United States District Court, D. South Carolina, Greenwood Division
Schilli Distribution Services, Inc., and Thomas R. Schilli, Plaintiff,
Steve Gilliam, George W. Benda, B.W.G., Inc., KCB Group, Inc. and Arete Logistics, Inc., Defendants.
ORDER ON MOTION OF PLAINTIFFS TO VACATE ORDER OF
DISMISSAL AND ENFORCE SETTLEMENT OR REOPEN CASE AS TO BENDA
C. Coggins, Jr., United States District Judge.
the Court is the motion of the Plaintiffs to vacate the order
dismissing this case without prejudice and enforce the
settlement between Plaintiffs and Defendants, George W.
Benda, B.W.G., Inc., and Arete Logistics, Inc. (collectively,
"the Benda Defendants") or, alternatively, reopen
the case as to the Benda Defendants. ECF No. 225. For the
reasons stated below, the Motion is HELD IN ABEYANCE.
case was set for a jury trial to begin April 15, 2019. Prior
to trial, counsel for the parties remaining in the case,
Plaintiffs and Benda Defendants,  announced they had settled
all claims of the parties, and the Court entered an order
dismissing the case without prejudice to the right any party,
for good cause shown, to move to reopen the case within sixty
(60) days if the settlement was not consummated. ECF No. 224.
11, 2019, Plaintiffs filed the instant motion asserting the
Benda Defendants had violated the settlement agreement
because the Benda Defendants had failed (1) to deliver a
mortgage on property in Indiana to secure, in part, the
settlement amount to be paid to Plaintiffs, (2) to sign and
deliver a security agreement or assignment regarding
Defendant George W. Benda's 401(k) account, and (3) to
make a required monthly payment under the settlement amount.
Benda Defendants filed a response to Plaintiffs' Motion,
ECF No. 227, and the Court conducted two telephone
conferences with counsel. ECF Nos. 229, 237. The Court
further directed Plaintiffs and the Benda Defendants to file
two status reports regarding the Motion. ECF Nos. 235, 238.
Thereafter, the Court held a hearing on the Motion. ECF No.
settlement agreement provides generally that the Benda
Defendants pay a sum certain in installments, and their
obligation to pay the settlement was to be secured by (1) a
confession of judgment, (2) an assignment or security
agreement regarding Defendant George W. Benda's 401(k)
account, and (3) a mortgage on the Indiana property. The
Indiana property is not owned by Defendant George W. Benda,
but is owned by his former girlfriend. During the
negotiations leading to the settlement agreement, the Benda
Defendants represented Defendant George W. Benda could obtain
his former girlfriend's signature on the mortgage;
however, he has been unable to do so.
the settlement negotiations, the parties did not determine
the value the mortgage would have as security for payment of
the settlement amount. Following the filing of
Plaintiffs' Motion, the Benda Defendants' counsel
retrieved publicly available documents regarding the Indiana
property and determined the value of the mortgage required by
the settlement agreement is between approximately $85, 000.00
and $106, 000.00.
Benda Defendants have complied with all provisions of the
settlement agreement, most importantly the required payments,
through the date of this Order, except for providing the
required mortgage. Defendant George W. Benda has indicated,
through counsel, he cannot obtain his ex-girlfriend's
signature on the sought-after mortgage. The Benda Defendants
have offered, as substitute security; (1) a continuing
security agreement or assignment on Defendant George W.
Benda's 401(k) account, (2) a security interest in
Defendant George W. Benda's 2013 Ford F350 truck, and (3)
a stock pledge of shares in an Indiana corporation, Sea Green
Argo, Inc., in which Defendant George W. Benda is the sole
Court has the inherent power to enforce agreements entered
into in settlement of pending litigation. However, under the
unique circumstances of this case, the Court finds it prudent
to hold in abeyance any ruling on the Motion.
owner of the Indiana property is not a party to this action.
The Court has no power to order her to sign the sought-after
mortgage. The Benda Defendants have indicated it is
impossible to obtain the mortgage and, therefore, the Court
ordering them to do so would be futile. However, the Benda
Defendants have offered to provide alternative security which
appears to approximate the value of the security the mortgage
would have provided. The Court agrees with the parties that
this substitute security, which approximates the value of the
mortgage, as security would fulfill the intent of the
security portion of the settlement agreement.
Plaintiffs' Motion is HELD IN ABEYANCE, and the Benda
Defendants are directed to provide the following substitute
security within thirty days of the date of this Order:
1. A security agreement or assignment of Defendant George W.
Benda's 401(k) account to secure all payments remaining
due under the settlement agreement;
2. A security interest in Defendant George W. Benda's
truck to secure all payments remaining due under the
settlement agreement; and
3. A stock pledge of all shares of Sea Green Argo, Inc., to
secure all payments remaining due under the ...