DelleChiaie v. United States 03-CV-222-SM 08/30/05 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Brian and Shannon DelleChiaie, Individually and as Parents and Next Friends of B.D., Plaintiffs
v. Civil No. 03-CV-222-SM Opinion No. 2005 DNH 123 United States of America. Defendant
O R D E R
Brian and Shannon DelleChiaie brought this medical
malpractice action against the government seeking damages for
injuries sustained by their minor son. Plaintiffs claimed that
Shannon's treating physicians failed to timely diagnose her
ruptured appendix during an early stage of her pregnancy. As a
consequence. Shannon became seriously ill, required emergency
surgery, and plaintiffs' son was delivered prematurely, weighing
only one pound, ten ounces at birth. Because the allegedly
negligent physicians were covered under the Federally Supported
Health Centers Assistance Act, suit lies only against the United
States, under the Federal Tort Claims Act. Prior to trial, the parties negotiated a settlement of all
plaintiffs'’ claims. Pursuant to Local Rule 17.1 and New
Hampshire law governing the settlement of claims brought on
behalf of a minor, plaintiffs submitted an "Assented-to Motion
for Approval of Minor's Settlement." The court approved the
settlement and, subsequently, the parties filed a stipulation for
dismissal of all plaintiffs' claims, with prejudice, pursuant to
Fed. R. Civ. P. 41(a) (1) (ii) .
Plaintiffs now move the court to enforce what they believe
to be terms of their settlement agreement with the government.
Specifically, they say the government is unreasonably withholding
its assent to a "Uniform Qualified Assignment" - a document
plaintiffs say they need in order to purchase an annuity for the
benefit of their minor child which will qualify for preferential
treatment under the Internal Revenue Code. The government
objects, asserting: (1) this court lacks subject matter
jurisdiction over plaintiffs' efforts to enforce the terms of the
settlement agreement; and (2) even if this court had
jurisdiction, the government has fully complied with all of its
obligations under that agreement.
2 For the reasons set forth below, the court concludes that it
lacks subject matter jurisdiction to enforce the terms of the
parties' settlement agreement. Accordingly, plaintiffs' motion
is denied.
Discussion
After the parties orally agreed to settle all claims,
plaintiffs filed an "Assented-to Motion for Approval of Minor's
Settlement," (document no. 21). Because the parties settled
claims on behalf of plaintiffs' minor son, both state law and
this court's local rules required that the settlement be approved
by the court. The motion for approval informed the court that
"the parties have reached an agreement to settle this case for a
total payment of $783,250." Ri. at para. 6. It went on to
describe how plaintiffs proposed to use a portion of those
settlement funds to pay their attorneys' fees, litigation
expenses, and a state Medicaid lien. Finally, plaintiffs
informed the court that they planned to distribute the remaining
funds as follows:
1. $10,000 to Brian Dellechiaie, Sr., the minor's father;
3 $25,000 to Shannon, the minor's mother; and
3. $346,074.98 to the minor himself, to be distributed as follows:
(a) $33,311.86 in cash; and
(b) $312,763.12 in a "structured settlement," by which plaintiffs explained that they planned to purchase an annuity that would pay their son $30,000 on his 18th through 21st birthdays, and then pay him $3,044 each month thereafter, for life.
I d . at para. 10. On March 28, 2005, the court approved the terms
of the settlement and the means by which plaintiffs proposed to
distribute the settlement proceeds to their minor son.
Subsequently, on April 15, 2005, the parties filed a
"Stipulation for Dismissal." That document provided, in its
entirety, as follows:
Pursuant to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure, the parties stipulate that the pending action shall be dismissed, with prejudice, with each party to bear its own costs and fees.
Document no. 23. Importantly, the stipulation for dismissal was
not expressly conditioned upon the parties' obligation to comply
with their settlement agreement, nor was it contingent upon
4 plaintiffs' ability to purchase the proposed annuity, nor did it
require the government to assist plaintiffs in obtaining the
annuity. Most significantly, however, the stipulation for
dismissal did not provide that the court would retain
jurisdiction to enforce the terms of the settlement agreement.
Given those facts, the government correctly points out that
this court lacks jurisdiction to construe or enforce the terms of
the settlement agreement. Under circumstances substantially
similar to those presented in this case, the Supreme Court held
that federal courts do not retain ancillary jurisdiction to
enforce the terms of a settlement agreement after a case has been
dismissed, absent affirmative steps by the court to retain such
jurisdiction.
[T]he only order here was that the suit be dismissed, a disposition that is in no way flouted or imperiled by the alleged breach of the settlement agreement. The situation would be quite different if the parties' obligation to comply with the terms of the settlement agreement had been made part of the order of dismissal - either by separate provision (such as a provision "retaining jurisdiction" over the settlement agreement) or by incorporating the terms of the settlement agreement in the order. In that event, a breach of the agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist. That, however, was not the case here.
5 The judge's mere awareness and approval of the terms of the settlement agreement do not suffice to make them part of his order.
Kokkonen v. Guardian Life Ins. Co. of A m . , 511 U.S. 375, 380-381
(1994) (citation omitted) (emphasis supplied).
Here, because the terms of the oral settlement agreement
were not made a part of the stipulation for dismissal, and
because the court did not act to retain jurisdiction over that
settlement agreement, it now lacks subject matter jurisdiction
over plaintiffs'’ efforts to enforce what they believe were the
terms of that agreement. See I d . at 382 ("Absent such action
[i.e., retention of federal jurisdiction over the settlement
agreement], however, enforcement of the settlement agreement is
for state courts, unless there is some independent basis for
federal jurisdiction."). See also Municipality of San Juan v.
Rullan, 318 F.3d 26, 30-31 (1st Cir. 2003).
Plaintiffs'’ efforts to compel the government to comply with
what they believe are the terms of the settlement agreement are
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DelleChiaie v. United States 03-CV-222-SM 08/30/05 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Brian and Shannon DelleChiaie, Individually and as Parents and Next Friends of B.D., Plaintiffs
v. Civil No. 03-CV-222-SM Opinion No. 2005 DNH 123 United States of America. Defendant
O R D E R
Brian and Shannon DelleChiaie brought this medical
malpractice action against the government seeking damages for
injuries sustained by their minor son. Plaintiffs claimed that
Shannon's treating physicians failed to timely diagnose her
ruptured appendix during an early stage of her pregnancy. As a
consequence. Shannon became seriously ill, required emergency
surgery, and plaintiffs' son was delivered prematurely, weighing
only one pound, ten ounces at birth. Because the allegedly
negligent physicians were covered under the Federally Supported
Health Centers Assistance Act, suit lies only against the United
States, under the Federal Tort Claims Act. Prior to trial, the parties negotiated a settlement of all
plaintiffs'’ claims. Pursuant to Local Rule 17.1 and New
Hampshire law governing the settlement of claims brought on
behalf of a minor, plaintiffs submitted an "Assented-to Motion
for Approval of Minor's Settlement." The court approved the
settlement and, subsequently, the parties filed a stipulation for
dismissal of all plaintiffs' claims, with prejudice, pursuant to
Fed. R. Civ. P. 41(a) (1) (ii) .
Plaintiffs now move the court to enforce what they believe
to be terms of their settlement agreement with the government.
Specifically, they say the government is unreasonably withholding
its assent to a "Uniform Qualified Assignment" - a document
plaintiffs say they need in order to purchase an annuity for the
benefit of their minor child which will qualify for preferential
treatment under the Internal Revenue Code. The government
objects, asserting: (1) this court lacks subject matter
jurisdiction over plaintiffs' efforts to enforce the terms of the
settlement agreement; and (2) even if this court had
jurisdiction, the government has fully complied with all of its
obligations under that agreement.
2 For the reasons set forth below, the court concludes that it
lacks subject matter jurisdiction to enforce the terms of the
parties' settlement agreement. Accordingly, plaintiffs' motion
is denied.
Discussion
After the parties orally agreed to settle all claims,
plaintiffs filed an "Assented-to Motion for Approval of Minor's
Settlement," (document no. 21). Because the parties settled
claims on behalf of plaintiffs' minor son, both state law and
this court's local rules required that the settlement be approved
by the court. The motion for approval informed the court that
"the parties have reached an agreement to settle this case for a
total payment of $783,250." Ri. at para. 6. It went on to
describe how plaintiffs proposed to use a portion of those
settlement funds to pay their attorneys' fees, litigation
expenses, and a state Medicaid lien. Finally, plaintiffs
informed the court that they planned to distribute the remaining
funds as follows:
1. $10,000 to Brian Dellechiaie, Sr., the minor's father;
3 $25,000 to Shannon, the minor's mother; and
3. $346,074.98 to the minor himself, to be distributed as follows:
(a) $33,311.86 in cash; and
(b) $312,763.12 in a "structured settlement," by which plaintiffs explained that they planned to purchase an annuity that would pay their son $30,000 on his 18th through 21st birthdays, and then pay him $3,044 each month thereafter, for life.
I d . at para. 10. On March 28, 2005, the court approved the terms
of the settlement and the means by which plaintiffs proposed to
distribute the settlement proceeds to their minor son.
Subsequently, on April 15, 2005, the parties filed a
"Stipulation for Dismissal." That document provided, in its
entirety, as follows:
Pursuant to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure, the parties stipulate that the pending action shall be dismissed, with prejudice, with each party to bear its own costs and fees.
Document no. 23. Importantly, the stipulation for dismissal was
not expressly conditioned upon the parties' obligation to comply
with their settlement agreement, nor was it contingent upon
4 plaintiffs' ability to purchase the proposed annuity, nor did it
require the government to assist plaintiffs in obtaining the
annuity. Most significantly, however, the stipulation for
dismissal did not provide that the court would retain
jurisdiction to enforce the terms of the settlement agreement.
Given those facts, the government correctly points out that
this court lacks jurisdiction to construe or enforce the terms of
the settlement agreement. Under circumstances substantially
similar to those presented in this case, the Supreme Court held
that federal courts do not retain ancillary jurisdiction to
enforce the terms of a settlement agreement after a case has been
dismissed, absent affirmative steps by the court to retain such
jurisdiction.
[T]he only order here was that the suit be dismissed, a disposition that is in no way flouted or imperiled by the alleged breach of the settlement agreement. The situation would be quite different if the parties' obligation to comply with the terms of the settlement agreement had been made part of the order of dismissal - either by separate provision (such as a provision "retaining jurisdiction" over the settlement agreement) or by incorporating the terms of the settlement agreement in the order. In that event, a breach of the agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist. That, however, was not the case here.
5 The judge's mere awareness and approval of the terms of the settlement agreement do not suffice to make them part of his order.
Kokkonen v. Guardian Life Ins. Co. of A m . , 511 U.S. 375, 380-381
(1994) (citation omitted) (emphasis supplied).
Here, because the terms of the oral settlement agreement
were not made a part of the stipulation for dismissal, and
because the court did not act to retain jurisdiction over that
settlement agreement, it now lacks subject matter jurisdiction
over plaintiffs'’ efforts to enforce what they believe were the
terms of that agreement. See I d . at 382 ("Absent such action
[i.e., retention of federal jurisdiction over the settlement
agreement], however, enforcement of the settlement agreement is
for state courts, unless there is some independent basis for
federal jurisdiction."). See also Municipality of San Juan v.
Rullan, 318 F.3d 26, 30-31 (1st Cir. 2003).
Plaintiffs'’ efforts to compel the government to comply with
what they believe are the terms of the settlement agreement are
not merely an extension of their malpractice action (which was
dismissed, with prejudice). Accordingly, they cannot simply move
6 to reopen that malpractice action and seek court enforcement of
the terms of the settlement agreement. Instead, the parties'
disagreement over their respective rights and obligations under
the settlement agreement is a new and independent contract
dispute. See, e.g.. Hansson v. Norton. 411 F.3d 231 (D.C. Cir.
2005) .
Plaintiffs must, therefore, bring a separate action against
the government for breach of contract, in a court of competent
jurisdiction. Absent a basis upon which to exercise subject
matter jurisdiction, this court cannot resolve the parties'
current dispute. Of course, nothing prevents the parties from
settling that dispute in a manner that would permit the
government, in good faith and in good conscience, to execute the
Uniform Qualified Assignment that plaintiffs say they need.
Conclusion
If, as plaintiffs' assert, they will not be able to
structure the distribution of the settlement proceeds to their
minor son in a manner favorable from a tax standpoint, as
presumably anticipated, due to the government's refusal to agree.
7 they may well have a viable claim. It would be unfortunate if
plaintiffs are correct in asserting that the document in question
is commonly executed by the government in cases like this and
exposes the government to no possible liability. But, once the
parties reached a settlement agreement, plaintiffs' claims
against the government were, pursuant to the parties'
stipulation, dismissed with prejudice. As noted, the case was
closed and the court did not retain jurisdiction over enforcement
of the settlement agreement.
Plaintiffs have failed to point to any independent basis
upon which this court might exercise subject matter jurisdiction
over their enforcement claim. In fact, because it amounts to a
breach of contract claim against the government, and one likely
for more than $10,000, it would appear that the Tucker Act vests
the Court of Federal Claims with exclusive jurisdiction over the
parties' current dispute. See 28 U.S.C. 1491. If the government
insists, plaintiffs might pursue that option and litigate the
matter to a further settlement or judicial resolution. For the foregoing reasons, the court lacks jurisdiction to
entertain plaintiffs' claim that the government has breached the
terms of the parties' settlement agreement. Accordingly, it
declines to reopen this matter and plaintiffs' Motion to Enforce
Settlement Agreement (document no. 24) is denied.
SO ORDERED.
Steven J. McAuliffe Chief Judge
August 30, 2005
cc: Kenneth C. Brown, Esq. T. David Plourde, Esq.