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International Painters and Allied Trades Industry Pension Fund v. Vimas Painting Company, Inc.

United States District Court, D. Maryland

May 2, 2014

INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND, et al., Plaintiffs,
v.
VIMAS PAINTING COMPANY, INC., et al., Defendants.

REPORT AND RECOMMENDATION

TIMOTHY J. SULLIVAN, Magistrate Judge.

This Report and Recommendation addresses the Motion to Reinstate Lawsuit for the Limited Purpose of Entry of Consent Order and Judgment ("the Motion") (ECF No. 26) filed by Plaintiffs International Painters and Allied Trades Industry Pension Fund, et al. Defendants Vimas Painting Company, Inc., et al. have not filed a response, and the time for doing so has passed. See Loc. R. 105.2.a. On March 24, 2014, in accordance with 28 U.S.C. § 636 and Local Rule 301, Judge Quarles referred this case to me for a report and recommendation on Plaintiffs' Motion. (ECF No. 27). For the reasons set forth below, I respectfully recommend that Plaintiffs' Motion be GRANTED.

I. FACTUAL AND PROCEDURAL HISTORY

On December 29, 2010, Plaintiffs filed a Complaint (ECF No. 1) against Defendants under 29 U.S.C. §§ 185(a), 1132 and 1145. On or about June 24, 2011, the parties reached a settlement and executed a settlement agreement (ECF No. 26-4). Plaintiffs filed stipulations of dismissal as to each of the Defendants (ECF Nos. 22 & 23), which were granted by the Court on June 28, 2011 (ECF Nos. 24 & 25). While the stipulation of dismissal as to Defendant Bessie Xipolitas was an unconditional dismissal with prejudice, the stipulation of dismissal as to Defendant Vimas Painting Company, Inc. ("the Company") operated as a dismissal without prejudice with the condition that the case was "subject to reinstatement under the terms of the settlement agreement." Id.

Plaintiffs state that the Company fell into arrears on its settlement payments in January 2013 and has not made an installment payment as required by the settlement agreement since October 2013. (ECF No. 26-1 at 2). Although Plaintiffs have sent the Company formal notices of default, the Company has not cured its default. (ECF No. 26-1 at 2-3). Plaintiffs now seek "that this matter be reinstated to the Court's active docket for the purpose of entry of the Consent Order and Judgment." (ECF No. 26 at 1). Plaintiffs seek judgment in the amount of $228, 152.31, which includes the amount the Company agreed to pay in the settlement agreement, as well as post-settlement interest, attorney's fees and costs. (ECF No. 26-1 at 3).

II. DISCUSSION

A. Reinstatement to Enforce a Settlement Agreement

When a district court dismisses a case under Rule 41(a)(1)(A)(ii) because the parties have reached a settlement agreement, the court may enforce the terms of the settlement agreement if it incorporated the terms of the settlement agreement in the order of dismissal, or if it separately ordered that it would retain jurisdiction over the settlement agreement. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 381 (1994). See also Smyth ex rel. Smyth v. Rivero, 282 F.3d 268 (4th Cir. 2002) ("If the obligation to comply with the terms of the agreement is not made part of an order of the court, jurisdiction to enforce the settlement agreement will not exist absent some independent basis of jurisdiction."); Board of Trustees of the Hotel and Restaurant Employees Local 25 v. Madison Hotel, Inc., 97 F.3d 1479, 1483 (D.C. Cir. 1996) (finding that because "there generally is federal jurisdiction over litigation of agreements settling ERISA claims, " the court did not need to decide whether a mere reference to a settlement agreement in a stipulation of dismissal was sufficient to retain federal jurisdiction in accordance with Kokkonen ).

B. The Court's Authority under Rule 60

District courts have the authority to reopen a case under Rule 60 of the Federal Rules of Civil Procedure for "any... reason that justifies relief." Fed.R.Civ.P. 60(b)(6). Generally, only truly "extraordinary circumstances" will allow a party to successfully invoke Rule 60(b)(6). Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 863 n.11 (1988). In any event, a motion under Rule 60(b)(6) must be filed within a "reasonable time, " and it is incumbent upon the moving party to "make a showing of timeliness." McLawhorn v. John W. Daniel & Co., Inc., 924 F.2d 535, 538 (4th Cir. 1991). See also Trustees of the Painters' Trust Fund of Washington, D.C. and Vicinity v. Clabbers, No. DKC-02-4063, 2010 WL 2732241 (D. Md. July 9, 2010) (finding that a moving party failed to demonstrate extraordinary circumstances to vacate a dismissal order where the order did not incorporate the settlement agreement and the party did not move to reopen until "over five years from the last date of any filing").

C. Reinstatement and Entry of the Consent Order and Judgment in this Case

Here, Plaintiffs and the Company stipulated that all of the claims in the case were "DISMISSED WITHOUT PREJUDICE subject to reinstatement under the terms and conditions of the settlement agreement... dated June 24, 2011." (ECF No. 23). The Court entered an order dismissing Plaintiffs' claims against the Company without prejudice "subject to reinstatement under the terms and conditions of the Settlement Agreement by and between all parties to this action dated June 24, 2011." (ECF No. 25). A copy of the settlement agreement (ECF No. 26-4) incorporated into the Court's order of dismissal is attached to Plaintiffs' Motion.

The settlement agreement provides that the Company "shall pay Plaintiffs the sum of $450, 000.00, " and that Plaintiffs' claims would be dismissed without prejudice, "subject to reinstatement and immediate entry of a Consent Judgment as to Company, pursuant to the parties['] joint stipulation, in the event of an uncured default under this Agreement." (ECF No. 26-4 at 3). The parties executed a Joint Stipulation for Entry of Consent Order and Judgment (ECF No. 26-4 at 12), which provided that a Consent Order and Judgment (ECF No. 26-4 at 13-14) "may be entered against Vimas Painting Company, Inc. without further notice or hearing." Plaintiffs agreed to "refrain from filing the Joint Stipulation and the Consent Order and Judgment... unless an uncured default occurs." (ECF No. 26-4 at 3, ¶ 5). An "uncured default" is defined by the settlement agreement to include any failure of the Company "to timely remit any monthly installment payments." (ECF No. 26-4 at 5-6, ¶ 10). The Company is permitted to cure a default, and the procedures for doing so are outlined in the settlement agreement. Id. In the event that a default is not timely cured, the settlement agreement also provides that "the unpaid balance of the Settlement Sum together with interest at the rate of four percent annually (4.00%) shall immediately become due and payable in full." In addition, the Company "shall pay all reasonable attorneys' fees and costs incurred to collect the sums due, enforce [the settlement agreement], or file and execute upon the Judgment." (ECF No. 26-4 at 6, ¶¶ 13-14).

Plaintiffs' Motion states that the Company fell into arrears on its settlement payments in January 2013. After Plaintiffs notified Company of the default, the Company made some additional payments, but did not cure the default. Plaintiffs have not received an installment payment from the Company since October 4, 2013. Pursuant to the terms of the settlement agreement, notices of default were transmitted to the Company six times between January 2013 and December 2013. Each notice allows the Company ten days to cure the default from the date the notice is received. Because more than ten days have elapsed from the Company's receipt of the ...


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