                     RECOMMENDED FOR FULL-TEXT PUBLICATION
                          Pursuant to Sixth Circuit Rule 206
                                File Name: 09a0185p.06

              UNITED STATES COURT OF APPEALS
                             FOR THE SIXTH CIRCUIT
                               _________________


                                                   X
                                                    -
 JAMES H. LIMBRIGHT and HENRY J.

                           Plaintiffs-Appellees, --
 LIMBRIGHT,

                                                    -
                                                        No. 08-1731

                                                    ,
                                                     >
                                                    -
             v.

                                                    -
                                                    -
 GEORGE S. HOFMEISTER, KAY R.
                                                    -
 HOFMEISTER, and DOUGLAS Q. HOLMES, as
 Trustee for the George S. Hofmeister Family        -
                                                    -
                                                    -
 Trust f/b/o Megan G. Hofmeister; DOUGLAS
                                                    -
 Q. HOLMES, as Trustee for the George S.
                                                    -
 Hofmeister Family Trust f/b/o Scott R.
 Hofmeister; DOUGLAS Q. HOLMES, as Trustee -
                                                    -
                                                    -
 for the George S. Hofmeister Family Trust

                        Defendants-Appellants. -
 f/b/o Jamie S. Hofmeister,
                                                   N
                     Appeal from the United States District Court
                    for the Eastern District of Michigan at Detroit.
                   No. 04-60270—David M. Lawson, District Judge.
                               Argued: March 11, 2009
                          Decided and Filed: May 28, 2009
      Before: BOGGS, Chief Judge; and GILMAN and ROGERS, Circuit Judges.

                                 _________________

                                     COUNSEL
ARGUED: Lindsay Kennedy James, SICILIANO MYCHALOWYCH VAN DUSEN &
FEUL, PLC, Farmington Hills, Michigan, for Appellants. Bruce N. Elliott, CONLIN,
McKENNEY & PHILBRICK, P.C., Ann Arbor, Michigan, for Appellees. ON BRIEF:
Lindsay Kennedy James, Andrew W. Mychalowych, SICILIANO MYCHALOWYCH VAN
DUSEN & FEUL, PLC, Farmington Hills, Michigan, for Appellants. Bruce N. Elliott, Joy
M. Glovick, CONLIN, McKENNEY & PHILBRICK, P.C., Ann Arbor, Michigan, for
Appellees.




                                          1
No. 08-1731         Limbright, et al. v. Hofmeister, et al.                           Page 2


                                   _________________

                                         OPINION
                                   _________________

        BOGGS, Chief Judge. In this case, we consider whether a district court may
summarily enforce a settlement agreement that produced the dismissal of an earlier federal
suit when the court has diversity jurisdiction over the breach-of-settlement-agreement
controversy. We conclude that it may, and we therefore affirm the district court’s judgment.

                                              I

        In 2001, James and Henry Limbright sued George and Kay Hofmeister in the United
States District Court for the Eastern District of Kentucky for breach of various agreements
made in connection with the Hofmeisters’ purchase of the Limbrights’ Michigan-based
business. The Limbrights won a judgment against the Hofmeisters for $1.2 million, which
they registered in the Eastern District of Michigan in June 2004. In December 2004, the
Limbrights filed a new suit against the Hofmeisters and their three irrevocable family trusts
(the “Trusts”) in the United States District Court for the Eastern District of Michigan. This
suit sought to reach the Trusts’ assets to satisfy the earlier judgment, alleging that the
Hofmeisters had fraudulently conveyed assets to the Trusts and that the Trusts were alter
egos of the Hofmeisters.

        On January 9, 2007, the parties reached a settlement agreement (the “Agreement”).
The Trusts agreed to purchase the Limbrights’ judgment and all of their claims against the
Hofmeisters and the Trusts in exchange for $950,000, to be paid in five installments over
approximately one year. If the Trusts defaulted, the Agreement provided that, upon an ex
parte motion by the Limbrights and without notice to the Trusts, the district court would
enter a consent judgment against the Trusts for $1.3 million, less the amount of any
payments made prior to default. Additionally, the Agreement contained strict confidentiality
provisions that prohibited even the district court from seeing it.

        The same day, the parties notified the district court of the Agreement by fax. The
district court immediately entered an order dismissing the case with prejudice but allowing
the case to be reopened to enforce the Agreement on or before May 9, 2007. This order did
No. 08-1731         Limbright, et al. v. Hofmeister, et al.                              Page 3


not conform to the Agreement’s enforcement scheme, so the parties asked the district court
to vacate the order and enter a new, stipulated, one that matched the Agreement’s terms.

        The district court, still without having seen the Agreement, granted the parties’
request on February 1, 2007. The new order stated:

        It is hereby ordered that the complaint is dismissed without prejudice and without
        costs to any party.
        It is further ordered that this Order of Dismissal is expressly subject to all terms and
        conditions of the settlement agreement executed by the parties on January 9, 2007.
        It is further ordered that this Court will not retain jurisdiction over this matter.
Although the parties’ proposed order did not contain the last clause, neither party brought
this discrepancy to the attention of the court.

        In December 2007, the Trusts failed to make the final balloon payment of $650,000.
In accordance with the Agreement, the Limbrights filed an ex parte motion to reinstate the
dismissed suit and enter a consent judgment against the Trusts for $1 million ($1.3 million
minus the $300,000 already paid).

        The district court granted the Limbrights’ motion, noting that, because the Trusts did
not dispute that they breached the Agreement, the only issue was whether the court had
subject matter jurisdiction to enforce the Agreement without a new case filing. The district
court concluded that it had diversity and ancillary jurisdiction, as well as continuing
jurisdiction based on the dismissed suit. The Trusts appeal, contesting only the court’s
subject matter jurisdiction. Our review is de novo. See McAlpin v. Lexington 76 Auto Truck
Stop, Inc., 229 F.3d 491, 499 (6th Cir. 2000).

                                               II

        In Kokkonen v. Guardian Life Insurance Co. of America, the Supreme Court held
that, in enforcing a settlement agreement that produced the dismissal of an earlier federal
suit, a federal court adjudicates a breach-of-contract controversy distinct from the dismissed
suit. 511 U.S. 375, 378 (1994). Therefore, “[e]nforcement of the settlement agreement . . .
requires its own basis for jurisdiction.” Ibid. The Kokkonen Court also held that a district
court may, on motion by a party and without the filing of a new suit, summarily enforce a
No. 08-1731             Limbright, et al. v. Hofmeister, et al.                                      Page 4


settlement agreement if the court has ancillary jurisdiction over the breach claim. Id. at
378–80.

         The district court below relied, in part, on diversity jurisdiction. There is no question
that diversity exists, and the Trusts concede that the district court could have enforced the
Agreement had the Limbrights filed a new breach-of-contract suit. See 28 U.S.C. § 1332.
However, the Trusts argue that the district court could not use diversity jurisdiction to
summarily enforce the Agreement; Kokkonen, they contend, allows summary enforcement
only when ancillary jurisdiction exists.

         Whether a district court must have ancillary jurisdiction to summarily enforce a
settlement agreement is a question of first impression in this circuit. At least two circuits
have explicitly addressed this issue since Kokkonen, and both held that a district court may
rely on a non-ancillary source of jurisdiction. See Blue Cross & Blue Shield Ass’n v. Am.
Express Co., 467 F.3d 634, 638 (7th Cir. 2006); U.S.I. Props. Corp. v. M.D. Const. Co., 230
F.3d 489, 499–500 (1st Cir. 2000); see also Bailey v. Potter, 478 F.3d 409, 412 (D.C. Cir.
2007) (recognizing this question without resolving it). The Seventh and Fourth Circuits
came to the same conclusion before Kokkonen. See McCall-Bey v. Franzen, 777 F.2d 1178,
1186–87 (7th Cir. 1985); Fairfax Countywide Citizens Ass’n v. Fairfax County, 571 F.2d
1299, 1303 & n.8 (4th Cir. 1978). We join these circuits and hold that a district court may
rely on any basis of jurisdiction to summarily enforce a settlement agreement that produced
the dismissal of an earlier federal suit.

         In challenging the district court’s jurisdiction, the Trusts misunderstand the nature
of subject matter jurisdiction. Subject matter jurisdiction is a federal court’s “power to
adjudicate a case.” United States v. Martin, 526 F.3d 926, 933 (6th Cir. 2008) (internal
quotation marks omitted). If that power exists, how it is properly invoked and exercised is
                       1
a procedural matter. See Blue Cross & Blue Shield, 467 F.3d at 638 (“Kokkonen is about
adjudicatory competence, not the number of filing fees a plaintiff must pay. As long as
§ 1332 supplies authority to decide, the court may act without a fresh complaint.”). The
         1
           Of course, the existence of subject matter jurisdiction can be conditioned on compliance with
procedural rules. See, e.g., 8 U.S.C. § 1252(d)(1) (conditioning federal court jurisdiction over immigration
claims on an alien’s exhaustion of administrative remedies). However, the existence of diversity
jurisdiction is not so conditioned. See 28 U.S.C. § 1332 (“The district court shall have original jurisdiction
of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of
interests and costs, and is between [diverse parties].”).
No. 08-1731             Limbright, et al. v. Hofmeister, et al.                                       Page 5


Trusts do not argue that the district court did not have power over the breach-of-
settlement-agreement controversy; thus, their argument is actually that summary
enforcement is an improper procedural mechanism for invoking and exercising diversity
jurisdiction.

         We disagree. This court has long approved summary enforcement of settlement
agreements “in order to promote the . . . speedy and reasonable resolution to disputes,”2
Bobonik v. Medina Gen. Hosp., 126 F. App’x 270, 273 (6th Cir. 2005) (citing Aro Corp.
v. Allied Witan Co., 531 F.2d 1368, 1372 (6th Cir. 1976)), a benefit that accrues
regardless of the source of jurisdiction. Neither Kokkonen nor the Trusts suggest any
substantive reason for distinguishing between ancillary and diversity jurisdiction for the
purpose of summary enforcement, and we therefore refuse to restrict this well-
established and valuable practice.

         Nonetheless, the Trusts maintain that precedent dictates a distinction, arguing
that, by focusing on ancillary jurisdiction and failing to analyze diversity explicitly,
Kokkonen and this court’s case law implicitly preclude summary enforcement based on
diversity.3 Aside from the lack of any rationale for this distinction, the Trusts’ reading
of the case law is flawed. Kokkonen stated that, “[a]bsent [ancillary jurisdiction], . . .
enforcement of the settlement agreement is for state courts, unless there is some
independent basis for federal jurisdiction.” 511 U.S. at 382 (emphasis added). The
Trusts concede that diversity is an “independent basis for federal jurisdiction,” but they
contend that this statement merely recognizes that non-ancillary jurisdiction can support
enforcement through a new suit.

         This is unpersuasive. Kokkonen, despite reviewing a motion for summary
enforcement, never distinguished between summary enforcement and new-suit
         2
           In particular, summary enforcement ensures that the judge enforcing the settlement agreement
is familiar with the parties and the underlying suit, and it avoids the delays inherent in having a newly filed
case adjudicated.
         3
          The Trusts also cite several district court cases that have held that diversity jurisdiction cannot
support summary enforcement. None of these cases offer a substantive justification for this holding, and
we decline to accord them any persuasive value. See, e.g., Geiringer v. Pepco Energy Servs., Inc., No.
CV05-4172, 2007 WL 4125094, at *1 (E.D.N.Y. Nov. 16, 2007); Deleon v. BBI Enters. Group, LP, No.
1:03-cv-820, 2006 WL 1313861, at *2 (W.D. Mich. May 11, 2006); Cross Media Mktg. Corp. v. Budget
Mktg., Inc., 319 F. Supp. 2d 482, 483 (S.D.N.Y. 2004).
No. 08-1731         Limbright, et al. v. Hofmeister, et al.                          Page 6


enforcement; the decision discusses only “enforcement.” Moreover, immediately prior
to this statement, Kokkonen concluded that there was no federal question jurisdiction
over the summary enforcement action, an inquiry that is unnecessary under the Trusts’
reading. See id. at 381 (“The suit involves a claim for breach of a contract, part of the
consideration for which was dismissal of an earlier federal suit. No federal statute makes
that connection (if it constitutionally could) the basis for federal-court jurisdiction over
the contract dispute.”). Given this context, Kokkonen’s failure to consider diversity
jurisdiction explicitly likely reflects the obvious lack of the required amount in
controversy (the enforcement action at issue sought only the return of certain files), not
a hidden intent to preclude summary enforcement based on diversity jurisdiction. See
id. at 376–77; see also Bd. of Trs. v. Madison Hotel, 97 F.3d 1479, 1485 n.10 (D.C. Cir.
1996) (characterizing Kokkonen as depending, in part, on a lack of diversity jurisdiction
and explaining that the amount in controversy requirement was not met by the
enforcement action).

        The Trusts similarly misunderstand this court’s precedent. They rely on
McAlpin’s statement that, without ancillary jurisdiction, “[t]he defendants’ proper
remedy for these violations lies in a separate action for breach of the Settlement
Agreement,” 229 F.3d at 505. But in that case a new suit in state court was required
because the summary enforcement action involved a contract claim that did not meet the
amount in controversy requirement, and thus there was no basis at all for federal
jurisdiction. See id. at 498 (explaining that the motion for summary enforcement sought
the return of documents and requested that the district court hold the breaching party in
contempt). In fact, McAlpin earlier explained, in summarizing the law governing
jurisdiction over summary enforcement actions, that “[s]ubject matter jurisdiction may
be independent or ancillary.” Id. at 499. Nor does this court appear to have refused
summary enforcement in a case where any basis of federal jurisdiction existed. See, e.g.,
Caudill v. N. Am. Media Corp., 200 F.3d 914, 916 (6th Cir. 2000) (noting the “lack of
complete diversity”).
No. 08-1731        Limbright, et al. v. Hofmeister, et al.                       Page 7


       Therefore, we conclude that Kokkonen and this court’s case law allow an
“independent basis for federal jurisdiction,” such as diversity or federal question
jurisdiction, to support summary enforcement.

                                            III

       Because the district court properly relied on diversity jurisdiction to summarily
enforce the Agreement, we express no opinion on other potential sources of jurisdiction.
The district court’s judgment is AFFIRMED.
