Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_07-cv-00659/USCOURTS-caed-1_07-cv-00659-9/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 28:1441 Petition for Removal- Racketeering (RICO) Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

FAMILIES AND SCHOOLS TOGETHER CASE NO. CV F 07-0659 LJO SMS

FEDERAL CREDIT UNION,

 ORDER ON MOTIONS TO ENFORCE

Plaintiff, SETTLEMENT AGREEMENT

vs.

AUTO MAXX, INC., EISSA ABOUMAALI,

JOE QUINTANA, SAM SALIDA, ABLE 

MORALES,

Defendants.

 / 

The parties filed cross motions to enforce the settlement agreement. Plaintiff Families and

Schools Together Federal Credit Union (“FAST”) moves to enforce the settlement. Defendants Auto

Maxx, Inc. and Eissa Aboumaali also move to enforce the settlement. FAST seeks to enter judgment

for the balance of the amount due and owing under the settlement agreement of $425,000. Defendants

seek to enforce the settlement agreement by requiring FAST to return the payments made totaling

$150,000. Pursuant to Local Rule 230(g), this matter is submitted on the pleadings without oral

argument. Therefore, the hearing set for January 12, 2010 is VACATED. Having considered the

moving, opposition, and reply papers, as well as the Court’s file, the Court issues the following order.

FACTUAL BACKGROUND

A. Overview of the Case

Plaintiff FAST is a federally chartered credit unions which engages in banking and lending

activities, including financing automobile purchases for its members. From January 2002 through

December 2002, FAST financed automobile loans to FAST members for automobiles purchased from

Defendant Auto Maxx, Inc. Defendant Auto Maxx, Inc. is licensed by the state of California as a dealer

of new and used vehicles. Defendant Eissa Aboumaali is the sole shareholder and chief executive officer

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of Auto Maxx. During January to December 2002, FAST made approximately 250 automobile loans for

vehicles sold by Auto Maxx, 50 of which are at issue in this litigation. Plaintiff repossessed the vehicles

used as collateral on the defaulted loans, liquidated the cars and was left with outstanding deficiencies. 

Plaintiff contends that Auto Maxx made intentional and/or negligent misrepresentations as to the

following information: (1) the value of the cars used as collateral, (2) the credit history and score of the

borrowers, and (3) the personal and financial information of the borrowers as contained on their credit

applications.

This action was removed from Fresno County Superior Court on May 1, 2007. FAST alleges

the following claims for relief as to the various loans made:

1. Intentional Misrepresentation

2. Negligent Misrepresentation

3. Money Had and Received.

B. Overview of the Settlement Agreement

On September 12, 2008, the parties entered into a written Settlement Agreement. Under the

terms of the Agreement, Auto Maxx/Aboumaali agreed to pay a total of $525,000 to FAST in two

separate installments. Auto Maxx/Aboumaali would pay $100,000 within fourteen (14) days of the

execution of the settlement agreement and the remaining $425,000 within another 75 days or no later

than December 22, 2008. To secure the payment, Mr. Aboumaali would give a deed of trust in the

amount of $425,000 on ten acres of real property he owned in Fresno County within 14 days fo the

execution of the Settlement Agreement, which was November 20, 2008. Mr. Aboumaali delivered a

deed of trust as required under the agreement. On November 20, 2008, at a status conference, Auto

Maxx tendered the first installment payment of $100,000.

1. First Modification to the Settlement Agreement

The parties thereafter modified the Settlement Agreement at a settlement conference on

December 10, 2008 (“December 10 Modification”). The December 10 Modification was entered

following a settlement conference with Judge Snyder and was placed on the record. The parties agreed

to a modification of Section 2.c of the Settlement Agreement regarding the dates of payment of the

$425,000.00 balance. The parties agreed that the remaining $425,000 would be paid bypaying $200,000

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before December 22, 2008 and $225,000 before January 5, 2009. 

2. Second Modification to the Settlement Agreement

At another status conference on May 27, 2009, the parties attempted to modify the Settlement

Agreement. They further changed the remaining balance due dates, among other things. This second

modification, however, was not placed on the record and was not otherwise memorialized in writing. 

 The parties agree that the Second Modification is not enforceable under Cal.Code Civ.Proc. §664.6. 

(Doc. 163, Plaintiff’s P&A p.9.) The parties do not argue that the terms of Second Modification should

be enforced in this motion. (Doc.170, Plaintiff’s Opposition p. 11; Doc. 167, Defendants’ P&A p.3.)

3. Payments after the Initial $100,000

Nonetheless, Auto Maxx made two further payments. One payment was on May 29, 2009 in the

amount of $15,000 and another payment was on July 2, 2009 in the amount of $35,000. The total

payments made by Auto Maxx and/or Aboumaali was $150,000. Auto Maxx and Aboumaali agree that

they have not made the required payments under the Settlement Agreement and are in default.

The dispute in the enforcement of the Settlement Agreement centers on FAST’s rights: may it

keep the $150,000 and proceed to trial or is FAST required to return the money paid. The parties’

positions focus on the December 10 Modification to Section 2 which was placed on the record. 

C. Section 2 of the Settlement Agreement

The relevant portions of the unmodified Settlement Agreement states:

Section 2. Payment. Auto Maxx and Aboumaali shall pay FAST the sum of five

hundred twenty-five thousand dollars($525,00.00) on the dates, time, and

terms as follows:

(a) No later than (14) days after the execution of this settlement Agreement,

and in any event on for before 4:30 p.m., October 8, 2008, Auto Maxx and/or Aboumaali

shall pay to FAST the sum of one hundred thousand dollars ($100,000.00) to be paid at

the law offices of Georgeson and Belardinelli located at 1111 East Herndon Avenue,

Suite 217, Fresno, California, 93720.

(b) In addition to and at the time of the payment of the one hundred thousand

dollars ($100,000.00) by Auto Maxx and/or Aboumaali described in Section 2(a) above,

and as a further condition to this settlement, Auto Maxx and/or Aboumaali and all other

owners of record shall execute a second deed of trust in favor of FAST on property

commonly known as 4890 Copper Avenue, Fresno, California, as more particularly

described in Exhibit 1 attached hereto consisting of ten (1)) acres of undeveloped

property. Said second deed of trust shall be in the amount of four hundred twenty five

thousand dollars ($425,000.00) to secure payment of the balance due on this settlement

subject only to the existing first deed of trust and to remain on said property until

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payment in full is made, or as otherwise provided herein.

( c) Aboumaali and/or Auto Maxx shall pay to FAST the balance due on

the settlement in the sum of four hundred twenty five thousand dollars

($425,000.00) no later than seventy-five (75) days after the payment of one hundred

thousand dollars ($100,000.00) is made pursuant to Section 2(a) above, and in any

event, no later than 4:30 p.m., December 22, 2008 at the law offices of Georgeson

and Belardinelli located at1111 East Herndon Avenue, Suite 217, Fresno,

California, 93720.

(I) If, after three days’ written notice of default, the sum of one hundred

thousand dollars and no cents ($100,000.00) is not paid by Aboumaali

and/or Auto Maxx or the second deed of trust on ten (1)) acres in favor

of FAST is not executed by Auto maxx and/or Aboumaali and all owners

of record as provided in Sections 2(a) and 2(b) above, or before 4:30

p.m., October 8, 2008, the settlement agreement reached between the

parties shall be null and void and of no effect whatsoever on the rights of

any party thereto. Immediately upon the failure of Aboumaali and/or

Auto Maxx to made the one hundred thousand dollar ($100,00.00)

payment and/or the failure to execute the second deed of trust in the

manner described in section 2(a) and 2(b) above, [this action] shall

proceed to trial as if no settlement agreement existed.

(ii) If the sum of one hundred thousand dollars and no cents ($100,000.00)

is paid by Aboumaali and/or Auto Maxx as providing in Section 2(a)

above and the second deed of trust is executed by all owners of record on

the ten (10) acres described in Section 2(b) above; but the balance due on

the settlement offour hundred twentyfive thousand dollars ($425,000.00)

is not paid by Aboumaali and/or Auto Maxx, FAST, as it sole option,

mayexercise either of the following rights under this agreement bygiving

three (3) day’s [sic] written notice to Auto Maxx, Aboumaali and

Defendants through their attorneys within ten (10) days of their default.

(A) Return to Auto Maxx and Aboumaali the sum of one hundred thousand

dollars ($100,000.00) paid by said parties pursuant to Section 2(a) above,

reconvey the second deed of trust on the ten (10) acres executed in favor of FAST

pursuant to the provisions of Section 2(b), and proceed with this action as if no

settlement had been reached. If this is the election made by FAST, any Party to

this agreement mayimmediatelyapplyto the Federal Court to obtain an operative

“SchedulingConference Order,” of all operative matters as hereinafter described;

or

(B) Affirm and ratify the settlement herein, retain the one hundred thousand

dollar ($100,000.00) payment made by Auto Maxx and/or Aboumaali pursuant

to Section 2(a) above, and pursue any and all rights, remedies and actions

possessed by FAST under the second deed of trust on the property located on

Cooper Avenue executed pursuant to Section 1(b) above. If this is the election

made by FAST, FAST shall dismiss the pending federal court action with

prejudice as to all defendants within ten (1) days of making that election.

(Doc. 164, Settlement Agreement, Exh. 1 to Belardinelli Decl.) Thus, the $525,000 settlement amount

was to be paid in two installments - $100,000 then $425,000. The $425,000 was to be secured by a

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second deed of trust on real property. In the event the $425,000 payment was not made, the Settlement

Agreement provided FAST with two options: (A) return the $100,000 and proceed with the litigation,

or (B) keep the money and enforce the deed of trust.

D. Transcript of the December 10 Modification of the Agreement

When the parties entered into the December 10 Modification of the Settlement Agreement, the

terms of the modification was placed upon the record. The Transcript of the modification is as follows:

Mr. Belardinelli: As I understand it, and if I made a mistake, somebody better correct me. 

It’s my understanding that the current settlement agreement will remain

in full force and effect except it would be modified in the following

particulars:

That a payment will be made by Auto Maxx and/or Mr. Aboumali in the

sum of $200,000 on or before December 22 by 4:30 p.m. to the law nd

offices of Georgeson and Belardinelli. It can be made payable to

Families and Schools together Credit Union. My name does not have to

be on the check.

And that will defer the balance due of 225,000 - - is that correct - -

Mr. Belardinelli: - - to January 5 , 2009, payable at my office on the same - - in the same th

manner, made payable to Families and Schools Together without my

signature on it by 4:30.

The Court: Okay.

Mr. Belardinelli: Is that correct?

Mr. Paloutzian: If I could just clarify, basically what we’re doing, You Honor is we’re

modifying paragraph - - it’s Section 2, subsection c of the agreement and

the payment date of December 22 will be reflected as set forth by Mr. nd

Belardinelli.

So the payment date would be set forth on page 4 of the settlement

agreement for the sum of $425,000 would be the sum of $200,000 should

be paid not later than 4:30 p.m. on December 22 , and whatever nd

remaining amounts are due will be paid no - - - which are $225,000, will

be paid no later than January 5, 2009 at 4:30 p.m. to the office of

Georgeson and Belardinelli. 

All other terms of the settlement agreement will remain the same. And

I’ve handed Mr. Belardinelli the signature pages of the remaining

individuals, defendants have all signed the agreement.

The Court: Okay.

 . . . 

The Court: He put it on the record correctly, Mr. Belardinelli. I was about to do it. 

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It’s the bottom of page 3, top of page 4 of the settlement agreement,

section 2 sub ( c) he put that all on the record, and it amends only that one

line, do you see there? Aboumaali and /or Auto Maxx shall pay to FAST

the balance due on the settlement in the sum of - - are you with me?

Mr. Belardinelli: Yes, I am.

The Court: And no later than - - flip over to page 4, pursuant to Section 2(a) above,

and in - - well, you can recraft that language. You’re going to have to put

together different document anyway it seems to me, and you’re going to

have to fix that - - to wit: no later than 4:30 p.m. on December the 22 ,

nd

2008, a payment of $200,000, and further, on or before January the 5 ,

th

2009 the remainder due and owing of $225,000. Word it how you wish.

(Doc. 167, Dec. 10, 2008, Settlement Conference Transcript p. 6-9.)

ANALYSIS AND DISCUSSION

A. Authority to Enforce Agreement Based on Jurisdiction Retained

This Court has authority to enforce the settlement agreement: “Courts have inherent power

to enforce settlements between the parties in pending cases.” See In re City Equities Anaheim, Ltd.,

22 F.3d 954, 957 (9th Cir.1994). However, a court has no power to enforce a settlement after a case

has been dismissed, unless it has retained jurisdiction to do so. Hagestad v. Tragesser, 49 F.3d

1430, 1432 (9 Cir. 1995). Parties who wish to retain the court’s jurisdiction to enforce their th

settlement agreement may do so either by having the court expressly “retain jurisdiction” or by

incorporating the terms of the settlement agreement in the order of dismissal. Kokkonene v.

Guardian Life Ins. Co. of America, 511 U.S. 275, 381 (1994). 

Here, the parties agree that this Court retained jurisdiction to enforce the settlement

agreement and modification. In particular, at the December 10, 2008 Settlement Conference, the

parties agreed on the record that (1) the Court retained jurisdiction to enforce the Settlement (Doc.

167, Transcript p.10:5-8); and (2) the Court could enforce the settlement under California Code

Civ.Pro §664.6 (Doc. 167, Transcript p.10:5-8). 

Pursuant to Cal.Code Civ. Proc. §664.6, this Court has authority to enter judgment on the

terms of the Settlement Agreement. Code.Civ.Proc §664.6 (“the court, upon motion, may enter

judgment pursuant to the terms of the settlement.”) The court is empowered “to enter judgment”

where parties to pending litigation stipulate to a settlement either orally before the court; or in a

writing signed by the parties outside court. Pursuant to Section 664.6, the Court may determine

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disputed factual issues and permits the court “to entertain challenges to the actual terms of the

stipulation, that is, whether there actually was a settlement ... and to interpret the terms and

conditions to settlement agreement.” Fiore v. Alvord, 182 Cal.App.3d 561, 566, 221 Cal.Rptr. 400,

(1985). Accordingly, the Court has jurisdiction to enter judgment on the terms of the Settlement

Agreement.

B. The Parties’ Positions on Enforcing the Settlement Agreement

1. Plaintiff’s position

Plaintiff contends that when the parties entered into the December 10 Modification of the

Settlement Agreement, the parties specifically modified Section 2, subparagraph ( c) “in its entirety.” 

Plaintiff argues that the parties agreed that since the written settlement agreement had not been

complied with by defendants, the modification would amend the entirety of Section 2. (Doc. 170,

Plaintiff’s Opposition p. 4:21-28.) Plaintiff argues that it “understood that the entirety of Section 2

including subparagraph 2( c) was being amended to provide for the conclusion of the settlement and

in the event Auto Maxx did not comply, FAST could seek a judgment on the remaining balance due

under the settlement agreement as amended.” (Doc. 170, Plaintiff’s Opposition p. 5:1-5; Doc. 175,

Reply p.3-4.) Implicit in plaintiff’s argument is that the remaining portions of the Section 2,

subparagraph ( c) were deleted by the December 10 Modification. Plaintiff argues that any

requirement to return to defendants the money paid on the settlement was eliminated by the

amendment of Section 2.c. (Doc. 175, Plaintiff’s Reply p.4:16-18.) Plaintiff argues that any other

interpretation of the settlement would make the agreement illusory, lacking any consideration by

defendants, because defendans would have no obligation to fulfil their promises by making payment. 

(Doc. 175, Plaintiff’s Reply p.4:24-26.) Plaintiff cites Scottsdale Ins. Co. v. Essex Ins. Co., 98

Cal.App.4th 86, 94 -95 (2002) for the proposition that for a contract to be valid, the parties must

exchange promises that represent legal obligations. 

2. Defendants’ position

Defendants Auto Maxx and Aboumaali argue that FAST has two options in the event of a

default: (1) FAST can either go to trial and return the payments or (2) FAST can keep the money

and pursue its rights under the deed of trust. Defendants contend that these are the only alternatives

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under the Settlement Agreement.

Defendant argues that if plaintiff desires to continue to trial, then the plain language of the

Settlement Agreement requires FAST to return the $150,000 paid to date and to proceed “as if no

settlement had been reached.” If no settlement had been reached, then FAST is not entitled to keep

the $150,000 paid as partial settlement. 

Defendants further argue that the parties entered into a settlement with very specific terms

that contemplated the inability of Defendants to comply with the payment obligations and which

limited the options of Plaintiff under such circumstances. (Doc. 174, Defendant’s Reply p. 1.)

Defendants ask that the Court require FAST to return the payments made and proceed to trial or

retain the monies and foreclose upon the deed of trust.

C. Interpretation of the Settlement Agreement

1. Standards for Contract Interpretation

 The court's initial focus in resolving a question of the language of the contract, is the contract

itself. Contract interpretation is solely a judicial function when “based on the words of the

instrument alone, when there is no conflict in the extrinsic evidence, or a determination was made

based on incompetent evidence.” See City of Hope Nat. Medical Center v. Genentech, Inc., 43

Cal.4th 375, 395, 75 Cal.Rptr.3d 333 (2008). Absent evidence indicating the parties intended a

special usage, words used in a contract should be interpreted in their “ordinary and popular sense.”

Cal.Civ.Code § 1644. In determining whether a provision has a “plain meaning,” it must be read in

the context of the entire contract: “The whole of a contract is to be taken together, so as to give effect

to every part ... each clause helping to interpret the other.” Cal.Civ.Code § 1641. Terms are to be

interpreted “in their ‘ordinary and popular sense,’ unless used by the parties in a technical sense or a

special meaning is given to them by usage.’” MacKinnon v. Truck Ins. Exchange, 31 Cal.4th 635,

647-648 (2003). 

Here, the parties do not contend that any term of the Settlement Agreement is ambiguous.

When terms are unambiguous, California law requires that the mutual intention of the parties is to be

“inferred, if possible, solely from the written provisions of the contract.” MacKinnon v. Truck Ins.

Exchange, 31 Cal.4th at 647-648. The mutual intention of the contracting parties at the time the

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contract was formed governs interpretation. Cal. Civ. Code §1636. “The parties' mutual intent is to

be determined, if semantically possible, solely from the written provisions of the contract.” AIU Ins.

Co. v. Sup.Ct., FMC Corp., 51 Cal.3d 807, 822, 274 Cal.Rptr. 820 (1990). Therefore, the Court

turns to the language used in the Settlement Agreement.

2. Interpretation of Section 2 of the Settlement Agreement and the December 10

Modification

Section 2 of the Settlement Agreement provides that defendants shall pay FAST $525,000, in

two installments. One installment of $100,000 was due on October 8, 2008. (Doc. 164, Settlement

Agreement, Section 2.a.) The other installment of $425,000 was due on December 22, 2008. (Doc.

164, Settlement Agreement, Section 2.c.) To secure payment of the $425,000, defendant Aboumaali

was required to give a second deed of trust. (Doc. 164, Settlement Agreement, Section 2.b; Doc.

164, Belardinelli Decl. ¶8.) Aboumaali gave the deed of trust, but it was not a second deed of trust.1

(Doc. 164, Belardinelli Decl. ¶8.) FAST did not record a deed of trust given by Mr. Aboumaali. 

(Doc. 167.2 p. 3:9-10.) The $425,000 was not paid as required by the Settlement Agreement.

Since the $100,000 was paid, but the $425,000 was not, Section 2.c.ii of the Settlement

Agreement was triggered. Section 2.c.ii provides:

(ii) If the sum of one hundred thousand dollars and no cents ($100,000.00)

is paid by Aboumaali and/or Auto Maxx as providing in Section 2(a)

above and the second deed of trust is executed by all owners of record

on the ten (10) acres described in Section 2(b) above; but the balance

due on the settlement of four hundred twenty five thousand

dollars ($425,000.00) is not paid by Aboumaali and/or Auto Maxx,

FAST, as it sole option, may exercise either of the following rights

under this agreement by giving three (3) day’s [sic] written notice to

Auto Maxx, Aboumaali and Defendants through their attorneys within

ten (10) days of their default. (Emphasis added)

Section 2.c.ii limits FAST’s options in the event the $425,000 is not paid. The “options” are

contained in Section 2.c.ii.(A) and in Section 2.c.ii (B) as follows:

 The Settlement Agreement provides that Aboumaali was to give a second deed of trust on specific real property.

1

According to plaintiff’s moving papers, he gave the deed of trust, but it was a third deed of trust. Thus, it appears that there

is a breach of the Settlement Agreement. The parties, however, did not address the deed of trust issue and did not raise it to

the Court for decision.

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(A) Return to Auto Maxx and Aboumaali the sum of one hundred thousand

dollars ($100,000.00) paid by said parties pursuant to Section 2(a) above,

reconvey the second deed of trust on the ten (10) acres executed in favor of

FAST pursuant to the provisions of Section 2(b), and proceed with this action

as if no settlement had been reached. If this is the election made by FAST,

any Party to this agreement may immediately apply to the Federal Court to

obtain an operative “Scheduling Conference Order,” of all operative matters

as hereinafter described; or

(B) Affirm and ratify the settlement herein, retain the one hundred thousand

dollar ($100,000.00) payment made by Auto Maxx and/or Aboumaali

pursuant to Section 2(a) above, and pursue any and all rights, remedies and

actions possessed by FAST under the second deed of trust on the property

located on Cooper Avenue executed pursuant to Section 1(b) above. If this is

the election made by FAST, FAST shall dismiss the pending federal court

action with prejudice as to all defendants within ten (1) days of making that

election. (Emphasis added.)

Pursuant to Section 2.c.ii (A) and (B), the parties agreed that in the event of a default on the

$425,000, FAST may either return the unrecorded deed and pursue its rights “as if no settlement had

been reached,” or record the deed and pursue its rights under the Deed of Trust and Settlement

Agreement.

The December 10 Modification modified only a small portion of the Settlement Agreement. 

According to the transcript, the on-the-record modification modified only one line in Section 2.c:

Mr. Paloutzian: If I could just clarify, basically what we’re doing, You Honor is we’re

modifying paragraph - - it’s Section 2, subsection c of the agreement

and the payment date of December 22 will be reflected as set forth by nd

Mr. Belardinelli.

So the payment date would be set forth on page 4 of the settlement

agreement for the sum of $425,000 would be the sum of $200,000

should be paid not later than 4:30 p.m. on December 22 , and nd

whatever remaining amounts are due will be paid no - - - which are

$225,000, will be paid no later than January 5, 2009 at 4:30 p.m. to the

office of Georgeson and Belardinelli. 

All other terms of the settlement agreement will remain the same. And

I’ve handed Mr. Belardinelli the signature pages of the remaining

individuals, defendants have all signed the agreement.

The Court: Okay.

 . . . 

The Court: He put it on the record correctly, Mr. Belardinelli. I was about to do it. 

It’s the bottom of page 3, top of page 4 of the settlement

agreement, section 2 sub ( c) he put that all on the record, and it

amends only that one line, do you see there? Aboumaali and /or

Auto Maxx shall pay to FAST the balance due on the settlement in the

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sum of - - are you with me?

Mr. Belardinelli: Yes, I am. (Emphasis added)

The transcript of the Settlement Conference shows that the only terms which were modified were the

timing of payments and amounts of the remaining payments. Thus, the “options” in the event of

default were not changed. The December 10 Modification modified Section 2.c, in substance, as

follows:

old: “Aboumaali and/or Auto Maxx shall pay to FAST the balance

due on the settlement in the sum of four hundred twenty five

thousand dollars ($425,000.00) no later than seventy-five (75) days

after the payment of one hundred thousand dollars ($100,000.00) is

made pursuant to Section 2(a) above, and in any event, no later than

4:30 p.m., December 22, 2008"

New: “Aboumaali and/or Auto Maxx shall pay to FAST the balance

due on the settlement in the sum of two hundred thousand dollars

($200,000.00) no later than 4:30 p.m., December 22, 2008 and

($225,000.00) no later than January 5, 2009" (Emphasis added.)2

The modification was merely an agreement to give defendants additional time to pay the $425,000

balance that was due under the original settlement, and in smaller increments. 

Plaintiff argues that the entirety of Section 2.c was modified. In essence, plaintiff argues that

after the December 10 Modification, all that was left in Section 2.c was the change of the payment

dates. Plaintiff argues that the remainder of Section 2.c was deleted, thus deleting the “options”

FAST had in the event of default. 

Nothing in the Transcript, however, states that all terms of Section 2.c were modified. 

Indeed, the Transcript identifies that only “one line” of the Settlement Agreement is modified:

The Court: He put it on the record correctly, Mr. Belardinelli. I was about to do it. 

It’s the bottom of page 3, top of page 4 of the settlement agreement,

section 2 sub ( c) he put that all on the record, and it amends only

that one line, do you see there? Aboumaali and /or Auto Maxx shall

pay to FAST the balance due on the settlement in the sum of - - are

you with me?

Mr. Belardinelli: Yes, I am.

(Doc. 167, Transcript p. 8.) There is no language in the Transcript that indicate that entirety of the

The Court interprets the modification from the Transcript, since the parties did not put the December 10

2

Modification in writing.

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remainder of Section 2.c was eliminated by the modification. The modification was limited and

confined to the timing and amounts of the remaining payments due.

Plaintiff argues that the December 10, 2008 modification is illusory. Plaintiff argues that any

other interpretation of the settlement would make the agreement illusory, lacking any consideration

by defendants, because defendants would have no obligation to fulfil their promises by making

payment. Plaintiff argues to interpret the Settlement Agreement as requiring the return of the monies

paid to FAST would be contrary to what was intended by the parties and contrary to good faith and

fair dealing.

Here, the modification is not illusory. The modification changes the dates of payment, not

the obligation whether to pay. The obligation to pay is the same as was always in the Settlement

Agreement. The options to FAST upon default are the same as in the original agreement. Upon

default, FAST may elect to return the money and proceed in the litigation as if no settlement had

occurred, or it may ratify the settlement and pursue the terms of the Settlement Agreement. 

(Doc.164, Settlement Agreement Section 2.c.ii (A) and (B).) The December 10 Modification is not

illusory.

It is undisputed that defendants are in default under the agreement. Thus, FAST is put to an

election of whether to return the money and proceed with the litigation or whether to ratify the

Settlement Agreement and thereby, allow the Court to grant the defendants’ motion.

3. Amount of Money to be “Returned” upon that Election

Defendants argue that should FAST elect to proceed with litigation pursuant to Section 2.c.ii

(A), defendants should be refunded the amount of money they paid, $150,000. 

If FAST elects to proceed with litigation, defendants are not entitled to a return of $150,000

under the Settlement Agreement. The Settlement Agreement states:

(A) Return to Auto Maxx and Aboumaali the sum of one hundred

thousand dollars ($100,000.00) paid by said parties pursuant to Section

2(a) above, reconvey the second deed of trust . . .

The Settlement Agreement requires the return of $100,000, not the amount actually paid. The

Settlement Agreement is specific in the amount of money to be refunded. It did not require the

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return of “any monies paid.” Any amounts paid in excess of the $100,000 was paid at the risk of

FAST’s election.3

CONCLUSION

For the foregoing reasons, the Court DENIES Families and Schools Together Federal Credit

Union’s Motion to Enforce the Settlement Agreement.

FAST is ordered to file its election within ten (10) Court days from the date of service of this

order. Once the election is filed, the Court will supplement and complete this Order appropriately.

IT IS SO ORDERED.

Dated: January 5, 2010 /s/ Lawrence J. O'Neill 

b9ed48 UNITED STATES DISTRICT JUDGE

The Court leaves to another day, if properly brought before the Court for decision, the issue of the excess $50,000

3

as a credit against any potential judgment.

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