Summary
In Wigton v. Murphy, 410 F. Supp. 3d 1121, 1121-22 (D. Mont. 2019), after the parties settled their claims, they filed a Motion to Approve Stipulation for Entry of Judgment with the District Court of Montana so the plaintiff could enforce her claims against the insurer of one of the defendants.
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CV 18-73-M-DWM
10-18-2019
Carla Marie WIGTON, Plaintiff, v. David Thomas MURPHY, Defendant.
Kenneth Cotter, Cotter Law Office, Ann L. Moderie, Moderie Law Firm, PLLC, Polson, MT, for Plaintiff Justin K. Cole, Kathleen L. DeSoto, Garlington Lohn & Robinson, PLLP, Dylan McFarland, Knight Nicastro MacKay, LLC, Tyson A. McLean, Kris Mclean Law Firm, PLLC, Missoula, MT, for Defendant
Kenneth Cotter, Cotter Law Office, Ann L. Moderie, Moderie Law Firm, PLLC, Polson, MT, for Plaintiff
Justin K. Cole, Kathleen L. DeSoto, Garlington Lohn & Robinson, PLLP, Dylan McFarland, Knight Nicastro MacKay, LLC, Tyson A. McLean, Kris Mclean Law Firm, PLLC, Missoula, MT, for Defendant
ORDER
Honorable Donald W. Molloy, United States District Judge
Carla Marie Wigton alleges David Thomas Murphy sexually assaulted her at his home and again in her apartment complex, where he was the property manager. She sued Murphy and the property management company, Sheni, LLP, for assault, battery, negligence, premises liability, and violations of federal and state fair housing law. (Am. Compl., Doc. 16.) Wigton settled her claims against Sheni, who was then dismissed from the case. (Docs. 19, 20.) Wigton also settled her claims against Murphy at the same settlement conference. As part of the settlement, Murphy assigned Wigton his rights against his homeowners' insurer, State Farm, which has refused to defend him in this case, in exchange for a covenant not to execute. (Doc. 32-1 at ¶¶ 6, 7.) In doing so, he did not admit liability. Wigton now seeks a ruling that the Murphy settlement amount is reasonable and requests entry of a stipulated judgment that she can enforce against State Farm as permitted by state law. (Doc. 22); see, e.g. , Abbey/Land LLC v. Interstate Mech., Inc. (" Abbey/Land I "), 378 Mont. 372, 345 P.3d 1032, 1034 (Mont. 2015).
The Court previously expressed concerns that the settled suit no longer presents a live case or controversy, (Docs. 29, 30, 32), but proceeded with a reasonableness hearing as requested by Wigton, (Docs. 24, 33, 39). Rather than assuage the Court's doubts, the hearing made clear that the prerequisites for subject matter jurisdiction under Article III are no longer met. Of note, neither Wigton nor Murphy attended the hearing personally. Further, though counsel for both sides were present, Murphy's attorneys did not participate; they made no statements to the Court, offered no evidence, and performed no cross-examination. Finally, Wigton's attorneys made no effort to connect the settlement to the particular claims in the case, which, paired with Murphy's failure to admit liability, raises the question of what grounds the requested judgment will be entered on. See Fed. R. Civ. P. 54(b) (describing "judgment" as adjudicating the parties' rights and liabilities); cf. TeleVideo Sys., Inc. v. Heidenthal , 826 F.2d 915, 917–18 (9th Cir. 1987) (requiring liability to be established before entry of default judgment).
This stipulated judgment procedure is apparently common, or at least accepted, in Montana state courts, courts of general jurisdiction. See Abbey/Land I , 345 P.3d at 1034 ; Tidyman's Mgmt. Servs. Inc. v. Davis ("Tidyman's I "), 376 Mont. 80, 330 P.3d 1139, 1153–54 (Mont. 2014). Indeed, what Wigton seeks here, a stipulated judgment to enforce against an insurer for allegedly breaching its duty to defend, is entirely a creature of Montana insurance law, which provides broad protections for insureds. See id. In essence, this mechanism grants an advisory opinion about reasonable settlement amounts and turns the court's imprimatur into a tactical and strategic tool in a possible bad faith claim. But federal courts are courts of limited jurisdiction constrained by Article III's "case or controversy" requirement. A crucial aspect of that limited jurisdiction is that federal courts do not render opinions when there is not a case or controversy extant.
To be sure, stipulated judgments are not unheard of in federal court, though they are more often called "consent decrees." However, consent decrees generally involve the enforcement of federal statutory or constitutional rights and require ongoing monitoring for compliance. That differs greatly from the proposed stipulated judgment here, which calls for a monetary award to resolve a dispute between private parties with no need for continued involvement by the Court. When a case settles and there are no live claims or controversies to adjudicate, the appropriate disposition is dismissal. The Court having been notified of the settlement of this case, and it appearing that no issue remains for the Court's determination,
See, e.g. , Hines v. Youseff , 914 F.3d 1218, 1223 (9th Cir. 2019) (discussing consent decree under Eighth Amendment); Sierra Club v. North Dakota , 868 F.3d 1062, 1064 (9th Cir. 2017) (discussing consent decree under Clean Air Act); Local No. 93, Int'l Ass'n of Firefighters v. City of Cleveland , 478 U.S. 501, 106 S.Ct. 3063, 92 L.Ed.2d 405 (1986) (reviewing consent decree under Title VII of the Civil Rights Act).
IT IS ORDERED that Wigton's Unopposed Motion to Approve Stipulation for Entry of Judgment (Doc. 22) is DENIED. None of the concerns outlined in this Order should be construed as a statement on the reasonableness of the settlement or proposed stipulated judgment.
In the ordinary course of litigation, when a case is settled the federal court has no further business in advising the parties about the reasonableness of the legal and factual positions they have taken to reach a mutually agreeable accord. Instead the parties are ordered to file the necessary paperwork to dismiss the case. That process is what must happen here. IT IS FURTHER ORDERED that within 30 days of the date of this Order, the parties shall file a stipulation to dismiss together with a proposed order dismissing the case. See Fed. R. Civ. P. 41(a)(1). All deadlines are VACATED and any pending motions are DENIED as moot.