The opinion of the court was delivered by: ANDREW PECK, Magistrate Judge
REPORT AND RECOMMENDATION
To the Honorable Kimba M. Wood, United States District Judge:
Presently before this Court is the motion by plaintiff
Hostcentric Technologies, Inc. ("Hostcentric") to enforce a
settlement agreement documented in an email offer and acceptance,
and for attorneys' fees against defendant Republic Thunderbolt,
For the reasons set forth below, Hostcentric's motion (Dkt. No.
21) to enforce the settlement should be GRANTED, but its request
for attorneys' fees should be DENIED.
The relevant facts are undisputed.
Hostcentric, as tenant, and Republic (at that time known as
Warthog, Inc.), as landlord, entered into a ten year commercial
lease agreement in January 2001. (Dkt. No. 23: Hostcentric Br. at 2; Dkt. No. 26: Republic Br. at 2; Dkt. No. 1:
Compl. Ex. A: Lease.) On December 12, 2003, Hostcentric purported
to terminate the lease agreement and it has not paid rent
pursuant to the lease since December 1, 2003. (Hostcentric Br. at
2; Republic Br. at 2.)
Hostcentric filed suit in this Court against Republic seeking a
declaratory judgement that Republic had acquiesced in the lease
termination by accepting Hostcentric's surrender of the premises.
(Compl.; see Hostcentric Br. at 2; Republic Br. at 2.) Republic
counterclaimed for rent due to it from Hostcentric under the
lease, and both parties engaged in discovery including
depositions. (Dkt. No. 5: Answer & Counterclaim; see
Hostcentric Br. at 2; Republic Br. at 3.)
In August 2004, the parties engaged in settlement negotiations.
(Hostcentric Br. at 2; Republic Br. at 3.) According to
Hostcentric, on September 15, 2004, the parties reached an oral
settlement agreement in which Hostcentric agreed to pay $785,000
to Republic, less a credit to Hostcentric of $59,793 for the rent
deposit held by Republic, and both parties would dismiss their
respective claims with prejudice and execute full and mutual
releases. (Hostcentric Br. at 2; see Dkt. No. 22: French Aff. ¶
3.) According to Hostcentric, Republic reneged on the oral
settlement, claiming that the settlement required Hostcentric to
pay $785,000 while allowing Republic to retain the $59,793
deposit. (Hostcentric Br. at 3; French Aff. ¶ 4.)
The September 21, 2004 Settlement Emails
On September 21, 2004, Hostcentric requested a conference with
Judge Wood to discuss enforcement of the oral agreement. (Dkt.
No. 23: Hostcentric Br. at 3.) Later that day, Republic's counsel
Anton Borovina called Hostcentric's counsel Michael French to
propose new settlement terms. (Hostcentric Br. at 3; Dkt. No. 22: French Aff.
¶ 6-7.) French replied that Hostcentric would not respond to any
further settlement offers from Republic "unless they were binding
offers made in writing." (Hostcentric Br. at 3; French Aff. ¶ 7.)
That evening at approximately 6:07 p.m., Borovina (Republic) sent
French (Hostcentric) the following email:
This is to confirm my client's final settlement
Fairchild will accept payment from your client in the
amount of $755,000.00 with my client retaining the
security deposit. The pending action would be
dismissed with prejudice and all parties would
exchange mutual general releases. The payment is due
my client within 10 days from today's date.
I must have your answer before the deposition of
Robert Sanchez takes place tomorrow. This
counter-proposal expires by 9:30 AM tomorrow unless
accepted by you before that time.
Your client will be required to remove its property
from the premises within 21 days and at its own
(French Aff. Ex. A, emphasis added; see French Aff. ¶ 8;
Hostcentric Br. at 3; Dkt. No. 26: Republic Br. at 3.) At 9:41
p.m., French (Hostcentric) emailed Borovina (Republic) to accept
the offer, as follows:
My client picked up my voicemail message and called
I am writing to formally accept your settlement
offer as set forth by you in your message from
earlier this evening below. This matter is now conclusively settled. Please let
me know how you would like to communicate this fact
to the Court.
(French Aff. Ex. B, emphasis added; see French Aff. ¶ 11;
Hostcentric Br. at 4; Republic Br. at 3-4.) At 10:02 p.m., French
(Hostcentric) sent Borovina (Republic) a follow-up email:
Now that the parties have agreed on a settlement,
please let me know if you still want to draft the
necessary papers. If so, please send us a draft as
soon as possible. We need to finalize these docs,
including the dismissal papers and release, prior to
the agreed date of payment.
(Dkt. No. 28: Borovina Aff. Ex. A.)
The next morning, September 22, 2004, French (Hostcentric) sent
Borovina (Republic) a letter by fax, attaching the above emails
and again formally accepting Republic's offer, stating that
"[t]his matter is now settled and concluded." (French Aff. Ex. C;
see also French Aff. ¶ 11; Hostcentric Br. at 4.)
On September 23, 2004, Borovina (Republic) sent a
letter to Judge Wood stating:
Counsel for all parties in the above referenced
matter are pleased to advise the court that this
action has been settled. The parties are preparing
the appropriate paperwork which will include a
stipulation of discontinuance with prejudice.
(French Aff. Ex. D; accord, Borovina Aff. Ex. B; see French
Aff. ¶ 12; Hostcentric Br. at 4-5; Republic Br. at 4.) Judge Wood
dismissed the action but provided that the case could be
reinstated to the docket ...