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L.A. Insurance Agency Franchising, LLC v. Kutob

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

July 18, 2019

L.A. INSURANCE AGENCY FRANCHISING, LLC, Plaintiff,
v.
SULEIMAN KUTOB, et al., Defendants.

          OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO ENFORCE SETTLEMENT AGREEMENT [43]

          HONORABLE STEPHEN J. MURPHY, III JUDGE

         On March 31, 2019, the Court dismissed the case without prejudice because the Court-appointed mediator advised that the parties had settled, but then they failed to timely submit documentation. ECF 41. The Court required the parties to submit a proposed, stipulated order of dismissal with prejudice by April 10, 2019. Id. at 1149. The parties failed to comply with the court-imposed deadline and did not submit the required documentation.[1]

         Then, on May 24, 2019, Defendants filed a motion to enforce the settlement agreement. ECF 43. Plaintiff's response was due on Friday, June 7, 2019. See E.D. Mich. LR 7.1(e)(2) (defining nondispositive motions and providing 14 days for a response). Plaintiff did not file a response. Instead, at 4 p.m. on Friday, June 7, the parties submitted a proposed, stipulated order to extend the time for Plaintiff to respond. By filing a late request, the parties ignored the Court's Practice Guidelines. See Practice Guidelines for Judge Stephen J. Murphy, III, (notifying parties that it takes one to two days to review and approve proposed, stipulated orders), https://www.mied.uscourts.gov/index.cfm?pageFunction=chambers&judgeid=31. The Court did not enter the proposed, stipulated order, but Plaintiff nevertheless filed its tardy response. See ECF 44 (Plaintiff's response filed June 10, 2019). The parties continue to disregard Court-ordered deadlines and deadlines mandated by the Local Rules. Any future noncompliance with Court orders, Local Rules, or other deadlines will result in the Court sanctioning the noncompliant party.

         The Court has reviewed the briefs and finds that a hearing is unnecessary. E.D. Mich. LR 7.1(f). For the reasons below, the Court will grant Defendants' motion.

         BACKGROUND

         The Court previously detailed the nature of the parties' underlying legal dispute. See ECF 33, PgID 1119-21. The Court adopts the description here. Defendants-individuals and the insurance agencies they operate-are franchisees of Plaintiff, L.A. Insurance Franchising Agency.

         The current dispute involves execution of the parties' Settlement Agreement. Defendants allege that Plaintiff failed to uphold the Settlement Agreement. The Settlement Agreement included terms governing Plaintiff's release of certain commissions earned by Defendants but withheld by Plaintiff during the legal dispute ("Held Commissions"). Plaintiff distributed 40% of the Held Commissions. Defendants maintain that Plaintiff did not release the remaining 60% of Held Commissions owed to them. ECF 43, PgID 1161. Defendants also allege that Plaintiff did not send letters to Defendant Suleiman Kutob's insurance carrier clients as required. Id. Plaintiff responds that Defendants failed to submit fully executed franchise agreements because the lease addendums lacked the agencies' landlords' signatures. ECF 44, PgID 1282. Plaintiff also avers that Defendants did not install appropriate signage. Id. at 1283. Plaintiff argues that Defendants' "failure to provide Plaintiff with those addendums" and "failure to install approved signage" are "material breach[es] of the settlement agreement." Id. at 1279.

         LEGAL STANDARD

         Courts possess "inherent authority to enforce settlement agreements between parties before it." U.S. Olympic Comm. v. David Shoe Co., 835 F.2d 880, at *2 (6th Cir. 1987) (Table); see also Bamerilease Capital Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir. 1992) (citation omitted).[2] If the parties dispute the settlement agreement's terms or validity, the Court ordinarily must conduct an evidentiary hearing. Kukla v. Nat'l Distillers Prods. Co., 483 F.2d 619, 621-22 (6th Cir. 1973) (citation omitted). If, however, an agreement is clear and unambiguous, or no issues of fact are present, no evidentiary hearing is required. Aro Corp. v. Allied Witan Co., 531 F.2d 1368, 1372 (6th Cir. 1976). Thus, "summary enforcement of a settlement agreement has been deemed appropriate [when] no substantial dispute exists regarding the entry into and terms of an agreement." RE/MAX Int'l, Inc. v. Realty One, Inc., 271 F.3d 633, 646 (6th Cir. 2001) (citing Kukla, 483 F.2d at 621). The Court "enforce[s] the settlement as agreed to by the parties and is not permitted to alter the terms of the agreement." Brock v. Scheuner Corp., 841 F.2d 151, 154 (6th Cir. 1988) (citation omitted).

         DISCUSSION

         I. The Settlement Agreement's Terms

         The Settlement Agreement required Plaintiff to release 40% of Defendants' Held Commissions within seven days of receipt of the Settlement Agreement and the new franchise agreements, or "receipt of the Carrier Verifications," whichever occurred later. ECF 43-2, PgID 1227. Plaintiff released the funds.

         The release of the remaining 60% of Defendants' Held Commissions was conditioned on: (1) the receipt of the Settlement Agreement and the new franchise agreements; (2) the "receipt of the Carrier Verifications"; and (3) Plaintiff's "written approval of all L.A. Insurance signage to be installed at the applicable [Defendant] Agencies in accordance with the specifications provided" on February 4, 2019. ECF 43-2, PgID 1227. Plaintiff "agree[d] to provide written notice to the applicable [Defendant] Agency whether it approves of the signage within seven (7) days of the agency providing written notice to [Plaintiff] that it believes the signage has been installed" as required. Id. n.2. The funds needed to be released "within seven (7) days" of the completion of the three conditions. Id. Plaintiff also agreed "to provide written notice to the carriers with whom the [Defendant] Agencies have done or do business" in the format agreed on by the parties. ECF 43-2, PgID 1227.

         Finally, the Settlement Agreement stated that, "[i]n the event of a breach or default, threatened breach or default, or claimed breach or default of this Agreement by any of the [P]arties," and a subsequent court proceeding to enforce the Settlement Agreement, "the prevailing Party shall recover against the opposing Party all of its reasonable ...


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