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Tnt Marketing, Inc., a Corporation, and Paul E. Simon, an Individual v. Frank Agresti
Citations: 796 F.2d 276; 6 Fed. R. Serv. 3d 812; 1986 U.S. App. LEXIS 27684Docket: 85-6312
Court: Court of Appeals for the Ninth Circuit; August 4, 1986; Federal Appellate Court
Frank Agresti appeals a judgment from the United States District Court for the Southern District of California, which awarded damages to plaintiffs TNT Marketing, Inc. and its president, Paul Simon, following Agresti's noncompliance with a stipulated court judgment. Simon, who provides real estate investment lectures and related materials, accused Agresti of unlawfully replicating his lectures and materials after leaving Simon's organization. The initial complaint included allegations under RICO and state claims for wrongful misappropriation and unfair competition, seeking an injunction and damages. The stipulated judgment mandated that Agresti and his co-defendants return all of Simon's materials and granted the prevailing party entitlement to reasonable attorney's fees for enforcement actions. After Agresti's failure to comply, Simon sought a contempt order. Although Agresti was not found in contempt, the court ruled he had converted Simon's materials for personal use, resulting in a damages award of $49,000, plus $10,828.50 in attorney's fees and costs. Agresti argues that the district court lacked authority under Federal Rule of Civil Procedure 70 to award damages. However, the court's inherent power to enforce settlement agreements allows for such remedies, as established by precedent. The court concluded that breach of the agreement justified the award of damages or specific performance. The court has the authority to enforce a settlement agreement either through a motion for enforcement or contempt proceedings for violating a court order that approves the settlement. In this case, although the judgment was labeled 'Judgment for Conversion of Property,' the damages awarded were for failure to comply with a consent judgment, not for conversion itself. Agresti claimed the settlement allowed only for injunctive relief, but the agreement was ambiguous regarding remedies for breach, allowing for both specific enforcement and damages. Agresti did not contest below the possibility of damage recovery, leaving that issue unaddressed. He also argued against the award of attorney's fees, claiming the order to show cause did not constitute a 'suit' under the settlement agreement. The court interpreted 'suit' broadly to include any legal proceeding aimed at enforcing rights, affirming that the order to show cause was indeed a 'suit.' Agresti argued he lacked notice regarding potential liability for damages, mistakenly assuming the damages were for conversion rather than breach of the settlement. While the court acknowledged this lack of adequate notice could have prejudiced Agresti, it affirmed the attorney's fee award while vacating the damage award and remanding the case for an evidentiary hearing to determine damages with proper notice. Thus, the court's decision was to vacate the damages and remand for further proceedings.