Court Opinion

ID: 3028844
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:41:38.454419+00
Date Added: 2024-06-11T15:02:24.845724
License: Public Domain

United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 01-2665
                                   ___________

Hayden & Associates, Inc.,             *
                                       *
            Plaintiff,                 *
                                       *
      v.                               *
                                       *
ATY Building Systems, Inc.,            *
                                       *
            Defendant,                 *
                                       *   Appeal from the United States
Wafa A. Yakhlef, Richard Wright,       *   District Court for the
                                       *   Eastern District of Missouri.
           Defendants.                 *
      ________________                 *
                                       *
ATY Building Systems, Inc.,            *
                                       *
            Counter Claimant,          *
                                       *
      v.                               *
                                       *
Hayden & Associates, Inc.,             *
                                       *
            Counter Defendant/         *
            Appellant,                 *
                                       *
Cumberland Casualty and Surety         *
Company,                               *
                                       *
            Counter Defendant/         *
            Appellee.                  *
                                   ___________

                             Submitted: January 15, 2002

                                  Filed: May 9, 2002
                                   ___________

Before WOLLMAN,1 Chief Judge, HANSEN, Circuit Judge, and OBERDORFER,2
      District Judge.
                             ___________

WOLLMAN, Chief Judge.

      Appellant Hayden & Associates, Inc. (Hayden) appeals the district court’s3
denial for lack of jurisdiction of Hayden’s motion to enforce a financing agreement.
We affirm.4

                                          I.

     On May 1, 1999, Hayden and Cumberland Casualty & Surety Co.
(Cumberland), which was Hayden’s surety on two of four construction projects that
Hayden was involved in at Fort Leonard Wood, Missouri, entered into a financing

      1
       The Honorable Roger L. Wollman stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on January 31,
2002. He has been succeeded by the Honorable David R. Hansen.
      2
       The Honorable Louis F. Oberdorfer, United States District Judge for the
District of Columbia, sitting by designation.
      3
       The Honorable Rodney W. Sippel, United States District Judge for the Eastern
District of Missouri.
      4
      In light of the basis upon which we affirm the district court, we deny Hayden’s
motion to strike Cumberland’s brief.

                                         -2-
agreement. The agreement assigned to Cumberland a portion of any recovery that
Hayden might achieve in its contemplated suit against ATY Building Systems, Inc.
(ATY) in a dispute arising out of the construction projects.

       On May 26, 1999, Hayden sued ATY in Missouri state court for ATY’s failure
to deliver contracted-for metal building components. ATY removed the case to the
United States District Court for the Eastern District of Missouri. ATY
counterclaimed against Hayden, alleging that it had delivered the components but
that Hayden refused to pay. It also sued Cumberland. By order of the district court
dated July 28, 2000, and pursuant to a settlement agreement entered into by Hayden,
ATY, and Cumberland, ATY deposited $110,000 into the court registry, and the case
was dismissed with prejudice.

                                         II.

       Following the dismissal of the lawsuit, a dispute arose between Hayden and
Cumberland over the distribution of the settlement proceeds, whereupon Hayden filed
a motion to enforce the financing agreement. On March 23, 2001, the district court
ruled that because the financing agreement was neither made part of Hayden’s suit
against ATY nor was included as a part of ATY’s counterclaims against Hayden in
that action, the court was without jurisdiction to rule on Hayden’s motion to enforce
the financing agreement. The district court then entered an order transferring the
settlement funds in the court’s registry from the previously dismissed action between
Hayden and ATY to the new action that Cumberland had filed on March 20, 2001,
against Hayden seeking an award of the entire amount of the settlement proceeds.

      Hayden presents three arguments on appeal. First, Hayden appeals the district
court’s finding that it does not have jurisdiction over the financing agreement, a
determination that we review de novo. Gilbert v. Monsanto Co., 216 F.3d 695, 699
(8th Cir. 2000) (citing Jenisio v. Ozark Airlines, Inc. Ret. Plan for Agent, Clerical

                                         -3-
Employees, 187 F.3d 970, 972 (8th Cir. 1999)). Second, Hayden asserts that if we
find that the district court has no jurisdiction over the agreement, the entirety of the
settlement fund should be paid out to Hayden. Finally, Hayden contends that
regardless of the jurisdictional issue, its counsel maintains an attorney’s lien in the
amount of twenty percent of the settlement fund.

                                          A.

       In Kokkonen v. Guardian Life Insurance Corp. of America, 511 U.S. 375
(1994), the Supreme Court held that enforcement of a settlement agreement by the
court with jurisdiction over the underlying dispute was appropriate only where the
agreement “had been made part of the order of dismissal . . . .” Id. at 381. The Court
stated that this could be accomplished in two ways. First, the court’s dismissal order
may incorporate the settlement agreement. Second, the court may explicitly retain
jurisdiction over the settlement agreement. Id.

       We conclude that the district court’s order does not incorporate the settlement
agreement.5 Although the order states that the parties “have settled their claims,”
mere mention of a settlement does not incorporate a settlement agreement into a court
order. Miener v. Mo. Dept. of Mental Health, 62 F.3d 1126, 1127-28 (8th Cir. 1995).

       Likewise, we conclude that the district court did not explicitly retain
jurisdiction over the financing agreement. Although the order of dismissal states that
“[t]he Court . . . shall retain jurisdiction over this matter as to resolution of the
distribution of funds,” that language does not express any intention to exercise

      5
      Only if the settlement agreement in some way incorporated the financing
agreement would Hayden be able to compel enforcement of the financing agreement.
Because we find that the court’s order does not incorporate the settlement agreement,
we need not decide whether the settlement agreement incorporated the financing
agreement.

                                          -4-
jurisdiction over the financing agreement. At most, it indicates that the court
recognized its responsibility to retain jurisdiction over the settlement fund.

                                         B.

       Hayden next argues that even if the district court lacks jurisdiction over the
financing agreement, we should direct it to distribute the entire settlement fund to
Hayden. Hayden asserts that it retains an exclusive right to the settlement fund
because it was the only party that brought claims against ATY. We disagree.
Cumberland was properly brought into this case and was a party to settlement
negotiations. The settlement agreement specifically states that the money was paid
into the registry “for the benefit of [Hayden] and Cumberland.” The district court
may retain the monies deposited with it until the resolution of Cumberland’s pending
suit or until such time as the parties come to an agreement.

                                         C.

       Finally, Hayden contends that its counsel is entitled to $22,000 of the
settlement fund by operation of Hayden’s contract with its counsel. That figure,
however, is based upon the forty percent of the settlement fund that Hayden claims
it is due under the financing agreement. To award this sum to Hayden’s counsel
would be tantamount to determining that Hayden is entitled to that percentage under
the financing agreement and would constitute an interpretation of the financing
agreement on our part that we have found the district court is foreclosed from making
in the first instance.

      The order is affirmed.

                                         -5-
A true copy.

      Attest:

         CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

                           -6-