Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Envy Hawaii LLC v. Cirbin Inc.

United States District Court, D. Hawaii

October 17, 2017

ENVY HAWAII LLC, Plaintiff,
v.
CIRBIN INC., DBA CAMPAGNA MOTORS, Defendant.

          FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFF ENVY HAWAII LLC'S MOTION TO ENFORCE SETTLEMENT AGREEMENT AND FOR AWARD OF ATTORNEYS' FEES AND COSTS [1]

          RICHARD L. PUGLISI, UNITED STATES MAGISTRATE JUDGE.

         Before the Court is Plaintiff Envy Hawaii LLC's Motion to Enforce Settlement Agreement and for Award of Attorneys' Fees and Costs, filed on August 23, 2017 (“Motion”). ECF No. 23. Defendant filed its Opposition to the Motion on September 8, 2017. ECF No. 25. Plaintiffs filed their Reply on September 18, 2017. ECF No. 26. A hearing on this matter was held on September 29, 2017, at 10:00 a.m. ECF No. 37. Kevin W. Herring, Esq. and Lyle Hosoda, Esq. appeared on behalf of Plaintiff; and Johnathan C. Bolton, Esq. and Dylan J. Taschner, Esq. appeared on behalf of Defendant. Id. Following the hearing, Plaintiff filed a declaration regarding the attorneys' fees and interest requested. ECF No. 38. Defendant filed its response on October 13, 2017. ECF No. 39. After careful consideration of the Motion, the supporting and opposing memoranda, declarations and exhibits attached thereto, the arguments of counsel, the supplemental declarations, and the record established in this action, the Court FINDS AND RECOMMENDS that Plaintiff's Motion be GRANTED IN PART AND DENIED IN PART.

         BACKGROUND

         Plaintiff filed this action on October 10, 2016, based on a contract dispute for the sale of Defendant's vehicles. ECF No. 1. In connection with that contract, Plaintiff purchased two of Defendant's vehicles in 2014 at a cost of $109, 854. Id. ¶ 22. On May 2, 2017, the parties informed the Court that they had reached a settlement, and the trial date was vacated. ECF No. 21.

         After the final terms were agreed upon, the parties executed a written settlement agreement and mutual release with an effective date of July 6, 2017 (“Settlement Agreement”), which was signed by the parties' presidents and by counsel. See ECF 23-2, Decl. of Kevin W. Herring (“Herring Decl.”) ¶ 3; ECF No. 23-3. Under the Settlement Agreement, Plaintiff agreed to return the two vehicles to Defendant that it had previously purchased in exchange for $90, 000. See ECF No. 23-3 ¶ 3. The Settlement Agreement contains a provision regarding the condition of the two vehicles, which states that Plaintiff represents that “the condition and mileage of the [vehicles] is as depicted in the photographs that were transmitted by email” to Defendant's counsel on June 8, 2017. Id. ¶ 3(a.i). Under the Settlement Agreement, Plaintiff was required to make the vehicles immediately available to Defendant at Plaintiff's premises and Defendant was responsible for all costs associated with transporting the vehicles to the destination of Defendant's choosing. Id. ¶ 3(a.ii). In exchange for returning the vehicles, Defendant agreed to pay Plaintiff $90, 000 in three separate installments. Id. ¶ 3(b). Defendant was required to pay Plaintiff $70, 000 no later than thirty days after the effective date, or August 5, 2017, pay another $10, 000 thirty days after the first payment, and pay the final $10, 000 thirty days after the second payment. Id.

         On August 9, 2017, four days after the first payment was due to Plaintiff, Defendant informed Plaintiff that the first payment would be delayed. ECF No. 26-1 ¶ 3. On August 10, 2017, counsel for the parties discussed payment, and Defendant's counsel confirmed that there would be a delay in payment to Plaintiff. Id. ¶ 3.

         Plaintiff filed the present Motion on August 23, 2017. ECF No. 23. According to Defendant's Opposition, the vehicles arrived at Defendant's headquarters in Canada on August 30, 2017, at which time Defendant discovered serious defects in the vehicles. ECF No. 25 at 6.

         In the present Motion, Plaintiff asks the Court to enforce the terms of the Settlement Agreement by requiring Defendant to pay Plaintiff $90, 000 and to award Plaintiff attorneys' fees and costs related to bringing this Motion. See ECF No. 22-1 at 14. Defendant argues that Plaintiff materially breached the Settlement Agreement, which excuses Defendant's performance and entitles Defendant to rescind the Settlement Agreement. ECF No. 25. Defendant also seeks an award of its attorneys' fees and costs related to the pending Motion. Id.

         DISCUSSION

         It is “well established that the trial court has power to summarily enforce on motion a settlement agreement entered into by the litigants while the litigation is pending before it.” City Equities Anaheim, Ltd. v. Lincoln Plaza Dev. Co., 22 F.3d 954, 957 (9th Cir. 1994); see also Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987). “[A] motion to enforce [a] settlement agreement essentially is an action to specifically enforce a contract.” Adams v. Johns-Manville Corp., 876 F.2d 702, 709 (9th Cir. 1989). The “court's enforcement power include[s] authority to award damages . . . [or] specific performance.” T.N.T. Mktg., Inc. v. Agresti, 796 F.2d 276, 278 (9th Cir. 1986). Federal courts apply state contract law principles when enforcing settlement agreements. O'Neil v. Bunge Corp., 365 F.3d 820, 822 (9th Cir. 2004); see also Boskoff v. Yano, 217 F.Supp.2d 1077, 1085 (D. Haw. 2001) (applying Hawaii contract law).

         A district court may only enforce complete settlement agreements. Callie, 829 F.2d at 890. A complete settlement agreement requires agreement on all “material terms” and “the intent of the parties to bind themselves.” Id. at 891; Carson v. Saito, 489 P.2d 636, 638 (Haw. 1971) (“There must be mutual assent or a meeting of the minds on all essential elements or terms in order to form a binding contract.” (quoting Honolulu Rapid Transit Co. v. Paschoal, 449 P.2d 123, 127 (Haw. 1968)).

         Here, the parties do not dispute the validity of the contract formation or the parties' intent to be bound. Instead, Plaintiff argues that Defendant breached the Settlement Agreement by failing to make timely payments; Defendant argues that Plaintiff breached the Settlement Agreement by failing to comply with the condition terms. Therefore, the Court need only determine whether the Settlement Agreement was materially breached, and if so, by which party, and the appropriate remedy.

         A. Defendant Breached the Payment Terms of the Settlement Agreement.

         In its Motion, Plaintiff argues that Defendant has breached the Settlement Agreement by failing to make timely payments. ECF No. 23. Under the Settlement Agreement, Defendant was required to pay Plaintiff $70, 000 no later than thirty days after the effective date, or August 5, 2017, pay another $10, 000 thirty days after the first payment, and pay the final $10, 000 thirty days after the second payment. Id. The payment terms contained in the Settlement Agreement do not include any condition to payment, but state simply that the first payment is to be made within thirty days of the effective date of the Settlement Agreement. See id. ¶ 3(b.i). There is no dispute that Defendant did not make the first payment by the date required by the Settlement Agreement and, to date, has not made any payments to Plaintiff. Thus, Defendant has not complied with the written terms of the Settlement Agreement and is in breach. See Velez v. The Bank of N.Y. Mellon, Civil No. 10-00468 JMS/KSC, 2011 WL 572523, at *3 (D. Haw. Feb. 15, 2011) (explaining elements of breach of contract claim under Hawaii law); Sharpe v. FDIC, 126 F.3d 1147, 1153 (9th Cir. 1997) (“failure to perform the express terms of the settlement agreement is a breach”).

         However, before the Court can order specific performance of the Settlement Agreement, the Court must consider Defendant's argument that its performance was excused because Plaintiff first failed to comply with the Settlement Agreement and Defendant is entitled to rescission. ECF No. 25 at 7-9. “Rescission is a remedy available to a nonbreaching party when there has been a material breach by the other party.” Guddee v. Abudanza, Inc., No. 06-00664 SOM/KSC, 2007 WL 4354420, at *6 (D. Haw. Dec. 12, 2007) (citing Bishop Trust Co., Ltd., v. Kamokila Dev. Corp., 555 P.2d 1193, 1196 (Haw. 1976); Aickin v. Ocean View Invs. Co., 935 P.2d 992, 1005 (Haw. 1997)). Here, Defendant argues that Plaintiff materially breached the condition provision of the Settlement Agreement because the vehicles delivered to Defendant were not “in the same good condition depicted in the photographs” that Plaintiff provided to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.