Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-01951/USCOURTS-casd-3_07-cv-01951-4/pdf.json

Nature of Suit Code: 365
Nature of Suit: Personal Injury - Product Liability
Cause of Action: 28:1332 Diversity-Personal Injury

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MAGDA GONZALEZ, et al.,

 Plaintiff,

v.

COMPASS VISION, INC., et al.,

 Defendants.

 

And all related cases.

_______________________________

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Case No. 07cv1951 AJB (WMC)

ORDER:

(1) GRANTING THIRD-PARTY

DEFENDANT MAXIMUS INC.’S

MOTION TO REOPEN ACTION

AND ENFORCE STIPULATED

SETTLEMENT; AND

(2) GRANTING IN PART AND

DENYING IN PART MAXIMUS’S

REQUEST FOR ATTORNEY’S FEES

(Doc. No. 346)

On March 4, 2011, the Court approved a stipulated settlement agreement (“Settlement Agreement”) between Third-Party Plaintiff Compass Vision, Inc. (“Compass”) and

Third-Party Defendant Maximus, Inc. (“Maximus”), and retained jurisdiction to enforce

the Settlement Agreement. (Doc. No. 343.) Presently before the Court is Maximus’s

motion to reopen the action, enforce the Settlement Agreement, and award Maximus its

attorney’s fees incurred in enforcing the Settlement Agreement. (Doc. No. 346.) To

date, Compass has not filed an opposition to Maximus’s motion. In accordance with

Civil Local Rule 7.1.d.1, the Court finds the motion suitable for determination on the

papers and without oral argument. For the reasons set forth below, the Court GRANTS

Maximus’s motion to reopen the action and enforce the Settlement Agreement, and

GRANTS IN PART AND DENIES IN PART Maximus’s request for attorney’s fees. 

(Doc. No. 346.) 

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BACKGROUND

The underlying action relates to a contract dispute between Maximus and Compass

regarding the administration of the California Department of Consumer Affairs’

Diversion Program (“Diversion Program”). (Doc. No. 81 at 2.) Pursuant to a subcontract

between the parties, Maximus served as the administrator of the Diversion Program, and

retained Compass as a third-party administrator responsible for Diversion Program

participants’ drug and alcohol testing. (Doc. No. 103-3 at 2.) On October 5, 2007,

several Diversion Program participants filed claims against Compass for negligence. 

(Doc. No. 1.) Thereafter, Compass filed third-party claims against Maximus for breach

of contract, contractual indemnity, equitable indemnity and contribution, and declaratory

relief. (Doc. No. 85.) On October 5, 2010, the Court granted summary judgment in favor

of Maximus on each of Compass’s third-party claims, and on March 3, 2011, Maximus

moved for attorney’s fees pursuant to its subcontract with Compass. (Doc. No. 331-1 at

7.) 

On March 17, 2011, the parties executed the Settlement Agreement currently at

issue, which specified that Compass would pay Maximus $300,000.00 in attorneys’ fees

over the course of the next seven years. (Doc. No. 339 at 3:27-4:6.) In the event

Compass failed to pay according to the terms set forth in the Settlement Agreement,

Maximus had the right to recover the full amount due and owing under the Settlement

Agreement, and to recover all attorney’s fees incurred in enforcing the Settlement

Agreement. (Id. at 5:23-27.) The Court approved the Settlement Agreement on March

24, 2011. (Doc. No. 343 at 2.) 

LEGAL STANDARD

“[I]t is . . . well settled in the usual litigation context that courts have inherent

power summarily to enforce a settlement agreement with respect to an action pending

before it; the actual merits of the controversy become inconsequential.” Dacanay v.

Mendoza, 573 F.2d 1075, 1078 (9th Cir. 1978) (citations omitted); see also Callie v.

Near, 829 F.2d 888, 890 (9th Cir. 1987) (“It is well settled that a district court has the

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equitable power to enforce summarily an agreement to settle a case pending before it.”);

In re City Equities Anaheim, Ltd., 22 F.3d 954, 957 (9th Cir. 1994) (affirming summary

enforcement of settlement agreement by bankruptcy court where there was no dispute

about the formation or consummation of the agreement). “The authority of a trial court to

enter a judgment enforcing a settlement agreement has as its foundation the policy

favoring the amicable adjustment of disputes and the concomitant avoidance of costly

and time consuming litigation.” Dacanay, 573 F.2d at 1078 (citation omitted). To be

enforced, a settlement agreement must be complete and both parties must have agreed to

the terms of the settlement. See Maynard v. City of San Jose, 37 F.3d 1396, 1401 (9th

Cir. 1994).

“Enforcement of a settlement agreement . . . is more than just a continuation or

renewal of the dismissed suit, and hence requires its own basis for jurisdiction.”

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 378 (1994). A district court

lacks jurisdiction to enforce a settlement agreement following a dismissal of the action

unless the district judge either: (1) expressly in the dismissal order, retains jurisdiction

over the settlement agreement; or (2) incorporates the terms of the settlement agreement

in the dismissal order. Id. at 381. If the court does not retain jurisdiction to enforce the

settlement agreement, the vehicle for the enforcement of the settlement agreement is a

breach of contract claim in another proceeding, where “part of the consideration [for the

contract] was dismissal of an earlier federal suit.” Id.

“[W]here material facts concerning the existence or terms of an agreement to settle

are in dispute, the parties must be allowed an evidentiary hearing.” Callie v. Near, 829

F.2d 888, 890 (9th Cir. 1987) (holding that district court erred in granting entry of

judgment without first holding requested evidentiary hearing after plaintiffs requested

evidentiary hearing challenging the existence and validity of the settlement agreement).

However, an evidentiary hearing is not required where the settlement agreement itself is

not disputed. See, e.g., Calcor Space Facility, Inc. v. McDonnell Douglas Corp., 5 F.

App’x 787, 789 (9th Cir. 2001) (district court did not err in enforcing settlement

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agreement where no party requested evidentiary hearing, court held hour-long hearing on

motion to enforce the settlement agreement and considered detailed memoranda and

declarations from several people, and no parties requested cross-examination of any of

the declarants); Situ v. Northrop Grumman Corp., 49 F. App’x 185 (9th Cir. 2002).

DISCUSSION

I. Motion to Enforce the Settlement Agreement 

Maximus’s instant motion seeks to enforce the Settlement Agreement pursuant to

Paragraph 10 of the Agreement, which states that the Court retains jurisdiction to enforce

the terms of the Settlement Agreement until all payments have been made. As a result,

because Compass has not made a payment since December 21, 2012, Maximus seeks a

court order requiring Compass to pay $297,950.00, the total amount still due and owing. 

(Doc. No. 346.) Compass does not oppose the Court’s continuing jurisdiction to enforce

the Settlement Agreement or the total amount requested by Maximus. 

As the parties expressly provided for the Court’s continuing jurisdiction over any

claims and disputes arising from the Settlement Agreement, and there is no dispute as to

the material facts concerning the formation, existence, or terms of the Settlement

Agreement, the Court finds it has jurisdiction over the motion and may entered the

requested judgment to the extent provided for in the Agreement. See, e.g., Tranquilli v.

VSB Investments, Inc., No. 07–cv–433 LJO, 2008 WL 1788022, at *2 (E.D. Cal. Apr. 18,

2008) (granting motion to enforce settlement agreement where parties stipulated to the

court’s jurisdiction to enforce the agreement, defendants failed to make monthly

payments under agreement, such failure accelerated the total sum owed, and defendants

did not oppose motion); U.A. Local 342 Joint Labor–Mgmt. Comm. v. S. City

Refrigeration, Inc., No. 09–cv–3219 JCS, 2010 WL 1293522, at *2-4 (N.D. Cal. Mar. 31,

2010) (granting motion to reopen case and enter judgment against defaulting defendant

where stipulated entry of judgment provided that judgment shall be entered against

defendant if it defaulted under the settlement agreement).

Pursuant to Paragraph 1 of the Settlement Agreement, Compass was required to

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pay Maximus $300,000.00 over seven years, which was dictated by the following

payment schedule: 

$1,000.00 by the fifth day of each month starting from January 5, 2012 and

ending on December 5, 2013;

$3,000.00 by the fifth day of each month starting from January 5, 2014 and

ending on December 5, 2014;

$5,000.00 by the fifth day of each month starting from January 5, 2015 and

ending on December 5, 2018. 

(Doc. No. 339 at 3:27-4:6.) The Settlement Agreement further provided that in the event

Compass failed to make the specified payment by the tenth day of any month, payment

would be considered late. (Id. at 4:11-13.) The parties agreed that Compass would be

assessed a late payment penalty of 5% of the unpaid balance owed for that payment

period the first time a payment was late, and a 15% late payment penalty for every

subsequent late payment. (Id. at 4:14-21.) 

Finally, in the event payment was not received by the tenth day of the month, the

Settlement Agreement provided Compass until the fifth day of the following month to

tender payment in full, including accrued penalties. (Id. at 4:22-5:1.) If Compass failed

to tender the full amount of the specific payment by this date, pursuant to Paragraph 6,

Compass would be considered “in full default” and was required to tender the entire

amount due and owing under the Settlement Agreement immediately. (Id. at 5:5-9.) The

Settlement Agreement further provided that the parties had to make a good faith effort to

resolve any disputes arising under the Settlement Agreement before seeking judicial

enforcement. (Id. at 5:18-22.) 

Based on the above, the Court finds Compass is in breach of the Settlement

Agreement and Maximus is entitled to judgment in the amount of $297,950.00. This

amount accounts for payments already received from Compass ($5,100.00) and all

accrued late penalties ($3,050.00). (Doc. No. 346-2 at 21.) Accordingly, the Court

GRANTS Maximus’s motion to reopen the case and enforce the Settlement Agreement,

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and enters judgment in favor of Maximus in the amount of $297,950.00, plus attorney’s

fees as discussed below.

II. Maximus’s Request For Attorney’s Fees 

Maximus also requests an attorney fee award for its enforcement efforts, which is

explicitly provided for in Paragraph 9 of the Settlement Agreement.1

 (Doc. No. 339 at

5:23-27.) Under California law, “where the contract specifically provides that attorney’s

fees and costs shall be awarded . . . to the prevailing party, then the party who is

determined to be the prevailing party . . . shall be entitled to reasonable attorney’s fees in

addition to other costs.” Cal. Civ. Code § 1717(a). Because the Court has already

determined Maximus to be the prevailing party, the Court must only address the

reasonableness of the requested fees. 

A. Reasonableness of Attorney’s Fees

In calculating reasonable attorneys’ fees, courts consider the following factors: (1)

the time and labor required; (2) the novelty and difficulty of the questions involved; (3)

the skill necessary to perform the legal services properly; (4) the preclusion of other

employment by the attorney due to acceptance of the case; (5) the customary fee; (6)

whether the fee is fixed or contingent; (7) time limitations imposed by the client or

circumstances; (8) the amount involved and the results obtained; (9) the experience,

reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the

nature and length of the professional relations with the client; and (12) awards in similar

cases. LaFarge Conseils et Etudes, S.A., 791 F.2d at 1341-42. “The matter of

reasonableness of attorney’s fees is within the sound discretion of the trial judge.” Stokes

v. Marsh, 217 Cal. App. 3d 647, 656 (Cal. Ct. App. 1990); see also Martinez v. Idaho

First Nat’l Bank, 755 F.2d 1376, 1378 (9th Cir. 1985) (finding that a complete failure to

1

 Paragraph 9 of the Settlement Agreement provides: “It is further understood and agreed by the Parties that, subject to the provisions of sections 7 and 8, if at any time a violation of any term of this Agreement is asserted by any Party hereto, that Party shall have the right to seek judicial enforcement of the Agreement, and/or any other necessary and proper relief, and the prevailing party shall be entitled to recover its reasonable costs and attorneys’ fees.” (Doc. No. 339 at 5:23-27.)

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consider these guidelines constitutes an abuse of discretion). 

Here, Maximus seeks a total of $18,372.60 in attorney’s fees and costs for the 55.6

hours that its attorney, Jeremy Meier (“Meier”) and his paralegal, Deborah Killion

(“Killion”) incurred in enforcing the Settlement Agreement. (Doc. No. 346-1 at 2.) This

amount includes time spent contacting Compass and Maximus regarding enforcement of

the Settlement Agreement, attempting to collect delinquent payments, drafting the motion

to enforce the Settlement Agreement, composing a reply brief, and preparing for and

attending oral argument.2

 (Doc. No. 346-2 at 41-43.) Maximus submitted a thorough

billing statement in support, including precise time records, detailed task descriptions,

and the resulting billable amounts. (Id.) The billing statement reflects an hourly rate of

$517.50 for Meier, and an hourly rate of $193.50 for Killion. (Id.) The Court does not

dispute that these rates are within the range of what may be considered reasonable, even

though both Meier and Killion’s rates are at or near the higher end, as there is sufficient

evidence of experience and expertise. (Id. at 2-5.) Therefore, the Court only considers

whether the time spent preparing the instant motion and the time spent corresponding

with Compass and Maximus was reasonable. 

1. Preparing the Instant Motion

Of the 55.6 total hours requested, Maximus alleges that Meier and Killion spent a

combined 42.9 hours drafting the instant motion to enforce the Settlement Agreement. 

(Doc. No. 346-2 at 41-43.) Broken down even farther, of the 42.9 total hours, Maximus

contends that Meier spent 10.8 hours ($5,589.00) researching, writing, and revising the

motion, and that Killion spent 32.1 hours ($6.211.35) drafting/revising the motion and

preparing the exhibits. (Id.) This equates to a total of $11,800.35 in requested fees in

preparing the instant motion to enforce the Settlement Agreement. Such amount is

unreasonable. Although the Court is cognizant that this motion is related to a complex

case, the motion itself—a motion to enforce a stipulated Settlement Agreement—is not

2

 Maximus may not recover attorney’s fees for the 6 hours Meier estimated it would take to prepare the reply brief and attend the motion hearing because Compass did not file an opposition, and the Court vacated the motion hearing. 

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complex. Accordingly, the Court GRANTS IN PART AND DENIES IN PART

Maximus’s request and finds fees in the amount of $7,438.50 reasonable to prepare the

instant motion.3

2. Contacting Compass and Maximus

Meier further alleges that he spent 5.8 hours attempting to contact Compass, and

0.9 hours communicating with Maximus regarding enforcement strategy. (Doc. No. 346-

2 at 41-43.) The Court does not take issue with the requested fees, and finds these hours

necessary and appropriate in light of the specific provisions in the Settlement Agreement

requiring such good faith efforts. Accordingly, the Court GRANTS Maximus’s request

for $3,467.25 in fees incurred in contacting Compass and communicating with Maximus.4

CONCLUSION

For the reasons set forth above, the Court GRANTS Maximus’s motion to reopen

the case and enforce the Settlement Agreement, and GRANTS IN PART AND DENIES

IN PART Maximus’s request for attorney’s fees. (Doc. No. 339.) Accordingly, the

Court awards Maximus $297,950.00 as the accelerated amount presently due and owing

under the Settlement Agreement, and $10,905.75 in attorney’s fees incurred to enforce

the Settlement Agreement. The Clerk of Court is instructed to enter judgment in favor of

Maximus and against Compass in the amount of $308,855.75.

IT IS SO ORDERED.

DATED: November 25, 2013

Hon. Anthony J. Battaglia

U.S. District Judge

3

 The Court finds Meier reasonably expended 5.4 hours ($2,794.50) as opposed to 10.8 hours, and that Killion reasonably expended 24 hours ($4,644.00) as opposed to 32.1 hours. 

4

 6.7 (5.8 + 0.9) multiplied by the reasonable rate ($517.50) equals $3,467.25.

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