United States Court of Appeals
For the First Circuit
No. 01-2384
ARON LIPMAN,
Plaintiff, Appellant,
v.
DAVID DYE, d/b/a ARMS MERCHANT,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Lipez, Circuit Judge,
Campbell and Bownes, Senior Circuit Judges.
Scott A. Herlands with whom Herlands, Rothenberg & Levine was
on brief for appellant.
Theodore A. Barone for appellee.
June 17, 2002
CAMPBELL, Senior Circuit Judge. Plaintiff-appellant Aron
Lipman ("Lipman") appeals from an order of the district court
denying his motion to enforce and implement the terms of a
settlement agreement. The underlying action was dismissed after
the parties represented to the court, on the eve of trial, that
their dispute had been settled. Fresh difficulties arose between
the parties, however, leading Lipman to move the district court to
help implement the terms of the settlement agreement or to order
binding mediation. The district court declined to re-open the
case. We affirm.
I. PROCEDURAL HISTORY
On April 15, 1996, Lipman instituted an action for
conversion in the Court of Common Pleas of Lackawana County against
the Appellee, David Dye ("Dye") d/b/a Arms Merchant, Inc.1 Dye
removed the action to the United States District Court for the
Middle District of Pennsylvania and promptly sought to transfer the
action to the District of Massachusetts. Dye’s motion for transfer
of venue was granted on March 13, 1997.
1
Lipman alleged that in April 1994 he entered into an
agreement with Dye pursuant to which Lipman consigned to Dye 339
firearms which had a retail value of $300,000. Lipman further
alleged that Dye was to sell the weapons at "established retail
prices" from which Dye would receive a ten percent commission, and
that the balance would be remitted to Lipman. According to Lipman,
Dye had neither made payments to him nor returned the consigned
goods. Dye, of course, denied the allegations and brought
counterclaims against Lipman for breach of contract and abuse of
process.
-2-
After arriving in Massachusetts in April 1997, the case
lay dormant for several months. Finally, Dye’s attorney requested
the district court to hold a scheduling conference to pursue his
counterclaims. In a letter dated September 26, 1997, Dye stated
that "[t]he opposing party, Aron Lipman, . . . has failed to pursue
his claims. David Dye is the plaintiff in the counterclaim and
wishes to proceed and pursue this action." A conference was
promptly scheduled and discovery was ordered. A trial date was set
for October 13, 1998. On October 5, 1998, Lipman’s attorney
requested a continuance of the trial date. A new trial date was
set for November 2, 1998. Again, Lipman’s attorney requested a
continuance. After a delay of almost a year, trial was set for
September 13, 1999. For reasons not clear on the record, the trial
did not go forward on this date, and the trial was rescheduled for
January 31, 2000.
Nearly four years after the complaint was filed, on
January 25, 2000, Lipman's attorney signed a settlement memorandum
written by Dye's attorney. Believing the case to be settled, the
district court promptly issued a Settlement Order of Dismissal, of
even date, reading as follows:
IT IS ORDERED that this action is hereby dismissed
without prejudice to reconsideration and possible re-
opening if within 60 days of this order a motion is filed
which represents that the terms of the settlement
agreement have not been performed and there is good cause
for the non-performing party or parties to have failed to
perform.
If no such motion is filed within 60 days of this Order,
the case may only be reopened upon a meritorious motion
pursuant to Fed. R. Civ. Procedure 60, See Pratt v.
Philbrook, 109 F.3d 18 (1st Cir. 1997).
-3-
Although the settlement memorandum had provided that Dye’s attorney
would prepare a stipulation of dismissal, no such stipulation was
filed. Neither the settlement memorandum itself nor any statement
as to the terms of the settlement was incorporated into the court’s
order or the record.
Within the sixty days allotted in the court's order,
Lipman filed a "Motion to Reopen Case or to Enforce Settlement
Agreement." In the motion, Lipman represented that the parties had
reached a "settlement in principle" on or about January 25, 2000,
but that the terms of the settlement had not been performed by Dye.
Specifically, Lipman alleged that Dye had sold $10,000 worth of
firearms without Lipman’s consent or knowledge, thereby breaching
the terms of the settlement agreement. Lipman requested that the
court reopen the case or enforce the terms of the agreement. Dye,
while acknowledging the existence of a settlement agreement,
opposed the motion, as well as the allegations made therein, and
requested an oral hearing.
On August 28, 2000, the district court held a hearing on
Lipman’s above motion. The parties summarized the argument, in
their papers and at the hearing, as a $10,000 dispute in the
settlement terms. The court responded to the arguments by stating
"[i]t seems to me that is a different cause of action. Sue him if
you want." When Lipman’s counsel protested, the court reiterated
its position. "No, but, I mean, if there was a breach of contract,
that’s a breach of contract. It’s a $10,000 case. Sue him in
Superior Court or the BMC. Okay. I am not going to open the case,
-4-
reopen it." Thereafter, on the same day, August 28, 2000, the
district judge signed and caused to be entered an order denying
Lipman’s motion to reopen the case or to enforce the settlement
agreement. Lipman did not file a timely notice of appeal from the
court’s August 28, 2000, order nor did he institute an action in
state court.
Seven months later, on April 20, 2001, Lipman again filed
a motion, this one called a "Motion to Enforce and Implement the
Terms of the Settlement Agreement." The motion did not mention the
$10,000 discrepancy discussed at the time of Lipman’s prior motion
but claimed that "[t]here is a problem with what is to be included
in the Releases, what documents are necessary to transfer the
firearms at issue and how to make the actual physical transfer of
said firearms." Lipman requested the district court "to direct in
specificity how to implement the terms of the Settlement in
Principle or order Binding Mediation to achieve the same." On
August 13, 2001, the court, in a margin order, denied the motion
without a hearing.
Thereafter, Lipman filed in this court what he styled as
a petition for writ of mandamus. On September 10, 2001, this court
denied the mandamus petition, suggesting that any available remedy
would be by appeal. Lipman thereupon filed a timely notice of
appeal from the district court's order of August 13, 2001. It is
this notice of appeal that is currently before us. Lipman has
filed essentially the same brief in connection with this appeal as
he did in support of his earlier petition for writ of mandamus.
-5-
I. DISCUSSION
In the motion denied on August 13, 2001, to which this
appeal pertains, Lipman sought the district court's assistance to
enforce, or have mediated, the original settlement agreement.
Lipman did not, as in his earlier motion, seek to reopen the
dismissed action. Nor, indeed, would a request to reopen have been
appropriate absent compliance with the strictures of Fed. R. Civ.
P. 60(b). Lipman had taken no appeal from the district court’s
earlier order dated August 28, 2000, refusing, inter alia, to
reopen the case. Without appeal, the court’s prior Settlement
Order of Dismissal became final thus barring any further attempt to
reopen the case in ordinary course.
Perhaps recognizing that reopening was no longer an
option, Lipman did not seek to reopen the case in his August 13,
2001, motion, but rather requested the district court’s help with
the enforcement or mediation of the settlement agreement. However,
such assistance goes beyond the district court’s jurisdiction at
this time. The Supreme Court has held that enforcement of a
settlement agreement, whether through an award of damages or decree
of specific performance "is more than just a continuation or
renewal of the dismissed suit and hence requires its own basis for
jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 378 (1994). Neither party addresses this jurisdictional
barrier.
Subject matter jurisdiction may be independent or
ancillary. Absent an independent basis for federal jurisdiction,
-6-
dismissal-producing settlement agreements are not enforceable in
federal court unless the district court has ensured its continuing
ancillary jurisdiction by making "the parties’ obligation to comply
with the settlement agreement . . . part of the order of
dismissal." Id. at 380. A district court can do so by either
including a provision explicitly retaining jurisdiction over the
settlement agreement or by incorporating the terms of the
settlement agreement in the court's order. Id. at 380-81. This is
so whether the dismissal is by order of the court pursuant to Rule
41(a)(2) or by stipulation of the parties pursuant to Rule
41(a)(1)(ii). Id. at 381.
The Settlement Order of Dismissal entered on January 25,
2000, purported to retain jurisdiction over the settlement
agreement for no more than sixty days. See Pratt v. Philbrook, 109
F.3d 18, 21 n.5 (1st Cir. 1997) (noting that "[t]he 60-day order
procedure has developed as a mechanism for the trial courts to
bring cases to closure while retaining jurisdiction to enforce a
settlement agreement for a period of time after closure is
announced"); see also Metro-Goldwyn Mayer, Inc. v. 007 Safety
Prods., Inc., 183 F.3d 10, 14 (1st Cir. 1999). The order dismissed
the case without prejudice "to reconsideration and possible re-
opening if within sixty days of this order a motion is filed which
represents that the terms of the settlement agreement have not been
performed and there is good cause for the non-performing party or
parties to have failed to perform." Lipman, in fact, moved to
reopen within 60 days, supra, and the court, after hearing, denied
-7-
Lipman's motion on August 28, 2000. Lipman’s one timely effort to
reopen had thus been denied without appeal long before Lipman
brought the present April 20, 2001, motion; and of course, the
sixty days had expired likewise long before that motion. To put
matters in a nutshell, by April 20, 2001, the case in question had,
for some time, been terminated. The district court itself lacked
jurisdiction to resurrect it.
Lipman's April 20, 2001, motion from which the present
appeal is taken was, of course, not a complaint instituting a new
law suit. But even were it regarded as such, the complaint would
have failed, as it presented no independent basis for federal court
jurisdiction. While there appears to be diversity of citizenship,
we find no evidence that the amount in controversy meets the
federal jurisdiction requirements. According to Lipman’s April 20,
2001, motion, the dispute concerning the implementation of the
settlement agreement centered on "what is to be included in the
Releases, what documents are necessary to transfer the firearms at
issue and how to take actual physical transfer of the said
firearms." Such a dispute is ministerial rather than monetary.
Moreover, even if the present dispute involves a conflict over
money, the parties conceded at the hearing on Lipman’s earlier
motion that no more than $10,000 is at stake..
In the end, Lipman’s claim appears to be one for a breach
of contract, part of the consideration for which was the dismissal
of an earlier suit. As the Supreme Court noted "[n]o federal
statute makes that connection (if it constitutionally could) the
-8-
basis for federal-court jurisdiction over the contract dispute."
Kokkonen, 511 U.S. at 381. If the parties had wanted the district
court to take appropriate steps to retain jurisdiction over the
enforcement of the settlement agreement they could have so
requested. They did not. Lipman can presumably bring an
independent action for breach of contract in the state courts. See
Kinan v. Cohen, 268 F.3d 27, 34 (1st Cir. 2001); Malave v. Carney
Hosp., 170 F.3d 217, 220 (1st Cir. 1999). The district court’s
August 13, 2001, order denying Lipman’s "Motion to Enforce and
Implement the Terms of the Settlement Agreement" is affirmed.
-9-