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Armstead v. Musah

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

October 31, 2019

Selena Armstead, Plaintiff,
Abdulai Musah and Patriot Carriers, Inc., Defendants.


          Kevin F. McDonald, United States Magistrate Judge

         This matter is before the court on the plaintiff's motion to enforce the parties' settlement (doc. 17). The motion was referred to the undersigned by the Honorable Timothy M. Cain, United States District Judge. As a ruling on the motion is potentially dispositive of the case, a report and recommendation is being submitted for final consideration by Judge Cain.


         The plaintiff Selena Armstead filed a complaint in this court on February 7, 2019, alleging tort clams that she was injured in a 2016 motor vehicle accident, and naming commercial driver Abdulai Musah and his employer Patriot Carriers, Inc. (“PCI”) as defendants (doc. 1). These defendants had insurance coverage through Spirit Commercial Auto Risk Retention Group, Inc. (“Spirit”), with Criterion Claims Solutions of Omaha, Inc. (“Criterion”) serving as Spirit's third party administrator (see docs. 17-2, -3, -4). Neither Spirit nor Criterion are named as parties here.

         Prior to filing suit, in January 2019, the plaintiff, through counsel, purportedly reached a settlement agreement with the defendants and Spirit and Criterion, whereby the plaintiff would release and discharge all of her claims arising from the accident in exchange for $75, 000.00. A document entitled “Settlement Agreement and Release of All Claims” (hereafter the “Settlement Agreement”) lists the plaintiff as the “claimant” and Musah, PCI, Spirit, and Criterion as the “released parties” (doc. 17-2). The Settlement Agreement is signed by the plaintiff, but is not signed by the defendants or representatives of Spirit or Criterion. Emails were exchanged between the plaintiff's counsel and a Criterion representative beginning December 17, 2018, through January 14, 2019, with the last emails referencing the settlement, and indicating that Spirit would be sending the settlement funds (doc. 17-3). However the next day, January 15th, Spirit was ordered into receivership by a state court in Nevada (doc. 17-5), and the settlement proceeds were never sent. A follow-up email on the status of the settlement proceeds was sent by a Criterion representative on January 29th, referencing the receivership (doc. 17-4). On February 7th, the plaintiff filed her tort claims action here against the defendants, but did not allege a breach of contract claim regarding the Settlement Agreement and again, did not name Spirit or Criterion as parties.

         It appears from the docket that PCI was served with the complaint in May 2019 (doc. 7) and that an entry of its default has been entered by the Clerk of Court (doc. 12). Musah was served by publication per the affidavit filed October 29th (doc. 34). Allstate Fire and Casualty Insurance Company (“Allstate”) filed an answer on behalf of the defendants on May 24, 2019, having been served the complaint via the South Carolina Department of Insurance as an alleged uninsured motorist carrier for the plaintiff (doc. 13).

         On July 22, 2019, the plaintiff filed the motion now at issue, asking this court to enforce the pre-suit Settlement Agreement (doc. 17). Allstate filed a response in opposition on July 26th, arguing in part that it had no role in the settlement, and it should not be bound by it (doc. 26). The plaintiff filed a reply on August 8th (doc. 27). A hearing was held on the motion on October 29, 2019, at which counsel for the plaintiff and Allstate appeared and presented their respective arguments.


         This court has the “inherent authority, deriving from [its] equity powers, to enforce settlement agreements” between parties in cases pending before it. See Hensley v. Alcon Labs., Inc., 277 F.3d 535, 540 (4th Cir. 2002). While this court has undoubtedly seen, and when necessary, enforced numerous settlements between parties to tort cases pending before it, those settlements were arrived at by the parties after the litigation was filed. This court has likewise entered judgments for properly pleaded breach of contract claims involving pre-suit agreements to settle underlying disputes. Here, however, the plaintiff is seeking to enforce a settlement agreement that she contends was reached in January, prior to her filing suit in February, the breach of which is not pleaded as a claim. Short of a re-affirmation of the settlement agreement by the parties after the filing of the complaint (or the arrival at a new settlement), this court's equity jurisdiction does not extend to enforce pre-litigation agreements between the parties that are not the subject of the action pending before it. To hold otherwise would potentially subject the court to resolve any tangential pre-suit, non-pleaded agreements between the parties, whether such agreements involve purported settlements or other matters. In addition, and importantly, the Settlement Agreement here involves non-parties Spirit and Criterion, and this court certainly lacks any jurisdiction to enforce the Settlement Agreement against them.

         Even if this court were to find it had jurisdiction to consider the Settlement Agreement, it would not be enforceable. First, while it purports to be a Settlement Agreement between the plaintiff, the defendants, and Spirit and Criterion, it only bears the plaintiff's signature. Second, the Settlement Agreement has not been re-affirmed by the parties following the filing of the complaint; indeed Allstate, on behalf of Musah and PCI, objects to its enforcement. Lastly, the plaintiff agreed in the Settlement Agreement purportedly reached in January to release and discharge all her claims against Musah and PCI arising from the accident, yet she filed this tort action against them the following month. As such, she appears to be in breach of the Settlement Agreement herself. Accordingly, the plaintiff's motion to enforce the Settlement Agreement should be denied.


         Based upon the foregoing, the undersigned recommends that the plaintiff's motion to enforce the parties' settlement (doc. 17) be denied.


         Notice of Right to File Objections to Report ...

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