Cochran v. Ernst & Young

• Decision Date: 20 March 1991
• Docket Number: No. 90-CV-70707-DT.,90-CV-70707-DT.
• Citation: 758 F. Supp. 1548
• Parties: Raymond COCHRAN, Plaintiff, v. ERNST & YOUNG, formerly Ernst & Whinney and Robert Daddow, Wayne County Employees Retirement Commission (formerly Board of Trustees), National Bank of Detroit, Defendants.
• Court: U.S. District Court — Western District of Michigan

758 F. Supp. 1548

Raymond COCHRAN, Plaintiff, v. ERNST & YOUNG, formerly Ernst & Whinney and Robert Daddow, Wayne County Employees Retirement Commission (formerly Board of Trustees), National Bank of Detroit, Defendants.

No. 90-CV-70707-DT.

United States District Court, E.D. Michigan, S.D.

March 20, 1991.

Clifford R. Williams, Detroit, Mich., for plaintiff.

William T. Coleman, III, Francis R. Ortiz, Detroit, Mich., for defendants.

MEMORANDUM OPINION AND ORDER

ZATKOFF, District Judge.

I. INTRODUCTION

Plaintiff sued defendants for breach of state law fiduciary duties, civil violation of the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961 et seq., and violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. The alleged violations stem from defendants' management of the Wayne County Retirement System's Defined Contribution Plan. Plaintiff seeks monetary relief.

This matter comes before the Court on defendants' motions to dismiss.¹ Plaintiff filed timely responses. All parties have fully briefed the relevant issues; and pursuant to E.D.Mich.Local R. 17(1)(2), the Court addresses them without entertaining oral argument.

Upon review of the motions, briefs and file in this case, the Court finds that a contractual settlement and release agreement executed by plaintiff and the Wayne County Employees Retirement Commission bars plaintiff from maintaining this litigation against all the defendants. Accordingly, defendants' motions are granted.

Furthermore, the Court finds that in accordance with Fed.R.Civ.P. 11, defendants Wayne County Employees Retirement Commission, Ernst & Young, and Robert Daddow are entitled to receive costs and attorney fees incurred after the execution of the disputed settlement and release agreement.

II. FACTS

A. Generally

On March 14, 1990, Raymond Cochran ("plaintiff") filed his original complaint, alleging breach of state common law fiduciary duties, RICO violations, and breach of a federal statute prohibiting false statements to federal agencies, 18 U.S.C. § 1001 et seq. Plaintiff subsequently filed an amended complaint, which substituted an ERISA claim for the 18 U.S.C. § 1001 claim. Although the captions to both of plaintiff's complaints indicate that the case is a class action lawsuit, he has not attempted to certify the suit as a class action under Fed.R.Civ.P. 23; therefore, plaintiff is the only complainant in this action.

Plaintiff was a Wayne County employee and a Certified Public Accountant. The Wayne County Employees Retirement Commission ("WCRC")² is charged with the operation and management of the Wayne County Retirement Fund. Ernst & Young and Robert Daddow ("EY & D") provide accounting services for the WCRC in relation to the management of the fund. National Bank of Detroit ("NBD") acts as trustee for the fund.

Soon after the instant case was filed, all defendants filed motions to dismiss in which they alleged that a prior state court judgment precluded the instant action and that plaintiff had failed to state a claim upon which relief could be granted. The Court held the motions in abeyance in order to resolve a preliminary matter regarding the existence and effect of a settlement and release agreement executed by plaintiff and the WCRC.

B. The Settlement Discussions

On July 6, 1990, plaintiff met with representatives of Wayne County³ for the purpose of discussing the settlement of three legal actions, two pending in state court and one—the instant case—pending in federal court. Plaintiff, represented by his attorney in one of the state cases, Mr. Kurt Yockey ("Yockey"), and representatives from Wayne County were all present at the meeting and were the only parties to the settlement agreement. The parties in attendance recorded the discussions, and the WCRC submitted a copy of the record as an attachment to its motion to dismiss.

The first state case discussed at the July 6 session involved plaintiff's claim of race discrimination against the WCRC, which a jury resolved in favor of plaintiff for over $400,000. At that time, the WCRC's appeal of that case was pending before the Michigan Court of Appeals. The second state case discussed involved a claim brought against EY & D, in which plaintiff challenged the parties' management of the Wayne County Retirement Fund. The instant case was also the topic of discussion at the settlement negotiations. As mentioned above, the instant case involves RICO, ERISA, and fiduciary claims. For the sake of convenience, the Court refers to the state cases as the "discrimination" and the "retirement" cases.

At the settlement discussions, Yockey stated that he was plaintiff's attorney in one of the state cases, but not in the instant case. Plaintiff advised Yockey that he would be requesting the attorney representing him in the other cases, including the instant case, to dismiss all three cases "as part of his obligation embodied in the release in the agreement ... about to put on the record." To this end, plaintiff's attorney in the instant case, Mr. Clifford Williams ("Williams"), subsequently prepared a stipulation and order of dismissal that was circulated for signatures but was never filed.

The comprehensive settlement and release agreement that emerged from the negotiation session released all cases then pending, specifically the state race discrimination case, the state retirement case, and the instant case. Now, though, plaintiff challenges the validity and enforcement of the settlement and release agreement in relation to the instant case.

III. LEGAL ANALYSIS

A. Jurisdiction to Enforce Settlement Agreements Through Summary Proceedings

Federal courts possess the inherent power to enforce agreements executed in settlement of litigation pending before them. Aro Corp. v. Allied Witan Co., 531 F.2d 1368 (6th Cir.1976); Kukla v. National Distillers Products Co., 483 F.2d 619 (6th Cir.1973); All States Investors, Inc. v. Bankers Bond Co., 343 F.2d 618 (6th Cir. 1965). The Sixth Circuit Court of Appeals has stated that

A compromise or settlement of litigation is always referable to the action or proceeding in the court where the compromise was effective; it is through that court the carrying out of the agreement should thereafter be controlled. Otherwise the compromise, instead of being an aid to litigation, would be only productive of litigation as a separate and additional impetus.

Aro, 531 F.2d at 1371 (quoting Melnick v. Binenstock, 318 Pa. 533, 179 A. 77 (1935)).

Additionally, this Court has the authority to enforce settlement agreements through summary proceedings. Aro, 531 F.2d at 1372; Kukla, 483 F.2d at 621. And when enforcement is determinable solely as a matter of law, a court need not conduct an evidentiary hearing. Aro, 531 F.2d at 1372. Because summary enforcement of the agreement in this case presents no genuine issue of material fact (as discussed more fully below), the Court in accordance with Aro and E.D.Mich.Local R. 17(1)(2) has declined to hold an evidentiary hearing. Therefore, this Court issues its opinion based entirely on the motions and the parties' briefs.⁴

B. Standard of Review

Summary judgment is appropriate where no genuine issue of material fact remains to be decided and the movant is entitled to judgment as a matter of law. Blakeman v. Mead Containers, 779 F.2d 1146 (6th Cir.1986); Fed.R.Civ.P. 56(c). "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). In applying this standard, the Court must view all materials offered in support of a motion for summary judgment, as well as all pleadings, depositions, answers to interrogatories, and admissions properly on file in the light most favorable to the non-movant. Anderson v. Liberty Lobby, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); United States v. Diebold, 368 U.S. 894, 82 S.Ct. 171, 7 L.Ed.2d 91 (1962); Cook v. Providence Hosp., 820 F.2d 176, 179 (6th Cir.1987); Smith v. Hudson, 600 F.2d 60 (6th Cir.1979), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979). In deciding a motion for summary judgment, the Court must consider "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52, 106 S.Ct. at 2512. Where the non-movant has failed to present evidence on an essential element of its case, it has failed to meet its burden and all other factual disputes are irrelevant; thus, summary judgment is appropriate. Celotex, 477 U.S. at 322-23, 106 S.Ct. at 2552; Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) ("when the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." (footnote omitted)). Although summary judgment is disfavored, it may be granted when the trial would merely result in delay and unneeded expense. Poller v. Columbia Broadcasting Systems, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); A.I. Root Co. v. Computer/Dynamics, Ind., 806 F.2d 673, 675 (6th Cir.1986).

The fact that two parties to a contract differ on the interpretation of terms in that contract does not, by itself, render summary judgment inappropriate. Tennessee Consolidated Coal Co. v. United Mine Workers of America, 416 F.2d 1192, 1199 (6th Cir.1969); Cleveland-Cliffs Iron v. Chicago & North Western Transp. Co., 581 F.Supp. 1144, 1149 (W.D.Mich.1984); Steinmetz Electrical Contractors v. Local Union No. 58, 517 F.Supp....