The Pennsylvania Superior Court recently ruled that it did not have jurisdiction to enforce a settlement agreement.

In Camp Horne Self Storage LLC v. Lawyers Title Ins. Corp., the insured sued its insurer alleging breach of contract, bad faith and wrongful denial of insurance benefits. Eventually, the parties reached a settlement and entered into a settlement agreement.  The agreement contained various terms including, among others, that the insurer would have landscaping work performed on the insured’s property.  Upon entering into said agreement, the insured discontinued its lawsuit against the insurer.

Ultimately, the insured was dissatisfied with the landscaping work that had been performed on its property, pursuant to the settlement agreement, and filed a motion with the court seeking to enforce the settlement agreement.  The court denied the motion holding that it lacked jurisdiction to rule on the motion since the insured had discontinued its action against the insurer, and there was no pending action upon which it could exert jurisdiction.

Therefore, this case reveals a court may not be able to enforce a settlement agreement, if a party fails to act under the agreement, if the lawsuit is discontinued too early following settlement.

Thanks to Colleen Hayes for her contribution to this post.