United States District Court, E.D. Virginia, Newport News Division.
OPINION AND ORDER
HENRY COKE MORGAN, Jr., Senior District Judge.
This matter came before the Court on the Motion of Intervenor James R. Theuer, PLLC ("Theuer") for Order of Contempt and Entry of Judgment ("Motion"), Doc. 57. Ruling from the bench, the Court FOUND Defendants in intentional, bad-faith violation of the Court's April 23, 2014 and June 13, 2014 Orders.
I. Factual and Procedural Background
A full description of the factual and procedural background can be found in this Court's previous Orders. Only the most relevant facts are restated below.
In an Order dated April 23, 2014, the Court granted Defendants' Motion for Settlement. Patel v. Barot, 2014 WL 1624001 (E.D. Va. Apr. 23, 2014). The Court permitted Plaintiff Mukesh Patel's ("Plaintiff or "Patel") counsel to testify and thus granted his Motion to Withdraw as counsel for Plaintiff. The Court found that the following terms contained in an e-mail from
Plaintiffs counsel constituted the terms of the settlement:
This confirms that Plaintiff accepts the offer of settlement, to wit:
Defendants will pay $100, 000 in six equal installments beginning 14 days from court approval and on 30-day intervals thereafter. Plaintiff will designate the allocation. In addition, Defendants will not dispute such that Plaintiff will get the $4855.85 on deposit with DOL from DBSH. The settlement amount will be secured through a promissory note and recorded DOT by CAAP Hospitality, LLC, against the Hampton Bay Plaza hotel property. Court retains jurisdiction to enforce the settlement.
Id. at *1, *5 n.7. Defendants failed to comply with this Order, and Theuer filed Motions to Intervene and for Entry of Judgment and Order of Contempt. Docs. 56 & 57.
In an Order dated June 13, 2014, the Court granted Theuer's Motion to Intervene and ordered Defendants to comply with the April 23 Order by 12:00 p.m. on June 23, 2014. Doc. 62 at 8. On June 20, 2014, Theuer faxed a letter to the Court stating that Defendants had paid him $13, 000 and executed a deed of trust (DOT) on the hotel property in his favor.
At the hearing, the Court learned that the DOT was executed in favor of Theuer only, and did not include Patel. The Court further learned that Defendants had not made any payment to Plaintiff, and had only paid Theuer.
II. Legal Standards
District courts have the inherent authority to enforce settlement agreements. Hensley v. Alcon Labs., Inc. , 277 F.3d 535, 540 (4th Cir. 2002). However, because federal courts are courts of limited jurisdiction, "a district court may not enforce a Settlement Agreement unless the agreement had been approved and incorporated into an order of the court, or, at the time the court is requested to enforce the agreement, there exists some independent ground upon which to base federal jurisdiction.'" Columbus-Am. Discovery Group v. Atlantic Mut. Ins. Co. , 203 F.3d 291, 299 (4th Cir. 2000) (quoting Fairfax Countywide Citizens Ass'n v. Fairfax Cnty. , 571 F.2d 1299, 1303 (4th Cir. 1978)). However, there is jurisdiction to enforce the settlement agreement if the court approves and incorporates it into its order. Columbus-Am. , 203 F.3d ...