Clarke v. Global Guaranteed Goods and Services, Inc.
6/9/23, Judge Wozniak
Topics: Settlement; Subject Matter Jurisdiction
The parties settled their civil case at mediation and entered a written agreement wherein Global agreed to pay $60,000 with a one-time payment of $5,000 followed by monthly installments of $2,391.30 until the debt was satisfied.
The agreement provided that Clarke would file a stipulation for dismissal with prejudice within 10 days of receiving the final payment. Things were proceeding well, so Clark filed a stipulated dismissal with prejudice eleven months before the anticipated payoff date.
By the date of the payoff, however, Global still owed over $12,000 of the $60,000. Clarke moved to enforce a settlement order. He also sought a $40,000 penalty per a default provision in the settlement agreement. He also sought permission to initiate proceedings supplementary to enforce liens on Global’s vehicles (which had been listed as security for the loan in the settlement agreement).
The trial court denied the motion and also provided Global 30 days beyond the original deadline provided in the settlement agreement terms for it to pay a $60,000 settlement. The trial court ordered that if Global failed to pay, then the full default provision of $100,000 would be awarded.
Clarke appealed. At some point within the 30 days, Global paid the $12,351 owed toward the $60,000, but they did not pay the $40,000 under the default provision.
On appeal, Global tried to argue that the court had lacked jurisdiction because Clarke had filed the dismissal with prejudice. They were correct, but that sort of jurisdictional problem, the DCA held, was one that was waived due to Global not immediately raising the lack of jurisdiction in the trial court. It is called lack of “case” jurisdiction, not lack of “subject matter” jurisdiction. And lack of “case” jurisdiction only renders the court’s act voidable, not void, and subject to consent, waiver, or estoppel.
On the merits, the trial court was not permitted to change the terms of a settlement agreement. Global was late in paying. That triggered the default provision. The court was not allowed to “tweak” the terms to do equity. While there may have been some sort of force majeure/Act of God preventing timely payment due to the COVID-19 pandemic, there was no force majeure/Act of God provision in the settlement agreement.
REVERSED AND REMANDED with instructions to enforce the agreement and then consider Clarke’s request to pursue proceedings supplementary to enforce his liens against Global’s construction related vehicles.