United States District Court, E.D. Pennsylvania
STEPHANIE J. SIMON, in her capacity as Trustee of the Julius M. Simon Revocable Trust, Plaintiff,
ELLIS BLOCK, LISA J. BLOCK and JONATHAN L. SIMON, Defendants.
HENRY S. PERKIN, Magistrate Judge.
This case involves a family dispute which was resolved and settled on January 7, 2013 following a lengthy in-person settlement conference. At that time, the case was dismissed pursuant to Local Rule of Civil Procedure 41.1 (b). The Court retained jurisdiction for a period of six months for the sole purpose of enforcing terms of settlement.
I. PROCEDURAL HISTORY FOLLOWING SETTLEMENT OF THE CASE.
On July 3, 2013, the Plaintiff, Stephanie J. Simon ("the Plaintiff") filed a motion to enforce settlement. Defendants Ellis Block and Lisa Block ("Block Defendants") responded to the motion to enforce with a motion for sanctions in the form of counsel fees. Defendant Jonathan L. Simon ("Defendant Simon") responded to the motion to enforce settlement by asserting that no relief was necessary and that the delay in fully accomplishing the settlement was due, in part, to the Plaintiff's failure to provide certain documents and Julius Simon's Rolex watch. The motion to enforce settlement and motion for sanctions were referred to me for resolution on November 19, 2013, by the Honorable Lawrence F. Stengel. Thereafter, I held a series of conference calls with counsel and scheduled a hearing on the motions for March 26, 2014.
A telephonic settlement conference was held on March 25, 2014, with counsel for the Plaintiff and Defendant Simon, at which time the Court believed that all issues concerning settlement between the Plaintiff and Defendant Simon had been resolved. It was anticipated on March 25, 2014, that the agreement of Plaintiff and Defendant Simon would be completed by March 28, 2014, and would result in the Plaintiff withdrawing her motion to enforce settlement filed on May 13, 2013. As a result, the hearing for March 26, 2014 was canceled. See Docket No. 60. On March 31, 2014, I denied the Block Defendants' motion for sanctions in the form of counsel fees. See Docket No. 63. On April 14, 2014, in order to effectuate settlement, I entered an Order directing that the Plaintiff should disclose information to counsel for Defendant Simon with respect to litigation in Massachusetts state court and
Upon compliance with the above enumerated directives, the remaining open items of performance under the settlement agreement, namely: the exchange of the Rolex watch which was the subject of the settlement; and the $215, 000 check payable to Plaintiff, Stephanie J. Simon, shall be exchanged no later than Friday, April 25, 2014. See Docket No. 66. Again, the Court believed that all matters between the parties with regard to enforcement and implementation of the terms of settlement were resolved.
On May 9, 2014, however, the Plaintiff filed a motion seeking to hold Defendant Simon in contempt of court and to assess sanctions against him. See Docket No. 67. Unfortunately, I learned during a conference call with counsel for both the Plaintiff and Defendant Simon on May 14, 2014, that the source of the funds to be paid pursuant to the settlement agreement by Defendant Simon to the Plaintiff was the final unresolved issue between the parties. Plaintiff filed a supplemental memorandum of law on May 29, 2014. See Docket No. 70. Defendant Simon's response in opposition was filed on June 10, 2014. See Docket No. 72. On June 19, 2014, the matter was referred by Judge Stengel for resolution. Plaintiff's reply brief was filed on July 14, 2014. See Docket No. 77. Thus, the motion was fully briefed by both parties and the Court set July 18, 2014, as the date for a hearing.
II. FINDINGS OF FACT.
The terms of settlement reached on January 7, 2013 between the Plaintiff and Defendant Simon provided for a payment of $215, 000 by Defendant Simon to the Plaintiff. This sum was to be paid by April 25, 2014. The first check in the amount of $215, 000 was tendered to Plaintiff's counsel in a timely fashion, but was made payable to an incorrect party, according to the Plaintiff. The Plaintiff also objected to the fact that the check was drawn on the account of a company named Royal Green, which was never a party in this case. Plaintiff's counsel informed the Court at the July 18, 2014 hearing that the Plaintiff objected to this check because Royal Green is not a party in this action. (N.T., 7/18/14, p. 7.) Although Defendant Simon did not agree with the Plaintiff's objections regarding the first check, he issued a second check made payable to the Plaintiff in her representative capacity as Trustee of the Julius M. Simon Revocable Trust, which the Plaintiff believed was the correct payee. The Plaintiff objected to this second check because it was also drawn on the account of Royal Green. (Id. at 8.)
Due to Plaintiff's objection to the second check, the Court held a telephone conference on May 13, 2014, in an effort to resolve the Plaintiff's objection. After this conference, Defendant Simon agreed to provide and did provide the Plaintiff with a cashier's check made payable to the Plaintiff in her representative capacity as Trustee of the Julius M. Simon Revocable Trust. Although this third check was a cashier's check, the Plaintiff again objected because the check bore a cross-reference by Fulton Bank that a Royal Green account was the original source of the funds which had been deposited into the Fulton Bank account from which the cashier's check was issued
During the July 18, 2014 hearing, the Court questioned the Plaintiff's position regarding this third check because cashier's checks are drawn from a bank's account and not from an individual or corporate account. Although Plaintiff's counsel agreed with the Court, his objection was that the bank's notation on the cashier's check indicated that Royal Green was the remitter of the funds, not Defendant Simon, and that Royal Green was, therefore, the entity providing the funds which enabled the bank to issue the cashier's check. ( Id. at 9.) Plaintiff's counsel argued that "[a] payment by Royal Green raises a number of possible risks that are foreign to the risks that were assessed in settling the case between the parties." ( Id. at 9-10.) Counsel further argued that these risks included a possible involuntary bankruptcy proceeding against Royal Green, a voluntary bankruptcy proceeding against Royal Green, a state law fraudulent transfer claim and issues involving the solvency of Royal Green and claims by possible creditors of Royal Green. ( Id. at 10.) In support of counsel's concerns, he referred to a personal injury case filed against Royal Green subsequent to the settlement of this case in January 2013. He further argued that the Pennsylvania fraudulent transfer statute of limitations is a four-year period, and that he was concerned that the liabilities of Royal Green may include environmental claims.
At the hearing, the Plaintiff submitted into evidence the April 14, 2014 Order of Court and the three checks which had each been separately tendered by Defendant Simon as payment of his $215, 000 obligation pursuant to the settlement between the parties reached on January 7, 2013. The Court's Order and the checks were admitted into evidence, with no objection by Defendant Simon. (Id. at 24-25.)
At the July 18, 2014 hearing, Defendant Simon first argued that even though Royal Green was not a party to the original litigation, it was a party to the release and was, in fact, released by the language of the settlement agreement. ( Id. at 28.) Defendant Simon presented the testimony of its counsel of record, Joseph E. Wolfson, Esquire, who first referred to a transcript of the settlement conference held before me on January 7, 2013, which constituted the settlement agreement between the parties. ( Id. at 34.) Attorney Wolfson referred to the Court's statement in the settlement colloquy that the $215, 000 payment was to be paid to the Estate of Julius Simon and that "this put to bed all of the issues starting with anything relating to the parents, relating anything to the individual defendants, as well as the businesses." ( Id. at 35.) He explained that "there were a number of different businesses. There were two separate Royal Green companies" and the release of claims was to go to all of the businesses. ( Id. )
Attorney Wolfson testified that an April 25, 2014 meeting was scheduled and held at his office for Defendant Simon to deliver the first check which was tendered in this matter. During that meeting, at the time the $215, 000 check was given to Plaintiff's counsel, he handed over Julius M. Simon's Rolex watch to Defendant Simon,  which was one term of the settlement. ( Id. at 42.) At that meeting, Plaintiff's counsel did not object to the payee designation on the check, which was the Estate of Julius M. Simon ("the Estate"). On April 28, 2014, Plaintiff's counsel, via email, objected to both the payee, which was the Estate, and the payor, which was Royal Green Reading Corporation, of the tendered check. Defendant Simon's counsel responded by saying that it was his understanding that the settlement check was to be made payable to the Estate. ( Id. at 45.) Plaintiff's counsel and Defendant Simon's counsel then discussed the ultimate payee of ...