Opinion
No. 98 C 5956
November 2, 2000
MEMORANDUM OPINION AND DOCKETED
Plaintiff Nebraska Petty, who is incarcerated, initially filed this action pro se. An attorney was subsequently appointed to represent him. The only defendant named in the Second Amended Complaint, which was drafted by counsel, is Neil Maas, a Chicago police officer. The only claim in the Second Amended Complaint is one pursuant to 42 U.S.C. § 1983 that Maas used excessive force when arresting Petty.
On May 10, 2000, the following order was entered: "Status hearing held. Defendant's counsel fails to appear. Upon oral representation to the court by plaintiff's counsel that case is being settled, order cause dismissed with prejudice and without costs with leave to reinstate upon properly noticed motion on or before 6/14/00." On June 13, 2000, Petty filed a pro se motion to reinstate the case. On June 14, Petty's counsel presented a motion to extend the time for reinstatement so that she could consult with her client regarding his motion to reinstate and his failure to sign the settlement agreement that had been negotiated by counsel. An extension was granted until July 14 and the Pro se motion was denied without prejudice. On June 21, counsel filed the motion to reinstate that had been drafted by plaintiff and counsel was granted leave to withdraw. Defendant thereafter moved to enforce the parties' purported settlement and plaintiff was provided with the further opportunity to respond, which he did.
It is undisputed that plaintiff never signed the written settlement agreement that was drafted and agreed upon by counsel for both parties. Defendant, however, contends that there is an enforceable oral agreement to settle the case for $1,000. Plaintiff contends that he never authorized his attorneys to settle for that amount.
In an unverified pleading filed on behalf of defendant by attorney Joseph Polick, it is stated that, sometime between March 21 and March 26, 2000, plaintiff's counsel Carrie Hamilton told defense counsel Stacy Benjamin that plaintiff had accepted defendant's $1,000 offer. Polick further represents that he then negotiated and resolved with Hamilton the written settlement terms. No affidavit is provided from Benjamin or Hamilton. Instead, defendant relies on the May 10, 2000 court order and the following statements contained in plaintiff's counsel's motion to withdraw, which is signed by Hamilton.
No transcript of the May 10, 2000 status hearing has been provided. Moreover, the May 10 order states the case was "being settled," not that it had already been settled.
2. In March and April, 2000, Grippo Elden, with Mr. Petty's authority, negotiated and finalized a settlement with defense counsel. On April 12, 2000, Grippo Elden sent Mr. Petty a finalized Settlement Agreement for his execution and return.
3. On May 10, 2000, this Court held a status hearing in the above—titled action. Grippo Elden, specifically Carrie E. Hamilton, appeared before this Court and represented that a settlement had been reached between the parties and that a finalized Settlement Agreement had been forwarded to Mr. Petty for his execution and return. Based on Mr. Petty's prior representations, Ms. Hamilton believed the foregoing representations to be true and accurate.
In his motions to reinstate and response brief, Petty represents that he never authorized Hamilton to settle for $1,000. Although not strictly in the form of an affidavit, each of the pleadings submitted by plaintiff were subscribed and sworn before a notary public.
Since the substantive claim in this lawsuit is a federal claim of unconstitutional excessive force, any settlement between the parties is governed by federal law, not Illinois law. Wilson v. Wilson, 46 F.3d 660, 667 (7th Cir. 1995) (quoting United States v. Orr Construction Co., 560 F.2d 765, 769 (7th Cir. 1977)); Taylor v. Gordon Flesch Co., 793 F.2d 858, 862 (7th Cir. 1986); Glass v. Rock Island Refining Corp., 788 F.2d 450, 454 (7th Cir. 1986). Under federal law, oral contracts to settle a lawsuit are enforceable, Taylor, supra; Glass, supra, unless the parties orally agreed that signing a written settlement agreement was necessary for a final settlement. Taylor, supra. "To constitute an enforceable oral contract, there must be an offer, an acceptance, and consideration to enforce the formation of a legally enforceable agreement. Premier Electrical Constr, Co. v. Miller-Davis Co., 291 F. Supp. 295, 300 (N.D. Ill. 1968), aff'd, 422 F.2d 1132 (7th Cir.),cert. denied, 400 U.S. 828 (1970). The offer in order to be legally operative and to create a power of acceptance must contain all terms of the contract to be made. Id. These terms must be `reasonably certain' and reasonably ascertainable from the acts and words of the parties. Id."Taylor, supra.
If Petty authorized his attorney to enter into a settlement agreement and she thereafter entered into an enforceable oral agreement in accordance with that authorization, Petty could not thereafter avoid the agreement by refusing to sign the written version. Taylor, supra; Glass, 788 F.2d at 454-55. To the extent a material factual dispute exists regarding the attorney's authority or the terms of the oral agreement, a hearing must be held. Wilson, 46 F.3d at 664.
An attorney may not consent to a final disposition of the client's case without express authority to do so. Bradford Exchange v. Trein's Exchange, 600 F.2d 99, 102 (7th Cir. 1979); Smith v. Widman Trucking Excavating. Inc., 627 F.2d 792, 796 (7th Cir. 1980). See also Brewer v. National Railroad Passenger Corp., 165 Ill.2d 100, 649 N.E.2d 1331, 1334 (1995). However, an attorney of record in litigation will be presumed to have the authority to settle the case. Bradford, supra; Smith, See also Brewer, In re Halko, 203 B.R. 668, 674 (Bankr. N.D. Ill. 1996) (applying Illinois law). That presumption may be rebutted by affirmative proof to the contrary. Bradford, supra; Smith, supra. See also Brewer, supra; Halko, supra.
Under Illinois law, the presumption only arises if the settlement is stated on the record in open court or incorporated in the judgment; it does not apply to an out of court settlement that is not incorporated in a judgment. See Brewer, supra. As to the federal rule applicable to the present case, though, the Seventh Circuit has indicated that being an attorney of record is sufficient to raise the presumption. See Bradford, supra.
Bradford and Smith both involved Rule 60(b) motions following the entry of judgment and therefore had more stringent requirements than the present case in which no judgment was entered and leave to reinstate was expressly granted in the event the settlement was not consummated.
In the present case, defendant has not presented evidence conclusively showing that Petty's attorney represented to the court or defendant's attorney that Petty agreed to the $1,000 settlement. It is also unclear whether an oral settlement agreement is adequately supported by defendant's presentation. But even assuming that the record is sufficient to support such conclusions, Petty's sworn statement that he did not authorize his attorney to settle the case for $1,000 is sufficient affirmative evidence to support that the authorization did not exist. There is at least a factual dispute as to whether such authorization existed. Therefore, there is no sufficient basis to grant defendant's motion to enforce the settlement. Defendant's motion will be denied without prejudice.
At this time, plaintiff's motion to reinstate will be granted. Defendant may raise as a defense to the pending cause of action that the case has been settled. Prior to the next status hearing, defendant should consult with plaintiff's former attorney to determine whether she could provide testimony showing that plaintiff did indeed authorize her to settle his case for $1,000. To the extent that she (or someone else at her firm) could so testify, defendant should obtain an affidavit to that effect. To the extent defendant desires to presently press its settlement defense, prior to the next status hearing, defendant should submit a new motion supported by affidavits supporting the existence of both plaintiff's authorization and an enforceable oral settlement agreement. If an adequately supported motion is presented, the court will consider setting a hearing to resolve the settlement issue prior to otherwise proceeding with the case. Defendant's counsel should also be prepared to address the issue of what procedures remain in this case if the settlement issue is not resolved in defendant's favor.
Alternatively, defendant may instead desire to negotiate a new settlement with plaintiff.
IT IS THEREFORE ORDERED that defendant's motion to enforce settlement 1151-11 is denied without prejudice. Plaintiff's motions to reinstate his action [49-1, 53-1] are granted. This case is reopened and plaintiff's cause of action is reinstated. Status hearing set for November 29, 2000 at 11:00 a.m.