1 2 3 6 7 ALIITASI T ALAPATI, Case No. 21-cv-04144-SI
8 Plaintiff, ORDER ON PLAINTIFF'S REQUEST 9 v. TO FIND CCSF LACKS AUTHORITY TO COLLECT RESTITUTION FROM 10 CITY AND COUNTY OF SAN PLAINTIFF'S SETTLEMENT FUNDS FRANCISCO, et al., 11 Re: Dkt. No. 62 Defendants. 12 13 14 Plaintiff Aliitasi Alapati filed a voluntarily dismissal of this lawsuit on July 30, 2022 after 15 reaching a settlement agreement with defendants. Dkt. No. 66. The Court entered a dismissal order 16 incorporating the terms of the settlement agreement. Dkt. No. 69. Now before the Court is an 17 ongoing dispute over whether the settlement agreement authorizes the City and County of San 18 Francisco (“CCSF”) to pay the settlement funds directly to the San Francisco Superior Court in 19 partial satisfaction of a restitution obligation owed by Alapati rather than sending the funds to 20 Alapati herself (who remains personally liable for restitution). 21 The Court finds the settlement agreement does not authorize CCSF to send settlement funds 22 to anyone other than Alapati. If CCSF wishes to avail itself of California Penal Code section 2085.7 23 to ensure restitution is paid, it may do so in accordance with the procedures set forth in the statute; 24 as written, section 2085.7 does not plainly authorize CCSF to send settlement funds to the San 25 Francisco Superior Court. Because the settlement agreement does not contemplate that anyone other 26 than Alapati receive the settlement funds, the Court ORDERS the settlement funds be paid directly 27 to Alapati (via her counsel, Legal Allies). 2 On September 3, 2020, Aliitasi Alapati entered a guilty plea for a felony before the San 3 Francisco Superior Court. Dkt. No. 63-4. On October 8, 2020, the Superior Court sentenced Alapati 4 to two years, crediting her for the 790 days she had already spent in jail. Id. Alapati was ordered 5 to pay $285,058 in restitution to the victim, Sandy Hu. Id.; Dkt. No. 63-5 at 2. To the Court’s 6 knowledge, Alapati’s restitution obligation remains outstanding. 7 While she was incarcerated, Alapati sued the CCSF and various jail nurses and staff for 8 injuries sustained while in custody. Dkt. No. 1 (filed in state court on March 11, 2020, removed on 9 Feb. 1, 2022). On May 4, 2022, the parties drafted a conditional settlement agreement of Alapati’s 10 claims. The agreement, fully executed the following day, states that CCSF will pay $100,000 for 11 emotional distress in exchange for a full release of Alapati’s claims. Dkt. No. 63-2. But after 12 executing the agreement, the San Francisco City Attorney informed Alapati of CCSF’s intention to 13 pay the entire $100,000 settlement, less attorney’s fees, to the San Francisco Superior Court in 14 partial satisfaction of the $285,058 restitution order, rather than sending the funds to Alapati, who 15 remains obligated to pay restitution. Dkt. No. 62-1. At issue now is whether, under California law 16 and the terms of the settlement agreement, CCSF may direct the settlement funds to the Superior 17 Court instead of Alapati. 18 20 Federal courts do not enjoy any inherent jurisdiction to enforce a settlement agreement 21 “simply because the subject of that settlement was a federal lawsuit.” O’Connor v. Colvin, 70 F.3d 22 530, 532 (9th Cir.1995). “Enforcement of [a] settlement agreement ... whether through award of 23 damages or decree of specific performance, is more than just a continuation or renewal of the 24 dismissed suit, and hence requires its own basis for jurisdiction.” Kokkonen v. Guardian Life Ins. 25 Co. of Am., 511 U.S. 375, 378 (1994). A federal court may exercise its “ancillary jurisdiction” to 26 enforce a settlement agreement, but such jurisdictional footing only exists “if the parties’ obligation 27 to comply with the terms of the settlement agreement ha[s] been made part of the order of 1 settlement agreement) or by incorporating the terms of the settlement agreement in the order.’” Id. 2 at 381. “In that event, a breach of the agreement would be a violation of the order, and ancillary 3 jurisdiction to enforce the agreement would therefore exist.” Id. 4 The Court entered a dismissal order incorporating the terms of the settlement agreement. Dkt 5 No. 69. CCSF’s anticipatory breach of the settlement agreement would thus be a violation of the 6 Court’s order, vesting this Court with ancillary jurisdiction to enforce the settlement. 7 9 A. Terms of the Settlement 10 The conditional settlement agreement, signed by plaintiff’s counsel on May 4, 2022 and 11 defendants’ counsel on May 5, 2022, states in full:
12 This confirms the conditional settlement reached at court-ordered mediation held on May 4, 13 2022 with Hon. Maria-Elena James (ret.) of ADR Services, Inc. in the above-captioned case. Subject to all necessary approvals, including but not limited to approvals by the San 14 Francisco Department of Public Health, San Francisco Health Commission, and the San Francisco Board of Supervisors, and subject to California Penal Code Sections 1202.4(i), 15 2085.7, the City will pay One Hundred Thousand Dollars ($100,000), characterized as compensatory damages for emotional distress, in full settlement of all claims, known and 16 unknown, in connection with the events and allegations of case United States District Court, 17 Northern District of California, case No. 21-CV-04144-SI; each side to bear its own costs and attorney’s fees; Plaintiff to satisfy all liens; and Plaintiff to execute a general release. 18 Dkt. No. 63-2. The agreement expressly conditions payment on California Penal Code section 19 2085.7. Only after the settlement agreement was executed did defense counsel inform Alapati that 20 CCSF would rely on section 2085.8—not mentioned in the agreement—to issue payment directly 21 to the Superior Court, rather than to Alapati. Dkt. No. 62-1 ¶ 5, 6 (plaintiff counsel declaration). 22 Alapati asks this Court to enforce the settlement agreement by directing payment of the 23 $100,000 directly to her (via her attorneys, Legal Allies P.C. Trust Account). Dkt. No. 62 at 10. 24 CCSF argues it is allowed to pay the settlement funds directly to the San Francisco Superior Court 25 because the “agreement clearly conveys that any release of funds is subject to [Alapati’s] obligation 26 to pay restitution.” Dkt. No. 63 at 5. Although CCSF is correct that Alapati has a continuing 27 obligation to pay restitution, it is incorrect that the settlement agreement authorizes it to act as a 1 collector of that debt. 2 3 B. Applicable State Law 4 Under California law, a “restitution order…shall be enforceable as if the order were a civil 5 judgment.” Cal. Penal Code § 1202.4. Two sections in the California Penal Code may be relevant 6 for deciding whether CCSF may direct payment of the settlement funds directly to the San Francisco 7 Superior Court in partial satisfaction of the restitution order. 8 The first is section 2085.7(b), which describes the authority of county agencies to collect 9 unpaid restitution from persons no longer subject to the state court’s criminal jurisdiction. It 10 provides: “[w]hen a prisoner who owes payment for a restitution order, or any portion thereof, is 11 released from the custody of a county jail facility after completion of a term [of mandatory 12 supervision under section 1170(h)(5)(A)], the prisoner has a continuing obligation to pay the 13 restitution order in full.” The code section then sets forth specific procedures for collection:
14 The balance of the restitution order remaining unpaid … is enforceable and may be collected, 15 in a manner to be established by the county board of supervisors, by the agency designated by the county board of supervisors in the county in which the prisoner is released.
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1 2 3 6 7 ALIITASI T ALAPATI, Case No. 21-cv-04144-SI
8 Plaintiff, ORDER ON PLAINTIFF'S REQUEST 9 v. TO FIND CCSF LACKS AUTHORITY TO COLLECT RESTITUTION FROM 10 CITY AND COUNTY OF SAN PLAINTIFF'S SETTLEMENT FUNDS FRANCISCO, et al., 11 Re: Dkt. No. 62 Defendants. 12 13 14 Plaintiff Aliitasi Alapati filed a voluntarily dismissal of this lawsuit on July 30, 2022 after 15 reaching a settlement agreement with defendants. Dkt. No. 66. The Court entered a dismissal order 16 incorporating the terms of the settlement agreement. Dkt. No. 69. Now before the Court is an 17 ongoing dispute over whether the settlement agreement authorizes the City and County of San 18 Francisco (“CCSF”) to pay the settlement funds directly to the San Francisco Superior Court in 19 partial satisfaction of a restitution obligation owed by Alapati rather than sending the funds to 20 Alapati herself (who remains personally liable for restitution). 21 The Court finds the settlement agreement does not authorize CCSF to send settlement funds 22 to anyone other than Alapati. If CCSF wishes to avail itself of California Penal Code section 2085.7 23 to ensure restitution is paid, it may do so in accordance with the procedures set forth in the statute; 24 as written, section 2085.7 does not plainly authorize CCSF to send settlement funds to the San 25 Francisco Superior Court. Because the settlement agreement does not contemplate that anyone other 26 than Alapati receive the settlement funds, the Court ORDERS the settlement funds be paid directly 27 to Alapati (via her counsel, Legal Allies). 2 On September 3, 2020, Aliitasi Alapati entered a guilty plea for a felony before the San 3 Francisco Superior Court. Dkt. No. 63-4. On October 8, 2020, the Superior Court sentenced Alapati 4 to two years, crediting her for the 790 days she had already spent in jail. Id. Alapati was ordered 5 to pay $285,058 in restitution to the victim, Sandy Hu. Id.; Dkt. No. 63-5 at 2. To the Court’s 6 knowledge, Alapati’s restitution obligation remains outstanding. 7 While she was incarcerated, Alapati sued the CCSF and various jail nurses and staff for 8 injuries sustained while in custody. Dkt. No. 1 (filed in state court on March 11, 2020, removed on 9 Feb. 1, 2022). On May 4, 2022, the parties drafted a conditional settlement agreement of Alapati’s 10 claims. The agreement, fully executed the following day, states that CCSF will pay $100,000 for 11 emotional distress in exchange for a full release of Alapati’s claims. Dkt. No. 63-2. But after 12 executing the agreement, the San Francisco City Attorney informed Alapati of CCSF’s intention to 13 pay the entire $100,000 settlement, less attorney’s fees, to the San Francisco Superior Court in 14 partial satisfaction of the $285,058 restitution order, rather than sending the funds to Alapati, who 15 remains obligated to pay restitution. Dkt. No. 62-1. At issue now is whether, under California law 16 and the terms of the settlement agreement, CCSF may direct the settlement funds to the Superior 17 Court instead of Alapati. 18 20 Federal courts do not enjoy any inherent jurisdiction to enforce a settlement agreement 21 “simply because the subject of that settlement was a federal lawsuit.” O’Connor v. Colvin, 70 F.3d 22 530, 532 (9th Cir.1995). “Enforcement of [a] settlement agreement ... whether through award of 23 damages or decree of specific performance, is more than just a continuation or renewal of the 24 dismissed suit, and hence requires its own basis for jurisdiction.” Kokkonen v. Guardian Life Ins. 25 Co. of Am., 511 U.S. 375, 378 (1994). A federal court may exercise its “ancillary jurisdiction” to 26 enforce a settlement agreement, but such jurisdictional footing only exists “if the parties’ obligation 27 to comply with the terms of the settlement agreement ha[s] been made part of the order of 1 settlement agreement) or by incorporating the terms of the settlement agreement in the order.’” Id. 2 at 381. “In that event, a breach of the agreement would be a violation of the order, and ancillary 3 jurisdiction to enforce the agreement would therefore exist.” Id. 4 The Court entered a dismissal order incorporating the terms of the settlement agreement. Dkt 5 No. 69. CCSF’s anticipatory breach of the settlement agreement would thus be a violation of the 6 Court’s order, vesting this Court with ancillary jurisdiction to enforce the settlement. 7 9 A. Terms of the Settlement 10 The conditional settlement agreement, signed by plaintiff’s counsel on May 4, 2022 and 11 defendants’ counsel on May 5, 2022, states in full:
12 This confirms the conditional settlement reached at court-ordered mediation held on May 4, 13 2022 with Hon. Maria-Elena James (ret.) of ADR Services, Inc. in the above-captioned case. Subject to all necessary approvals, including but not limited to approvals by the San 14 Francisco Department of Public Health, San Francisco Health Commission, and the San Francisco Board of Supervisors, and subject to California Penal Code Sections 1202.4(i), 15 2085.7, the City will pay One Hundred Thousand Dollars ($100,000), characterized as compensatory damages for emotional distress, in full settlement of all claims, known and 16 unknown, in connection with the events and allegations of case United States District Court, 17 Northern District of California, case No. 21-CV-04144-SI; each side to bear its own costs and attorney’s fees; Plaintiff to satisfy all liens; and Plaintiff to execute a general release. 18 Dkt. No. 63-2. The agreement expressly conditions payment on California Penal Code section 19 2085.7. Only after the settlement agreement was executed did defense counsel inform Alapati that 20 CCSF would rely on section 2085.8—not mentioned in the agreement—to issue payment directly 21 to the Superior Court, rather than to Alapati. Dkt. No. 62-1 ¶ 5, 6 (plaintiff counsel declaration). 22 Alapati asks this Court to enforce the settlement agreement by directing payment of the 23 $100,000 directly to her (via her attorneys, Legal Allies P.C. Trust Account). Dkt. No. 62 at 10. 24 CCSF argues it is allowed to pay the settlement funds directly to the San Francisco Superior Court 25 because the “agreement clearly conveys that any release of funds is subject to [Alapati’s] obligation 26 to pay restitution.” Dkt. No. 63 at 5. Although CCSF is correct that Alapati has a continuing 27 obligation to pay restitution, it is incorrect that the settlement agreement authorizes it to act as a 1 collector of that debt. 2 3 B. Applicable State Law 4 Under California law, a “restitution order…shall be enforceable as if the order were a civil 5 judgment.” Cal. Penal Code § 1202.4. Two sections in the California Penal Code may be relevant 6 for deciding whether CCSF may direct payment of the settlement funds directly to the San Francisco 7 Superior Court in partial satisfaction of the restitution order. 8 The first is section 2085.7(b), which describes the authority of county agencies to collect 9 unpaid restitution from persons no longer subject to the state court’s criminal jurisdiction. It 10 provides: “[w]hen a prisoner who owes payment for a restitution order, or any portion thereof, is 11 released from the custody of a county jail facility after completion of a term [of mandatory 12 supervision under section 1170(h)(5)(A)], the prisoner has a continuing obligation to pay the 13 restitution order in full.” The code section then sets forth specific procedures for collection:
14 The balance of the restitution order remaining unpaid … is enforceable and may be collected, 15 in a manner to be established by the county board of supervisors, by the agency designated by the county board of supervisors in the county in which the prisoner is released. If the 16 county elects to collect the restitution order, the agency designated by the county board of supervisors for collection shall transfer the collected amount to the California Victim 17 Compensation Board for deposit in the Restitution Fund or may pay the victim directly. 18 Cal. Penal Code Section 2085.7(b). This is the code section cited in the settlement agreement itself. 19 To date, CCSF has not offered any evidence suggesting its proposed method of collecting restitution 20 (i.e., cutting a check to the San Francisco Superior Court) is a “manner” that has been “established 21 by the county board of supervisors,” or that it itself is the “agency designated by the county board 22 of supervisors” to enforce and collect the restitution. While nothing in this order should be read to 23 preclude the county board of supervisors from designating a collection agency and setting forth a 24 manner of collection that is consistent with CCSF’s proposed approach in the present case, the Court 25 is unable to find that the county board of supervisors has actually done so. Section 2085.7(b) does 26 not otherwise authorize CCSF to collect restitution in any manner it sees fit. 27 Perhaps recognizing the flaw in relying on section 2085.7, CCSF now purports to rely on 1 damages awarded by trial or settlement to any inmate, parolee, person placed on post release 2 || community supervision pursuant to Section 3451, or defendant on mandatory supervision imposed 3 pursuant to [section 1170(h)(5)(A)] in connection with a civil action brought against a federal, state, 4 || or local jail, prison, or correctional facility, or any official or agent thereof, shall be paid directly, 5 after payment of reasonable attorney’s fees and litigation costs approved by the court, to satisfy any 6 || outstanding restitution orders or restitution fines against that person.” CCSF’s reliance on section 7 2085.7 also suffers a fundamental defect: Alapati is not an “inmate, parolee, person placed on post 8 || release community supervision pursuant to Section 3451, or defendant on mandatory supervision 9 || imposed pursuant to [section 1170(h)(5)(A)].” Alapati was released from the state court’s criminal 10 || jurisdiction after sentencing on October 8, 2020. 11 Accordingly, payment should be made directly to Alapati (via her counsel) under the terms 12 || of the setthement agreement. Alapati concedes that her restitution obligations are ongoing, and state 13 law will provide adequate remedies for the victim to be made whole even if the settlement funds 14 || end up in Alapati’s bank account in the first instance. See, e.g., Cal. Penal Code §§ 1214(b), 3 15 || 2085.8(a), 2085.7(b). 16
= 17 IT IS SO ORDERED. || Datea: August 17, 2022 Site WU tee 19 SUSAN ILLSTON 20 United States District Judge 21 22 23 24 25 26 27 28