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Akbar v. Bangash

United States District Court, E.D. Michigan, Southern Division

July 11, 2017

A. NISAR AKBAR, et al., Plaintiffs,
v.
SHAUKAT BANGASH, et al., Defendants.

          OPINION & ORDER DENYING PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT OR, IN THE ALTERNATIVE, FOR SANCTIONS (Dkt. 84) AND DENYING DEFENDANTS' MOTION TO STRIKE AND FOR SANCTIONS (Dkt. 87)

          MARK A. GOLDSMITH United States District Judge

         This matter is before the Court on Plaintiffs' motion to enforce a settlement agreement or, in the alternative, for sanctions (Dkt. 84), as well as Defendants' motion to strike Plaintiffs' motion and for sanctions (Dkt. 87). Because oral argument will not aid the decisional process, the Court will decide the motions based on the parties' briefing. See E.D. Mich. LR 7.1(f)(2).

         For the reasons stated below, the Court denies both motions.

         I. BACKGROUND

         Eleven Plaintiffs brought suit on July 31, 2015, claiming that they were offered and sold fake securities in the form of investment contracts and shares in Defendant Quaid-e-Azam International Hospital, which is located in Islamabad, Pakistan, through Global Health Services Limited (“GHS”), a limited company headquartered in Pakistan. Am. Compl. ¶¶ 1, 70 (Dkt. 10). After the Court denied Defendants Shaukat Bangash (the chief executive officer of GHS) and GHS's motion to dismiss, see Akbar v. Bangash, No. 15-cv-12688, 2016 WL 4060930, at *13 (E.D. Mich. July 29, 2016), the parties appeared to have reached a settlement, and an order dismissing the case with prejudice was issued on September 7, 2016, subject to reopening within 30 days if the settlement was not consummated. 9/7/2016 Order of Dismissal (Dkt. 66). Plaintiffs filed a motion to reopen the case on October 13, 2016, see Pls. Mot. to Reopen (Dkt. 69), which the Court granted, see 11/15/2016 Order to Reopen (Dkt. 74).

         In addition to reopening the case, the Court also referred this matter to the magistrate judge to conduct another settlement conference with the parties. See 11/15/2016 Referral Order (Dkt. 75). The settlement conference was held on February 22, 2017, after which the magistrate judge noted that the parties were unable to reach a settlement agreement. See 2/22/2017 Docket Minute Entry.

         II. ANALYSIS

         A. Plaintiffs' Motion to Enforce Settlement or for Sanctions

         In their motion, Plaintiffs first contend that the parties reached an agreement on all material terms of the settlement during the February 22 conference with the magistrate judge, despite the fact that Bangash allegedly attempted to modify one of the terms near the end of the conference. See Pls. Br. at 1, 3-4. Although the parties did not reduce the initial agreement into a signed writing, Plaintiffs request that the Court exercise its inherent authority to enforce the terms of that agreement. Id. at 5-6.

         The Court agrees with Plaintiffs that it possesses the inherent authority to enforce a settlement agreement when the parties have agreed on all material terms, even if the agreement has yet to be memorialized in writing. Therma-Scan, Inc. v. Thermoscan, Inc., 217 F.3d 414, 419 (6th Cir. 2000) (“This circuit has long recognized the broad, inherent authority and equitable power of a district court to enforce an agreement in settlement of litigation pending before it. Moreover, a federal court possesses this power even if that agreement has not been reduced to writing.”); see also RE/MAX Int'l, Inc. v. Realty One, Inc., 271 F.3d 633, 646 (6th Cir. 2001) (“The existence of a valid agreement is not diminished by the fact that the parties have yet to memorialize the agreement. When parties have agreed on the essential terms of a settlement, and all that remains is to memorialize the agreement in writing, the parties are bound by the terms of the oral agreement.”). However, as Defendants correctly point out in their response brief, see Defs. Br. at 13-19, Plaintiffs have not provided this Court with any objective evidence to suggest that the parties actually reached an agreement on a settlement.

         Before it can enforce a settlement agreement, the Court must first “conclude that agreement has been reached on all material terms.” Therma-Scan, 217 F.3d at 419. “Whether the parties actually reached an agreement is a question of fact for the district court, ” Moore v. U.S. Postal Serv., 369 F.App'x 712, 717 (6th Cir. 2010), which is governed by state contract law, Cuyahoga Valley Ry. Co. v. U.S. Bank Trust Nat'l Ass'n, 515 F.App'x 494, 498 (6th Cir. 2013) (“Because settlement agreements are a type of contract, the formation and enforceability of a purported settlement agreement are governed by state contract law.”).

         Under Michigan law, a “contract is formed upon offer and acceptance and a mutual assent or meeting of the minds on all essential terms.” Masco Cabinetry Middlefield, LLC v. Cefla N.A., Inc., 637 F.App'x 192, 197 (6th Cir. 2015). Determining whether there was mutual assent between the parties “is judged by an objective standard, looking to the express words of the parties and their visible acts, not their subjective states of mind, ” Tillman v. Macy's Inc., 735 F.3d 453, 459 (6th Cir. 2013), which requires the consideration of the “relevant circumstances surrounding the transaction, including all writings, oral statement, and other conduct by which the parties manifested their intent, ” Innotext, Inc. v. Petra'Lex USA Inc., 694 F.3d 581, 589 (6th Cir. 2012); see also Huntington Nat'l Bank v. Daniel J. Aronoff Living Trust, 853 N.W.2d 481, 488 (Mich. Ct. App. 2014) (“Courts judge whether there was a meeting of the minds from objective evidence.”).

         Plaintiffs have not provided any evidence of objective manifestations from which this Court can ascertain the parties' mutual assent. In fact, the only evidence presented to the Court shows that there was no mutual assent between the parties on all material terms, including those terms proposed by Plaintiffs. See Bangash Decl. ¶¶ 5, 7-8 (Dkt. 86-3); Dolley Aff. ¶¶ 2-7 (Dkt. 86-6); see also Marked-Up Agreement (Dkt. 86-5). Having opted to not file a reply brief, Plaintiffs neither rebut Defendants' arguments or evidence, nor do they attempt to provide objective evidence that there was a meeting of the minds between the parties on all material terms.

         Given the complete absence of any evidence of the parties' mutual assent on all material terms, the Court declines to enforce the purported settlement agreement. See Therma-Scan, 217 F.3d at 420 (holding that the district court abused its discretion in enforcing the settlement agreement where there was “simply no objective manifestation of a ‘meeting of the minds' on [a] material term of the settlement”); Gonzalez Prod. Sys., Inc. v. Martinrea Int'l Inc., No. 13-cv-11544, 2014 WL 6455592, at *11 (E.D. Mich. Nov. 17, 2014) (granting the plaintiff's motion to dismiss the defendant's counterclaim that a settlement agreement was reached “because there is no written settlement agreement, and the Court has not been provided with evidence that there was mutual assent to material terms of a settlement agreement”); cf. Remark, LLC v. Adell Broad. Corp., 702 F.3d 280, 283 (6th Cir. 2012) (“[T]he emails conveyed an objective meeting of the minds as to each of the material terms [of the settlement agreement], and as such they meet all requirements of an enforceable contract under Michigan law.”); Moore, 369 F.App'x at 717 (noting that there was evidentiary support “for the district court's conclusion that an agreement had indeed been ...


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