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Hendrickson v. United States

United States District Court, W.D. New York

May 20, 2014

WILLIAM R. HENDRICKSON and PATRICIA HENDRICKSON, Plaintiffs,
v.
UNITED STATES OF AMERICA, Defendant.

DECISION and ORDER

MICHAEL A. TELESCA, District Judge.

INTRODUCTION

By Decision and Order dated March 25, 2014, I granted plaintiffs' motion to enforce the settlement agreement (the "Agreement" or "Settlement Agreement") in this action, and Ordered the defendant United States to make payments to the plaintiffs in accordance with the terms of the Agreement which was made an Order of this Court on April 29, 1985. Under the original terms of the Agreement, the plaintiffs were to receive monthly payments, along with larger periodic payments as set forth in the schedule of payments listed in the Agreement. To facilitate making the agreed payments, the defendant purchased an annuity from the Executive Life Insurance Company of New York ("ELNY") and all payments were to be made from the annuity.

In 2013, however, ELNY was liquidated, and the plaintiffs began receiving only approximately one-half of the amounts they were entitled to under the Settlement Agreement. Plaintiffs thereafter moved this Court to enforce the terms of the Agreement, claiming that under those terms, the United States guaranteed that the full amount of future payments would be made to the plaintiffs, and that as a result of ELNY's inability to pay the full amount of the settlement proceeds, the defendant was required to remit the additional amounts required to make plaintiffs whole under the agreement. By Decision and Order dated March 25, 2014, I granted the plaintiffs' motion to enforce the settlement.

The Government now moves for reconsideration of my March 25, 2014 Decision and Order on grounds that this Court overlooked facts, which, had they been considered, would have established that this Court failed to retain jurisdiction over the enforcement of the settlement of this action. The Government further argues that this Court overlooked binding legal precedent establishing that this Court lacks jurisdiction to enforce the settlement agreement because the Government did not wave its immunity to be free from such an action in district court. Defendant additionally argues that it is prohibited by law from making future payments as directed by the Court, and therefore, because the Government is legally incapable of making such payments, the Court must relieve the Government of that obligation. Finally, the Government objects that the Court failed to allow the Government to address the merits of plaintiffs' motion to enforce the settlement, and should have permitted the Government to file additional opposition papers to the plaintiffs' motion.

For the reasons set forth below, I deny the defendant's motion for reconsideration.

BACKGROUND

In 1985, during the trial of plaintiffs' injury claims against the Government, the parties agreed to settle the case, and in doing so, entered into a "structured" settlement whereby the United States would be obligated to pay plaintiff William Hendrickson an initial lump sum payment of $151, 782.66, and additional future payments including $2, 500.00 per month for 40 years (which amount would be increased by 4% annually); $625, 000.00 in 10 lump sum payments over the course of 24 years; and $80, 000.00 in eight equal lump sum payments to assist with anticipated educational expenses of the plaintiffs' children. Pursuant to its obligation to make future payments to the plaintiffs, the Government purchased an annuity from the Executive Life Insurance Company of New York in the amount of $522, 217.34. Under the terms of the settlement agreement, the United States retained "sole" ownership of the annuity.[1]

Until 2013, the payments owed to plaintiffs were made as required under the terms of the parties' settlement agreement. In 2013, however, ELNY was liquidated, and the plaintiffs were informed that they would be receiving approximately one-half of their payments. The plaintiffs attempted to recoup the remaining amounts owed under the settlement from the defendants, but the defendants refused to contribute any additional payments, and as a result, the plaintiffs moved this Court to enforce the April 29, 1985 settlement agreement.

By Decision and Order dated March 25, 2014, I granted plaintiffs' motion to enforce the terms of a settlement agreement entered into by the parties. In that ruling, I held that because the Settlement Agreement entered into by the parties required the approval of the Court, and was made an Order of the Court, this Court retained jurisdiction to enforce the Order issued on April 29, 1985. I further held that this Court retained ancillary jurisdiction in this matter to enforce its own Orders, and therefore the Government was precluded from claiming that sovereign immunity prohibited this Court from exercising jurisdiction over the defendant, or that any motion to enforce the Settlement Agreement could only be brought before the United States Court of Federal Claims. Finally, I held that under the terms of the Settlement Agreement, the Government is obligated to make the payments promised to the plaintiffs, and that any shortfall in payments resulting from the liquidation of ELNY must be satisfied by the defendant.

DISCUSSION

I. Standard of review on a motion for reconsideration.

A motion for reconsideration pursuant to Federal Rule of Civil Procedure 59(e) may be properly brought if it appears that the court overlooked controlling decisions or factual matters which might reasonably be expected to alter the court's decision. "The standard for granting [a motion for reconsideration] is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked - matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transpiration, Inc. , 70 F.3d 255, 257 (2d Cir. 1995). A motion for reconsideration, however, may not be used to relitigate matters already considered by the court, and may not ...


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