Farmer v. Banco Popular of N. Am.

• Decision Date: 30 June 2015
• Docket Number: No. 14–1423.,14–1423.
• Citation: 791 F.3d 1246
• Parties: George FARMER, (a/k/a George L. Farmer), individually and as Executor of the Estate of George H. Farmer, Plaintiff–Appellant, v. BANCO POPULAR OF NORTH AMERICA ; John Does 1–100, Defendants–Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

791 F.3d 1246

George FARMER, (a/k/a George L. Farmer), individually and as Executor of the Estate of George H. Farmer, Plaintiff–Appellant

v.BANCO POPULAR OF NORTH AMERICA ; John Does 1–100, Defendants–Appellees.

No. 14–1423.

United States Court of Appeals, Tenth Circuit.

June 30, 2015.

George Farmer, Longmont, CO, Pro Se.

Sanjay Shivpuri, Chuhak & Tecson, P.C., Chicago, IL, for Defendant–Appellee Banco Popular of North America.

Before MORITZ, PORFILIO, and BALDOCK, Circuit Judges.^*

Opinion

BALDOCK, Circuit Judge.

This matter was previously before the Court on Plaintiff George Farmer's appeal from a district court order, in the nature of a mandatory injunction, directing Farmer to perform under the terms of a settlement agreement he reached with Defendant Banco Popular a year earlier. We affirmed. Farmer v. Banco Popular, 557 Fed.Appx. 762 (10th Cir.2014) (unpublished), aff'g 2013 WL 2112428 (D.Colo.2013). Now here we are again, this time to consider Farmer's appeal from a district court order imposing fees and costs on him as a punitive sanction for his extended delay in executing the settlement. We exercise jurisdiction under 28 U.S.C. § 1291, and again affirm, while modifying the district court's reasoning and the amount of sanctions imposed. See Stan Lee Media, Inc. v. Walt Disney Co., 774 F.3d 1292, 1296 (10th Cir.2014) (recognizing the authority to “affirm on any grounds supported by the record.”); Valley Improvement Ass'n, Inc. v. United States Fid. & Guar. Corp., 129 F.3d 1108, 1126 (10th Cir.1997) (recognizing the authority to modify a district court judgment).

I.

Our prior decision recited in detail Farmer's ongoing conduct that led the district judge to “warn that he would impose the most severe sanctions and penalties if the parties did not comply with his order” enforcing the settlement. Farmer, 557 Fed.Appx. at 766. We will not repeat verbatim the tangled and tortuous history of the case ably set out in Part I there. Instead, we simply adopt that factual recitation and restate here only the more salient facts bearing on our review.

This litigious ordeal began when Farmer, a resident of Colorado and a licensed attorney who insists on representing himself, sued Banco under federal and state law to challenge Banco's by-all-appearances legitimate demand that he pay off the full amount owed under a $150,000 Home Equity Line of Credit (HELOC) his deceased father obtained in 2001.¹ On June 15, 2012, the parties informed the district court they had reached a settlement and “placed the terms of a settlement agreement on the record.” Id. at 764. Banco was to pay Farmer $30,000 and forgive some principal, unpaid interest, and attorney's fees. Farmer's payment of $137,380.94 in satisfaction of the HELOC was then due Banco on October 15, 2012. But soon, Farmer “began to negotiate a number of the ... terms of the draft agreement.” Id. On July 2, Banco “sent Farmer the completed settlement agreement, but Farmer sought changes to the exhibits.” Id. These exhibits included a deed in lieu of foreclosure and a satisfaction of mortgage. After Farmer received the revised exhibits he still would not sign the settlement agreement, but “again sought more changes, including the amount, timing, and structure of the payment.”² Id.

On August 7, 2012, Banco informed Farmer it would file a motion to enforce the settlement agreement unless he tendered the executed agreement before a court hearing the next day. In an email to Banco the next day, “Farmer stated that he was ‘in agreement with the last version of the Settlement Agreement.’ ” Id. “But Farmer challenged the request that, because [his father's] estate had not been closed within one year, he had to sign the attached real estate documents in his capacity as heir and executor. The parties' further discussions proved fruitless, so Banco ... filed a motion to enforce.” Id. at 764–65. Responding to Banco's motion, Farmer told the court the settlement agreement “ ‘as drafted is fine’ ... and in fact he asked the court to ‘enforce the [s]ettlement [a]greement only (pursuant to the terms that were placed on the record on June 15, 2012)’ and extend his repayment date.” Id. at 765.

Notwithstanding his prior representations to the court, on August 29, 2012, Farmer sought to reduce his net payment of $107,380.34 under the terms of the agreement to $100,000, but pay it by October 1 rather than by October 15. The court held another hearing on September 10 at which Farmer again told the court the settlement was fine: “ ‘[W]e are all in agreement to enforce the settlement,’ and ‘the only thing that remains is the date that my payment is due.’ ” Id. (internal brackets and ellipses omitted). The parties then agreed that Banco would not pay Farmer $30,000 as previously agreed, but instead, Farmer would pay Banco $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.” Id.

Two days before Farmer's November 15 payment was due, “Farmer sought to add a liquidated damages provision and a paragraph stating that Banco Popular would not issue Form 1099 [presumably for forgiveness of a portion of the debt]. He also sought a six-week extension on his due date because Hurricane Sandy ... had delayed an expected loan from his cousin.” Id. Farmer then refused Banco's offer to extend the payment deadline if he would sign the agreement absent these newly proposed changes, whereupon Banco filed a motion to enforce the revised settlement agreement. “Farmer responded that the parties had agreed to a settlement on September 10.” Id. Farmer also “explained his financing troubles” to the court, despite sitting on a piece of New Jersey property valued well in excess of the amount due Banco. Id. Farmer “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” all contrary to the revised settlement agreement. Id.

On December 4, 2012, the magistrate judge who had presided over “numerous and lengthy settlement negotiations in this case” held an evidentiary hearing on Banco's second motion to enforce the settlement. Farmer v. Banco Popular, 2013 WL 2112429, at *1 (D.Colo.2013). The magistrate issued a recommendation that the district judge enforce the settlement. Id. at *1–2. The recommendation rejected the notion that Farmer's obligation to pay was contingent on him obtaining financing. Anticipating he might be called to testify before the district court, the magistrate recused from further involvement in the case.³ In a supplemental recommendation, the magistrate clarified he was recommending enforcement of the revised agreement. Dist. Ct. Doc. 152, at 1–2 (filed Feb. 7, 2013). Farmer filed objections to both the original and supplemental recommendations.

In May 2013, the district judge held an evidentiary hearing on Farmer's objections. Farmer yet again informed the court “that a settlement has been reached,” to which the court responded:

Let me ask you a question. If a settlement has been reached, why do we need to have this hearing? I mean, you said a settlement has been reached. If there's a settlement why haven't you consummated it—the settlement? And why—why do I have all of these Motions to Enforce Settlement in front of me for—and why are we having a hearing today?

Dist. Ct. Doc. 181, at 3–4 (filed June 12, 2013) (hereinafter Doc. 181). The best answer Farmer could muster was that Banco had breached the first settlement agreement by failing to timely perform, notwithstanding the fact Farmer had never signed the agreement. The district court was unmoved. We too in our prior decision rejected the argument that Banco had breached the first agreement thereby excusing Farmer's failure to perform. Farmer, 557 Fed.Appx. at 767–68. Once the district judge had heard enough, he decided to enforce the original June 15, 2012 settlement agreement, which Farmer on at least two previous occasions had told the court he approved. The court ordered Banco's payment of $30,000 due in 30 days, Farmer's payment of $137,380.84 due in 60 days, and dismissal documents due in 75 days. “Banco Popular timely made its $30,000 payment, but Farmer never made his payment. Instead, he filed a post judgment motion and [his first] appeal.” Id. at 766.

We affirmed the district court's order enforcing the original settlement agreement, and concluded with these parting words for Farmer:

Though ... having agreed to settle the case [in June 2012], Farmer continues to use the [mortgaged] New Jersey property (with a value far in excess of the disputed amount) with no payment to [mortgagee] Banco Popular, which is prevented from foreclosing on the property [due to the settlement agreement]. Rather than adhering to the terms of the settlement agreement, Farmer has multiplied the proceedings, causing the court to expend considerable effort, Banco Popular to incur attorney's fees, and delaying the ultimate resolution.... The district court has all lawful authority to bring this matter to a prompt and just conclusion.

Id. at 769 (emphasis added).

On remand, Defendant Banco, panel decision in hand, renewed its motion initially made prior to Farmer's first appeal for a rule to show cause why he should not be held in contempt for his failure to abide by the district court's order enforcing the original settlement. Only then did Farmer tender $137,380.84 to Banco, rendering the latter's motion for a rule to show cause moot. At the same time, Banco also renewed its motion for an award of attorney's fees and costs pursuant to 28 U.S.C. § 1927and the district court's inherent authority. Alleging both Farmer's vexatious litigation strategy and his bad faith, Banco sought fees in the amount of $56,944.38 and costs in the amount of $11,617.77. These...