FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 23, 2021 _________________________________ Christopher M. Wolpert Clerk of Court DIGITAL ADVERTISING DISPLAYS, INC., a Colorado corporation,
Plaintiff - Appellant,
v. No. 20-1014 (D.C. No. 1:12-CV-00682-MEH) NEWFORTH PARTNERS, LLC, (D. Colo.) a California limited liability company; DHANDO INVESTMENTS, INC., a Delaware corporation; ROBERT HOFFER,
Defendants - Appellees. _________________________________
ORDER AND JUDGMENT* _________________________________
Before HARTZ, KELLY, and EID, Circuit Judges. _________________________________
Digital Advertising Displays, Inc. (DAD) appeals the district court’s order
denying DAD’s Motion for Contempt Citation and administratively closing this case.
We affirm.
* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. I
In 2013, DAD sued Defendants Robert Hoffer and his alleged alter egos,
Newforth Partners, LLC and Dhando Investments, Inc. (Dhando), for damages for
breach of contract and fraud with respect to various property, including interests in
intellectual property, such as software, patent applications, and customer lists.1 To
resolve the dispute, the parties engaged in settlement negotiations facilitated by a
magistrate judge, which resulted in October 2014 in their signature of an agreement
titled “Material Terms of Settlement Agreement-Confidential” (the Agreement), Aplt.
App., vol. 3 (sealed) at 15. The Agreement contemplated a future Final Settlement
Agreement (FSA).
The Agreement’s terms included Dhando’s agreement to grant a license to
DAD concerning “the Licensed Product.” Id. at 16. It stated that the parties agreed
(1) to “reduce the terms of this [A]greement into a motion for consent decree,” id. at
18, and (2) “that any disputes arising from this Agreement will be subject to
contempt proceeding[s] to be held before” the magistrate judge, id. at 19. The FSA
was to be fully executed by the parties before they filed a motion for a joint consent
decree. The parties further agreed that “[i]n the event of a dispute over the terms of
[an FSA] that does not constitute a violation of the consent decree, [the magistrate
1 The case was initially filed in 2012 in state court. The defendants removed it to federal court, where DAD filed an amended complaint. Although DAD named additional defendants in the amended complaint, they were later dismissed by stipulation. 2 judge] shall be the sole and final arbiter of the final terms of the [A]greement.” Id. at
19. Defendants’ counsel was to take the lead in drafting the FSA.
Despite various efforts by DAD, no FSA was produced. The district court
administratively closed the case in early 2015 because of the lack of progress, but in
response to DAD’s motion to reopen in October 2017, the court reopened the matter,
scheduled an evidentiary hearing, and in February 2019 directed the parties to submit
their proposed license agreements. When the parties’ further efforts to finalize the
settlement ultimately failed, DAD moved for contempt. But the court denied the
motion and closed the case on December 9, 2019, explaining:
This has been one of the most difficult and frustrating experiences for the undersigned judicial officer in a fourteen-year career. As I see the landscape, to resolve the many factual disputes that have arisen between the parties since the signing of the original [Agreement] would require litigation the equivalent of an entirely new lawsuit. Indeed, if there was a binding settlement reached in this case, the appropriate mechanism for enforcing it is a separate breach of contract lawsuit. The [Agreement] contemplated my continuing involvement in the event the anticipated underlying documents (especially a license agreement) were executed. Unfortunately, as [DAD] so painfully notes, no such documents were ever completed. Further, as Defendants state, to the extent the parties conceded to this Court’s contempt power, it was to enforce compliance with documents that have never been executed. My experience has shown that in the norm, reasonable people involved in litigation can usually reach a mutually beneficial resolution. I suspect the truth is that unreasonableness is at play here. But that must be for another case. I believe this Court has accomplished all that it can for the parties, within its jurisdiction. For the foregoing reasons, [DAD’s] Motion for Contempt Citation . . . is denied. Further, the Clerk of the Court is directed to close this case. Aplt. App., vol. 1 at 144-45 (citation omitted). This appeal followed.2
2 Defendants have not appeared in this court on appeal.
3 II
We first consider our jurisdiction over this appeal. We have jurisdiction to
review the district court’s “final decisions.” See 28 U.S.C. § 1291. Ordinarily, a
“final decision” is one that “ends the litigation on the merits and leaves nothing for
the court to do but execute the judgment.” Caitlin v. United States, 324 U.S. 229,
233 (1945). Put another way, it is a decision “by which the district court
disassociates itself from a case.” McClendon v. City of Albuquerque, 630 F.3d 1288,
1292 (10th Cir. 2011) (internal quotation marks omitted).
The district court administratively closed the case and did not enter a final
judgment. But the administrative closure order did not contemplate any further
proceedings in this case. See Aplt. App., vol. 1 at 145 (“I believe this Court has
accomplished all that it can for the parties, within its jurisdiction.”). Because that
order “ended the litigation and effectively disassociated the district court from the
case,” it qualified as a final decision that we have jurisdiction to review. Hayes Fam.
Tr. v. State Farm Fire & Cas. Co., 845 F.3d 997, 1004 (10th Cir. 2017) (addressing
finality in context of administrative closure).
III
We review the district court’s decision to administratively close a case for an
abuse of discretion. See Rodriguez v. Gusman, 974 F.3d 108, 112 (2d Cir. 2020). An
abuse of discretion occurs when the district court makes “a clear error of judgment or
exceed[s] the bounds of permissible choice in the circumstances.” Hayes Fam. Tr.,
845 F.3d at 1004 (internal quotation marks omitted). “The abuse-of-discretion
4 standard includes review to determine that the discretion was not guided by
erroneous legal conclusions.” Id.
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FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 23, 2021 _________________________________ Christopher M. Wolpert Clerk of Court DIGITAL ADVERTISING DISPLAYS, INC., a Colorado corporation,
Plaintiff - Appellant,
v. No. 20-1014 (D.C. No. 1:12-CV-00682-MEH) NEWFORTH PARTNERS, LLC, (D. Colo.) a California limited liability company; DHANDO INVESTMENTS, INC., a Delaware corporation; ROBERT HOFFER,
Defendants - Appellees. _________________________________
ORDER AND JUDGMENT* _________________________________
Before HARTZ, KELLY, and EID, Circuit Judges. _________________________________
Digital Advertising Displays, Inc. (DAD) appeals the district court’s order
denying DAD’s Motion for Contempt Citation and administratively closing this case.
We affirm.
* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. I
In 2013, DAD sued Defendants Robert Hoffer and his alleged alter egos,
Newforth Partners, LLC and Dhando Investments, Inc. (Dhando), for damages for
breach of contract and fraud with respect to various property, including interests in
intellectual property, such as software, patent applications, and customer lists.1 To
resolve the dispute, the parties engaged in settlement negotiations facilitated by a
magistrate judge, which resulted in October 2014 in their signature of an agreement
titled “Material Terms of Settlement Agreement-Confidential” (the Agreement), Aplt.
App., vol. 3 (sealed) at 15. The Agreement contemplated a future Final Settlement
Agreement (FSA).
The Agreement’s terms included Dhando’s agreement to grant a license to
DAD concerning “the Licensed Product.” Id. at 16. It stated that the parties agreed
(1) to “reduce the terms of this [A]greement into a motion for consent decree,” id. at
18, and (2) “that any disputes arising from this Agreement will be subject to
contempt proceeding[s] to be held before” the magistrate judge, id. at 19. The FSA
was to be fully executed by the parties before they filed a motion for a joint consent
decree. The parties further agreed that “[i]n the event of a dispute over the terms of
[an FSA] that does not constitute a violation of the consent decree, [the magistrate
1 The case was initially filed in 2012 in state court. The defendants removed it to federal court, where DAD filed an amended complaint. Although DAD named additional defendants in the amended complaint, they were later dismissed by stipulation. 2 judge] shall be the sole and final arbiter of the final terms of the [A]greement.” Id. at
19. Defendants’ counsel was to take the lead in drafting the FSA.
Despite various efforts by DAD, no FSA was produced. The district court
administratively closed the case in early 2015 because of the lack of progress, but in
response to DAD’s motion to reopen in October 2017, the court reopened the matter,
scheduled an evidentiary hearing, and in February 2019 directed the parties to submit
their proposed license agreements. When the parties’ further efforts to finalize the
settlement ultimately failed, DAD moved for contempt. But the court denied the
motion and closed the case on December 9, 2019, explaining:
This has been one of the most difficult and frustrating experiences for the undersigned judicial officer in a fourteen-year career. As I see the landscape, to resolve the many factual disputes that have arisen between the parties since the signing of the original [Agreement] would require litigation the equivalent of an entirely new lawsuit. Indeed, if there was a binding settlement reached in this case, the appropriate mechanism for enforcing it is a separate breach of contract lawsuit. The [Agreement] contemplated my continuing involvement in the event the anticipated underlying documents (especially a license agreement) were executed. Unfortunately, as [DAD] so painfully notes, no such documents were ever completed. Further, as Defendants state, to the extent the parties conceded to this Court’s contempt power, it was to enforce compliance with documents that have never been executed. My experience has shown that in the norm, reasonable people involved in litigation can usually reach a mutually beneficial resolution. I suspect the truth is that unreasonableness is at play here. But that must be for another case. I believe this Court has accomplished all that it can for the parties, within its jurisdiction. For the foregoing reasons, [DAD’s] Motion for Contempt Citation . . . is denied. Further, the Clerk of the Court is directed to close this case. Aplt. App., vol. 1 at 144-45 (citation omitted). This appeal followed.2
2 Defendants have not appeared in this court on appeal.
3 II
We first consider our jurisdiction over this appeal. We have jurisdiction to
review the district court’s “final decisions.” See 28 U.S.C. § 1291. Ordinarily, a
“final decision” is one that “ends the litigation on the merits and leaves nothing for
the court to do but execute the judgment.” Caitlin v. United States, 324 U.S. 229,
233 (1945). Put another way, it is a decision “by which the district court
disassociates itself from a case.” McClendon v. City of Albuquerque, 630 F.3d 1288,
1292 (10th Cir. 2011) (internal quotation marks omitted).
The district court administratively closed the case and did not enter a final
judgment. But the administrative closure order did not contemplate any further
proceedings in this case. See Aplt. App., vol. 1 at 145 (“I believe this Court has
accomplished all that it can for the parties, within its jurisdiction.”). Because that
order “ended the litigation and effectively disassociated the district court from the
case,” it qualified as a final decision that we have jurisdiction to review. Hayes Fam.
Tr. v. State Farm Fire & Cas. Co., 845 F.3d 997, 1004 (10th Cir. 2017) (addressing
finality in context of administrative closure).
III
We review the district court’s decision to administratively close a case for an
abuse of discretion. See Rodriguez v. Gusman, 974 F.3d 108, 112 (2d Cir. 2020). An
abuse of discretion occurs when the district court makes “a clear error of judgment or
exceed[s] the bounds of permissible choice in the circumstances.” Hayes Fam. Tr.,
845 F.3d at 1004 (internal quotation marks omitted). “The abuse-of-discretion
4 standard includes review to determine that the discretion was not guided by
erroneous legal conclusions.” Id. at 1005 (internal quotation marks omitted).
IV
DAD raises two issues on appeal: (1) “Did the District Court err by finding an
ambiguous and vague interim settlement agreement to be an enforceable contract
when the parties thereto contested the meaning of all material terms?” and (2) “Did
the District Court err by declining to enforce an interim settlement agreement crafted
such that the District Court retained jurisdiction to enforce the agreement and instead
ordering the case closed?” Aplt. Opening Br. at 5. This statement of the issues
appears self-contradictory. On one hand, DAD asserts that the interim settlement
agreement was too ambiguous and vague to be an enforceable contract. On the other
hand, it argues that the district court erred by failing to enforce that agreement.
For reasons we will explain, neither argument prevails here; DAD fails to show the
district court abused its discretion by closing the case rather than enforcing the
Agreement.
A
“[S]ettlement agreements are contracts,” Walters v. Wal-Mart Stores, Inc.,
703 F.3d 1167, 1172 (10th Cir. 2013), and “[a] trial court has the power to summarily
enforce a settlement agreement entered into by the litigants while the litigation is
pending before it,” United States v. Hardage, 982 F.2d 1491, 1496 (10th Cir. 1993).
Some of the language DAD uses seems to invoke a contractual theory of
enforcement. See, e.g., Aplt. Opening Br. at 26 (complaining that DAD lost the
5 benefit of its bargain, which resulted from its “compromis[ing] extraordinarily
valuable claims”). But by repeatedly denying that the Agreement was an enforceable
contract, DAD has effectively conceded that this theory is meritless. See, e.g., id. at
17 (“[T]he Parties never actually agreed to anything when the Agreement was
signed”); 22 (“[I]t is plainly evident that the Parties failed to form a contract when
they signed the Agreement”); 29 (“[T]he Court erred in the finding that the
Agreement was a valid contract”). We therefore decline to consider whether the
district court should have enforced the Agreement as a contract between the parties.
B
This leaves us with what appears to be DAD’s real argument: that the district
court should have exercised its contempt powers to compel the defendants to finalize
the settlement. The problem with that argument is that the Agreement was (at most)
a contract between the parties, not a court order. Although the parties contemplated
the entry of an enforceable consent decree, that was never accomplished.
The Agreement itself could not be enforced through the court’s contempt
power, because “[s]tanding alone, a settlement agreement is nothing more than a
contract; the imprimatur of an injunction is required to render it a consent decree
enforceable through contempt.” Consumers Gas & Oil, Inc. v. Farmland Indus., Inc.,
84 F.3d 367, 370 (10th Cir. 1996) (internal quotation marks omitted). In other
words, “a provision of a settlement agreement not explicitly set forth in a judicial
order is not enforceable by contempt.” Id. at 371. See also, e.g., Williams v.
Vukovich, 720 F.2d 909, 920 (6th Cir. 1983) (distinguishing between a settlement
6 agreement and a consent decree, noting that “[j]udicial approval of a settlement
agreement places the power and prestige of the court behind the compromise struck
by the parties. . . . The injunctive quality of consent decrees compels the court to . . .
protect the integrity of the decree with its contempt powers”).
To bolster its argument, DAD points to the Agreement’s provisions purporting
to grant the district court enforcement power through contempt proceedings. For
example, Paragraph 10 states that “any disputes arising from this Agreement will be
subject to contempt proceeding[s] to be held before [the magistrate judge] or his
successor.” Aplt. App., Vol. 3 (sealed) at 19 (emphasis added). But none of the
provisions of the Agreement were ever incorporated into an enforceable decree.
Further, as the district court recognized, those stipulated enforcement provisions
would have been triggered only if the parties had executed the anticipated documents
(resulting in the eventual entry of a consent decree), which they did not.
V
DAD also requests that this case be reopened and set for trial. See, e.g., Aplt.
Opening Br. at 23, 28. To this end, it asks us to set aside the district court’s order
closing the case. It argues that the district court abused its discretion by closing the
case, leaving DAD without a “settlement, dismissal, or trial.” Id. at 22.
We discern no abuse of discretion in the district court’s decision to
administratively close the case, given the parties’ failure to finalize their settlement.
The magistrate judge was in a position to determine that leaving the case open for
further settlement negotiations would have been futile and a waste of judicial
7 resources. Had the parties reached a binding agreement, the magistrate judge could
perhaps have kept the case open to enforce it—but as we have seen, DAD insists
there was no enforceable agreement.
This does not necessarily leave DAD without a remedy. Assuming that
proceeding with the case—as opposed to trying to implement a moribund
settlement—remains a live possibility, DAD could still ask the district court to
reopen the case and set it for trial.3 See D. Colo. Civ. R. 41.2 (permitting court to
“order the clerk to close a civil action administratively subject to reopening for good
cause” (emphasis added)).
VI
We affirm the district court’s order denying DAD’s motion for contempt
citation and closing the case.
DAD previously filed a motion to seal certain documents, which are currently
found in Volume III of its appendix. The clerk provisionally granted that motion in
part, subject to a final determination by the merits panel. Upon further review the
3 DAD mentioned this alternate form of relief in a single sentence at the end of its district-court reply brief in support of its contempt motion. The district court understandably did not address this conclusory and unsupported suggestion. DAD remains free to seek reopening and a setting for trial through a better-developed argument to the district court. We take no position on whether DAD has shown sufficient diligence in seeking reopening for a trial setting to make such relief appropriate here.
8 order provisionally sealing portions of Volume III is vacated and the motion to seal is
denied. The clerk is directed to unseal the sealed documents from Volume III.
Entered for the Court
Harris L Hartz Circuit Judge