Major v. Coleman (D2 5.5.21)

The parties entered into a settlement agreement under which the defendant agreed to make settlement payments over time. If the payments were not made, the parties agreed plaintiff could file a stipulation for entry of judgment. The parties then filed a stipulation to dismiss the case with prejudice stating, “in the event of a default in payment of the settlement amount, [plaintiff] shall have the right to file, and the Court shall have jurisdiction to immediately enter, and shall enter, a Stipulated Judgment held by [plaintiff’s’ counsel].” The trial court denied the request stating that the dismissal with prejudice is an adjudication on the merits and such language was inconsistent with the dismissal.

The court of appeals could not find anything in the rules or statutes “allowing or forbidding” courts from retaining jurisdiction; the United States Supreme Court has given some direction to federal courts allowing such under Fed.R.Civ.P. 41 (in dicta); and, several other states allow courts to retain jurisdiction to enforce settlements. After citing what other jurisdictions have done, the court determined cases allowing such were persuasive and consistent with Arizona law by encouraging settlement and providing an easy mechanism to enforce an agreement. Retaining jurisdiction will enable “a trial court to clear the case from its docket until the time arises, if ever, to enforce the terms of the agreement.” Thus, the trial court abused its discretion by stating it could not retain jurisdiction when a case is dismissed with prejudice. But what if the trial court refuses to retain jurisdiction not because it cannot retain jurisdiction but because it does not want to do so? What then? The court of appeals does not give any bounds to this discretion. A trial court may decide a case is better cleared from it docket and better reflective of the rule of law by not retaining jurisdiction instead of giving an open-ended opportunity for litigants to come back.

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