Trustees of the Operating Engineers Pension Trust v. Smith-Emery Company, 2:13-cv-09545

Background

Trustees (four ERISA fringe-benefit trusts) sued Smith-Emery Company (SEC) to collect unpaid contributions for covered employees across two related actions (2003–2009; 2010–2015/2016 audits).
The parties executed a September 9, 2016 Memorandum of Understanding (MOU) purporting to settle both suits for $1.6 million, payable in 120 monthly installments of $16,970.48 with 5% interest.
The Court held the MOU was a complete and enforceable settlement on January 19, 2017 and instructed plaintiffs to prepare installment judgments to be held in trust pending entry of final judgments.
SEC objected to plaintiffs’ proposed form of judgment (filed January 27, 2017), noting the proposed order included specific dates for interest accrual, the first payment, and an acceleration clause that SEC contended were not in the MOU, and appealed the Settlement Order.
SEC moved for reconsideration (Rule 60/C.D. Cal. L.R. 7‑18), arguing the proposed order revealed that the MOU lacked material terms and thus was unenforceable; Trustees moved to enter judgment claiming default on payments.
The Court denied SEC’s motion for reconsideration and granted Trustees’ motion to enter judgment, ruling that the MOU was enforceable, interest accrues beginning the month before the first payment, and the judgment’s payment start date would be the date the Court enters judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Sept. 9, 2016 MOU was a complete, enforceable settlement	MOU is complete and enforceable; plaintiffs prepared proposed judgments consistent with MOU	MOU omitted material terms (first-payment date, interest start date, acceleration clause) shown by plaintiffs’ later Proposed Order, so no meeting of minds	Court held MOU enforceable; missing dates do not render agreement unenforceable and the court can supply reasonable timing
Whether the Proposed Order filed later could be “new evidence” invalidating the MOU	Proposed Order merely implements MOU; does not create new material terms	Proposed Order reveals additional terms not in MOU and thus is new evidence that agreement was uncertain	Court found the Proposed Order was not new evidence that would invalidate the MOU; terms were either implied or within court’s authority
Whether absence of explicit interest start date and first-payment date in MOU makes agreement uncertain	Plaintiffs: payment amount implies interest accrual timing; reasonable time will be implied	SEC: date is essential; without it, terms are fatally uncertain	Court held law implies a reasonable time; monthly amount demonstrates interest began the month before first payment; court set judgment commencement date as payment start
Whether entry of judgment in trustees’ favor is appropriate given SEC’s alleged default	Trustees sought entry of installment-judgments per MOU and said SEC defaulted	SEC argued timing implied by MOU is unreasonable until court enforces MOU and appeal remains; contested enforceability	Court granted judgment entry, concluding payments were definite and commencement date is the date of the court’s judgment; SEC’s reconsideration denied

Key Cases Cited

McClatchy Newspapers v. Cent. Valley Typographical Union No. 46, 686 F.2d 731 (9th Cir.) (notice-of-appeal generally divests district court of jurisdiction)
Kern Oil & Refin. Co. v. Tenneco Oil Co., 840 F.2d 730 (9th Cir.) (limitation on application of jurisdictional-divestiture doctrine)
Sch. Dist. No. 1J, Multnomah Cty. v. ACandS, Inc., 5 F.3d 1255 (9th Cir.) (Rule 60(b) standards)
Latshaw v. Trainer Wortham & Co., 452 F.3d 1097 (9th Cir.) (Rule 60(b)(6) requires injury and circumstances beyond control)
Casey v. Albertson's Inc., 362 F.3d 1254 (9th Cir.) (motions under Rule 60(b) are committed to district court discretion)
Laguna Royalty Co. v. Marsh, 350 F.2d 817 (5th Cir.) (trial court discretion in weighing newly discovered evidence)
Hastings v. Matlock, 171 Cal. App. 3d 826 (Cal. Ct. App.) (California law implies reasonable time for performance where no time specified)
Fosson v. Palace (Waterland), Ltd., 78 F.3d 1448 (9th Cir.) (where no time limit specified, reasonable time is implied)