Trustees of Indiana State Council of Roofers Health and Welfare Fund v. CMT Roofing, LLC

          OPINION AND ORDER

          JOSHUA P. KOLAR MAGISTRATE JUDGE

         This matter is before the Court on a Motion to Approve Consent Judgment [DE 39], filed by the parties on February 15, 2019. Having stipulated and agreed to the terms of a Consent Judgment based on a Settlement Agreement they entered into in May 2018, the parties now ask the Court to approve and enter their proposed Consent Judgment.

         BACKGROUND

         On October 31, 2016, Plaintiffs filed this lawsuit against Defendant to recover delinquent fringe benefit contributions and other amounts owed by Defendant to Plaintiffs.

         The proposed Consent Judgment explains in several introductory “whereas” clauses that, based on documentation produced by Defendant during the course of the lawsuit, it was determined that Defendant owed Plaintiffs $54, 489.54 in contributions to the Health and Welfare Fund and $32, 346.62 in contributions to the Local No. 2 Supplemental Pension Fund. The proposed Consent Judgment represents that, in May 2018, the parties entered into a Settlement Agreement to resolve the amounts owed by Defendant.

         The proposed Consent Judgment then explains that, under the terms of the Settlement Agreement, Defendant is to repay the full amount of contributions owed to Plaintiffs, subject to the following terms: (1) an initial payment of $17, 681.95; (2) 23 consecutive monthly installments of $2, 881.32, and (3) a final monthly installment of $2, 881.32. As of February 14, 2019, Defendant had paid $40, 733.39 toward the total amount owed of $86, 836.16.

         After setting out these facts, the proposed Consent Judgment has the Court enter judgment against Defendant and in favor of Plaintiffs in the amount of $46, 102.77-the remaining amount owed by Defendant under the Settlement Agreement.

         The proposed Consent Judgment then provides that “the Court retains jurisdiction of this matter pending compliance with the Court's orders, ” which is followed by this final paragraph:

Plaintiffs agree to accept and Defendant to pay the amount of this judgment pursuant to the payment terms of the parties' Settlement Agreement, the terms of which are incorporated by reference herein. Plaintiffs shall take no action in furtherance of executing upon this Judgment unless and until Defendant fails to make the monthly payments as specified in the parties' Settlement Agreement. Plaintiffs further agree to give Defendant notice and an opportunity to cure a failure to make a monthly payment before taking action to execute upon the judgment, with such cure period to be no less than seven days.

(emphasis added). The parties have not filed a copy of the Settlement Agreement.

         ANALYSIS

         In the instant motion, the parties ask the Court to enter their proposed Consent Judgment, which is based on the parties' Settlement Agreement and which would enter a judgment in the amount of the total remaining payments owed by Defendant under the Settlement Agreement. “The law generally favors and encourages settlements.” Metro. Hous. Dev. Corp. v. Vill. of Arlington Heights, 616 F.2d 1006, 1013 (7th Cir. 1980) (citing Airline Stewards and Stewardesses Ass'n v. Am. Airlines, Inc., 573 F.2d 960, 963 (7th Cir. 1978); Dawson v. Pastrick, 600 F.2d 70, 75 (7th Cir. 1979)); see also Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682, 689 (7th Cir. 2005). A consent judgment is “a court order that embodies the terms agreed upon by the parties as a compromise to litigation.” United States v. Alshabkhoun, 277 F.3d 930, 934 (7th Cir. 2002). A consent judgment is a final judgment on the merits and prevents relitigation of the underlying claim. Arizona v. California, 530 U.S. 392, 414 (2000); United States v. Fisher, 864 F.2d 434, 439 (7th Cir. 1988). A court has the authority to enforce a consent judgment through its contempt power. Spallone v. United States, 493 U.S. 265, 276 (1990); Kasper v. Bd. of Election Comm'rs, 814 F.2d 332, 338 (7th Cir. 1987); McCall-Bey v. Franzen, 777 F.2d 1178, 1183 (7th Cir. 1985).

         However, before entering a consent judgment proposed by parties, the court must satisfy itself “that the decree is consistent with the Constitution and laws, does not undermine the rightful interests of the third parties, and is an appropriate commitment of the court's limited resources.” Kasper, 814 F.2d at 338 (considering a proposed consent decree intended to reduce the number of ghost voters in City of Chicago elections); see also NLRB v. Brooks Indus., Inc., 867 F.2d 434, 436 (7th Cir. 1989); Local No. 93, Int'l Ass'n of Firefighters v. City of Cleveland, 478 U.S. 501, 529 (1986); Metro. Life Ins. Co. v. Hanni, No. 1:17-CV-80, 2017 WL 6805318, at *2 (N.D. Ind. Sept. 14, 2017) (citing Kasper, 814 F.2d at 338).

         In this case, the parties generally followed the proper procedure by filing a motion, and, from the information contained in the “whereas” clauses of the proposed Consent Judgment, it appears that the proposed decree may be consistent with the Constitution and laws, would not undermine the rightful interest of third parties, and would be an appropriate commitment of the Court's resources, given the simple nature ...