DelleChiaie v. United States 03-CV-222-SM 08/30/05 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Brian and Shannon DelleChiaie, Individually and as Parents and Next Friends of B.D., Plaintiffs

v. Civil No. 03-CV-222-SM Opinion No.

United States of America. Defendant

O R D E R

Brian and Shannon DelleChiaie brought this medical

malpractice action against the government seeking damages for

injuries sustained by their minor son. Plaintiffs claimed that

Shannon's treating physicians failed to timely diagnose her

ruptured appendix during an early stage of her pregnancy. As a

consequence. Shannon became seriously ill, required emergency

surgery, and plaintiffs' son was delivered prematurely, weighing

only one pound, ten ounces at birth. Because the allegedly

negligent physicians were covered under the Federally Supported

Health Centers Assistance Act, suit lies only against the United

States, under the Federal Tort Claims Act. Prior to trial, the parties negotiated a settlement of all

plaintiffs'’ claims. Pursuant to Local Rule 17.1 and New

Hampshire law governing the settlement of claims brought on

behalf of a minor, plaintiffs submitted an "Assented-to Motion

for Approval of Minor's Settlement." The court approved the

settlement and, subsequently, the parties filed a stipulation for

dismissal of all plaintiffs' claims, with prejudice, pursuant to

Fed. R. Civ. P. 41(a) (1) (ii) .

Plaintiffs now move the court to enforce what they believe

to be terms of their settlement agreement with the government.

Specifically, they say the government is unreasonably withholding

its assent to a "Uniform Qualified Assignment" - a document

plaintiffs say they need in order to purchase an annuity for the

benefit of their minor child which will qualify for preferential

treatment under the Internal Revenue Code. The government

objects, asserting: (1) this court lacks subject matter

jurisdiction over plaintiffs' efforts to enforce the terms of the

settlement agreement; and (2) even if this court had

jurisdiction, the government has fully complied with all of its

obligations under that agreement.

2 For the reasons set forth below, the court concludes that it

lacks subject matter jurisdiction to enforce the terms of the

parties' settlement agreement. Accordingly, plaintiffs' motion

is denied.

Discussion

After the parties orally agreed to settle all claims,

plaintiffs filed an "Assented-to Motion for Approval of Minor's

Settlement," (document no. 21). Because the parties settled

claims on behalf of plaintiffs' minor son, both state law and

this court's local rules required that the settlement be approved

by the court. The motion for approval informed the court that

"the parties have reached an agreement to settle this case for a

total payment of $783,250." Ri. at para. 6. It went on to

describe how plaintiffs proposed to use a portion of those

settlement funds to pay their attorneys' fees, litigation

expenses, and a state Medicaid lien. Finally, plaintiffs

informed the court that they planned to distribute the remaining

funds as follows:

1. $10,000 to Brian Dellechiaie, Sr., the minor's father;

3 $25,000 to Shannon, the minor's mother; and

3. $346,074.98 to the minor himself, to be distributed as follows:

(a) $33,311.86 in cash; and

(b) $312,763.12 in a "structured settlement," by which plaintiffs explained that they planned to purchase an annuity that would pay their son $30,000 on his 18th through 21st birthdays, and then pay him $3,044 each month thereafter, for life.

I d . at para. 10. On March 28, 2005, the court approved the terms

of the settlement and the means by which plaintiffs proposed to

distribute the settlement proceeds to their minor son.

Subsequently, on April 15, 2005, the parties filed a

"Stipulation for Dismissal." That document provided, in its

entirety, as follows:

Pursuant to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure, the parties stipulate that the pending action shall be dismissed, with prejudice, with each party to bear its own costs and fees.

Document no. 23. Importantly, the stipulation for dismissal was

not expressly conditioned upon the parties' obligation to comply

with their settlement agreement, nor was it contingent upon

4 plaintiffs' ability to purchase the proposed annuity, nor did it

require the government to assist plaintiffs in obtaining the

annuity. Most significantly, however, the stipulation for

dismissal did not provide that the court would retain

jurisdiction to enforce the terms of the settlement agreement.

Given those facts, the government correctly points out that

this court lacks jurisdiction to construe or enforce the terms of

the settlement agreement. Under circumstances substantially

similar to those presented in this case, the Supreme Court held

that federal courts do not retain ancillary jurisdiction to

enforce the terms of a settlement agreement after a case has been

dismissed, absent affirmative steps by the court to retain such

jurisdiction.

[T]he only order here was that the suit be dismissed, a disposition that is in no way flouted or imperiled by the alleged breach of the settlement agreement. The situation would be quite different if the parties' obligation to comply with the terms of the settlement agreement had been made part of the order of dismissal - either by separate provision (such as a provision "retaining jurisdiction" over the settlement agreement) or by incorporating the terms of the settlement agreement in the order. In that event, a breach of the agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist. That, however, was not the case here.

5 The judge's mere awareness and approval of the terms of the settlement agreement do not suffice to make them part of his order.

Kokkonen v. Guardian Life Ins. Co. of A m . ,

(1994) (citation omitted) (emphasis supplied).

Here, because the terms of the oral settlement agreement

were not made a part of the stipulation for dismissal, and

because the court did not act to retain jurisdiction over that

settlement agreement, it now lacks subject matter jurisdiction

over plaintiffs'’ efforts to enforce what they believe were the

terms of that agreement. See I d . at 382 ("Absent such action

[i.e., retention of federal jurisdiction over the settlement

agreement], however, enforcement of the settlement agreement is

for state courts, unless there is some independent basis for

federal jurisdiction."). See also Municipality of San Juan v.

Rullan,

(1st Cir. 2003).

Plaintiffs'’ efforts to compel the government to comply with

what they believe are the terms of the settlement agreement are

not merely an extension of their malpractice action (which was

dismissed, with prejudice). Accordingly, they cannot simply move

6 to reopen that malpractice action and seek court enforcement of

the terms of the settlement agreement. Instead, the parties'

disagreement over their respective rights and obligations under

the settlement agreement is a new and independent contract

dispute. See, e.g.. Hansson v. Norton.

(D.C. Cir.

2005) .

Plaintiffs must, therefore, bring a separate action against

the government for breach of contract, in a court of competent

jurisdiction. Absent a basis upon which to exercise subject

matter jurisdiction, this court cannot resolve the parties'

current dispute. Of course, nothing prevents the parties from

settling that dispute in a manner that would permit the

government, in good faith and in good conscience, to execute the

Uniform Qualified Assignment that plaintiffs say they need.

Conclusion

If, as plaintiffs' assert, they will not be able to

structure the distribution of the settlement proceeds to their

minor son in a manner favorable from a tax standpoint, as

presumably anticipated, due to the government's refusal to agree.

7 they may well have a viable claim. It would be unfortunate if

plaintiffs are correct in asserting that the document in question

is commonly executed by the government in cases like this and

exposes the government to no possible liability. But, once the

parties reached a settlement agreement, plaintiffs' claims

against the government were, pursuant to the parties'

stipulation, dismissed with prejudice. As noted, the case was

closed and the court did not retain jurisdiction over enforcement

of the settlement agreement.

Plaintiffs have failed to point to any independent basis

upon which this court might exercise subject matter jurisdiction

over their enforcement claim. In fact, because it amounts to a

breach of contract claim against the government, and one likely

for more than $10,000, it would appear that the Tucker Act vests

the Court of Federal Claims with exclusive jurisdiction over the

parties' current dispute. See 28 U.S.C. 1491. If the government

insists, plaintiffs might pursue that option and litigate the

matter to a further settlement or judicial resolution. For the foregoing reasons, the court lacks jurisdiction to

entertain plaintiffs' claim that the government has breached the

terms of the parties' settlement agreement. Accordingly, it

declines to reopen this matter and plaintiffs' Motion to Enforce

Settlement Agreement (document no. 24) is denied.

SO ORDERED.

Steven J. McAuliffe Chief Judge

August 30, 2005

cc: Kenneth C. Brown, Esq. T. David Plourde, Esq.

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