Farmer v. Banco Popular of N. Am.
| Decision Date | 21 February 2014 |
| Docket Number | No. 13-1252,13-1252 |
| Parties | GEORGE FARMER, (a/k/a George L. Farmer), Plaintiff - Appellant, v. BANCO POPULAR OF NORTH AMERICA, John Does 1-100, Defendants - Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
(D. Colo.)
ORDER AND JUDGMENT*Before KELLY, ANDERSON, and MATHESON, Circuit Judges.
George Farmer, a licensed attorney representing himself, appeals from an order of the district court granting Banco Popular of North America's motion to enforce a settlement agreement. We affirm.
In 2001, Farmer's father obtained a $150,000 home equity line of credit (HELOC) secured by a house in New Jersey, one block from the ocean. Farmer's father died in 2002, and Farmer was the sole heir and executor of his father's estate. After his father died and until 2010, Farmer wrote a series of checks to himself against the HELOC, allegedly in his capacity as executor and to reimburse himself for maintenance costs he paid on the property securing the HELOC. Farmer also made some payments towards the HELOC, but at the time he filed the case underlying this appeal, there was an outstanding balance of approximately $144,000. In 2010, Farmer wrote a $5,000 check to himself against the HELOC and deposited it into his Wells Fargo account. Banco Popular initially honored the check, but after an investigation into past-due payments, the bank determined that Farmer was accessing his deceased father's HELOC and allegedly threatened Farmer with charges of criminal fraud if he did not pay off the full amount owed on the HELOC. Banco Popular also closed the HELOC and returned the $5,000 check, allegedly informing Wells Fargo that the check was counterfeit. This caused Wells Fargo to close Farmer's account and his daughter's account.
Farmer then filed an action against Banco Popular in Colorado state court, alleging twelve claims for relief. He sought damages and a judgment that the HELOC be voided. Banco Popular removed the action to federal court and initiated foreclosure proceedings on the New Jersey property. The parties had multiplesettlement conferences with a magistrate judge, who held a hearing on June 15, 2012, and placed the terms of a settlement agreement on the record. The relevant terms were that Banco Popular would pay Farmer $30,000 and forgive some principal, unpaid interest, and attorney's fees. Farmer would give Banco Popular a deed in lieu of foreclosure that the bank would hold in escrow pending Farmer's repayment of $137,380.94 to Banco Popular, which was to be funded by either the sale of the New Jersey house or refinancing the HELOC with another lender. Banco Popular would return the deed in lieu if Farmer made the repayment by October 15, 2012, but could record it or pursue foreclosure or other remedies if he did not. Farmer agreed to waive defenses to the foreclosure action and give Banco Popular a complete release, and the parties agreed to dismiss the federal action without prejudice. In order to avoid tax consequences, Farmer wanted Banco Popular's $30,000 payment to him to be characterized as a loan and he did not want the bank to issue an IRS Form 1099 showing cancellation of debt. But the magistrate judge suggested that the parties do whatever the tax laws require and make no representations in the agreement about the tax consequences of the settlement. The parties agreed with that suggestion.
The same day as the hearing, Banco Popular sent Farmer a draft settlement agreement and IRS Form W-9, Request for Taxpayer Identification Number and Certification. With regard to taxes, the agreement stated that the bank was forgiving amounts due on the HELOC and was making no representations regarding the tax consequences of the settlement. The agreement did not include the deed in lieu offoreclosure or a satisfaction of the mortgage, each of which required review by a New Jersey title company. Farmer completed and signed the W-9 the same day and returned it to Banco Popular, but he began to negotiate a number of the other terms of the draft agreement, none of which had to do with the tax issue. Banco Popular rejected most of those changes. On July 2, Banco Popular sent Farmer the completed settlement agreement, but Farmer sought changes to the exhibits. On July 27, the parties filed a joint motion stating they had settled on June 15 and were awaiting further information from the title company regarding Farmer's requested changes.
After Farmer received the revised exhibits, he again sought more changes, including the amount, timing, and structure of the payment. Apparently, due to the length of time it took for the title company to complete its review, Farmer no longer needed the $30,000 upfront payment, and he offered several options for paying Banco Popular either $95,000 or $107,000. On August 7, Banco Popular declined those requests, stating it would file a motion to enforce the settlement agreement unless Farmer tendered the executed agreement before a court hearing scheduled for the next day. In an August 8 email to Banco Popular's counsel, Farmer stated that he was "in agreement with the last version of the Settlement Agreement." Aplee. App., Vol. II at A-285. Like the parties and the district court, we will refer to the agreement Farmer referenced in his email as the "Exhibit K" agreement, which is apparently the one Banco Popular sent to Farmer on July 2. But Farmer challenged the request that, because the estate had not been closed within one year, he had tosign the attached real estate documents in his capacity as heir and executor. The parties' further discussions proved fruitless, so Banco Popular filed a motion to enforce. In a response filed August 20, Farmer stated that "[t]he Settlement Agreement as drafted is fine," R., Vol. I at 981, and in fact he asked the court to "enforce the Settlement Agreement only (pursuant to the terms that were placed on the record on June 15, 2012)" and extend his repayment date by two months, id. at 982. But he again insisted that the real estate documents be revised to show that he was signing them only in his capacity as executor of his father's estate.
The magistrate judge held a conference on August 29. Correspondence from that same day shows that Farmer now sought to reduce his net payment from $107,380.34 to $100,000 but pay it by October 1 instead of October 15. Banco Popular declined that offer, stating that it required payment by October 15 of the full net amount, which had never changed since the June 15 hearing. The magistrate judge held another hearing on September 10, at which Farmer stated that "we all are in agreement to enforce the settlement," and "the only thing that remains is . . . the date that [my payment is] due." R., Vol. III at 7. None of the terms of the agreement were read into the record, but the parties agreed that Farmer would pay Banco Popular $107,380.34 by November 15, 2012. Banco Popular sent Farmer an agreement reflecting the new amount and due date, but instead of signing, Farmer asked for changes and additions. Banco Popular refused most of those changes and asked Farmer to sign the revised agreement, which he never did.
On November 13, two days before his payment was due, Farmer sought to add a liquidated damages provision and a paragraph stating that Banco Popular would not issue Form 1099. He also sought a six-week extension on his due date because Hurricane Sandy, which struck the New Jersey coast on October 29, had delayed an expected loan from a cousin that would finance his payment. Banco Popular responded that it would extend the deadline only if Farmer would sign the agreement without his other proposed changes. He refused, and Banco Popular filed a second motion to enforce and attached a written agreement reflecting the parties' agreement as of the September 10 hearing (the "Revised Agreement"). Farmer responded that the parties had agreed to a settlement on September 10, and he explained his financing troubles. He sought a 45-day extension, the inclusion of a provision that Banco Popular would not issue Form 1099, and a mutual and immediately effective release (the Revised Agreement provided that Farmer's release would be effective upon signing and Banco Popular's release effective upon Farmer's payment).
On December 4, 2012, the magistrate judge held an evidentiary hearing on the second motion to enforce and issued a recommendation that it be granted. He rejected the notion that Farmer's obligation to pay was contingent on obtaining financing, noting that there were several hundred thousand dollars in equity in the New Jersey property. Farmer objected to the recommendation. In response to an order for clarification from the district judge, the magistrate judge issued asupplemental recommendation stating that he recommended enforcing the Revised Agreement. Farmer filed objections to the supplemental recommendation.
The district judge then held an evidentiary hearing at which the magistrate judge testified and the parties argued at length. The district judge ruled that he would enforce the Exhibit K agreement, observing that Farmer had twice indicated his agreement with Exhibit K. He ordered Banco Popular to pay Farmer $30,000 within 30 days, Farmer to pay Banco Popular $137,380.84 within 60 days, and the parties to file dismissal documents within 75 days. He warned that he would impose the most severe sanctions and penalties if the parties did not comply with his order. At the hearing, the district judge declined Banco Popular's request that he order the parties to sign the agreement absent some authority for such an order. But he did rule that the terms of the settlement and release would be in full force and effect by court order.
Banco Popular timely made its $30,000 payment, but Farmer never made his payment. Instead, he filed a post-judgment motion and then this appeal. Banco Popular filed a motion asking the district court to (1) issue a rule to show...
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