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Holt v. Asset Acceptance

August 31, 2010


The opinion of the court was delivered by: Judge George M. Marovich


Defendant Asset Acceptance, LLC ("Asset Acceptance") has filed a motion to enforce the settlement agreement it claims to have reached with plaintiff Vivian Holt ("Holt"). For the reasons set forth below, the Court grants the motion and enforces the settlement agreement.

I. Background

In July 2009, Plaintiff Holt filed against Asset Acceptance a complaint alleging violations of the Fair Debt Collection Practices Act ("FDCPA"). The Court granted Holt leave to proceed in forma pauperis and appointed her counsel. At a status hearing on December 22, 2009, counsel reported to the Court that the parties had reached a settlement agreement and that they would file a stipulation of dismissal.

At some point in January 2010, counsel for defendant sent counsel for plaintiff a proposed written settlement agreement. Counsel for plaintiff sent defense counsel an email, in which plaintiff's counsel stated:

Attached is a mark-up copy of the Settlement Agreement. You will obviously see the edits, but I wanted to explain the need for the changes in Paragraph 3. Specifically, my client does not want to provide a general release of the assignor of the debt (I believe Target), nor does she want to release any person or party from future acts or claims. The release contains a release of any claim she now has or ever had, so that should suffice. Paragraph 3(b) seems to be an enlarged restatement of paragraph 3(a), so we have deleted a portion of that section. (1/29/10 email from W. Kent Carter to Nabil Foster). On February 2, 2010, defense counsel responded, "OK. Send me a final version for signature. I also need a completed W-9 form from your client. I attach a blank W-9 for your convenience." On February 3, 2010, plaintiff's counsel sent defense counsel an email that said, "Attached is a clean, final version of the Settlement Agreement. I will let you know when I have a signed copy of the Agreement and W9 from my client. Thank you." The written settlement agreement sets out, among other things, that: (1) Holt would dismiss this case with prejudice; (2) Asset Acceptance would issue Holt a check for $2,000.00; and (3) Holt would release Asset Acceptance for claims that were brought or could have been brought in this suit.

Months passed. On April 7, 2010, defense counsel sent plaintiff's counsel an email that said, among other things, "I need a copy of the signed settlement agreement before I can send you the settlement check." The plaintiff never signed the written agreement.

When the parties had not filed a stipulation of dismissal by April, the Court set a status hearing for May 11, 2010. The parties informed the Court that the plaintiff had refused to sign the written settlement agreement. Soon thereafter, defendant filed a motion to enforce the settlement agreement and noticed the motion for hearing June 1, 2010. The following are excerpts from that hearing.

The Court: What's the problem with the plaintiff?

Plaintiff's counsel: The settlement agreement, your Honor, was reached at a time and an amount, and during the course of the drafting, the negotiating of the language of that agreement and the terms of the release, my client noticed--a few different things happened, your Honor.

Number one, my client received a 1099 tax form for forgiveness of debt from the defendant related to two debts which she contended all along are fraudulent, so that upset her somewhat. The other issue is that she noticed on her credit report the accounts which she believed should have been corrected by the defendants in prior litigation a year prior to this and so there is--there was some unease, there is some unease about this, and so realizing that there is going to be a continuing struggle to not only repair her credit but also deal with the defendant, she has decided that the amount of money for which she was originally to settle for she is no longer willing to settle for.

The Court: Well, my problem is this. A change of heart does not feed the bulldog as far as an agreement is concerned. I mean, a settlement agreement, for lack of a better description, is a contract. You have had a meeting of the minds as far as a settlement is concerned and that is the end all and be all of it. I don't know--what is the amount that you're talking about here?

Plaintiff's counsel: If I may, your Honor, a settlement agreement was not ...

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