Free Response in Opposition to Motion - District Court of Arizona - Arizona

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Stephen G. Montoya (#011791) MONTOYA JIMENEZ, P.A.
The Great American Tower 3200 North Central Avenue, Ste. 2550 Phoenix, Arizona 85012 (602) 256-6718 (fax) 256-6667

[email protected] Attorney for Plaintiff

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Ernest B. Jackson, plaintiff, vs. ABC Nissan, Inc., et al., defendants. No. CV 03-0563-PHX-SMM Plaintiff's Response in Opposition to Defendant's Motion to Enforce the Settlement Agreement (Evidentiary Hearing Requested)

Plaintiff respectfully asks the Court to deny Defendant's Motion to Enforce the Settlement Agreement for the reasons set forth in the following Memorandum of Points and Authorities. Specifically, based on the evidence attached to this Response, this Court should conclude that the parties entered into a "global" settlement agreement, which included a stipulation to "dismiss this case, with prejudice, each side to bear its own costs and attorney fees." Alternatively, this Court should conclude that there was no meeting of minds in reference to the settlement agreement based upon a mutual misunderstanding and schedule Mr. Jackson's claims against ABC Nissan to proceed to trial. Respectfully submitted this 11th day of June 2007. MONTOYA JIMENEZ A Professional Association

Stephen G. Montoya

Stephen G. Montoya 3200 North Central Avenue, Ste. 2550 Phoenix, Arizona 85012-2490 Attorney for Plaintiff

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MEMORANDUM OF POINTS AND AUTHORITIES Factual Background: For the past several years, Plaintiff's counsel (Stephen Montoya) has represented

4 various plaintiffs in a series of federal civil rights actions filed against a group of local 5 automobile dealerships and their management company, namely, EEOC v. Pinnacle 6 Nissan, No. CIV 00-1872-PHX-MHM, Griffin v. CBV Motors, Inc., et al., No. CIV-00-21037 PHX-MHM, Love v. Pinnacle Nissan, Inc., et al., No. CIV 01-1449-PHX-EHC, Madani v. 8 BHVT Motors, Inc., No. CV 04-1897-PHX-RCB, Jerome v. Midway Holdings, Inc., et al., No. 9 CV 03-1913-PHX MHM, and the present case, Jackson v. ABC Nissan, Inc., et al., No. CV 10 03-0563-PHX-SMM. See Affidavit of Stephen G. Montoya, attached hereto as Exhibit 1, ¶ 11 4. 12

All of these lawsuits have also involved claims against a management company that

13 is owned by the primary principal of all of the dealerships listed above, namely the 14 "Automotive Investment Group." Id. at ¶ 5. 15

In all of these lawsuits, the various defendant automobile dealerships have been

16 represented by the same law firm, namely, "Akin Gump Strauss Hauer & Feld" of Dallas, 17 Texas, specifically, Ms. Laura Franze, Mr. M. Brett Burns, and Ms. Stephanie Osteen. Id. 18 at ¶ 7. 19

All of these lawsuits have been resolved by stipulation in consideration of lump sum

20 monetary payments to the respective plaintiffs, and a "stipulation to dismiss, with prejudice, 21 each side to bear its own costs and attorney fees," with the exception of Jerome v. Midway 22 Holdings, Inc., which is pending before the Honorable Mary H. Murguia, and Jackson v. 23 ABC Nissan, which is pending before this Court. Id. at ¶ 8. 24

In the context of settling the case of Madani v. BHVT Motors, Inc., counsel for the

25 respective parties were involved in several lengthy telephone discussions. Id. at ¶ 9. In 26 those discussions, Mr. Burns and Mr. Montoya expressed an interest in attempting to settle 27 all of the cases in which Mr. Montoya represented the plaintiff, including Jackson v. ABC 28 Nissan, et al. and Jerome v. Midway Holdings, Inc., et al., if the parties could agree on -2-

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1 reasonable settlement amounts. Id. at ¶ 12. Moreover, Mr. Montoya informed Mr. Burns 2 that it was his preference to settle all of the cases in which he represented the plaintiff 3 against an AIG-related dealership so that his clients could get on with their lives and he 4 could move on to other matters. Id. at ¶ 11. 5

Mr. Burns agreed in principle that the settlement of all these claims would be in

6 everyone's best interest, if they could agree upon reasonable settlement amounts. Id. at 7 ¶ 12. 8

In early 2007, Ms. Osteen and Mr. Montoya started to engage in telephonic

9 settlement discussions regarding the resolution of Jackson v. ABC Nissan, Inc., et al. Id. 10 at ¶ 13. In those discussions, Mr. Montoya specifically explained to Ms. Osteen that Mr. 11 Jackson was only interested in discussing a "global" settlement of this case, which would 12 include a "stipulation to dismiss this matter with prejudice, each side to bear its own costs 13 and attorneys fees." Id. at ¶ 14. 14

Mr. Montoya also emphasized to Ms. Osteen that Mr. Jackson just wanted to try to

15 forget his employment with Ms. Osteen's various clients, conclude all litigation with Ms. 16 Osteen's clients, and move on with his life. Id. at ¶ 18. 17

Ms. Osteen did not in any way object to the idea of a global settlement of this dispute, In fact, in order to assure Ms. Osteen that he was not planning any other litigation

18 if the parties could agree upon a reasonable settlement amount. Id. at ¶ 15. 19

20 against any of her AIG related clients, the parties also agreed that Mr. Montoya would return 21 (or destroy) all of the various files that he had accumulated over the years regarding AIG, 22 ABC Nissan, and Camelback Toyota. Id. at ¶ 19. 23

Moreover, the parties agreed that Mr. Jackson would not discuss in any way his

24 employment with ABC Nissan, the Automotive Investment Group, or Camelback Toyota, 25 and that Mr. Jackson would not disparage any of Ms. Osteen's clients in this matter. Id. at 26 ¶¶ 20-21. 27

At no time in the settlement discussions did Ms. Osteen ever state, suggest, or imply

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1 fees against Mr. Jackson (or his counsel) in the context of the settlement. Id. at ¶ 22. 2

To the contrary, both parties understood that any settlement would result in a

3 "stipulation to dismiss, with prejudice, each side to bear its own costs and attorneys fees." 4 Id. at ¶ 23. 5

Neither Mr. Jackson nor Mr. Montoya would have ever agreed to even consider

6 settling this matter without a stipulation to dismiss, each side to bear its own costs and 7 attorney fees, because Mr. Jackson did not want to be involved in any expensive or time8 consuming appeals regarding this Court's orders relating to either AIG or Camelback 9 Toyota. Id. at ¶ 24. Moreover, it would have been impossible to evaluate the economic 10 value of any settlement of Mr. Jackson's claims against ABC Nissan absent an agreement 11 to dismiss the case, "with prejudice, each side to bear its own costs and attorney fees," 12 because any claim for attorney fees by either AIG or Camelback Toyota could have 13 significantly reduced or even rivaled the settlement amount. Id. at ¶ 25. 14

This understanding was also consistent with the settlements reached in EEOC v.

15 Pinnacle Nissan, Love v. Pinnacle Nissan, Griffin v. CBV Motors, Inc., and Madani v. BHVT 16 Motors, Inc. Id. at ¶ 27. 17

This understanding was also reflected in Mr. Montoya's letters to Ms. Osteen For example, in Mr. Montoya's letter of February 6, 2007 to Ms. Osteen, he advised

18 regarding settlement negotiations. 19

20 her that Mr. Jackson was willing to settle "this matter in consideration of a lump sum 21 payment of . . .each side to bear its own costs and attorneys fees." See attached Exhibit 22 A (emphasis added). 23

Similarly, almost six-weeks later on March 16, 2007, Mr. Montoya wrote Ms. Osteen

24 once again indicating that Mr. Jackson was "willing to dismiss this matter, with prejudice, 25 each side to bear its own costs and attorneys fees, in consideration of a lump sum payment 26 of [a specified amount]. See attached Exhibit B (emphasis added). 27

Ms. Osteen did not write, orally indicate, or suggest in any way that her clients AIG

28 and Camelback refused to enter into such a stipulation. See Exhibit 1 at ¶ 31. -4-

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1

Ultimately, on Good Friday, April 6, 2007, when Mr. Montoya was out-of-the-state

2 during the Easter holiday, Ms. Osteen and Mr. Montoya telephonically agreed to settle this 3 case. Id. at ¶ 32. After their telephone conversation, Ms. Osteen emailed Mr. Montoya at 4 approximately 4:08 p.m. on April 6, 2007, writing that: 5 6 7 8 9 10 11 12 13 14 15

Steve: Confirming the agreement we reached today by telephone, ABC Nissan will pay $150,000.00 to settle Mr. Jackson's claims against it. We will notify the Court today and will begin preparing formal settlement papers next week, which will include the strict confidentiality provision we discussed. Please confirm your acceptance in writing by responding to this email. See attached Exhibit C. Mr. Montoya responded to Ms. Osteen's email on April 6, 2007 at 5:25 p.m., writing that: Stephanie, your understanding of our agreement to settle this case is correct. Please prepare separate settlement drafts, one in the amount of $100,000.00 made payable to Mr. Jackson and one in the amount of $50,000.00 made payable to my law firm, the legal name of which is "the Montoya Law Group." Have a happy holiday. Thanks. Stephen Montoya.

16 Id. During their telephone conversation of April 6, 2007, Mr. Montoya informed Ms. Osteen 17 that he would have his secretary (Ms. April Roll) in Phoenix file a notice of settlement with 18 the Court indicating that the parties had settled this dispute. See Exhibit 1 at ¶ 35. In 19 accordance with the agreement, Mr. Montoya prepared a notice of settlement, indicating 20 that "the parties to this proceeding have settled this dispute and will be dismissing this 21 action, with prejudice, each side to bear its own costs and attorney fees. . ." See attached 22 Exhibit D. 23

On Monday, April 9, 2007, Ms. Osteen emailed Mr. Montoya's legal assistant, Ms.

24 April Roll, stating that the notice of settlement that Ms. Roll had emailed Ms. Osteen was 25 "incorrect" and asked Ms. Roll to revise it. See attached Exhibit E. Mr. Montoya was 26 traveling back to Phoenix after the Easter holiday on Monday, April 9, 2007. See Exhibit 1 27 at ¶ 38. In response to Ms. Osteen's request to revise the Notice of Settlement, Ms. Roll 28 redrafted the notice of settlement to reflect the revisions that Ms. Osteen had requested be -5-

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1 inserted into the agreement and then called Mr. Montoya to approve them. Id. at ¶ 39. After 2 Ms. Roll read Ms. Osteen's proposed revisions to Mr. Montoya over the telephone, he 3 instructed Ms. Roll not to consent to the filing of the revised notice of settlement and 4 indicated that he would address the matter on Tuesday, April 10, 2007 when he returned 5 to the office. Id. at ¶ 40. 6

On Tuesday morning, April 10, 2007, Mr. Montoya immediately emailed Ms. Osteen

7 asking her what was wrong with the notice of settlement and indicated that he believed that 8 it reflected their settlement agreement. See attached Exhibit F. 9

For the first time, on April 10, 2007, Ms. Osteen emailed Mr. Montoya indicating that

10 there were unspecified "other matters" regarding the case that we would have to deal with 11 "in due course." See attached Exhibit G. 12

Thus, it was only after the exchange of emails of April 6, 2007 that Ms. Osteen ever

13 mentioned that AIG and/or Camelback Toyota intended to attempt to preserve any claims 14 in the face of the underlying settlement agreement. During the course of their previous 15 settlement negotiations, Ms. Osteen never objected to the express requirement that any 16 settlement of Mr. Jackson's claims must result in a "stipulation to dismiss, with prejudice, 17 each side to bear its own costs and attorney fees." See attached Exhibit H. 18 19

Legal Argument: It is clear by the testimonial and documentary evidence attached to this Response

20 that Mr. Jackson and his counsel understood that the settlement of this matter would include 21 a stipulation to "dismiss this matter, with prejudice, each side to bear its own costs and 22 attorneys fees." 23

Each time that Mr. Jackson's counsel explicitly advised Ms. Osteen in writing that the

24 settlement was contingent upon a "stipulation to dismiss this matter, with prejudice, each 25 side to bear its own costs and attorneys fees," see attached Exhibits A and B. Ms. Osteen 26 did not state or suggest that she objected to this requirement in any way. 27

The first and only indication that Ms. Osteen made that she believed that either AIG

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1 or his counsel was after Mr. Jackson's counsel emailed a notice of settlement to Ms. Osteen 2 on Monday, April 9, 2007. See attached Exhibit G. Then, for the first time, Ms. Osteen 3 suggested that there were unspecified "other matters" that remained after the settlement 4 that would be addressed "in due course." Id. 5

The only documentary evidence that Defendants submit in support of their contention

6 is an email that Ms. Osteen sent to Mr. Jackson's counsel on Good Friday, April 6, 2007 at 7 3:00 p.m. in the afternoon. See attached Exhibit C. In that email, Ms. Osteen correctly 8 indicates that ABC agreed to "pay $150,000.00 to settle Mr. Jackson's claims against it." 9 Id. 10

Although Ms. Osteen's recitation of the settlement agreement was accurate--ABC in The settlement agreement also included a "stipulation to dismiss, with prejudice, each

11 fact did agree to pay Mr. Jackson $150,000.00--it was not complete. 12

13 side to bear its own costs and attorneys fees." Significantly, a "stipulation to dismiss, with 14 prejudice, each side to bear its own costs and attorneys fees," is not in any way inconsistent 15 with ABC Nissan's obligation to pay Mr. Jackson $150,000.00. That Ms. Osteen's email 16 indicated that ABC Nissan had agreed to pay $150,000.00 to settle Mr. Jackson's claims 17 against it merely reflected the fact that Mr. Jackson's claims against AIG and Camelback 18 Toyota had already been dismissed. 19

Moreover, the emails omitted the fact that the parties had also agreed that Mr.

20 Jackson would not in any way discuss his employment with ABC Nissan, AIG, or 21 Camelback Toyota, that Mr. Jackson would instruct his counsel to return any materials that 22 he had collected regarding ABC Nissan, AIG or Camelback Toyota, and that Mr. Jackson 23 would not disparage any of the Defendants in any way. 24

Thus, the two emails of April 6, 2007 undisputedly did not reflect all of the material Based upon these facts, it is clear that the weight of testimonial and documentary

25 terms of the settlement agreement. 26

27 evidence--in addition to the course and scope of dealings between the parties-28 demonstrates that the parties agreed that ABC Nissan would tender Mr. Jackson and his -7-

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1 counsel $150,000.00 and execute a "stipulation, to dismiss this matter, each side to bear 2 its own costs and attorney fees." 3

In the event that the Court concludes that there is a factual dispute regarding the

4 nature and scope of the agreement based upon the affidavit of Ms. Osteen, the Court 5 should conclude that there was no settlement agreement as a matter of law because there 6 was a mutual misunderstanding regarding the scope of the settlement agreement. As the 7 Arizona Court of Appeals aptly noted in Hill-Shafer Partnership v. Chilson Family Trust, 165 8 Ariz. 469, 473(App. 1990), "contracts are founded on the agreements, not on the 9 disagreements, of the parties. Where they misunderstand each other, there is no contract." 10 Quoting McCarty v. Anderson, 58 So.2d 255, 259 (La.App.1952).

"As long as the

11 misunderstandings of the parties are reasonable under the specific circumstances of the 12 case, a court may properly find a lack of mutual assent." Hill-Shafer, 165 Ariz. at 475. See 13 also, Hartford v. Industrial Com'n of Arizona, 178 Ariz. 106 (App. 1994)("in Arizona a 14 contract may be rescinded when there is a mutual mistake of material fact"). 15

In this case­at the very least­the evidence is substantial that there was a "mutual

16 misunderstanding" that precluded the formation of an enforceable contract. This case 17 should consequently proceed to trial. 18 19

Conclusion: For the foregoing reasons, this Court should conclude that the parties agreed to

20 dismiss this matter, each side to bear its own costs and attorneys fees, in consideration of 21 a payment of $150,00.00 to Mr. Jackson and his counsel. 22

Alternatively, if the Court believes that there is a factual dispute regarding the

23 settlement, this Court should conclude that there is no settlement agreement because there 24 was never mutual assent and schedule this matter for a trial on the merits. 25 26 27 28 -8-

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Respectfully submitted this 11th day of June 2007. MONTOYA JIMENEZ A Professional Association

Stephen G. Montoya

Stephen G. Montoya 3200 North Central Avenue, Ste. 2550 Phoenix, Arizona 85012-2490 Attorney for Plaintiff

10 I electronically transmitted the foregoing document 11 and transmittal of a Notice of Electronic Filing 12

I hereby certify that on June 11, 2007, to the following CM/ECF registrants: Laura M. Franze Stephanie K. Osteen 1700 Pacific Avenue Suite 4100

to the Clerk's Office using the CM/ECF System for filing

13 M. Brett Burns

14 Akin Gump Strauss Hauer & Feld LLP 15 Dallas, Texas 75201 16 Tricia Schafer

17 2901 North Central Avenue, Suite 200 18 19

Mariscal, Weeks, McIntyre & Friedlander, P.A. Phoenix, Arizona 85012 Attorney for Defendants United States District Court for the District of Arizona 401 West Washington Street

20 The Honorable Stephen M. McNamee

21 Sandra Day O'Connor United States Courthouse 22 Phoenix, Arizona 85003 23 24 25 26 27 28 -9-

Stephen G. Montoya

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