Court Opinion

ID: 3182996
Source: CourtListenerOpinion
Date Created: 2016-03-05 01:05:01.083277+00
Date Added: 2024-06-11T14:35:45.647616
License: Public Domain

Case: 15-30791      Document: 00513406751         Page: 1    Date Filed: 03/04/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                            United States Court of Appeals
                                                                                     Fifth Circuit

                                                                                   FILED
                                    No. 15-30791                               March 4, 2016
                                  Summary Calendar
                                                                              Lyle W. Cayce
                                                                                   Clerk
RICHARD H. MARTIN, III; CONCERNED CARE HOSPICE, L.L.C.;
CONCERNED CARE HOME HEALTH, INCORPORATED,

              Plaintiffs - Appellees

v.

KOBY R. JACKSON,

              Defendant - Appellant

                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:13-CV-5895

Before HIGGINBOTHAM, ELROD, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Koby Jackson appeals from the district court’s order enforcing indemnity
obligations he had undertaken in a settlement agreement. We AFFIRM.
       Richard H. Martin, III, was the Chief Executive Officer of EZ Healthcare,
Inc., from February 2010 to July 2013. After resigning, Martin brought suit
against EZ Healthcare and its owner Koby Jackson to recover money Martin

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 15-30791    Document: 00513406751     Page: 2   Date Filed: 03/04/2016

                                 No. 15-30791
was owed. The parties entered into a settlement agreement, under which
Martin purchased EZ Healthcare from Jackson. The district court entered an
order dismissing the case with prejudice but retaining jurisdiction to enforce
the settlement agreement.
      A few months later, Martin moved to enforce the settlement agreement
against Jackson. Martin claimed that Jackson agreed to indemnify Martin
from all undisclosed debts and liabilities that EZ Healthcare incurred prior to
the entry of the settlement agreement. Martin submitted evidence of several
undisclosed debts he had recently discovered and asked the court to order
Jackson to pay those debts in accordance with the settlement agreement.
      The district court held that the settlement agreement required Jackson
to indemnify Martin for the undisclosed debts. It entered judgment against
Jackson for the amount of the debts. Jackson timely appealed.

                                 DISCUSSION
      We review a district court’s enforcement of a settlement agreement for
abuse of discretion. Sundown Energy, L.P. v. Haller, 773 F.3d 606, 614 (5th
Cir. 2014). A district court abuses its discretion if it makes clearly erroneous
factual findings, erroneous conclusions of law, or incorrectly applies the law to
the facts. Id. Federal courts rely on state contract law for the construction and
enforcement of settlement agreements. Id. at 611. The parties agree that
Louisiana law applies to their settlement agreement.
      Section 1.3 of the settlement agreement contains a promise by Jackson
to indemnify Martin “from and against any and all claims, demands, liability,
obligation[s], . . . [arising] prior to entry of this Agreement, except for those
liabilities set forth in Exhibit ‘A’ attached hereto. Jackson is unaware of any
other debts or liabilities of EZ Healthcare, Inc.” (emphasis omitted). The
parties agree that the undisclosed debts were not listed in Exhibit A or
                                       2
    Case: 15-30791     Document: 00513406751      Page: 3   Date Filed: 03/04/2016

                                  No. 15-30791
incurred after entry of the settlement agreement.           Section 6(c) contains
Jackson’s warranties and representations, including that he will disclose any
outstanding debts “to the best of his knowledge, information and belief.”
      Jackson claims that, when read together, these sections make him liable
to Martin only for debts that he actually knew about but did not disclose. The
district court disagreed with this interpretation. So do we. The final sentence
of Section 1.3 does not limit Jackson’s indemnification obligations. Instead, it
serves as personal assurance that Jackson has disclosed what he knows.
Section 6(c) also does not limit Jackson’s indemnification obligations under
Section 1.3.
      The district court did not err in refusing to consider parol evidence of the
parties’ intent. Under Louisiana law, if “the words of a contract are clear and
explicit and lead to no absurd consequences, no further interpretation may be
made in search of the parties’ intent.” LA. CIV. CODE art. 2046. The language
of Section 1.3 is “clear and explicit” that Jackson is liable for any undisclosed
debts arising prior to entry of the settlement agreement. See id.
      Jackson also argues on appeal that the district court erred in ruling on
the motion without discovery or an evidentiary hearing. He relies on our
holding that “when opposition to enforcement of the settlement is based not on
the merits of the claim but on a challenge to the validity of the agreement itself,
the parties must be allowed an evidentiary hearing on disputed issues of the
validity and scope of the agreement.” Mid-South Towing Co. v. Har-Win, Inc.,
733 F.2d 386, 390 (5th Cir. 1984). Jackson does not challenge the agreement’s
validity but instead the district court’s interpretation of the agreement. The
factual issues Jackson identifies as justifying an evidentiary hearing are only
relevant under his erroneous interpretation of the settlement agreement.
Accordingly, the district court did not err in summarily deciding the motion.

                                        3
    Case: 15-30791   Document: 00513406751    Page: 4   Date Filed: 03/04/2016

                               No. 15-30791
     Finally, we do not reach Jackson’s remaining arguments that: 1) Martin
did not carry the burden of proof to show Jackson breached the settlement
agreement; 2) Jackson complied with the terms of the settlement agreement;
and 3) Martin knew of some of the undisclosed debts in this case. These
arguments are based on Jackson’s interpretation of the settlement agreement,
which we reject.
     The district court did not abuse its discretion in ordering Jackson to
indemnify Martin for the undisclosed debts.
     AFFIRMED.

                                     4