United States District Court, D. Arizona
HONORABLE G. MURRAY SNOW UNITED STATES DISTRICT JUDGE.
before the Court is the Motion to Enforce Settlement of
Plaintiff Federal Deposit Insurance Corporation as Receiver
for AmTrust Bank (“FDIC-R”). (Doc. 78.) For the
following reasons, the Court grants the motion.
case arises out of a Loan Purchase Agreement between
Defendant Nova Financial and Investment Corporation
(“Nova”) and AmTrust Bank. AmTrust Bank was
closed by the Office of Thrift Supervision in December 2009,
and FDIC-R was appointed as Receiver. FDIC-R brought suit
against Nova in the United States District Court for the
Northern District of Ohio for breach of the Loan Purchase
Agreement. The case was transferred to this district.
February 2016, FDIC-R and Nova agreed to private mediation.
On February 15, FDIC-R provided Nova and the mediator with a
copy of their Confidential Mediation Statement. This document
included a provision that “[a]ny settlement at
mediation will be subject to the FDIC's customary
settlement terms (see Ex. A), and even minor deviations from
that form will need the approval of senior management of the
FDIC.” (Doc. 78-2 at 3.) Those “customary
settlement terms” were attached in the form of a
“Settlement and Release Agreement” (“FDIC
Form”). The FDIC Form included a release provision,
which stated in relevant part that “FDIC-R . . . hereby
releases and discharges the Defendant and its respective
heirs, executors, administrators, representatives,
successors, and assigns, from any and all claims . . . that
arise from or relate to the transactions contained within the
cause of action alleged in the Action.” (Id.
at 7.) The mediator emphasized to FDIC-R, in an e-mail
confirming that the FDIC Form had been shared with Nova, the
importance of sharing the FDIC Form in advance so that
“the language of that document should not become a
sticking point if the economics are resolved.” (Doc.
80-2 at 3.)
negotiations took place on February 23. After failing to come
to an agreement in person, the parties reached an oral
settlement in a teleconference with the mediator that same
evening. The mediator sent an e-mail to the parties to
confirm the settlement. The e-mail summarized the agreement
1. NOVA will pay FDIC-R as receiver for AmTrust a total of
2. NOVA will pay all costs of today's mediation, both its
share and FDIC's, and FDIC will have no responsibility
for any of the mediation costs.
3. The parties will enter into a settlement agreement for
them to put in final form consistent with the form of
stipulation FDIC presented with its mediation statement, to
include a provision that (a) the two current actions pending
against NOVA will be dismissed with prejudice and (b) FDIC-R
will file no further claims or actions against NOVA based on
any loans NOVA made to any person or entity and underwrote
for or sold to AmTrust at any time.
(Doc. 78-3 at 2.) Neither party objected at that time to the
mediator's description of the settlement. Neither party
now argues that the parties had not reached an agreement, or
that the mediator incorrectly summarized the agreement in the
e-mail. (Doc. 79 at 2.) But within two days, a number of
disagreements arose as the parties sought to reduce the
agreement to writing. The parties have resolved all
disagreements except one. That disagreement pertains to the
scope of the release provision. FDIC-R maintains that the
only parties released from liability were those listed in the
FDIC Form, which encompassed “Defendant and its
respective heirs, executors, administrators, representatives,
successors, and assigns.” (Doc. 78-8 at 5.) Nova, on
the other hand, argues that the release as agreed to includes
not just those people but also Nova's “employees,
officers, directors, shareholders, subsidiaries, affiliates,
[and] agents.” (Doc. 78-10 at 5).
filed the pending Motion to Enforce, asking the Court to
enforce the settlement agreement in accordance with
have the power to enforce valid settlement agreements.
See In re City Equities Anaheim, Ltd., 22 F.3d 954,
957 (9th Cir. 2014). A court “may enforce only
complete settlement agreements.” Callie v.
Near, 829 F.2d 888, 890 (9th Cir. 1987). “Where
material facts concerning the existence or
terms of an agreement to settle are in dispute, the
parties must be allowed an evidentiary hearing.”
Id. Here, while a material term of the settlement
agreement is disputed, it appears that there is no dispute
about the facts relevant to that term, and hence there is no
need for an evidentiary hearing.
an enforceable settlement agreement has been entered into is
a question of state law. Wilcox v. Arpaio, 753 F.3d
872, 876 (9th Cir. 2014). In Arizona, the construction and
enforcement of settlement agreements are governed by general
contract principles. Emmons v. Superior Court, 192
Ariz. 509, 512, 968 P.2d 582, 585 (Ct. App. 1998). A valid
contract in Arizona consists of “an offer, acceptance,
consideration, and sufficient specification of terms so that
obligations can be ascertained.” K-Line Builders v.
First Fed. Sav. & Loan Ass'n, 139 Ariz. 209,
212, 677 P.2d 1317, 1320 (Ct. App. 1983). “It is
well-established that before a binding contract is formed,
the parties must mutually consent to all material