Free Motion to Enforce - District Court of Arizona - Arizona

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LITTLER MENDELSON
A PROFESSIONAL CORPORATION Camelback Esplanade 2425 East Camelback Road Suite 900 Phoenix, AZ 85016 602.474.3600

J. Mark Ogden; AZ Bar No. 017018 [email protected] R. Shawn Oller; AZ Bar No. 019233 [email protected] LITTLER MENDELSON A Professional Corporation Camelback Esplanade 2425 East Camelback Road, Suite 900 Phoenix, AZ 85016 Telephone: 602.474.3600 Facsimile: 602.957.1801 Attorneys for Defendant

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Kenneth A. Batory, Plaintiff, v. Sears, Roebuck and Co., a New York corporation, dba "The Great Indoors," Defendant. I. INTRODUCTION

Case No. CIV 02 2026 PHX-JWS DEFENDANT'S MOTION TO ENFORCE ORAL SETTLEMENT AGREEMENT

On February 2, 2007, the parties, through their respective counsel, reached an oral settlement in the above-styled case. The parties agreed to a settlement amount, including characterization of the settlement proceeds, in exchange for Plaintiff releasing his claims against Defendant. Exactly two weeks later, however, Plaintiff refused to honor the parties' settlement agreement and, instead, notified Defendant's counsel that he was "backing out" of the parties' settlement agreement. Despite being given ample opportunity to reconsider his position, Plaintiff continues to refuse to honor the parties' settlement agreement. Because the parties had a mutually binding oral settlement agreement, Defendant respectfully requests that the Court grant its Motion to Enforce Oral Settlement Agreement ("Motion"), and grant it any additional relief, including attorneys' fees and costs.

Case 2:02-cv-02026-JWS

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Filed 02/26/2007

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LITTLER MENDELSON
A PROFESSIONAL CORPORATION Camelback Esplanade 2425 East Camelback Road Suite 900 Phoenix, AZ 85016 602.474.3600

II.

FACTUAL BACKGROUND Beginning in mid-December 2006, the parties, through their respective attorneys,

began negotiating a settlement of the above-styled lawsuit (Oller Declaration, ¶ 3; Exhibit A). While the parties were negotiating, both attorneys agreed to forego formal discovery, in the hope of reaching an amicable settlement (Oller Declaration, ¶ 4). On January 17, 2007, the parties agreed on a settlement amount to settle the above-styled case in exchange for Mr. Batory releasing his claims against Defendant (Oller Declaration, ¶ 5). At that time, the parties' disagreed about the characterization of the settlement proceeds. That is, the parties disagreed what portion of the settlement proceeds would be characterized as compensation for lost wages, subject to statutory withholdings (Oller Declaration, ¶ 6). On February 2, 2007, the parties, through their respective counsel, resolved this issue and reached a final settlement of the above-styled lawsuit (Oller Declaration, ¶ 7). Following their oral agreement, Defendant's counsel requested the plaintiff's current mailing address, social security number, and tax identification number from Plaintiff's counsel for preparation of the settlement checks (Oller Declaration, ¶ 8 and 02/13/07, 2:33 p.m. e-mail to Lynn M. Laney, Jr.; Exhibit 1). In response, Plaintiff's counsel provided this information. In addition, Defendant's counsel prepared and forwarded a draft of the Stipulation to Dismiss and accompanying Order to Plaintiff's Counsel for his approval (Oller Declaration, ¶ 9 and 02/13/07, 3:56 p.m. e-mail to Lynn M. Laney, Jr.; Exhibit 1). Finally, Defendant's counsel forwarded a draft of the Settlement Agreement and Release to Plaintiff's counsel, asking that his client sign it, and notifying Plaintiff's counsel that his client had begun processing the settlement check and would "have it to you shortly" (Oller Declaration, ¶ 10 and 02/14/07, 2:51 p.m. e-mail to Lynn M. Laney, Jr.; Exhibit 1). At no time between February 2, 2007 and February 15 2007 did Mr. Laney dispute that the parties had reached a settlement agreement (Oller Declaration, ¶ 11). On Friday, February 16, 2007, Plaintiff's counsel telephoned Defendant's counsel to say that his client, Mr. Batory, was "backing out" of the parties' settlement. Plaintiff's counsel would not elaborate why his client would no longer honor the parties' settlement
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LITTLER MENDELSON
A PROFESSIONAL CORPORATION Camelback Esplanade 2425 East Camelback Road Suite 900 Phoenix, AZ 85016 602.474.3600

agreement. At no time during the conversation did Plaintiff's counsel express the belief that the parties did not have a prior settlement agreement (Oller Declaration, ¶ 12). In response, Defendant's counsel e-mailed Plaintiff's counsel to reiterate that the parties had entered into a binding settlement agreement and provided Plaintiff's counsel with a deadline of February 22, 2007 to honor the parties' settlement agreement or, alternatively, Defendant's counsel would file a Motion to Enforce the parties' settlement agreement (Oller Declaration, ¶ 13 and 02/21/07 e-mail to Lynn Laney, Jr.; Exhibit 1). In the correspondence, Defendant's counsel notified Plaintiff's counsel that if forced to file a Motion to Enforce, Defendant would seek its attorneys' fees and costs for doing so (Id.). In response, Plaintiff's counsel did not dispute that the parties had entered into a binding settlement agreement but, instead, only questioned whether attorneys' fees would be available to Defendant in such a case (Id.). To date, Plaintiff's counsel has failed to honor the parties settlement agreement and, therefore, Defendant respectfully submits its Motion. III. LEGAL ANALYSIS In a diversity action, the Court applies Arizona law with respect to the enforcement of oral settlement agreements. See Adams v. Johns-Manville Corp., 876 F.2d 702, 704 (9th Cir. 1989). Under Arizona law, oral settlement agreements, like other oral contracts, are

enforceable. See Fotinos v. Baker, 164 Ariz. 447, 793 P.2d 1114 (Ct. App. 1990). For an enforceable contract to exist, there must be an offer, acceptance, and consideration. See Rogus v. Lords, 166 Ariz. 600, 602, 804 P.2d 133, 135 (Ct. App. 1991). "That [an oral settlement agreement] was later to be reduced to writing does not affect the enforceability of the contract." Fotinos, 164 Ariz. at 448. Here, all of the requisite elements of an oral contract exist. Plaintiff, through his attorney, and Defendant, through its attorney, agreed to the material terms of the settlement agreement on February 2, 2007. Specifically, Defendant offered to pay Mr. Batory a specific sum in exchange for a signed settlement agreement and release, releasing his claims against Defendant. Plaintiff, through his attorney, agreed. Indeed, the parties' respective counsel agreed how the settlement proceeds would be characterized, allocating a certain amount as
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LITTLER MENDELSON
A PROFESSIONAL CORPORATION Camelback Esplanade 2425 East Camelback Road Suite 900 Phoenix, AZ 85016 602.474.3600

lost wages which would be subject to statutory withholdings. After reaching this agreement, Plaintiff's counsel then provided his client's current address and social security number, as well as his own tax identification number, so that the settlement check could be processed. In turn, Defendant's counsel drafted and forwarded to Plaintiff's counsel (1) a Stipulation to Dismiss, (2) accompanying Order of Dismissal, and (3) Settlement Agreement and Release. Plaintiff and Defendant are bound by their settlement agreement. As the Court in Fotinos recognizes, oral settlement agreements are binding contracts. Indeed, Arizona and federal courts encourage settlement agreements because they promote the amicable resolution of disputes and lighten the increasing loads of litigation faced by courts. See State Farm Mut. Auto. Ins. Co. v. Peaton, 168 Ariz. 184, 194, 812 P.2d 1002, 1012 (App. 1990); Ahern v. Central Pac. Freight Lines, 846 F.2d 47, 48 (9th Cir. 1988). When parties, through their respective counsel, assent to the terms of the oral agreement, the oral settlement agreement is binding. Fotinos, supra. IV. CONCLUSION For the reasons set forth above, Defendant respectfully requests that this Court grant its Motion to Enforce Settlement Agreement. RESPECTFULLY SUBMITTED this 26th day of February 2007. s/ R. Shawn Oller J. Mark Ogden R. Shawn Oller LITTLER MENDELSON, P.C. Attorneys for Defendant I hereby certify that I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following if CM/ECF registrants, and mailed a copy of same to any non-registrants this 26th day of February, 2007: Lynn M. Laney, Jr. 934 West McDowell Road Phoenix, AZ 85007-1730 Attorney for Plaintiff s/ Jaye Sanschagrin
Firmwide:82074979.1 016144.1070

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