Tesoro Ref. & Mktg. Co. v. Oil
| Decision Date | 15 August 2016 |
| Docket Number | Case No.: 12-CV-1312-WVG |
| Parties | TESORO REFINING AND MARKETING COMPANY, Plaintiff, v. CALIFORNIA FINEST OIL, et al., Defendants. |
| Court | U.S. District Court — Southern District of California |
ORDER GRANTING PLAINTIFF'S MOTION TO ENFORCE SETTLEMENT; GRANTING PLAINTIFF'S REQUEST FOR ATTORNEYS' FEES
[DOC. NO. 101]
Pending before the Court is Plaintiff Tesoro Refining and Marketing Company's ("Plaintiff") Motion to Enforce the Settlement Agreement ("Motion"). (Doc. No. 101.) Plaintiff seeks an order: (1) compelling Defendants1 to pay $75,000.00 immediately per the parties' Settlement Agreement; (2) entering judgment, jointly and severally, against each of the Defendants for the outstanding amount, $75,000.00, pursuant to California Code of Civil Procedure Section 664.6 which is made applicable pursuant to Section 16 of the Settlement Agreement; and (3) ordering Defendants to pay Plaintiff's attorneys' feesassociated with preparing and filing this Motion, pursuant to Section 17 of the Settlement Agreement, or, as an alternative basis for recovering its attorneys' fees, Plaintiff asks the Court to issue monetary sanctions under its inherent authority in the total amount of Plaintiff's attorneys' fees associated with this Motion. Plaintiff also asks that this Court extend its jurisdiction over the settlement in this case for another year to ensure that the settlement is performed. (Doc. No. 101 at 2.)
For the reasons set forth below, the Court hereby GRANTS Plaintiff's Motion and ORDERS the Clerk of this Court to enter judgment in favor of Plaintiff in the amount of $83,714.00 (the outstanding amount of $75,000.00 plus reasonable attorneys' fees of $8,714.00).
According to Plaintiff, the instant litigation arises from the wrongful premature termination and breach by Defendants of various agreements, including, but not limited to a Retail Sales Agreement ("RSA") which was entered by and between Plaintiff and Defendant California Finest Oil on November 15, 2009. The RSA obligated Defendant California Finest Oil to purchase fuel from Plaintiff for sale to consumers at a motor fuel dispensing station, located in San Diego, California (the "Station"), which Defendant California Finest Oil agreed to operate under the Shell brand for ten years.
On or about November 17, 2009, Defendants Raad Attisha and Nazar Theweny each executed an Unconditional Guaranty for the benefit of Plaintiff in connection with any debt or obligation owed by Defendant California Finest Oil to Plaintiff. On or about November 19, 2009, Defendant Hossom Theweny executed an Unconditional Guaranty for the benefit of Plaintiff in connection with any debt or obligation owed by Defendant California Finest Oil to Plaintiff.
Also according to Plaintiff, on March 22, 2012, Defendants intentionally breached the RSA and Unconditional Guaranty by, among other things, (i) failing to purchase their minimum fuel requirements from Plaintiff; (ii) partially de-branding the Station; and (iii)continuing to use Shell trademarks without proper authorization or license. As a result, Plaintiff initiated this lawsuit against Defendants on May 31, 2012.
On January 16, 2014, the parties entered into the Settlement Agreement to settle all claims related to this lawsuit. Under the Settlement Agreement, Defendants agreed to pay Plaintiff the total sum of $225,000.00 over the course of three years, beginning in 2014 and ending in 2016, in three annual payments of $75,000.00 per payment. (Doc. No. 101-1 at 6; See Settlement Agreement at Section 3, attached as Exhibit A to Declaration of Jeffrey M. Hamerling ("Hamerling Decl.").) The Settlement Agreement was signed by all parties and their counsel on February 10-13, 2014. Id. at 11-13.
The first payment of $75,000.00 was to be remitted on or before May 1, 2014. (See Settlement Agreement at Section 3.) The second payment of $75,000.00 was to be remitted on or before May 1, 2015, and the third and final payment of $75,000.00 was to be remitted on or before May 1, 2016. Id. Under the Settlement Agreement, settlement payments are to be delivered to the law firm of Archer Norris, Plaintiff's counsel's law firm, to the attention of Jeffrey M. Hamerling. Id.
Defendants failed to timely remit the first payment under the Agreement, causing Plaintiff to prepare and file a motion to compel enforcement of the Settlement Agreement on May 30, 2014. (Doc. No. 98.) Defendants eventually made that payment and Plaintiff withdrew its motion to enforce the Agreement on June 20, 2014. (Doc. No. 99.)
In the instant Motion, Plaintiff asserts that Defendants have failed to pay the third settlement payment of $75,000.00 to either Archer Norris or Plaintiff. On June 1, 2016, Plaintiff's in-house counsel sent a meet-and-confer letter to Defense counsel, demanding payment of the third settlement installment by June 15, 2016, or confirmation that the payment was sent with proof of mailing and/or delivery of the payment.
To date, Defendants have failed to respond to Plaintiff's meet-and-confer correspondence and have failed to pay the third settlement payment. Defendants were to pay $75,000.00 to Plaintiff by May 1, 2016, pursuant to the terms of the SettlementAgreement. However, Defendants failed to remit all settlement payments as required, and currently owe Plaintiff $75,000.00 under the terms of the Agreement.
On June 30, 2016, Plaintiff filed the instant Motion. (Doc. No. 101.) On July 11, 2016, this Court issued a briefing schedule and ordered Defendants to file a response to Plaintiff's Motion by July 22, 2016. (Doc. No. 102.) The Court set a hearing on Plaintiff's Motion to be held on July 28, 2016, at 9:00 a.m., in Courtroom 2A of the above-entitled Court. Id. at 2. The Court explicitly ordered counsel for all parties to be present for the hearing. Id.
Defendants failed to file a response to Plaintiff's Motion, as ordered by the Court. Defendants failed to appear before this Court for the motion hearing, also as ordered by the Court. On July 28, 2016, at 9:00 a.m., the Court went on the record for the motion hearing. Plaintiff's counsel, Mr. David Marchiano, participated telephonically in the hearing, with the advance permission of the Court. On the record, the Court noted that it was after 9:00 a.m., the start time for the hearing, no Defendant was present, and Defense counsel also had failed to appear, failed to file a response to Plaintiff's Motion, and had not contacted the Court to provide an explanation.
While on the record, Plaintiff's counsel stated that his firm sent a letter to Defense counsel on June 1, 2016, seeking payment of the $75,000.00 owed under the Settlement Agreement. Plaintiff's counsel represented to the Court that he did not receive a response from Defense counsel. Plaintiff's counsel also stated that, on July 5, 2016, he left a voicemail for Defense counsel. Plaintiff's counsel represented to the Court that he did not receive a response from Defense counsel. The Court remained on the record until 9:11 a.m. Neither Defendants nor Defense counsel appeared or called the Court to provide an explanation. To date, Defendants have not filed the Court-ordered response to Plaintiff's Motion.
On July 29, 2016, the Court issued an Order Following Hearing on Plaintiff's Motion to Enforce Settlement; Ordering Defendants to Respond to Plaintiff's Motion by August 12, 2016. (Doc. No. 104.) The Court stated that it was prepared to issue an order grantingPlaintiff's Motion, but noted that it would hold the order in abeyance and allow Defendants one final opportunity to file a response to Plaintiff's Motion. (Doc. No. 104 at 3.) Defendants were ordered to file a response to Plaintiff's Motion by August 12, 2016. Id. The Court stated that, should Defendants fail to file a response by the deadline, the Court was prepared to issue an Order Granting Plaintiff's Motion to Enforce the Settlement on August 15, 2016. Id.
"It is well settled that a district court has the equitable power to enforce summarily an agreement to settle a case pending before it." Facebook, Inc. v. ConnectU, Inc., 2008 WL 8820476, at *2 (N.D.Cal. Jun. 25, 2008) (quoting Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987)). "Once a settlement has been reached in a pending action, any party to the agreement may bring a motion to enforce it." Id. (citing Doi v. Halekulani Corp., 276 F.3d 1131, 1135 (9th Cir. 2002)). "[T]he court's enforcement powers include the inherent authority to order a party's specific performance of acts required by the settlement agreement and to award damages or other sanctions for noncompliance." Id. at 3 (citing TNT Mktg., Inc. v. Agresti, 796 F.2d 276, 278 9th Cir. 1986)); Makua v. Panetta, 2012 WL 2370620, at *2 (D.Hawai'i Feb.28, 2012) ().
"The construction and enforcement of settlement agreements are governed by principles of local law which apply to interpretation of contracts generally." Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 1990). As applicable here, "California has a strong policy in favor of enforcing settlement agreements." Facebook, 2008 WL 8820476, at *4 (citing Osumi v. Sutton, 151 Cal.App.4th 1355, 1357, 60 Cal.Rptr.3d 693 (2007)). California law provides:
If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.
Facebook, 2008 WL 8820476, at *3 (quoting Cal.Civ.Proc.Code § 664.6). See Scott v. Napolitano, 2012 WL 2836186 (S.D.Cal. Jul. 10, 2010) (); Bryant v. Amtrak, 2011 WL 291233 ...
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