Court Opinion

ID: 815710
Source: CourtListenerOpinion
Date Created: 2013-01-22 17:25:23+00
Date Added: 2024-06-11T12:38:02.480400
License: Public Domain

NOT PRECEDENTIAL

               UNITED STATES COURT OF APPEALS
                    FOR THE THIRD CIRCUIT
                         ____________

                       Nos. 11-4526 and 11-4527
                            _____________

                EDDIE LESTER; SHARON LESTER;
            GILBERT VAZQUEZ; MADELINE VAZQUEZ;
           ARTHUR LUCKY; ANGELA ROMANO-LUCKY

                                    v.

GENE P. PERCUDANI; CHASE MANHATTAN MORTGAGE CORPORATION;
        CHAPEL CREEK HOMES, INC.; RAINTREE HOMES, INC.;
            CHAPEL CREEK MORTGAGE BANKER, INC.;
            DOMINICK P. STRANIERI; WILLIAM SPANER;

              Gene P. Percudani; Chapel Creek Homes, Inc.;
        Raintree Homes, Inc.; Chapel Creek Mortgage Banker, Inc.;
                 *Homes by Vintage, Inc.; * Y-Rent, Inc.,
                         Appellants No. 11-4526

                      * (Pursuant to F.R.A.P. 12(a))
                             _____________

          PABLO ACRE; IVETTE ACRE; RICHARD ALTENOR;
    ROBIN ALTENOR; KEVIN ANDERSON; KIMBERLY ANDERSON;
 JOY ARCIA; FRANCIS ASHUN; DIANE ASHUN; MICHAEL BARNWELL;
 BURNETTE BARNWELL; FLOYD BENNETT; BARBARA BELLARDINO;
LEROY BLOUNT; ELEANORE MCCORMICK-BLOUNT; STANLEY BOOTS;
     TERRY BURDICK; FLORD ALIZA BURDICK; PEDRO CABAN;
      OLGA CABAN WILLIAM CATALANO; DENISE CATALANO;
       JOHN CHAMPION; GERALDINE CHAMPION; JAY COLON;
    DAISY COLON; FRANCIS CORCHADO; MARISOL CORCHADO;
     MILTA CORNELIO; DAMARIE COTTO; VALERIE BRACERO;
           JAMES DAVIS; YOLANDA DAVIS EVA WRIGHT;
      JAMES DEMAREST; KAREN DEMAREST; LOUISE DEVAUX;
   AMBROSE DEVAUX; VINCENT DEZONIE; MICHELLE DEZONIE;
    LUIS DOMENECH; AMALIA DOMENECH; LOUIS GARBARINO;
     ADRIENE GARBARINO; ESTELLE GIBSON; JUDITH MAUPIN;
    LUIS GONZALEZ; GRACE GONZALEZ; ROBERT GONZALEZ;
     GLENDA GONZALEZ; LYNNE GRIFFIN; RODNEY HAILEY;
   CAROLYN HAILEY; RUTH R. HALLMOND; ODELL HARRISON;
          STACY HARRISON; CHRISTOPHER HENDRICKS;
     TANIA MONTGOMERY-HENDRICKS; ROBERT HERCULES;
       FRAN HERCULES; RICHARDEAN HINDS; EARL HINDS;
      DONALD HOLMES; NIDIA HOLMES; WILLIE LITTLE, JR.;
        BARBARA HOWARD-LITTLE; FRANNIE M. HOWELL;
         PETER HUNT; JANN JACKSON; ROBERT JOHNSON;
       SYLVIA JOHNSON; BRENDA KEIZER; GAIL KELLMAN;
    ANGELA KELLMAN; JEFFREY KRISIAK; MIRIAM KRISIAK;
          BRYANT LEE; VANESSA LEE; BERNARD LEWIS;
        MERLYN LEWIS; ANTHONY LEY; DONALD LUTON;
      VALERIE LUTON; JOSEPH MAHANA; GRACE MAHAMA;
      TROY MCMILLAN; DINA MCMILLAN; LIONEL MENDEZ;
       ELAINE MYRIE; RICHARD NEGRON; MARY NEGRON;
  ROBERT C. NICHOLS, IV; ROBYN ODITA; LAWRENCE PETERSON;
     ELISSA PETERSON; CARLOS RIVERA; PRISCILLA RIVERA;
     EDWARD RIVERA; CHARLES STANLEY; EFRAN RAMIREZ;
          LETICIA RIVERA-RAMIREZ; MYRON ROBERTS;
   CHEQUETTA ROBERTS; ALFRESO RODRIGUEZ; GAIL GAVIN;
    MARIE RUFFIN; DANNY RUIZ; YVETTE RUIZ; GLORIA RUIZ;
    ANTHONY SANCHEZ; EVELYN SANCHEZ; JULIA SANCHEZ;
    NORBERTO SERRANO; LYDIA ALVAREZ; JEFFREY SHUTES;
    PAMELA HARRISON; WILLIAM SPINNER; DIANA STANLEY;
      NORRIS TEEL; SANDRO TERRANA; TRACEY TERRANA;
 CAROL THOMPSON; DWAYNE THOMPSON; CARLSON THOMPSON;
ANGELA THOMPSON; GERALD THOMPSON; ELIZABETH THOMPSON;
 SHARON WARBURTON; PAUL WARZYNSKI; LAURA WARZYNSKI;
 SCARLETT WEST; BERNICE WILLIAMS; JOAN WILLIAMS-AIKENS;
 CAMILLE WILLIAMS; JOHN WILLIAMS, III; SHEILA WILLIAMS, III;
      ROSLYN YOUNG; THOMAS ZAPATA; JANELL PEARSON

                             v.

            CHASE MANHATTAN MORTGAGE CORP.;
         WILLIAM K. SPANER; DOMINICK P. STRANIERI;
        GENE PERCUDANI; CHAPEL CREEK HOMES, INC.;
       RAINTREE HOMES, INC.; HOMES BY VINTAGE, INC.;
     Y-RENT, INC.; CHAPEL CREEK MORTGAGE BANKER, INC.

                             2
                      Gene Percudani; Chapel Creek Homes, Inc.;
                    Raintree Homes, Inc.; Homes by Vintage, Inc.;
                   Y-Rent, Inc.; Chapel Creek Mortgage Banker, Inc.,
                                 Appellants No. 11-4527
                                    _____________

                     Appeals from the United States District Court
                        for the Middle District of Pennsylvania
                  (D.C. Civil Nos. 3-01-cv-01182 and 1-04-cv-00832)
                   District Judge: Honorable Christopher C. Conner
                                    _____________

                       Submitted Under Third Circuit LAR 34.1(a)
                                   January 7, 2013

              Before: RENDELL, FISHER and JORDAN, Circuit Judges

                           (Opinion Filed: January 22, 2013)
                                   _____________

                              OPINION OF THE COURT
                                   _____________

RENDELL, Circuit Judge.

      Defendants appeal the District Court’s enforcement of the Settlement Agreement

between the parties. For the reasons discussed below, we will affirm in part, and vacate

in part, and remand for further proceedings.

                                               I.

      Because we write solely for the parties, we recount only those facts necessary to

our disposition. In November 2008, at the direction of the District Court,

Plaintiffs/Appellees entered mediation with Defendants/Appellants and other defendants.

In February 2009, the parties orally agreed to a settlement agreement. Based on their

                                               3
understanding of the agreement, Plaintiffs’ counsel began collecting written releases from

plaintiffs of their claims against Defendants (the “pre-Settlement release”).

       The parties executed a written settlement agreement on September 3, 2010 (the

“Settlement Agreement”). The Settlement Agreement required Plaintiffs’ counsel to

provide Defendants with “an executed release, approved by these parties, to be signed by

each Plaintiff, or in the case of plaintiff’s [sic] who filed bankruptcy, an order approving

settlement signed by the bankruptcy court judge, where applicable.” In exchange, the

Defendants were to pay Plaintiffs’ counsel $300,000.00, which represented “payment of

attorneys fees and costs towards plaintiffs’ counsels’ fees and costs associated with the

prosecution of the cases. . . .”

       Defendants claim that after the Settlement Agreement was executed, the parties

negotiated and agreed upon the form of the release (the “approved release”). Plaintiffs

disagree that there was an agreed upon release and argue that they only had to provide

Defendants with a general release of plaintiffs’ claims. As such, Plaintiffs’ counsel did

not use the approved release, but continued using the pre-Settlement release. This release

is identical to the approved release except it includes two additional sentences that state:

“In return for this release I will be provided a pro rata share of the $300,000.00

settlement. My attorneys’ fees and other case costs will be deducted out of that pro rata

share of the $300,000.00 settlement.” Similar language was also included in the

bankruptcy orders that plaintiffs who filed for bankruptcy were required to procure.

       Because of this language, Defendants refused to release the settlement money,

claiming that the intent of the Settlement Agreement was to pay plaintiffs’ counsel their

                                              4
attorneys’ fees and costs and that distributing the money to plaintiffs would be contrary to

that express purpose. In addition, Defendants asserted that they had not received all the

required releases and bankruptcy orders. In response, Plaintiffs filed a motion to enforce

the Settlement Agreement, arguing that nothing in the agreement prevented Plaintiffs’

counsel from distributing the settlement money to plaintiffs and that they provided all the

required releases and bankruptcy orders to Defendants. Defendants then filed a cross-

motion to enforce the Settlement Agreement based on their understanding of the

agreement.

       The District Court ruled in favor of Plaintiffs, holding that (1) the Settlement

Agreement did not limit how Plaintiffs’ counsel could distribute the settlement funds; (2)

the releases did not violate the terms of the Settlement Agreement; (3) Plaintiffs’ failure

to use the approved release did not excuse Defendants from complying with the

Settlement Agreement; and (4) all the bankruptcy orders and releases had been obtained.

Defendants appeal this ruling.

                                            II. 1

                                 a. The Settlement Agreement

       We agree with the District Court’s well-reasoned analysis that the Settlement

Agreement did not prevent Plaintiffs’ counsel from distributing the settlement money to

plaintiffs and that Defendants should not be excused from complying with the Settlement

1
 The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction
under 28 U.S.C. § 1291. We review the District Court’s construction of the Settlement
Agreement de novo, but review any factual findings for clear error. In re Cendant Corp.
Prides Litig., 233 F.3d 188, 193 (3d Cir. 2000).

                                             5
Agreement because the releases and bankruptcy orders that Plaintiffs provided included

language that expressed this intent. Thus, we will affirm this aspect of the District

Court’s order for the reasons outlined in its opinion.

                    b. The “ Missing” Bankruptcy Orders and Releases

       Defendants claim that the District Court erred in concluding that all the releases

and bankruptcy orders had been obtained for two reasons. First, Defendants assert that

the District Court incorrectly concluded that five plaintiffs had withdrawn from the

litigation, and that, as a result, it improperly excused them from providing bankruptcy

orders or releases to the Defendants. Second, Defendants argue that the District Court

failed to apply the provision in the Settlement Agreement that required plaintiffs who

were in bankruptcy to provide Defendants with bankruptcy orders, as opposed to releases.

As a result, Defendants contend that the District Court improperly concluded that

approximately twenty plaintiffs who were in bankruptcy had complied with the

Settlement Agreement even though they provided only releases. 2

       We agree with the District Court that the five plaintiffs at issue withdrew from the

litigation, see Case No. 1:04-CV-0832, Docs. 345, 346, 347, 348 and 352, and that as a

result, releases and bankruptcy orders were not required for these plaintiffs. Thus, we

2
  In their supplemental brief, Defendants suggest for the first time that plaintiffs who filed
for bankruptcy were also required to provide releases signed by their respective trustees.
See, e.g., Supplemental Appendix 64a ¶ 3. There is nothing in the Settlement Agreement
that requires this. Moreover, there is no reason why this requirement would be necessary.
The bankruptcy orders leave no room for doubt that the trustees are releasing their claims
in exchange for the settlement payout.

                                              6
will affirm this aspect of the District Court’s ruling for the reasons outlined in the District

Court’s opinion.

       We cannot conclude, however, that Plaintiffs provided Defendants with all of the

required bankruptcy orders. The Settlement Agreement explicitly states that plaintiffs

who filed for bankruptcy were required to provide Defendants with “an order approving

settlement signed by the bankruptcy court judge, where applicable.” Despite this express

requirement, the District Court held, without explanation, that plaintiffs who filed for

bankruptcy complied with the Settlement Agreement by providing Defendants with

releases. Appendix 71a (“A comparison of defendants [sic] list of missing bankruptcy

orders with the releases and bankruptcy orders provided to the court by plaintiffs

establishes that all releases are present.” (emphasis added)). We have reviewed the

record, including the citations in the District Court’s opinion, and the parties’ briefs 3, and

we cannot determine the basis of the District Court’s conclusion, or whether bankruptcy

3
 Plaintiffs’ only explanation as to why bankruptcy orders were not required for the
plaintiffs listed in Appendix 360a is that bankruptcy orders were “not required for
individuals whose bankruptcy trustee had understandably abandoned any claim to the
relatively small proceeds ($2,093.02)” from the settlement. In footnote 2 of their
response brief, Plaintiffs claimed that there are fifteen of these abandoned claims. As
support for this contention, Plaintiffs cited to three pages of the docket (App. 3a, 4a, and
41a) and the second page of the District Court’s order (App. 60a). We could not
determine how these citations shed light on which claims had been abandoned, and
requested supplemental briefing on the issue. In their supplemental brief, Plaintiffs
identified three claims that have been abandoned and then cited footnote 2 of their
response brief. Needless to say, we are now only three claims closer to deducing which
of the fifteen claims Plaintiffs are claiming have been abandoned.

                                               7
orders were required from the plaintiffs that Defendants have identified. 4 As a result, we

will vacate this portion of the District Court’s order and remand so that the District Court

can make additional findings and/or explain its conclusions as to whether the “missing”

bankruptcy orders were required.

                                            III.

       For the reasons stated above, we will affirm in part, vacate in part, and remand for

further proceedings.

4
  We note that because the Settlement Agreement states that bankruptcy orders are
necessary for plaintiffs who filed for bankruptcy “where applicable,” it is possible that
there are plaintiffs who filed for bankruptcy who did not need to provide bankruptcy
orders to Defendants. This analysis, however, is not included in the District Court’s
opinion or in the parties’ briefs.

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