AmTrust North America, Inc. v. MBA Network, LLC
- Paul Engelmayer
- 1:18-cv-06241
- U.S. District Court · Southern District of New York
- 5
In AmTrust v. MBA Network, Judge Engelmayer granted AmTrust’s motion, enforced the settlement, and ordered MBA and Forrest Reynolds to pay $255,000.
AmTrust North America, Inc. was awarded $255,000. MBA Network, LLC and Forrest Reynolds were ordered to pay that amount under the settlement agreement and Reynolds’s personal guarantee.
What happened
AmTrust North America, Inc. v. MBA Network, LLC concerned a settlement reached after AmTrust sued MBA for breach of contract. The settlement required MBA to make monthly payments totaling $230,000, and Forrest Reynolds personally guaranteed MBA’s payment obligations.
MBA missed its first four payments, and neither MBA nor Reynolds paid anything after AmTrust sent notice of default. Neither responded to AmTrust’s motion to enforce the settlement agreement or to a later court order giving them another chance to respond.
Judge Paul A. Engelmayer ruled that the court retained authority to enforce the settlement and that both MBA and Reynolds breached it. He granted AmTrust’s motion and ordered MBA and Reynolds to pay AmTrust $255,000 immediately.
The detailed version
- AmTrust North America, Inc. v. MBA Network, LLC · No. 1:18-cv-06241
- Paul Engelmayer
- Dec. 2, 2020
Background
AmTrust sued MBA for an alleged breach of contract. After MBA failed to appear, the court entered a judgment of liability against MBA and referred the issue of damages for further proceedings. The parties later reached and filed a settlement agreement, which the court approved and entered.
Under the agreement, MBA was to pay AmTrust $230,000 in monthly installments. If MBA missed a payment and failed to cure the default within five days after notice, the remaining payments would become immediately due, along with an additional $25,000, for a total of $255,000. Forrest Reynolds personally and unconditionally guaranteed MBA’s payment obligations.
MBA missed the first four scheduled payments, due October 30, 2019, November 30, 2019, December 30, 2019, and January 30, 2020. AmTrust sent MBA and Reynolds a notice of default on February 4, 2020. Neither MBA nor Reynolds made any payment under the agreement. Neither responded to AmTrust’s motion to enforce the settlement or to the court’s later order giving them another opportunity to respond.
Court’s Analysis
The court first held that it had subject-matter jurisdiction—authority to decide the matter—because the settlement agreement stated that the court retained jurisdiction to enforce it. The court explained that its approval and entry of the agreement made compliance with the agreement part of the court’s order.
The court then held that the settlement agreement was enforceable and that MBA and Reynolds had breached it. Applying New York contract law, the court found that AmTrust had performed its obligations, MBA had failed to make the required payments, and the agreement’s acceleration provision entitled AmTrust to $255,000. The court also concluded that Reynolds was equally liable because he had personally guaranteed MBA’s obligations and the debt remained unpaid.
Ruling
Judge Paul A. Engelmayer granted AmTrust’s motion to enforce the settlement agreement. The order required MBA and Reynolds to pay AmTrust $255,000 forthwith.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.