Ricatto v. M3 Innovations Unlimited, Inc.

Background

The caption identifies David S. Neufeld, acting for the Estate of Michael Ricatto, as plaintiff-counterclaim defendant and M3 Innovations Unlimited, Inc. as defendant-counterclaim plaintiff. The Settlement Agreement also identifies Kyle Kietrys as a party. The agreement states that the original plaintiff’s claims had been dismissed in an earlier order, while M3 had obtained partial summary judgment on liability for its breach-of-contract claim. A trial of M3’s claims against the Estate had been scheduled for February 5, 2024.

The parties represented that they disputed liability and had asserted or would assert claims and defenses. They agreed to settle and fully dispose of the lawsuit and other claims between them, except claims arising from the Settlement Agreement.

Settlement Terms

The Estate agreed to pay M3 $3,125,000 within 120 days of January 18, 2024. It also agreed to cause the transfer of two specified parcels of real property in Adelanto, California, to M3 or its designated affiliate within the same 120-day period. The agreement requires the Estate to pay specified transaction costs and to ensure that the property is transferred without listed liens or other encumbrances.

The agreement provides for broad releases by the Estate, M3, and Kietrys, effective after the Estate fully and timely performs its payment and property-transfer obligations. The releases exclude claims arising under the Settlement Agreement. The Estate was required to obtain approval from the probate court for its payment and property-transfer obligations. If that approval had not been obtained within 120 days, the agreement required the Estate to reimburse M3 for up to $99,000 in specified attorneys’ fees and costs.

After full compliance with the payment and property-transfer obligations, counsel were required to submit a proposed order dismissing all claims and counterclaims in the lawsuit with prejudice. That dismissal was not entered by the January 18 order itself.

Court’s Order

The court ordered that all proceedings be stayed for 150 days from the date of the order while the parties pursued a possible final settlement. It required the parties to file a status report by June 24, 2024, unless the case was dismissed earlier. The court ordered the parties to comply with the Settlement Agreement, annexed it as Exhibit A, and incorporated it into the order.

The court retained jurisdiction to enforce the Settlement Agreement and directed the Clerk of Court to terminate the pending motions at docket entries 150, 153, 156, and 162. Judge Katherine Polk Failla signed the order on January 18, 2024.