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Epps v. Midvale Indemnity Co.

United States District Court, D. South Carolina, Florence Division

December 4, 2017

Sherye Epps d/b/a Sunshine Shoes, Plaintiff,
v.
Midvale Indemnity Company, Defendant.

          REPORT AND RECOMMENDATION

          Kaymani D. West, United States Magistrate Judge.

         This matter is before the court on a Motion to Enforce Settlement filed by Defendant, Midvale Indemnity Company (“Defendant” or “Midvale”), ECF No. 37, which was referred to the undersigned when United States District Judge Bruce H. Hendricks granted the Motion to Withdraw as Attorney of then-counsel for Plaintiff Sherye Epps d/b/a Sunshine Shoes (“Plaintiff” or “Epps”).[1] The undersigned conducted a hearing on November 14, 2017, at which Plaintiff appeared pro se and Defendant appeared through its counsel of record, Jeffrey Kull.[2] As discussed more fully within, at that hearing the undersigned considered Plaintiff's questions about the settlement at issue, explaining that the agreed-to settlement involves only the above-captioned litigation and that the release Plaintiff is required to sign before receiving her check is appropriate based on the terms the parties agreed to in writing on June 29, 2017. Having considered the documentary and testamentary evidence submitted to the court and provided at the hearing, as well as the additional filings of Plaintiff and Defendant related to the Motion to Enforce Settlement, the undersigned recommends Defendant's Motion to Enforce Settlement, ECF No. 37, be granted. If this recommendation is adopted, the settlement can be consummated and this matter will be ended.

         I. Factual and procedural background

         A. Filing in state court and removal to this court

         Sunshine Shoes, a therapeutic shoe company of which Plaintiff is the sole proprietor, experienced property damage in September/October 2015 as the result of a significant storm and flooding. Plaintiff made a claim on her insurance policy that had been issued by Midvale. Midvale denied Plaintiff's claim, taking the position the policy did not cover the loss. Appearing through her former counsel, Plaintiff brought suit against Midvale for alleged breach of the contract of insurance between Midvale and Sunshine Shoes and for bad-faith refusal to pay a claim. Plaintiff filed her Complaint in state court on or about May 20, 2016.[3] While in state court, this matter had a case number of 2016-CP-21-1243 (“state-court action”). The state-court action also included Bolt Insurance Agency (“Bolt”) as a Defendant. See ECF No. 1-1. http://publicindex.sccourts.org/Florence/PublicIndex/CaseDetails.aspx?County=21&CourtAgency=21 002&Casenum=2016CP2101243&CaseType=V&HKey=516787112654872715381488011679716588 431201195411150118101108799987791161224371106507010484711107189 (last visited Dec. 4, 2017).

         On July 25, 2016, a Stipulation of Dismissal was filed in state court dismissing Bolt from the matter. ECF No. 1-2.

         On August 5, 2016, Defendant removed the matter to this court based on the court's jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). ECF No. 1. Jurisdiction pursuant to 28 U.S.C. § 1332, often called diversity-of-citizenship jurisdiction, requires complete diversity of citizenship between plaintiff and defendant and that the amount in controversy exceed $75, 000. 28 U.S.C. § 1332. As required when a case is removed, counsel for Defendant set out the bases for § 1332 jurisdiction, noting that Plaintiff and remaining-Defendant Midvale are citizens of different states. Notice of Removal ¶ 3, ECF No. 1. To support Defendant's assertion that the amount in controversy exceeded $75, 000, Defendant provided the court with Plaintiff's discovery responses in which Plaintiff declined to agree that her potential damages would be no more than $75, 000. ECF No. 1-3.[4] Defendant's Notice of Removal also included Midvale's Answer to the Complaint, which had been filed while the matter was still in state court. ECF No. 1-4.

         Upon filing in this court, the matter was initially assigned to United States District Judge R. Bryan Harwell, with a civil action number of 4:16-cv-2747-RBH. However, On August 10, 2016, the matter was reassigned to Judge Hendricks, which gave it the current civil action number of 4:16-cv-2747-BHH.

         Upon removal Defendant gave written notice to the clerk of the state court (in the Florence County Court of Common Pleas) as required by 28 U.S.C. § 1446. See ECF No. 9, 9-1 (acknowledgement of the filing of notice of removal signed by Clerk of Court, Florence County on August 15, 2016). Section 1446 provides that the filing of the Notice of Removal in Florence County ended the matter in that court. Section 1446 provides that “the State court shall proceed no further unless and until the case is remanded.” 28 U.S.C. § 1446. Online docket information from the Florence County Court of Common Pleas (state court) indicates the matter was dismissed by removal to another court on August 15, 2016. See http://publicindex.sccourts.org/Florence/PublicIndex/CaseDetails.aspx?County=21&CourtAgency=21 002&Casenum=2016CP2101243&CaseType=V&HKey=516787112654872715381488011679716588 431201195411150118101108799987791161224371106507010484711107189 (last visited Dec. 4, 2017). Although online records also include a December 16, 2016 entry described as “ADR/Alternative Dispute Resolution (Workflow), ” that entry indicates it was completed on August 15, 2016, the date of removal. Counsel for both parties attested at the hearing that no ADR was done in state court.

         The undersigned notes that the state-court online records include entries indicating Sherye Epps made an undescribed “filing” in the closed state court action on November 14, 2017 and filed a “Motion/Rule Failure to Make Disclosure Sanctions” there on November 30, 2017. See Id. Documents associated with these November 2017 filings are not available online. Nonetheless, the undersigned again advises Plaintiff that the state-court action was closed when the matter was removed to this court. As the state court no longer has jurisdiction over this matter, filings or activity there have no impact on this case.

         B. Pretrial scheduling and mediation requirement

         Shortly after removal, Judge Hendricks issued a Conference and Scheduling Order and a Mediation Order on August 11, 2016. ECF Nos. 6, 7. These orders included deadlines and information routinely provided to civil litigants and their counsel. Judge Hendricks' Mediation Order included details and requirements for the court-ordered mediation. ECF No. 7.

         Three times counsel for Plaintiff and counsel for Defendant agreed to and were granted extensions of the deadlines for mediation, discovery, and related deadlines contained in the court's scheduling orders. See ECF Nos. 15, 23, 27. The most recent scheduling order included a mediation deadline of August 7, 2017. ECF No. 27.

         C. Mediation and order of dismissal

         On June 29, 2017, with Karl A. Folkens serving as mediator, the parties mediated this matter to a full resolution, and so advised the court on June 30, 2017. On June 29, 2017, the parties executed a “Mediated Settlement Agreement, ” (“MSA”). See ECF No. 37-1. The MSA includes the caption of this litigation and sets out the parties' agreement-including information about the sum to be paid by Defendant, the release that Plaintiff will be required to sign, as well as information about the payment of mediation and the logistics of dismissing the matter in court. See ECF No. 37-1 (quoted in its entirety below). The MSA was signed by Plaintiff; her attorneys, Moore and Evans; her mother, Mary Ann Epps;[5] defense counsel J Kull; and another party whose signature is not legible. At the parties' request, Judge Hendricks issued a one-page Order of Dismissal on July 5, 2017. ECF No. 29. In the Order, Judge Hendricks indicated the parties had advised the court this matter had been settled and dismissed this action “without costs and without prejudice.” ECF No. 29. Further, the Order provided:

If settlement is not consummated within sixty (60) days, either party may petition the Court to reopen this action and restore it to the calendar. Rule 60(b)(7), F.R. Civ. P. In the alternative, to the extent permitted by law, either party may within sixty (60) days petition the Court to enforce the settlement.

         Order, ECF No. 29 (citing Fairfax Countywide Citizens v. Fairfax Cnty., 571 F.2d 1299 (4th Cir. 1978)).

         D. Matter reopened; Plaintiff's counsel relieved

         Although still represented by counsel at the time, on July 28, 2017, Plaintiff filed a pro se motion asking that the court grant a six-month release from all creditors. See ECF Nos. 30-34. That motion, which was docketed as a Motion for Extension of Time, made it clear to the court that the agreed-to settlement had not been consummated. See ECF No. 39. On August 3, 2017, Plaintiff's counsel moved to withdraw from representing her, noting communication issues between counsel and client. Plaintiff's then-counsel also noted Plaintiff had filed for Chapter 13 bankruptcy. ECF No. 34. “Based on Plaintiff's bankruptcy filing and her desire not to sign the General Release, no disbursements have been made from [Plaintiff's] settlement proceeds.” Id. at 2. Counsel advised they were maintaining the check in their trust account pending resolution of issues concerning the settlement. Id. On August 10, 2017, Defendant filed the Motion to Enforce the Settlement now under consideration, ECF No. 37.

         Based on these filings, Judge Hendricks reopened this matter and conducted a hearing on September 19, 2017. Plaintiff; her then-counsel Moore and Evans; and defense counsel Kull attended that hearing. See ECF No. 43. For reasons discussed on the record during that hearing, Judge Hendricks granted the motion of Plaintiff's counsel to withdraw from representing her. Because this meant Plaintiff would be proceeding pro se, the matter was assigned to the undersigned magistrate judge for consideration of pretrial matters. Judge Hendricks declined to rule on Defendant's Motion to Enforce Settlement at that time. Id.

         E. Proceedings since referred to the undersigned

         In accordance with the court's usual practice when pro se litigants are involved, the undersigned issued an order on September 21, 2017, advising Plaintiff of pleading and practice rules applicable to pro se litigants. ECF No. 50. On September 27, 2017, the undersigned instructed Plaintiff to file a written response to Defendant's Motion to Enforce Settlement no later than October 13, 2017. ECF No. 52. Plaintiff provided some documentation to the court that was docketed on October 3, 2017, ECF No. 58, although those documents concern an unrelated matter. On October 4, 2017, Plaintiff requested that the court appoint counsel for her and that she be given an extension of time within which to respond to the Motion to Enforce Settlement. ECF No. 58. The court granted Plaintiff's request for an extension, advising her to respond to the motion by November 3, 2017. Plaintiff's request for appointed counsel was denied. ECF No. 56.

         Since then, Plaintiff has submitted voluminous filings to the court in support of her questions about the settlement. See ECF Nos. 60, 61, 62, 67, 68, 69, 73, 76, 77, 78, 83, 85, 86, 88 (filings and attachments, some duplicative, totaling over 1500 pages).[6] Defendant has provided additional information in response to Plaintiff's filings and in further support of the Motion to Enforce Settlement. See ECF Nos. 42, 59, 74, 75. The undersigned conducted a hearing on the Motion to Enforce Settlement on November 14, 2017.

         On November 20, 2017, Plaintiff submitted another supplemental filing, which is docketed as a Motion for Funds, Package Settlement and Disbursement, and to Remove Bond Ride. Plaintiff has since filed several supplements in support of that Motion. ECF Nos. 86, 87, 88. The information contained in ECF Nos. 86-88 reiterates issues raised in Plaintiff's other filings or concerns unrelated matters. Accordingly, the undersigned denied the Motion. ECF No. 89.

         II. Standard in considering Motion to Enforce Settlement

         “[D]istrict courts have inherent authority, deriving from their equity power, to enforce settlement agreements.” Hensley v. Alcon Labs., Inc., 277 F.3d 535, 540 (4th Cir. 2002). In order to exercise this power, a district court “(1) must find that the parties reached a complete agreement and (2) must be able to determine its terms and conditions.” Id. at 540-41. In making these determinations, courts generally rely on standard contract principles. Topiwala v. Wessell, 509 F. App'x 184, 186 (4th Cir. 2013). The first step is to look to “the objectively manifested intentions of the parties, ” to determine whether there was a meeting of the minds. Moore v. Beaufort Cnty., 936 F.2d 159, 162 (4th Cir. 1991). To the extent “there is a factual dispute over the existence of an agreement, over the authority of attorneys to enter into the agreement, or over the agreement's terms, the district court may not enforce a settlement agreement summarily.” Hensley, 277 F.3d at 541 (emphasis in original) (footnote omitted). Instead, the district court must hold a plenary evidentiary hearing to resolve the dispute. Id. (quoting Millner v. Norfolk & W. Ry. Co, 643 F.2d 1005, 1009 (4th Cir.1981)). In the event a settlement “has been reached and its terms and conditions can be determined, the court may enforce the agreement summarily as long as the excuse for nonperformance of the agreement is ‘comparatively insubstantial.'” Hensley, 277 F.3d at 540 (quoting Millner, 643 F.2d at 1009) (internal citation omitted). “[H]aving second thoughts about the results of a settlement agreement does not justify setting aside an otherwise valid agreement.” Young v. F.D.I.C, 103 F.3d 1180, 1195 (4th Cir. 1997).

         III. Analysis

         The only case at issue here, and thus the only litigation that is the subject of the Mediation Settlement Agreement (MSA) signed by Plaintiff and Defendant, is Epps v. Midvale, Civil Action No. 4:16-cv-02747. Plaintiff has correctly noted that at one time the case number included the initials “RBH” at the end. Those initials represent the United States District Judge to whom the matter was initially assigned. See, e.g., ECF No. 30 at 1 (listing both 4:16-cv-2727-BHH and 4:16-cv-2727-RBH). When reassigned to Judge Hendricks, the initials “BHH” were appended to the end of the case number. Similarly, when this matter was referred to the undersigned, the initials “KDW” were also added to the case number. The case number in this court has never changed, and any change in initials does not change what this case entails. Further, this case is the same case as the one initial brought in the Florence County Court of Common Pleas and given the case number 2016-CP-21-1243. As noted above, when the matter was removed the case became active in this court and the matter was dismissed in the Court of Common Pleas.

         A. The Policy

         This summary of Plaintiff's claims and Defendant's defenses in this matter is provided for clarity and for the reader's information. The court's role in considering the Motion to Enforce Settlement does not include making specific findings of fact or conclusions of law concerning the relative merits of Plaintiff's claims and Defendant's defenses. See generally Hensley, 277 F.3d at 542 (noting court's role in considering such a motion); Liberty Media Holdings, LLC v. FF Magnat Ltd., No. 2:12-CV-01057-GMN, 2013 WL 1187520, at *2 (D. Nev. Mar. 19, 2013) (noting court's finding that parties “had reached an enforceable settlement agreement” was not a resolution of the case's merits).

         Plaintiff's Complaint concerns one policy of insurance: commercial insurance coverage issued by Midvale to Sunshine Shoes as policy number BPP1000782 (the “Policy”). Compl. ¶ 6, ECF No. 1-1. Plaintiff attached a copy of the Policy declarations as exhibit 1 to her Complaint. Ex. 1 to Compl., ECF No. 1-1. The Midvale Business Owner's Policy (“BOP”) was effective from November 17, 2014 until 12:01 AM on November 17, 2015. ECF No. 1-1 at 9. The Policy's Location Address is 4001 E. Palmetto St., Florence, SC 29506. The policy indicates the Location Coverage applies to all buildings at that address. Id. The Policy Coverage is listed as follows:

Liability Coverage
Liability and Medical Expenses (per-occurrence limit/annual aggregate limit):
$1, 000, 000/$2, 000, 000
Damage to Premises Rented to You: ...

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