. 34 at 23 3. Klein has stated that he sent all the documents he had. Dkt. 126 at 3. (“If it was not 24 sent to Plaintiff it did not exist.”). 25 requirements of the agreement. The Court finds these documents satisfy the 26 The Court is persuaded that Klein has substantially complied with the terms of the 27 settlement agreement by producing to Ewing documents linking K2 to these other 28 telemarketing firms and providing a declaration to that effect. His slight delay in providing -6- 1 the documents does not change that analysis. Klein’s motion to enforce the agreement 2 is GRANTED. 3 DISPOSITION 4 For the reasons set out above, the Court finds that Klein substantially performed 5 his portion of the settlement agreement, that the settlement agreement should be 6 enforced, and that this case should be terminated. 7 supersedes any previous settlement agreements. See Dkt. 34 at 5:21-23. Because the 8 parties originally contemplated stipulating to provisions regarding confidentiality and non- 9 disparagement in their dismissal, the parties may file a joint dismissal with confidentiality 10 and non-disparagement provisions by October 19, 2018. However, that agreement shall 11 DISMISS ALL DEFENDANTS WITH PREJUDICE and shall not contain terms requiring 12 this Court to find Ewing is not a vexatious litigant. If the parties fail to jointly dismiss by 13 that date, the Court will DISMISS THIS CASE WITH PREJUDICE. This settlement agreement 14 Defendant’s Request for Judicial Notice is DENIED AS MOOT. Dkt. 115. 15 The parties’ remaining motions, including Ewing’s Motion for Partial Summary 16 Judgment (Dkt. 132), Ewing’s Motion for Default Judgment against K2 Properties 17 (Dkt. 134), Klein’s Motion for a Judgment on the Pleadings (Dkts. 135), and Ewing’s Ex 18 Parte Motion to Amend (Dkt. 141), are DENIED AS MOOT. 19 20 21 22 IT IS SO ORDERED. Dated: October 4, 2018 HONORABLE LARRY ALAN BURNS United States District Judge 23 24 25 26 27 28 -7-
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