United States District Court, N.D. Illinois
FREDERICK J. KAPALA, District Judge.
Plaintiff's motion to enforce settlement agreement  is granted. The clerk is directed to enter judgment in favor of plaintiff and against defendants in the amount of $280, 000 without costs. This case is closed.
Plaintiff, First American Bank ("FAB"), entered into a promissory note with defendant, Cardinal Resources, LLC ("Cardinal"), in which Cardinal agreed to make monthly payments to FAB in order to repay a $250, 000 commercial loan. According to the allegations in the first amended complaint, Cardinal defaulted on its obligations by failing to make timely payments, and Cardinal has failed to cure this default. In its complaint, FAB sought judgment against Cardinal on the note and against three individuals, Kevin R. Jones, Barbara H. Jones, and Carol J. McKee, each of whom signed a guaranty to help Cardinal secure the loan. Currently before the court is a motion by FAB seeking to enforce a settlement agreement that the parties reached with the assistance of the court. For the reasons stated below, that motion is granted.
Shortly before the court was scheduled to hold a bench trial in this rather straightforward case, defendants requested that the court conduct a settlement conference with the parties. The court obliged and referred the parties to the magistrate judge, who carefully and patiently worked with the parties until a settlement agreement was reached. The magistrate judge then recited the material terms of the settlement on the record,  which included, among other things, "[t]otal payment to the plaintiff in the amount of $280, 000" with "an initial payment of [$50, 000]... made upon execution of the settlement agreement, which will be no later than November 1st, 2014." The magistrate judge also discussed the remaining monthly payments that would be due, indicated that "[t]he settlement agreement will contain a confession of judgment provision, " and discussed the financial disclosure provisions. Finally, the magistrate judge explained that "[t]he case will be dismissed with prejudice upon execution." As a result of the parties' settlement agreement, the court canceled an upcoming motion hearing and the bench trial.
Despite several emails back and forth between counsel, the settlement agreement was never executed, either by the agreed-upon date or otherwise, and the initial payment was not made. At a status hearing before the magistrate judge on November 6, 2014, after the court helped resolve what is now an inconsequential dispute regarding the scope of the confession of judgment provision, counsel for defendants indicated for the first time that they "need to change the required date for payment of the initial payment." Counsel explained that "another entity that is trying to get money from Cardinal... froze Cardinal's main bank account, and Cardinal's in the process of trying to replace those funds and can't make the additional payment until they do so." The magistrate judge noted that payment of the initial payment by the agreed-upon date was "a clear material term of the settlement agreement" but left it to FAB to determined how it wanted to proceed.
At the request of counsel, the magistrate judge held another status hearing concerning the settlement agreement on November 21, 2014. Shortly before the hearing, however, there was some communication between the parties, and FAB "was assured that the wire for the first $50, 000 payment is confirmed." Plaintiff's counsel stated that FAB was "willing to wait based on this assurance, " but noted that it was "starting to be a little concerned." Counsel for defendants then clarified that they had received "a written confirmation from counsel from one of the entities that owes the money [to Cardinal] that the wire for that has been initiated, " and that her client "has been doing everything possible to get the money owed to it paid." Because the settlement was potentially back on track, the magistrate judge once again left it to the parties to contact the court if they needed any further assistance in resolving their dispute.
On December 3, 2014, FAB filed an amended motion to transfer the case back to the this court arguing that "[d]efendants avoided a trial by requesting a settlement conference, settled the case, and then refused to sign the settlement agreement and make any payments." FAB further alleged that, despite the fact that defendants had provided numerous assurances that funds were available or had been wired to them by a third party, they have refused to comply with the settlement agreement or are unable to do so. FAB requested that the case be transferred back to this court for further proceedings so that they could seek a judgment and enforce its rights in full against all of the defendants. The magistrate judge denied the motion to transfer and noted that the case remained set for another status hearing on December 11, 2014.
At the next status hearing, the magistrate judge heard more of the same from counsel for defendants: "We stand in the same place we were before. Nothing's been signed yet because my client is still trying to get moneys that they're owed to put together the initial down payment." In response, plaintiff's counsel argued that FAB did not agree to some sort of contingent payment from defendants and that this delay has "materially changed everything that we discussed in court." Defendants' counsel reminded the court that Cardinal's bank account was not frozen at the time of the settlement conference and suggested that Cardinal had no way of knowing that was going to happen. Thereafter, counsel proposed that Cardinal could make the December 1 payment of $23, 000 if FAB would agree that "the fifty that was supposed to be the initial payment be tacked onto the end as two additional $25, 000 payments."
With regard to this new proposal, the magistrate judge indicated that was "an issue that can be resolved among the parties if the plaintiff is even willing to entertain that." He then commented:
We have a settlement agreement. We reached a settlement. From what I'm seeing, the defendant is not complying with that settlement agreement. I leave it up to the plaintiff to see how the plaintiff wants to proceed with the settlement. They can seek to enforce it. There's other remedies available.... This case involves the nonpayment of a promissory note to which there is no defense. I leave it to the plaintiff to do and file whatever motion they want to file.
Shortly thereafter, FAB filed the instant motion seeking to enforce the parties' settlement agreement, although it styled it as a "motion for confession of judgment." In response, defendants argue, in relevant part, that they have not breached their settlement obligations (i.e. ...