UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA, for the

use of McDermitt, Incorporated, 83

Hunterstown Road, Gettysburg,

Pennsylvania 17325,

Plaintiff-Appellant,

v.

CENTEX-SIMPSON CONSTRUCTION

No. 99-1213

COMPANY, INCORPORATED; SEABOARD

SURETY COMPANY; ST. PAUL FIRE &

MARINE INSURANCE COMPANY;

NATIONAL UNION FIRE INSURANCE

COMPANY OF PITTSBURG,

PENNSYLVANIA; FEDERAL INSURANCE

COMPANY,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of West Virginia, at Martinsburg.

W. Craig Broadwater, District Judge.

(CA-96-54-3)

Argued: December 1, 1999

Decided: January 19, 2000

Before MURNAGHAN and WILKINS, Circuit Judges,

and HAMILTON, Senior Circuit Judge.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: William Anthony Kolibash, PHILLIPS, GARDILL, KAISER & ALTMEYER, Wheeling, West Virginia, for Appellant. David

L. Cole, Jr., OBER, KALER, GRIMES & SHRIVER, P.C., Baltimore, Maryland, for Appellees. ON BRIEF: David B. Hamilton,

OBER, KALER, GRIMES & SHRIVER, P.C., Baltimore, Maryland,

for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

This case arises from a dispute between Centex-Simpson, a general

contractor, and McDermitt, a subcontractor. The parties verbally settled their dispute during a telephonic conference held on the record

and attended by the district court judge. Centex-Simpson agreed to

pay McDermitt $217,500, and both parties agreed to release all claims

against the other. After the conference concluded, however, the parties could not agree on the language of the release provision in the

written settlement agreement.

The district court granted in part Centex-Simpson's motion to

enforce the settlement agreement and ordered that the written agreement include certain challenged language. The language prohibits

either party from encouraging, sponsoring, suggesting or otherwise

fostering any claim against the other party undertaken by any person

or entity. McDermitt filed this appeal alleging that the district court

abused its discretion by construing the agreement to include the "do

not encourage" language in the release provision.

For the reasons discussed below, we affirm.

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I.

Centex-Simpson was awarded the general contract for construction

of the U.S. Fish and Wildlife Service National Education and Training Center in Shepherdstown, West Virginia ("NETC"). In 1994,

McDermitt entered into a subcontract with Centex-Simpson to provide concrete, labor, and materials for that project. A dispute arose

between the parties concerning completion of the work and payment.

McDermitt filed suit against Centex-Simpson in the U.S. District

Court for the Northern District of West Virginia in September of

1996. Centex-Simpson filed an answer and a counter claim against

McDermitt for breach of contract concerning a different construction

project, that was the State Farm Mutual Automobile Insurance Company Seabord Regional Office in Frederick, Maryland ("State Farm").

After several unsuccessful attempts to settle the disputes, the parties participated in a telephonic settlement conference before the

Court on May 15, 1998. At that time, on the record and in the presence of the district court judge, Centex-Simpson and McDermitt

agreed verbally to settle their dispute. The parties agreed that CentexSimpson would pay McDermitt $217,500 in return for settlement and

release of all claims, with one specific exception. A potential $31,000

claim regarding a supplier was excepted from the settlement agreement.

On May 26, 1998, McDermitt's counsel prepared a proposed written settlement agreement which provided for the release of both parties from any claims arising out of the NETC and State Farm projects.

In response, Centex-Simpson's counsel prepared a different proposed

written settlement agreement. Centex-Simpson's proposal contained

broader language in the release provision. In addition to the agreement to release all future claims arising out of the two construction

projects, the counter-proposal also included a "do not encourage" provision:

McDermitt further covenants that it will in no way encourage, sponsor, suggest or otherwise foster any claim or cause

of action arising out of or pertaining to the NETC project

and/or State Farm Project against [any party to this Agree-

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ment or the officers of any party to this agreement]

undertaken by (1) . . . any party to this Agreement . . . or,

(4) any other person or entity.

The additional language in the release provision prevents either party

from encouraging another person or entity to bring a suit related to

either the NETC or State Farm construction projects.

McDermitt would not agree to the "do not encourage" language,

and Centex-Simpson would not agree to remove the challenged language. In the months following the settlement conference, both parties petitioned the court to enforce the settlement agreement and to

resolve the dispute over the language used in the release provision.

On January 7, 1999, the district court issued a memorandum opinion and order granting Centex-Simpson's motion and instructing the

parties to comply with the written settlement agreement proposed by

Centex-Simpson, including the challenged language in the release

provision.

McDermitt now appeals and insists that it never agreed to the "do

not encourage" restriction contained in the challenged language.

McDermitt alleges that the district court abused its discretion by

ordering the parties to execute an agreement which contains the challenged language in the release provision.

II.

This court reviews the district court order enforcing the settlement

agreement for abuse of discretion. Young v. FDIC , 103 F.3d 1180,

1194 (4th Cir. 1997). We must decide whether including the "do not

encourage" language in the release provision of the written settlement

agreement constitutes an abuse of discretion. We hold that it does not.

District courts possess the inherent authority to enforce a settlement agreement and to enter judgment based on an agreement. Petty

v. Timken Corp., 849 F.2d 130, 132 (4th Cir. 1988). Neither party disputes that a settlement was reached at the telephonic conference in

May of 1998; however, during the settlement conference there was no

discussion of the precise terms of the release of claims provision. The

district court judge reviewed the transcript of the settlement conference and concluded that the "do not encourage" language was consis-

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tent with the general release of claims that was agreed to during the

conference.

Our review of the transcript of the settlement conference and

indeed the entire purpose of a "settlement" conference convince us

that the parties intended to arrive at a dollar figure that would be paid

by Centex-Simpson to settle all claims between Centex-Simpson and

McDermitt. If McDermitt agreed to give up any future claims against

Centex-Simpson in exchange for money, they should not be allowed

now to reserve the right to goad others into similar action from the

courtroom sidelines.

The district court judge had this to say about the dispute over the

language in the release provision:

In the present case, as in the cases cited herein, the parties

knew precisely what they were agreeing to at the first telephonic settlement conference. In exchange for $217,500,

McDermitt agreed to release all present and future claims,

with the explicit exception of a single potential claim.

McDermitt had ample opportunity to inform the Court and

Centex that it also intended to except any other contemplated action against Centex from the agreement but did not

do so. Thus, all evidence before the court at the time of the

agreement indicated the essential scope of the settlement.

McDermitt agreed to settle all claims, save one, in exchange

for $217,500.

By adopting the broad language contained in Centex-Simpson's

draft of the release provision, the district court implicitly found that

such broad language was in keeping with the agreement reached on

May 15, 1998. Nothing in the record of the original settlement conference suggests otherwise. The judge, therefore, did not abuse his discretion by construing the agreement to include the broad release

language in the Centex-Simpson proposal.

The district court judgment is accordingly

AFFIRMED.

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