TNT Marketing, Inc. v. Agresti

• Decision Date: 04 August 1986
• Docket Number: No. 85-6312,85-6312
• Citation: 796 F.2d 276
• Parties: TNT MARKETING, INC., a corporation, and Paul E. Simon, an individual, Plaintiffs-Appellees, v. Frank AGRESTI, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 276

796 F.2d 276

6 Fed.R.Serv.3d 812

TNT MARKETING, INC., a corporation, and Paul E. Simon, an individual, Plaintiffs-Appellees, v. Frank AGRESTI, Defendant-Appellant.

No. 85-6312.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 8, 1986.

Decided Aug. 4, 1986.

Lori Miller, Kevin T. Wirsing, San Diego, Cal., for plaintiffs-appellees.

Michael Patrick Murry, San Diego, Cal., for defendant-appellant.

Appeal from the United States District Court for the Southern District of California.

Before BROWNING, Chief Judge, BOOCHEVER and HALL, Circuit Judges.

PER CURIAM:

Frank Agresti appeals the district court's judgment awarding appellees TNT Marketing, Inc. and Paul Simon, its president (jointly referred to as Simon), damages for Agresti's failure to comply with the terms of a district court judgment entered pursuant to the parties' stipulation.

Simon offers real estate investment lectures and sells written, audio, and video materials on the "Simon System of Equity Participation." Agresti is one of a group of individuals once associated with Simon who allegedly presented lectures and offered materials identical to Simon's after they left the Simon organization. Simon filed a complaint against Agresti and the others alleging a violation of RICO, 18 U.S.C. Secs. 1961-1968 (1982), and common law and state claims for wrongful misappropriation, unfair business practices and unfair competition. The complaint sought an injunction, damages, and attorney's fees.

The parties stipulated to a judgment issuing the permanent injunction requested in the complaint. The judgment required, inter alia, that defendants return all of Simon's products, objects, materials, notes, memoranda, manuals, drawings, videotapes and customer lists in their possession or under their control. It also provided that the prevailing party would be entitled to reasonable attorney's fees if "suit is brought to enforce or interpret any part of this stipulation or judgment." The district court entered a judgment pursuant to the stipulation.

Shortly thereafter Simon applied for an order requiring defendants to show cause why they should not be held in contempt for failing to comply with the judgment, and for other relief pursuant to Fed.R.Civ.P. 70. The district court entered the order. Agresti failed to appear and the district court issued a bench warrant for his arrest. He was arrested and posted bond. Simon waived further proceedings against the other defendants.

Agresti appeared before the district court to respond to an order to show cause in connection with both the charge underlying the original order and the failure to appear. After hearing testimony from several witnesses, the court held that Agresti was not in contempt, but that he had not complied with the consent judgment and had converted plaintiffs' materials to his own use. The court entered judgment awarding Simon $49,000 in damages (apparently a rounded-off figure based on retention of 125 sets of Simon's materials valued at $395 each) plus attorney's fees of $10,828.50 and costs. Agresti appealed.

Agresti contends the district court lacked power to award damages because Fed. R. Civ. P. 70 does not authorize such a remedy. The district court had inherent power to enforce the agreement in settlement of litigation before it, In re Suchy, 786 F.2d 900, 902-03 (9th Cir.1985), subject to possible limitations not present here, see United States v. Sparks, 685 F.2d 1128, 1131 n. 3 (9th Cir.1982). The district court's enforcement power included authority to award damages for failure to comply with the settlement agreement. Hobbs & Co. v. American Investors Management, Inc., 576 F.2d 29, 33 & n. 7 (3d Cir.1978); breach of the agreement entitled the nonbreaching party to specific performance or an award of unliquidated damages, as appropriate. Village of Kaktovik v. Watt, 689 F.2d 222, 230 (D.C.Cir.1982); see Hobbs, 576 F.2d at 35, 36 n. 21.

Although the court normally exercises its enforcement power in response to a motion to enforce the agreement, it may do so in contempt proceedings for violation of a court order approving the settlement and commanding or enjoining particular conduct. See Gardiner v. A.H. Robins Co., 747 F.2d 1180, 1190 n. 13 (8th Cir.1984). The fact that the judgment was captioned "Judgment for Conversion of Property" does not obscure the fact clearly reflected in the body of the judgment that the damages were awarded, not for the tort of conversion, but for failure to comply with the consent judgment.

Agresti contends the settlement agreement authorized only injunctive relief. The...