United States District Court, W.D. Pennsylvania
MICKEY J. BERGERON, individually and on behalf of all others similarly situated, Plaintiff,
BENTON ENERGY SERVICE COMPANY, Defendant.
MEMORANDUM AND ORDER
Bissoon United States District Judge.
before the Court is Plaintiff Mickey J. Bergeron
(Plaintiff)'s Motion to Enforce Court Approved
Settlement. (Doc. 40). For the following reasons,
Plaintiff's Motion will be GRANTED.
August 3, 2015, Plaintiff filed a Complaint against Defendant
Benton Energy Service Company (“Defendant”), on
behalf of himself and others similarly situated, alleging
violations of the Fair Labor Standards Act (FLSA). (Doc. 1).
On August 26, 2016, Plaintiff and Defendant filed a Joint
Motion for Preliminary Approval of Proposed Collective Action
Settlement and a Joint Stipulation and Settlement Agreement
of Collective Action Claims (“Settlement
Agreement”). (Doc. 35). The Settlement Agreement
provides that Defendant will pay a gross settlement amount of
$260, 523 to class members and Plaintiff's counsel in
exchange for a release of all claims asserted in the lawsuit.
(Doc. 35-3 ¶¶ 2(a), 2(b) and 2(c)). The Settlement
Agreement further provides that Defendant will issue such
payments “within 10 days after Plaintiff's Counsel
. . . file[s] a notice with the Court setting forth a listing
of Settlement Class members who have returned a timely Notice
of Consent . . . .” (Doc. 35-3 ¶¶ 5(b), 6).
August 30, 2016, this Court granted the Motion to Settle and
approved the Settlement Agreement. (Doc. 36). In its August
30, 2016 Order, the Court dismissed the case with prejudice
but retained jurisdiction to enforce the Settlement
Agreement. (See id). On December 22, 2016,
Plaintiff's counsel filed a Notice of Settlement Class
Members. (Doc. 37). According to the parties, 13 days later,
on January 4, 2017, Plaintiff's counsel, Attorney Richard
Burch, emailed Defendant's counsel, Attorney Phillip J.
Binotto, Jr. and Attorney Zachary D. Bombatch, regarding the
status of Defendant's payments under the Settlement
Agreement. (Doc. 44 at 1). On January 5, 2017, during a
telephone conversation, Attorney Bombatch told Attorney Burch
that Defendant was experiencing financial difficulties in
light of the downturn in the energy industry, and that it
would not be able to make the agreed-upon payments in the
time frame set out in the Settlement Agreement. (Id.
at 2). The parties agreed that Defendant could make several
installment payments to Plaintiff's counsel throughout
the month of January 2017. (Id.; Doc. 40-1).
Defendant, however, has failed to make these payments. (Doc.
44 at 2-3).
filed the instant Motion to Enforce Court Approved Settlement
on January 23, 2017. (Doc. 40). In response to
Plaintiff's Motion, Defendant claims that it is
financially unable to make any payments to Plaintiff's
counsel under the terms of the Settlement Agreement. (Doc.
44). Specifically, Defendant claims that, currently,
“demand for [its] services is low, and its revenue
stream and cash flow are likewise low.” (Doc. 44 at 2).
Defendant further claims that it is “awaiting
substantial payment from its various customers, ”
stating that “the accounts receivable total is a
six-figure amount.” (Doc. 44 at 3). Defendant requests,
therefore, that the Court allow it to “make payments
according to its receipt of accounts receivable upon which
time it will be positioned to furnish said payments.”
(Doc. 44 at 6).
Court has subject matter jurisdiction over Plaintiff's
Motion because it expressly retained jurisdiction to enforce
the Settlement Agreement in its Order of Dismissal.
Shaffer v. GTE North, Inc., 284 F.3d 500, 503 (3d
Cir.2002) (district courts may exercise ancillary
jurisdiction to enforce a settlement agreement if they
retained jurisdiction to do so in the order of dismissal);
see also In re Phar-mor, Inc. Sec. Litig., 172 F.3d
270, 274 (3d Cir.1999).
validity and enforceability of settlement agreements is
governed by state contract law.” Shell's
Disposal & Recycling, Inc. v. City of Lancaster, 504
Fed.Appx. 194, 200 (3d Cir. 2012). “It is by now
axiomatic under Pennsylvania law that ‘the test for
enforceability of [a settlement] agreement is whether both
parties have manifested an intention to be bound by its terms
and whether the terms are sufficiently definite to be
specifically enforced.'” Calif. Sun Tanning
USA, Inc. v. Elec. Beach, Inc., 369 Fed.Appx. 340, 346
(3d Cir. 2010) (quoting Channel Home Ctrs. v.
Grossman, 795 F.2d 291, 298-99 (3d Cir. 1986)).
“Where a settlement agreement contains all of the
requisites for a valid contract, a court must enforce the
terms of the agreement.” Step Plan Servs., Inc. v.
Koresko, 12 A.3d 401, 408-09 (Pa. Super. Ct. 2010).
Applying the above principles, it is clear that Plaintiff is
entitled to an order compelling Defendant to pay the
settlement amount. The Settlement Agreement clearly provides
for this payment, obligating Defendant to pay class members
and Plaintiff's counsel a total of $260, 523, as set
forth in Paragraphs 2(a), (b) and (c) of the agreement. (Doc.
35-3 ¶¶ 2(a), 2(b) and 2(c)). Indeed, Defendant
does not dispute this obligation. (Doc. 44). Rather,
Defendant merely asserts that, at this time, it is
financially unable to fulfill its contractual obligation.
this Court does not question Defendant's purported
inability to fulfill its settlement obligations, this does
not justify modification or vacation of those obligations. A
business's economic hardship is insufficient to excuse it
from fulfilling its contractual obligations. See
McDonough v. Toys R Us, Inc., 795 F.Supp.2d 329, 336
(E.D. Pa. 2011) (“It is well settled that the financial
inability of a party to complete obligations under a
settlement is not a basis for voiding the settlement.”)
(citing Felix v. Giuseppe Kitchens & Baths,
Inc., 848 A.2d 943, 948 (Pa. Super. Ct. 2004)).
Likewise, the Court will not, as Defendant requests, modify
the terms of the Settlement Agreement to allow Defendant to
“make payments according to its receipt of accounts
receivable upon which time it will be positioned to furnish
said payments.” (Doc. 44 at 6). Defendant
misunderstands the role of courts in the settlement process.
Contrary to Defendant's belief, “[a] court must
enforce the settlement as agreed to by the parties and is not
permitted to alter the terms of the agreement.” See
In re Sulzer Orthopedics & Knee Prosthesis Prod. Liab.
Litig., 398 F.3d 782, 783 (6th Cir. 2005); see also
Brokers Title Co. v. St. Paul Fire & Marine Ins.
Co., 610 F.2d 1174, 1181 (3d Cir. 1979) (“The
essence of contract law is the objective intent of the
parties and when there has been no allegation of mistake,
fraud, overreaching or the like, it is not the function of
the court to redraft a contract to be more favorable to a
given party than the agreement he chose to enter.”).
Accordingly, the Court will enforce the terms of the
Settlement Agreement, as agreed to by the parties and
memorialized in Doc. 35-3.
foregoing reasons, Plaintiff's Motion to Enforce
Settlement Agreement (Doc. 40) is GRANTED. Defendant is
ORDERED to issue payment to class members and Plaintiff's
counsel, as required by the ...