Free Opening Brief in Support - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT FOR THE DISTRICT OF DELAWARE THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, Plaintiff, v. JAMES R. WITHROW and MYUNG PHAM LEGRO, Defendants. § § § § § § § § § § §

C.A. No. 07-511-LPS

JURY TRIAL OF 12 DEMANDED

JAMES R. WITHROW'S OPENING BRIEF IN SUPPORT OF HIS MOTION TO ENFORCE STIPULATED JUDGMENT AND ORDER

JAMES S. GREEN (DE 0481) KEVIN A. GUERKE (DE 4096) SEITZ, VAN OGTROP & GREEN, P.A. 222 Delaware Avenue, Suite 1500 P.O. Box 68 Wilmington, DE 19899 (302) 888-0600 Attorneys for Defendant James R. Withrow DATED: December 10, 2007

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TABLE OF CONTENTS page TABLE OF CITATIONS. .................................................................................................. ii I. II. III. IV. STATEMENT OF THE NATURE AND STAGE OF PROCEEDINGS .............. 1 SUMMARY OF ARGUMENT .............................................................................. 2 STATEMENT OF FACTS ..................................................................................... 3 ARGUMENT.......................................................................................................... 7 STANDARD OF REVIEW. ................................................................................... 7 THE STIPULATED JUDGMENT AND ORDER IS A VALID AND ENFORCEABLE SETTLEMENT AGREEMENT. .............................................. 7 MR. WITHROW SHOULD BE AWARDED ATTORNEYS' FEES. .................. 9 V. CONCLUSION..................................................................................................... 11

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TABLE OF CITATIONS CASES Hobbs & Company, Inc. v. American Investors Management, Inc., 576 F.2d 29 (3rd Cir. 1978) ............................................................................................... 7 In re Elonex Phase II Power Management Litigation, 2003 WL 21460391 (D. Del. 2003) .............................................................................. 7, 9 Leonard v. University of Delaware, 204 F. Supp. 2d 784 (D. Del. 2002)............................................................................ 7, 10 Liberate Technologies LLC v. Worldgate Communications, Inc., 133 F.Supp.2d 357 (D. Del. 2001).................................................................................... 8 Read v. Baker, 438 F.Supp. 732 (D. Del. 1977)........................................................................................ 8 Rowe v. Rowe, 2002 WL 1271679 (Del. Ch. 2002) .................................................................................. 8 Tierman v. Deroe, 923 F.2d 1024 (3rd Cir. 1991) ........................................................................................... 7

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I.

STATEMENT OF THE NATURE AND STAGE OF PROCEEDINGS On August 21, 2007, United States Life Insurance Company in the City of New

York ("US Life") filed an Interpleader Complaint. (D.I. 1) On August 27, 2007, US Life filed a Motion Authorizing Payment of Funds into Court. On October 26, 2007, US Life filed a Stipulated Judgment and Order executed by all of the parties. On November 21, 2007, the parties consented to this Court's jurisdiction. On November 28, 2007, the Court ordered the deposit of interpleader funds and ordered Defendants to interplead. On December 7, 2007, both defendants filed Answers to the Interpleader Complaint and James R. Withrow ("Mr. Withrow") filed a Crossclaim.

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II.

SUMMARY OF ARGUMENT The Stipulated Judgment and Order Myung Pham LeGro signed is a valid

settlement agreement that this Court should enforce to end this case.

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III.

STATEMENT OF FACTS Lisa P. Withrow ("Mrs. Withrow") was employed by Playtex Products, Inc.

("Playtex") prior to her death on May 24, 2007. (Complaint ¶2) As part of Mrs. Withrow's Playtex benefits, US Life issued a life insurance policy to her in the amount of $36,400.00 ("Policy"). (Complaint ¶2) Mr. Withrow was Mrs. Withrow's husband. He was the sole primary beneficiary of the Policy until May 23, 2004 ­ the day prior to Mrs. Withrow's death. (Complaint ¶3) On that date, Myung Pham LeGro ("LeGro"), Mrs. Withrow's sister, was purportedly named Mrs. Withrow's sole primary beneficiary in place of Mr. Withrow. (Complaint ¶4) Mr. Withrow thereafter notified US Life that he intended to challenge LeGro's claim to the Policy proceeds and Mrs. Withrow's competency to execute such a document considering her physical and mental condition. (Complaint ¶11) After it became clear Mr. Withrow intended to challenge LeGro's actions surrounding the change of beneficiary, LeGro informed US Life that she wanted to settle, relinquishing any rights to the Policy. US Life then drafted a Stipulated Judgment and Order ("Stipulation") and circulated the draft to Mr. Withrow and LeGro on September 19, 2007. A true and correct copy of a September 19, 2007 email is attached hereto as Exhibit "A". Mr. Withrow's only request related to the Stipulation was a reduction in US Life's award of attorney's fees, to which US Life agreed. A true and correct copy of a September 21, 2007 email is attached hereto as Exhibit "B". US Life sent LeGro the Stipulation under separate cover on September 21, 2007, reflecting a 50% reduction in attorneys' fees. A true and correct copy of US Life's September 21, 2007 letter is attached as Exhibit "C". US Life stated that it was its
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understanding that LeGro wanted to enter into the Stipulation. US Life also advised LeGro to obtain an attorney. LeGro responded to US Life by letter on September 27, 2007. A copy of the September 27, 2007 letter is attached hereto as Exhibit "D". She stated "I have told you that I intend to relinquish my right as beneficiary of my late sister's insurance policy, and I still plan to do so." In that letter, LeGro sought assurance from US Life that the "5/23/07" date on the insurance form was written on the original document. She also wrote, "I do not want to fight for this money, to endure the stress of a trial far from my home, or to see Mr. Withrow or Delaware ever again." US Life responded by letter dated October 4, 2007, stating "US Life is not in the position to provide any assurances to either Mr. Withrow or you in this matter." A true and correct copy of the October 4, 2007 letter is attached hereto as Exhibit "E". Related to the Stipulation US Life wrote: Furthermore, the enclosed Stipulated Judgment and Order was drafted entirely because you (and your husband) indicated to me that you no longer wanted to challenge Mr. Withrow's claim to the Proceeds. Based upon those telephone conversations, it was my understanding that you wished to enter into this arrangement. If you no longer wish to sign the Stipulated Judgment and Order, which is entirely your prerogative, this litigation will be necessary to resolve the competing disputes over the Proceeds to the Policy. US Life again suggested LeGro retain counsel. In the October 4, 2007 letter, US Life enclosed the Stipulation identical to the one circulated on September 21, 2007. LeGro signed the Stipulation after receiving US Life's October 4, 2007 letter. She agreed to settle the dispute. Mr. Withrow and US Life also executed the Stipulation.

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US Life filed the Stipulation with the Court on October 26, 2007. (D.I. 11) A true and correct copy of US Life's October 26, 2007 letter and the signed Stipulation is attached as Exhibit "F". Specifically, LeGro agreed to have judgment entered in Mr. Withrow's favor. LeGro agreed that the full amount of the Policy, less attorneys' fees, would be dispersed to Mr. Withrow solely. She further agreed that the "entry of this Stipulated Judgment shall constitute a final judgment in this action, provided however that the Court shall retain jurisdiction over this matter for the purpose of enforcing this Stipulated Judgment among the parties." A previously scheduled teleconference with the Court was held on October 31, 2007. (D.I. 12) The Court notified LeGro of the teleconference and US Life set up the call. A true and correct copy of US Life's October 12, 2007 letter is attached hereto as Exhibit "G". Presumably because she signed the Stipulation and believed the case was over, LeGro did not participate in the teleconference. During that teleconference, the Court raised the issue of the parties' consent to its jurisdiction. After the teleconference, US Life sent a letter to LeGro summarizing the teleconference. A true and correct copy of the November 9, 2007 letter is attached hereto as Exhibit "H". US Life reiterated that "the Stipulated Judgment and Order was drafted entirely because you (and your husband) indicated to me that you no longer wanted to challenge Mr. Withrow's claim to the Proceeds". Between November 9, 2007 and the date the parties consented to this Court's jurisdiction, November 21, 2007, LeGro indicated to US Life that she changed her mind. She retained counsel on November 29, 2007. She filed an Answer to the Complaint claiming she has the sole right to the proceeds of the Policy. This is Mr. Withrow's

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Motion to Enforce the Stipulated Judgment and Order that was fully executed by all the parties and filed with the Court.

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IV.

ARGUMENT Standard of Review. It is well established that this Court has the power to summarily enforce

settlement agreements. Hobbs & Company, Inc. v. American Investors management, Inc., 576 F.2d 29 , 33 (3rd Cir. 1978). A motion to enforce a settlement agreement closely resembles a motion for summary judgment, therefore, a similar standard applies. Tierman v. Deroe, 923 F.2d 1024, 1031 (3rd Cir. 1991). "The court must treat all the nonmovant's assertions as true, and `when these assertions conflict with those of the movant, the former must receive the benefit of the doubt.'" In re Elonex Phase II Power Management Litigation, 2003 WL 21460391 (D. Del. 2003). The Stipulated Judgment and Order is a Valid and Enforceable Settlement Agreement. The Stipulation is a valid, enforceable contract to settle this case because LeGro and the other parties reached a definite agreement on all the essential terms. She

intentionally breached the Stipulation when she answered the Complaint and asserted a claim over the Policy proceeds. LeGro's breach of the Stipulation should not be

permitted and judgment should be entered on the terms of the Stipulation. "It is well-settled that the Court has jurisdiction to enforce a settlement agreement entered into by the parties in a case currently pending before it." Leonard v. University of Delaware, 204 F. Supp. 2d 784, 787 (D. Del. 2002) (citations omitted). The Court's authority "to enforce a settlement agreement has as its foundation the policy favoring the amicable adjustment of disputes and the avoidance of costly and time-consuming litigation. Liberate Technologies LLC v. Worldgate Communications, Inc., 133
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F.Supp.2d 357, 358 (D. Del. 2001)(citations omitted). When considering a motion to enforce, the Court must determine whether the settlement agreement at issue is an enforceable contract under Delaware law. Leonard, 204 F. Supp. 2d at 787. "Under Delaware Law a contract `comes into existence if a reasonable person would conclude, based on the objective manifestations of assent and the surrounding circumstances, that the parties intended to be bound by their agreement on all essential terms.'" Id. LeGro agreed to the terms of the Stipulation, which were very basic. "When parties agree to settle a lawsuit, a binding contract is deemed to have been created." Rowe v. Rowe, 2002 WL 1271679, *3 (Del. Ch. 2002)(citations omitted) (enforcing an oral agreement to settle). Withrow's favor. LeGro agreed that judgment would be entered in Mr.

LeGro agreed all the proceeds of the Policy, less $1,425.00 in

attorneys' fees, would be disbursed solely to Mr. Withrow. She agreed that US Life would be discharged from any potential liability related to the Policy. And, LeGro agreed the Court would have jurisdiction to enforce the Stipulation. LeGro initiated the agreement and is bound by its terms. "`[A]n agreement to settle a lawsuit, voluntarily entered into, is binding upon the parties, whether or not made in the presence of the court, and even in the absence of a writing.'" Read v. Baker, 438 F.Supp. 732, 735 (D. Del. 1977)(citation omitted). "Such a settlement is enforceable summarily, upon motion, by a district court in a case pending before it." Id. The Stipulation was written in plain English without any legalese. Anyone would understand the terms Moreover, US Life, a neutral party in the dispute between LeGro and Mr. Withrow, explained the Stipulation to LeGro and her husband, a retired colonel in the

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military, on several occasions both over the telephone and in writing. (Exhibits "C" and "E") US Life advised LeGro to retain counsel at least twice before she executed the Stipulation. LeGro had ample time to consider the written terms. She received the original version over a month before she signed it. LeGro had every opportunity to review the Stipulation and to discuss it with anyone she chose. She was given the opportunity to retain counsel to assister her. She decided to execute the Stipulation without alteration and return it to US Life for filing. As evidence of her assent to the terms, she failed to appear for the Court ordered teleconference because she believed the case was over. The Court should not sanction LeGro's attempt to challenge the settlement Stipulation because she changed her mind or is now unhappy with the terms to which she agreed in October. See Leonard, 204 F. Supp. 2d at 788. "A unilateral change of heart by a party to a settlement agreement is not ground to set the settlement aside." Rowe, 2002 WL 1271679 at *4. Because there are no material facts genuinely in dispute concerning the existence, or the terms, of the Stipulation, the Court should enforce the parties' fully executed Stipulation and enter judgment in Mr. Withrow's favor. Mr. Withrow should be Awarded Attorneys' Fees. Mr. Withrow is entitled to reasonable attorneys' fees he expended as a result of bringing this motion. "The court has inherent discretionary power to award attorneys' fees `when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'" In re Elonex, 2003 WL 21460391 at *3. In both In re Elonex and Leonard, Chief Judge Sleet awarded attorneys' fees for breaching an agreement to settle.
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"`[R]efusal to abide by the terms of a settlement agreement can constitute bad faith, entitling the wronged party to attorneys' fees.'" Id.; See also Leonard, 204 F.Supp.2d at 789. As a result of LeGro's breach of the Stipulation, Mr. Withrow has been required to pay attorneys' fees to Answer the Complaint, file a Crossclaim, and prepare this Motion none of which would be necessary had LeGro not breached the Stipulation. LeGro acted in bad faith and her actions were without justification.

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V.

CONCLUSION For all the reasons stated above, James R. Withrow respectfully requests that the

Court grant his motion and enter and enforce the Stipulated Judgment and Order.

SEITZ, VAN OGTROP & GREEN, P.A. /s/ Kevin A. Guerke JAMES S. GREEN (DE 0481) KEVIN A. GUERKE (DE 4096) 222 Delaware Avenue, Suite 1500 P.O. Box 68 Wilmington, DE 19899 (302) 888-0600 Attorneys for Plaintiffs DATED: December 10, 2007

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