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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

FRANK M. DIMEGLIO v. J. ROBERT HAINES, ET AL.

* * * * * * *

CIVIL NO. Y-93-2656

Donald F. Chiarello, Towson, Maryland, counsel for Plaintiff. Brian A. Goldman, Esquire, Baltimore, Maryland, Gerard R. Vetter, Esquire, Baltimore, Maryland, and Andrew H. Levine, Esquire, Baltimore, Maryland, counsel for Brian A. Goldman, Trustee in Bankruptcy. Mary E. Pivec, Esquire, Washington, D.C., counsel for Defendants. YOUNG, Joseph H., Senior United States District Judge Date: December ___, 1999

MEMORANDUM OPINION I. In 1993, the original plaintiff in the underlying action, Frank M. DiMeglio, brought suit against Arnold M. Jablon, Roger Hayden, Merreen E. Kelly, J. Robert Haines, and Baltimore County [collectively "Defendants"], claiming violations of his federal and state constitutional rights. history. The case has had a complicated

Most recently, it is on interlocutory appeal to the

Fourth Circuit and the parties have conducted settlement negotiations, which are the source of the present controversy. 1

DiMeglio filed a voluntary petition under Chapter 7 of the Bankruptcy Code in July 1998, and Brian A. Goldman ["Trustee"] was appointed Trustee for the bankruptcy estate. In October

1998, the Trustee entered into settlement negotiations with Baltimore County ["the County"]. The Trustee alleges that in

November 1998, the County offered to settle the underlying action for $60,000, subject to the approval of the Bankruptcy Court. January 14, 1999, the Trustee sent a letter to the County accepting the settlement offer. The Trustee claims that the On

parties spoke by telephone on January 18, 1999, and agreed to settle the action for $60,000. In addition, they allegedly

agreed that the Trustee would prepare appropriate papers to be filed with the Bankruptcy Court, and the County would prepare a written settlement agreement to memorialize the verbal agreement reached that day. On January 29, 1999, the Trustee sent the County the appropriate papers to be filed with the Bankruptcy Court and inquired about the County's preparation of the settlement agreement. The Trustee contends that, in February 1999, the

County advised Donald F. Chiarello, DiMeglio's attorney, that the case was settled. On March 1, 1999, the Trustee sent another

letter to the County inquiring about the status of the settlement agreement. Two days later, Mary E. Pivec, counsel for

Defendants, sent a letter informing the Fourth Circuit that "the parties have reached agreement in concept with respect to the 2

settlement of all claims, subject to approval of the U.S. Bankruptcy Court" and asking the Clerk to "remove this matter from the active docket, pending finalization of the settlement agreement." The letter concluded that "[u]pon finalization, the

appeal will be withdrawn concurrent with the dismissal of the underlying suit, with prejudice." On March 24, 1999, Virginia W.

Barnhardt, Attorney for Baltimore County, wrote to inform this Court that "both parties have reached a tentative settlement" in the case and hoped to settle within sixty days. By letter dated April 29, 1999, however, the County advised the Trustee that it would no longer settle the case because DiMeglio had informed the County and another Defendant, Arnold Jablon, that his allegations were a "fiction of his imagination." In a letter to Virginia W. Barnhardt, DiMeglio wrote that his lawsuit "never really existed and was actually a self-improvement mechanism designed to help me." He apologized for his

"ridiculous statements and allegations" and thanked her for her patience. The Trustee has filed a Motion to Enforce Settlement, claiming that the parties reached an enforceable agreement before the County decided not to settle the matter.1 Defendants oppose

this Motion, arguing that the parties' settlement discussions were never reduced to a written agreement and, in any case, the The Trustee has also filed a Motion to Substitute Party, which the Court will grant. 3
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Court lacks jurisdiction to enforce the agreement.

They have

also filed a Motion for Summary Judgment, contending that the underlying action is now moot because DiMeglio has repudiated his claims. The Trustee has opposed Defendants' Motion.

II. A. Jurisdiction over the Trustee's Motion to Enforce The Court has jurisdiction to entertain the Trustee's Motion to Enforce Settlement Agreement. A party to a settlement

agreement may seek to enforce the terms of the agreement when the opposing party reneges. 217, 220 (1st Cir. 1999). See Malave v. Carney Hosp., 170 F.3d When the settlement collapses before

the original suit is dismissed, the party seeking to uphold the settlement may file a motion to enforce, and need not resort to a separate action for breach of contract. See id.; see also Young Here, the Trustee

v. FDIC, 103 F.3d 1180, 1194 (4th Cir. 1997).

has filed a Motion to Enforce involving a case that is still before this Court, thus giving the Court subject matter jurisdiction to entertain the Motion.

B.

Defendants' Motion for Summary Judgment Defendants argue that the Court should grant their Motion

for Summary Judgment because DiMeglio's disavowal of his earlier allegations renders the underlying action moot. The Court

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disagrees.

The bankruptcy trustee succeeds to all causes of

action held by the debtor at the time the bankruptcy petition is filed. 1988). See, e.g., Jones v. Harrell, 858 F.2d 667, 669 (11th Cir. Once the petition is filed, only the trustee has See id. In this

authority to settle or release such claims.

case, it is undisputed that DiMeglio filed his Chapter 7 petition in July 1998. At that time, the Trustee became the "owner" of

the underlying claim and held full authority to settle or release it. It follows that DiMeglio's subsequent repudiation of his In other words, even

claim, standing alone, is not dispositive.

if DiMeglio had formally withdrawn his claim, that withdrawal would be ineffective because it is the Trustee's claim to pursue or withdraw. Motion.2 The Court will, therefore, deny Defendants'

C.

The Settlement Agreement The Trustee seeks to have this Court enforce the settlement

agreement allegedly reached by the parties in January 1999. District courts have the authority to enforce a settlement agreement and enter judgment based on such an agreement without Defendants also argue that they are entitled to summary judgment because no reasonable fact-finder could decide in the Trustee's favor given that DiMeglio has disavowed his earlier allegations. The Court disagrees. Given the bizarre turn of events in this case, along with DiMeglio's statement that the "lawsuit ... never really existed," the credibility of his disavowal is, to say the least, questionable, and credibility issues are for the trier-of-fact. 5
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holding a plenary hearing. 130, 132 (4th Cir. 1988).

See Petty v. Timken Corp., 849 F.2d Summary enforcement, however, is

inappropriate when there is a material dispute about the existence or terms of a settlement agreement. See id. In such

situations, the court should take evidence to resolve contested issues of fact. See id.; Malave, 170 F.3d at 220 (citing cases).

In this case, the Court initially decided that there was insufficient evidence to justify granting the Trustee's Motion, and requested that the parties file additional memoranda to help resolve the matter. See Letter to Counsel, July 15, 1999. The

parties submitted additional legal arguments, but no evidence to resolve the issue of whether a contract was agreed upon in the first place. Given that there is a material dispute about the

existence of a contract, the Court is unable to resolve the issue without an evidentiary hearing.

III.

Conclusion

Based on the foregoing analysis, the Court will deny Defendants' Motion for Summary Judgment. The Trustee's Motion to

Substitute Party will be granted, but the Court is unable to grant its Motion to Enforce Settlement Agreement at this time. Instead, the Court will schedule an evidentiary hearing to resolve the disputed issues of material fact. ___________________________________ Joseph H. Young 6

Senior United States District Judge

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND FRANK M. DIMEGLIO v. J. ROBERT HAINES, ET AL. * * * * * * *

CIVIL NO. Y-93-2656

ORDER In accordance with the attached Memorandum, it is this ___ day of December 1999, by the United States District Court for the District of Maryland, ORDERED: 1. That the Trustee's Motion to Substitute Party BE,

and the same IS, hereby GRANTED; and 2. That the Defendants' Motion for Summary Judgment

BE, and the same IS, hereby DENIED; and 3. That an evidentiary hearing be scheduled to

resolve disputed issues of material fact with regard to the Trustee's Motion to Enforce Settlement Agreement; and 4. That copies of this Memorandum and Order be mailed

to counsel for the parties. ___________________________________ Senior United States District Judge

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