Illinois Central Railroad v. Byrd

44 So. 3d 943, 2010 Miss. LEXIS 444, 2010 WL 3341567

• Court: Mississippi Supreme Court
• Decided: August 26, 2010
• Docket: 2009-CA-00065-SCT
• Status: Published

Opinions

GRAVES, Presiding Justice,

for the Court:

¶ 1. After a large number of its former employees sued Illinois Central Railroad Company (“ICRR”), alleging occupational exposure to asbestos, plaintiffs’ counsel and ICRR’s counsel met to discuss the possibility of a settlement. Although the parties dispute exactly what transpired at the meeting, they agree that ICRR later sent settlement checks to a substantial majority of the 216 plaintiffs after receiving signed releases and other pertinent information from them. However, ICRR refused to send settlement checks to several remaining plaintiffs. Of these remaining plaintiffs, twenty-five sought enforcement of the alleged settlement agreement. Ultimately, the trial court granted the remaining plaintiffs’ motion to enforce settlement, and ICRR appeals.

FACTS AND PROCEDURAL HISTORY

¶ 2. The original action in this case was filed on December 19, 2002, by 216 former employees of ICRR in the Circuit Court of Hinds County, Mississippi. The plaintiffs sought damages under the Federal Employers’ Liability Act (FELA) for personal injuries related to occupational exposure to asbestos. In response, ICRR raised, among others, the defenses of improper joinder and improper venue.

¶ 3. On January 23, 2004, Robert Peirce met with Thomas Peters to discuss a possible settlement of the claims against ICRR. The meeting took place at Peirce’s office in Pittsburgh, Pennsylvania (“the Pittsburgh meeting”). At issue is whether the parties entered into a binding settlement agreement or a conditional settlement process. Plaintiffs allege that all claims were settled that day at the Pittsburgh meeting. ICRR alleges that the claims were to be settled on a case-by-case basis only if certain criteria were met, specifically: (1) that the plaintiff had not signed any prior occupational release, (2) that the plaintiffs claim was not barred by the statute of limitations, and (3) that each plaintiff must complete and sign a pulmonary questionnaire, provide proof of employment, and submit to a B-read from a competent and credible reader.¹ It is undisputed that after the Pittsburgh meeting, ICRR settled all plaintiffs’ claims save approximately thirty-seven.²

¶ 4. On June 23, 2006, twenty-five of the remaining plaintiffs filed a motion to enforce settlement,³ alleging that the parties had reached a binding settlement agreement at the Pittsburgh meeting regarding all plaintiffs.⁴ ICRR responded, alleging that the Pittsburgh meeting had produced only a conditional settlement process, by which plaintiffs’ claims would be settled on a case-by-case basis after certain criteria were met. ICRR claimed that the majority of the remaining plaintiffs had signed a prior occupational release, and that the Breads submitted by each plaintiff were read by Dr. Ray Hamm, whose competence and credibility had been compromised.⁵ Finally, ICRR filed a motion to sever and dismiss the claims of the remaining plaintiffs (arguing improper join-der and improper venue) and asked the trial court to rule on the motion before reaching the merits of the plaintiffs’ motion to enforce settlement.

¶ 5. The trial court conducted a hearing on the parties’ motions on November 6, 2006, during which the court heard arguments of counsel. The parties offered conflicting affidavits of the two attorneys involved in the Pittsburgh meeting — neither of whom appeared at the hearing. The court entered an order on November 17, 2006, holding: (1) that ICRR’s motion to sever and dismiss was denied;⁶ (2) that no agreement existed between the parties to disqualify a plaintiff who had executed a release from the settlement process; (3) that no agreement existed to disqualify a plaintiff based on the statute of limitations; (4) that an enforceable agreement existed between the parties to settle the claims of the plaintiffs upon the submission of a release for the specified amount, a pulmonary questionnaire, proof of employment, and a B-read from a competent reader; (5) that ICRR had grounds to question the Breads submitted by Dr. Harron and to require the submission of another B-read from a competent reader; and (6) that the plaintiffs had complied with the terms of the settlement agreement except for the submission of a B-read from a competent reader. The trial judge ordered ICRR to pay each plaintiff⁷ within a reasonable time after receiving a B-read from a competent reader.

¶ 6. Subsequently, the plaintiffs submitted second B-reads to ICRR. ICRR refused to pay, however, claiming that the new B-reads also were questionable. ICRR propounded discovery to the plaintiffs, requesting information about the doctors who had performed the second Breads. The plaintiffs each filed identical responses, objecting to the information requested as “not relevant to the pending cause of action.” ICRR filed its Supplement to Response to Motion for Sanctions and Motion to Compel, arguing that “plaintiffs’ responses to discovery are critical in that the competency and credibility of the selected b-readers ... is in serious doubt.” ICRR later supplemented its motion to compel with an affidavit from Dr. John Parker that seriously questioned the methods and procedures used by the doctors who submitted the second B-reads.

¶ 7. Plaintiffs filed a second motion to enforce, arguing that they had fulfilled the trial judge’s requirements of supplying a competent B-read, and that ICRR’s continued refusal to pay had “reached a level of pure maliciousness.”⁸ The trial judge conducted a hearing on the motions⁹ and, on September 26, 2008, issued his final order. He found that each of the twenty-five remaining plaintiffs had “fully complied with the conditions precedent to payment of settlement,” specifically holding that they had submitted B-reads from competent readers. ICRR filed a motion to amend the final judgment, which the trial court denied, and ICRR appealed.

ANALYSIS

¶ 8. ICRR presents five issues on appeal:

(1) Whether the trial court committed plain error when it decided plaintiffs’ motion to enforce settlement before determining whether plaintiffs’ claims were properly before the court.

(2) Whether trial court erred when it decided disputed, material factual issues in granting plaintiffs’ motion to enforce settlement;

(3) Alternatively, whether the trial court’s enforcement of the purported settlement agreement was clearly erroneous and constitutes an abuse of discretion;

(4) Alternatively, whether ICRR was erroneously denied discovery (a) related to the unreliable B-reads tendered by plaintiffs in support of their claims; and (b) related to the effect of prior occupational releases on plaintiffs’ current claims; and

(5) In the alternative, whether the “settlement agreement” was unenforceable under the Mississippi Statute of Frauds

I. Whether the trial court erred when it ruled on the plaintiffs’ motion to enforce settlement before determining whether the plaintiffs’ claims were properly before the court.

1! 9. ICRR claims that the trial judge committed plain error when he chose to proceed with the merits of the plaintiffs’ motion to enforce settlement before addressing its motion to sever and dismiss. We find, however, that the trial judge’s reasoning in doing so is sound and hold that his decision was correct.

¶ 10. At the November 6, 2006, hearing, the trial judge stated:

[I]t occurs to me that settlements, just like any other contract, if it was entered into it is enforceable. If it wasn’t, of course, it’s not. And, of course, if there is ... an enforceable settlement, then there is nothing to transfer and sever, you see. So I think the settlement issue has got to be addressed first.

In other words, if the settlement was found to be valid, whether the plaintiffs were improperly joined or in the wrong venue in the original action was irrelevant. If a settlement agreement was reached, the plaintiffs relinquished the right to pursue their claims against ICRR for negligent exposure. Whether they were properly joined in the original action does not affect the consideration exchanged in the settlement-agreement meeting. Indeed, a settlement agreement often is reached before any litigation commences. On a motion to enforce a settlement agreement, what may well be viable defenses to a claim are simply not relevant unless they are a part of the settlement agreement. In this case, that judge found that they were not. Thus, we hold that the trial judge was correct and find this issue to be without merit.

II. Whether the trial court erred when it decided disputed, material factual issues in granting plaintiffs’ motion to enforce settlement.

¶ 11. A review of this Court’s cases reveals that trial judges presented with motions to enforce settlement agreements customarily make findings of fact related to the existence and/or terms of the settlement agreements as necessary to rule on the motions to enforce settlement. Further, this Court has not found such trial-court action to be improper. See, e.g., Ill. Cent. R.R. v. McDaniel, 951 So.2d 523, 525-26 (Miss.2006) (trial judge made findings of fact in deciding plaintiffs’ motion to enforce settlement agreement); Howard v. TotalFina E & P USA, Inc., 899 So.2d 882, 888-89 (Miss.2005) (trial judge made findings of fact regarding existence of a settlement agreement in denying plaintiffs motion to enforce settlement agreement); Tupelo Redevelopment Agency v. Abernathy, 913 So.2d 278, 282-85 (Miss.2005) (trial judge made findings of fact in denying defendant landowners’ motion to enforce settlement agreement); WRH Props., Inc. v. Estate of Johnson, 759 So.2d 394, 395 (Miss.2000) (trial judge made findings of fact regarding existence of a settlement agreement in granting defendant’s motion to enforce settlement agreement).

¶ 12. In this case, the trial judge made informed findings of fact and law. The trial judge reviewed all of the parties’ pleadings, considered all of the other affidavits submitted by the plaintiffs’ attorney, Peirce, and ICRR’s attorney, Peters, describing their understanding of the settlement negotiations, and conducted two quite lengthy hearings on the disputed issues of fact. Moreover, multiple attorneys representing ICRR appeared before the trial judge and had ample opportunity to present evidence and argument.

¶ 13. ICRR never asked the trial judge to hold a hearing in addition to the two that were held. In fact, at the second hearing, the trial judge even invited the parties to request an additional hearing if they deemed it necessary, but ICRR evidently chose not to request one at that time. Furthermore, there is no evidence that the trial judge prevented ICRR from acquiring additional evidence regarding what Peirce and Peters had agreed to at the Pittsburgh meeting by, for example, deposing Peirce or calling witnesses at either hearing.

¶ 14. In addition, this Court previously has held that unless substantial rights are affected, issues not presented to the trial judge are procedurally barred from being raised for the first time on appeal. Dora v. State, 986 So.2d 917, 925 (Miss.2008). In this case, the record reveals that ICRR never raised the issue of the need for an evidentiary hearing either in addition to or in lieu of the hearings which were held. We conclude that it was proper for the trial judge to make findings of fact in ruling on plaintiffs’ motion to enforce settle agreement.

III. Whether the trial court’s enforcement of the settlement agreement was clearly erroneous and constitutes abuse of discretion.

¶ 15. It is well-settled that “this Court will not disturb the findings of the chancellor unless it is shown the chancellor was clearly erroneous and the chancellor abused his discretion. Also a circuit judge sitting without a jury is accorded the same deference with regard to ... factual findings as is a chancellor.” Ill. Cent. R.R. v. McDaniel, 951 So.2d 523, 526 (Miss.2006) (internal quotations and citations omitted). In determining whether a trial judge abused his discretion, the reviewing court must have a “ ‘definite and firm conviction’ that the court below committed a clear error of judgment and the conclusion it reached upon a weighing of the relevant factors.” Howard v. TotalFina E & P USA, Inc., 899 So.2d 882, 888 (Miss.2005) (quoting Caracci v. Int’l Paper Co., 699 So.2d 546, 556 (Miss.1997)).

¶ 16. A settlement agreement is a contract. McManus v. Howard, 569 So.2d 1213, 1215 (Miss.1990). This Court previously has stated that a “meeting of the minds” must exist between the parties in order to have a settlement. Thomas v. Bailey, 375 So.2d 1049, 1052 (Miss.1979). Further, in order for a settlement agreement to be enforced, the party claiming the benefit of enforcement must prove by a preponderance of the evidence that there was a meeting of the minds. Hastings v. Guillot, 825 So.2d 20, 23 (Miss.2002).

¶ 17. As noted above, the trial court has thoroughly considered the arguments and evidence that each party presented in support of their conflicting accounts of what Peirce and Peters agreed to at the Pittsburgh meeting. This evidence included the fact that ICRR already had paid approximately 180 of the approximately 216 plaintiffs, and many of the plaintiffs who already had been paid had signed prior releases (when they had settled claims for other occupational injuries). Furthermore, the approximately thirty-six remaining, unpaid plaintiffs had provided the same documentation to ICRR as those plaintiffs who had been paid. Thus, it was not clearly erroneous nor an abuse of discretion for the trial judge to find that Peirce and Peters did have a “meeting of the minds” regarding settlement of the claims of all plaintiffs, including those who had signed prior releases.

TV. Whether ICRR was erroneously denied discovery (a) related to the questionable B-reads submitted by the plaintiffs in support of their claims; and (b) related to the effect of prior occupational releases on plaintiffs’ current claims.

¶ 18. This Court reviews the denial of a motion to compel discovery under the abuse-of-discretion standard on appeal. Edmonds v. Williamson, 13 So.3d 1283, 1292 (Miss.2009) (citing Taylor Mach. Works Inc. v. Great American Surplus Lines Ins. Co., 635 So.2d 1357 (Miss.1994)).

¶ 19. ICRR argues that it was erroneously denied discovery regarding the plaintiffs’ second B-reads that were submitted in support of the plaintiffs’ claims for settlement and discovery related to the effect of the prior occupational releases on plaintiffs’ current claims. However, there is no indication that ICRR ever requested a hearing regarding discovery related to the second B-reads. Moreover, the trial judge clearly found that the second B-reads were sufficient to meet the conditions of the settlement agreement. Therefore, this Court finds this issue without merit.

V. Whether the settlement agreement was enforceable under the Mississippi Statute of Frauds.

¶ 20. ICRR argues that plaintiffs’ settlements are barred by Mississippi’s Statute of Frauds, Mississippi Code Annotated section 15-3-1 (d), because the alleged agreement could not be performed within fifteen months. We disagree.

¶21. Mississippi’s Statute of Frauds states, in part,

An action shall not be brought whereby to charge a defendant or other party:

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(d) upon any agreement which is not to be performed within a space of fifteen months from the making thereof; or

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unless, in each of said cases, the promise or agreement upon which such action may be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith or signed by some person by him or her thereunto lawfully authorized in writing.

Miss.Code Ann. § 15-3-1 (Rev.2003). A settlement agreement is a contract. Mc-Manus, 569 So.2d at 1215. This Court previously has held that “where a contract is for an indefinite period of time with the possibility of performance within fifteen months, it is not within the statute of frauds.” American Chocolates, Inc. v. Mascot Pecan Co., Inc., et al, 592 So.2d 93, 95 (Miss.1991) (citing Beane v. Bowden, 399 So.2d 1358, 1361 (Miss.1981)).

¶ 22. The record reflects that a settlement was reached at the Pittsburgh meeting on January 23, 2004. Since the Pittsburgh meeting, the claims of approximately 180 of the approximately 216 plaintiffs were paid by ICRR well within the fifteen-month time limit designated by Mississippi’s Statute of Frauds. Because ICRR could pay and did pay a majority of the plaintiffs’ claims in settlement, we find that ICRR could have paid the remaining plaintiffs’ claims -within the statutory time period. Therefore, ICRR may not claim Mississippi’s Statute of Frauds as a defense to this settlement agreement.

CONCLUSION

¶ 23. This Court finds that the trial judge was correct in finding that each of the twenty-five remaining plaintiffs had complied with the conditions of settlement and in enforcing the settlement agreement. The trial court also properly denied ICRR’s motion to amend the final judgment. Thus, the decision of the Circuit Court of Holmes County is affirmed.

¶ 24. AFFIRMED.

KITCHENS AND CHANDLER, JJ., CONCUR. PIERCE, J., CONCURS IN RESULT ONLY WITH SEPARATE WRITTEN OPINION. DICKINSON, J, DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY CARLSON, P.J., AND LAMAR, J. LAMAR, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY WALLER, C.J., CARLSON, P.J., AND DICKINSON, J. RANDOLPH, J., NOT PARTICIPATING.

1 . This Court has noted that "[a] B-reader is a doctor certified by NIOSH [the National Institute for Occupational Safety and Health] to identify the presence of asbestos- and silica-related disease precursors on chest x-rays.” Choctaw, Inc. v. Campbell-Cherry-Harrison-Davis and Dove, 965 So.2d 1041, 1046 n. 10 (Miss.2007) (citation omitted).

2 . The exact number of original plaintiffs and those with whom ICRR refused to settle is unclear from the record.

3 . Plaintiffs' counsel originally filed a motion to enforce settlement on December 20, 2004, but withdrew the motion on September 15, 2005, to pursue the claim in another forum. The plaintiffs then filed a petition to enforce in a Pennsylvania court, but the court dismissed it for lack of jurisdiction.

4 . In reality, about thirty-seven claims had not been settled out of the original 216. However, about ten or so were, for reasons not apparent from the record, left out of the June 23, 2006, motion to enforce. In his November 2006 order, the trial judge severed those ten claims and dismissed them without prejudice. The plaintiffs’ attorneys contended that they subsequently filed a motion to amend their motion to enforce, in an effort to add the ten omitted plaintiffs to the action before us. No such motion was found on the docket or in the court file. The trial judge allowed the plaintiffs’ attorneys to file another motion to amend, but then ultimately denied it in his September 2008 final order. Thus, the trial judge's final order considers only twenty-seven plaintiffs, and ultimately orders settlement with twenty-five of them, dismissing two because of prior release issues.

5 . See In Re Silica Products Liability Litigation, 398 F.Supp.2d 563, 603-608, 635 (S.D.Tex.2005) (stating that Dr. Harron's diagnoses, among others, "were manufactured for money”); Jonathan D. Glater, Reading X-Rays in Asbestos Suits Enriched Doctor, N.Y. Times, Nov. 29, 2005, available at http:llwww. ny times, com/2005/11/29/business/2 9 asbestos, html? (accessed July 21, 2010).

6 . It appears from the record that the trial judge did not deny ICRR's Motion to Dismiss on the merits; rather, he deemed it moot because he found that a valid settlement existed. At the hearing on November 6, 2006, he stated: “[I]t occurs to me that a settlement, just like any other contract, if it was entered into is enforceable. If it wasn't, of course, it's not. And, of course, if there is ... an enforceable settlement, then there is nothing to transfer and sever, you see. So I think the settlement issue has got to be addressed first.”

7 .ICRR was to pay each plaintiff the amount listed next to his name in the Motion to Enforce.

8 . Plaintiffs previously had filed a Motion for Sanctions against ICRR for its continued refusal to pay following the submission of the second B-reads. The trial judge denied the motion in his final order.

9 . The hearing consisted of arguments from counsel only; no witnesses were called.