Omenka v. Select Portfolio Servicing Inc.

Background

Lenora Omenka filed the underlying lawsuit against Select Portfolio Servicing Inc. (SPS) and later amended her complaint. Omenka was proceeding without a lawyer. After the court issued an order asking why the case should not be dismissed for failure to prosecute, Omenka appeared at a hearing and said that she wanted to continue pursuing the case but that the parties had reached a settlement.

The parties submitted a joint statement explaining that they had signed a settlement agreement under which Omenka agreed to dismiss the case with prejudice. The agreement required her to file a dismissal within five days after the agreement’s effective date. Omenka did not do so. SPS then moved to enforce the settlement agreement. Omenka did not respond to the motion.

Under the agreement, Omenka also agreed to withdraw her applications for loan-modification review and release claims against SPS arising from the dispute. SPS agreed to delay nonjudicial foreclosure of Omenka’s property until January 5, 2023, so she could try to sell the property, refinance the mortgage, or pay off the loan.

Court’s analysis

The court explained that a federal district court may summarily enforce a settlement agreement in a case before it. The party seeking enforcement must show that the parties formed a legally enforceable agreement. California contract law governed the agreement’s construction and enforcement.

The court found that the agreement satisfied California’s contract requirements. It identified parties capable of contracting, showed mutual consent because both parties signed it, had the lawful purpose of resolving the litigation, and included mutual promises that served as consideration.

The court also found that the agreement satisfied federal requirements. It was complete because it stated the parties’ material obligations and provided enough information to determine the scope of their duties. The court found that both parties intended to be bound because Omenka personally signed the agreement, SPS’s counsel signed it, and Omenka had previously told the court that she intended to be bound. The court also found that Omenka had not provided a reason why the agreement was invalid or unenforceable.

Ruling

Judge William H. Orrick granted SPS’s motion to enforce the settlement agreement. Under the agreement’s terms, the court ordered that the case be dismissed with prejudice and directed the clerk to close the case.