SAN FRANCISCO – Beauty retailer Sephora USA Inc. was only partially victorious in its motion to enforce a settlement agreement against law firm Palmer Recovery Attorneys.
Chief Magistrate Judge Joseph C. Spero of the U.S. District Court for the Northern District of California ruled on the case Jan. 25.
"Sephora’s motion is granted as to PRA’s delinquent payment of $4,444.44, but denied as to Sephora’s request to enter a consent judgment including liquidated damages pursuant to the default provision of the parties’ settlement agreement," Spero wrote.
The court also ordered PRA to produce documents before Feb. 1, 2019, to determine when PRA first initiated the electronic transfer for money that was due on Dec. 9, 2018. Both parties were ordered to meet and discuss methods to guarantee they each comply with the orders in the future.
The court stated that PRA not only breached the agreement in the past but continues to do so.
Sephora filed the action against PRA after Sephora was sued by a woman whose daughter was accused of shoplifting and received letters from PRA on Sephora’s behalf. Sephora said PRA breached its contractual duty to defend and indemnify it. Even though they were able to come together for a settlement agreement under the condition the current action would be dismissed (the agreement said PRA would pay Sephora $160,000 in total, broken up to $4,444.44 a month), they also entered into a consent judgment if PRA didn’t follow the terms of the agreement.
PRA did make its first payment on time in July 2017, but August, September and October's payments were late. The following two payments were timely but the remaining ones were not.
Spero ruled that Sephora isn’t owed entry of the stipulated judgment, which is the $175,000 consent judgment against PRA. He pointed out that this type of remedy will only be allowed if PRA defaults and fails to fix its actions or lack thereof and Sephora failed to detail why it is owed this type of relief.