Sawyer v. Town of Ashland, NH

Opinion

USCA1 Opinion

June 24, 1994         [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

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        No. 93-2375

                                    WAYNE SAWYER,

                                Plaintiff, Appellant,

                                          v.

                           TOWN OF ASHLAND, NEW HAMPSHIRE,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF NEW HAMPSHIRE

                [Hon. Martin F. Loughlin, Senior U.S. District Judge]
                                          __________________________

                                 ____________________

                                        Before

                                 Selya, Circuit Judge,
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                            Bownes, Senior Circuit Judge,
                                    ____________________

                              and Boudin, Circuit Judge.
                                          _____________

                                 ____________________

            Peter  S.  Smith, Disabilities  Rights  Center,  Inc.,  with  whom
            ________________
        Ronald K. Lospennato was on brief for appellant.
        ____________________
            David P. Slawsky with whom Russell  F. Hilliard and Upton, Sanders
            ________________           ____________________     ______________
        & Smith were on brief for appellee.
        _______

____________________

____________________

BOUDIN,  Circuit  Judge.   Wayne  Sawyer,  the plaintiff
                          ______________

            below,  appeals from the  district court's determination that

            his  claims  against the  Town  of  Ashland for  damages  and

            attorneys' fees  were barred by an  oral settlement agreement

            entered into at an unrecorded pretrial conference.  The issue

            is difficult but turns  primarily on the facts.   We conclude

            that the agreement discharged  Sawyer's damages claim against

            the  Town, and thereby eliminated  any basis for  an award of

            attorneys' fees.  Accordingly, we affirm the  judgment of the

            district court.

                 The  present litigation  arose out  of efforts  to place

            Sawyer in  a sexual offender treatment  program following his

            conviction  for felonious  sexual assault.   Sawyer  has been

            diagnosed  as  suffering  from   a  number  of  developmental

            disorders, including mild mental  retardation.  In July 1990,

            the state court sentenced Sawyer to serve three and a half to

            fifteen years  in New Hampshire state  prison but recommended

            that he be treated  in accordance with his disabilities.   In

            keeping with this suggestion, the court on December 20, 1991,

            deferred  the balance  of  Sawyer's prison  sentence so  that

            Sawyer  could enroll  in  a  newly developed  community-based

            treatment program for  developmentally disabled persons  with

            sexual disorders.

                 After three months in the program, which was operated by

            the  Lakes Region Community Services Council ("the Council"),

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Sawyer was charged with  violating his probation and returned

            to  state prison.  The state court authorized Sawyer's return

            to  the treatment  program in  August 1992,  and arrangements

            were made  to place  Sawyer  in a  new residential  treatment

            facility  in  Ashland, New  Hampshire.    Plans to  open  the

            Ashland  facility, however,  were ultimately  cancelled as  a

            result  of  public protest.    Because Sawyer's  slot  in his

            previous treatment  program had  been filled in  his absence,

            Sawyer  was left with no  alternative but to  remain in state

            prison.

                 On  June 25, 1993, Sawyer filed suit in federal district

            court  against the  Council,  the New  Hampshire Division  of

            Mental  Health and  Developmental Services  ("the Division"),

            and the Town of Ashland.  Sawyer's complaint alleged that the

            failure to  open the Ashland treatment  facility deprived him

            of his civil rights under the  Fair Housing Act, 42 U.S.C.   

            3601 et seq.,  the Rehabilitation  Act of 1973,  29 U.S.C.   
                 _______

            794, and  the Fourteenth Amendment.   At an  initial pretrial

            conference on  September 16,  1993, the district  court urged

            the parties to explore settlement  of the case.  At a  second

            pretrial  conference   on  September  30,  counsel   for  the

            defendants  proposed  a residential  placement  and treatment

            plan for Sawyer.

                 Although the parties differ as to exactly what  was said

            and  understood   at  the   September   30  conference,   the

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defendants' counsel and the court came away thinking that the

            case  had been settled.   On October 6,  1993, the defendants

            sent Sawyer's counsel a proposed "Stipulation for  Dismissal"

            articulating  the residential treatment plan discussed at the

            September 30 conference and also incorporating provisions for

            nondisclosure of the agreement and waiver of attorneys' fees.

            Sawyer's counsel objected to the latter two provisions--which

            everyone  agrees  were  not  discussed at  the  September  30

            conference--as well  as  to certain  provisions for  Sawyer's

            treatment program.  Accordingly, Sawyer's counsel returned to

            the  defendants  a  "redrafted  settlement  agreement," which

            addressed   the   development  and   implementation  problem,

            eliminated  the  nondisclosure provision,  and  provided that

            Sawyer's  "claim  for  attorney's  fees  shall  be  addressed

            separately  in  a  stipulation  or other  filings  with  this

            court."

                 In  turn,  counsel  for  the  Council  informed Sawyer's

            counsel that  the Council  and the other  defendants believed

            Sawyer's  claim  for attorneys'  fees or  other relief  to be

            precluded by the  oral agreement reached at the  September 30

            conference.   When the parties met with the district court on

            October  25,  1993,   Sawyer's  counsel   pointed  out   that

            attorneys'  fees   had  not  been  discussed   at  the  prior

            conference, and also said that he had never intended to reach

            an  oral  settlement  agreement  at  that  conference.    The

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district court scheduled a hearing for November 15 to resolve

            the fees issue.

                 Prior to  the November  15 hearing, Sawyer,  the Council

            and the  Division agreed to a final  "Consent Order Approving

            Settlement," which provided more detailed standards governing

            Sawyer's treatment  program and  included $500 each  from the

            Council and the Division to cover a portion of Sawyer's costs

            and  attorneys' fees.  Because the Town  of Ashland was not a

            party to  the consent  order, the  November  15 hearing  went

            forward to  determine whether  Sawyer was entitled  to pursue

            his  claim for attorneys' fees against the Town.  On November

            29, 1993, the district court entered an order concluding that

            the  case had  been settled at  the September  30 conference,

            that  the  settlement  did  not  include  any  provision  for

            attorneys'  fees, and  that the  plaintiff was  now precluded

            from seeking such  an award.   Sawyer now  appeals from  this

            ruling.

                 The district court found  that the agreement by Sawyer's

            counsel  to  a comprehensive  resolution of  the case  at the

            September  30  conference  barred any  subsequent  claim  for

            attorneys' fees.   However,  parties do sometimes  settle the

            merits of a case but leave  the issue of attorneys' fees open

            for  either later  agreement or  determination by  the court.

            Accordingly, courts  have generally demanded  evidence either

            that  the  parties  intentionally  waived  fees  or  made  an

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agreement that definitively  terminated all claims  including

            attorneys' fees.  See, e.g., Muckleshoot Tribe v. Puget Sound
                              ___  _____ _________________    ___________

            Power & Light Co., 875 F.2d  695, 698 (9th Cir. 1989); Elmore
            _________________                                      ______

            v. Shuler, 787 F.2d 601, 603 (D.C. Cir. 1986).
               ______

                 In this case, both sides  appear to acknowledge that the

            only issue actually discussed  at the September 30 conference

            was  relief on the merits.   Absent affirmative evidence that

            Sawyer's  counsel  intended  to   waive  their  fees  at  the

            September 30  conference, it might  be easy to  conclude that

            counsel were simply looking to the  interests of their client

            first before  addressing  their own  payment.   We  need  not

            resolve this issue because we  think that the attorneys' fees

            claim is barred even if it was not deliberately  relinquished

            on September 30.

                 The problem for Sawyer  arises from the district judge's

            finding that the parties settled the underlying merits of the

            case.    Fees  are  available  under  section  1988  only  to

            "prevailing parties,"  Farrar v. Hobby,  113 S. Ct.  566, 572
                                   ______    _____

            (1992),  and  the  fact  "[t]hat a  plaintiff  has  prevailed

            against one party does  not entitle him to fees  from another

            party . . . ."  Kentucky v. Graham, 473 U.S. 159, 168 (1985).
                            ________    ______

            Here, it is undisputed that the Town of Ashland "consistently

            had  refused  to  do or  not  do  anything  to satisfy  Wayne

            Sawyer's  demands, [and]  also refused  to offer  anything to

            settle the case . . . ."  Sawyer therefore has not yet earned

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prevailing  party status  vis-a-vis  the Town,  and can  only

            retain  a  claim for  attorneys' fees  if  he also  retains a
                                                          ____

            viable claim against  the Town for substantive  relief on the

            merits.

                 Sawyer argues  that he  retains a  claim for  damages or

            other  relief against the Town despite  his settlement of his

            claims for  damages and  injunctive relief against  LCRSC and

            the Division.    However, after  the fee  dispute arose,  the

            court  held a conference on  October 25 at  which the parties

            presented their views of what had transpired on September 30;

            on the basis of this conference, the court found that "it was

            clear to the court as a  result of the statements made by the

            parties,  that all  substantive  issues  had previously  been

            resolved by the parties . . .  ."  The court also noted  that

            "[t]he  determination that the parties had  in fact reached a

            settlement agreement  comes  from observations  made  by  the

            court during the course of three settlement conferences."

                 The  district judge's  findings  on this  fact-intensive

            issue are entitled to  substantial deference on appeal.   See
                                                                      ___

            Fed. R. Civ. P. 52(a) (factual findings of trial judge may be

            set  aside only  if "clearly  erroneous").   This presumption

            becomes  even  more  formidable  where as  here  the  court's

            findings concern the content of negotiations conducted in the

            presence of the district judge.

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The district court's  findings are supported by  letters

            and  affidavits  from  defense  counsel,  which  confirm  the

            defendants' understanding  that the case had  been settled at

            the  September  30  conference.   And  although  neither  the

            court's  nor defense  counsel's recollections  allude  to any

            discussion  of relief  beyond  establishment  of a  treatment

            program for Sawyer, Sawyer's  own counsel acknowledged at the

            November 15 hearing that "I told [defense counsel] that if we

            could get a  program for  Wayne, that the  damages aspect  of

            this case would not be pursued."

                 Sawyer's  counsel  continue to  insist  that they  never

            intended to enter  into a binding agreement  at the September

            30  conference.   But it  is hornbook  law that  the parties'

            intent  must  be  determined based  on  objective  standards,

            rather than on their subjective, unmanifested states of mind.

            See, e.g., 1 Farnsworth on Contracts   3.6, at 169-70 (1990).
            _________    _______________________

            We thus find no  clear error in the district  court's finding

            that  the September  30 conference  resulted in  a settlement

            that included a release of Sawyer's  damages and other merits

            claims in return for placement in a treatment program.

                 Sawyer argues  that any agreement with  the Town reached

            at  the September  30 conference  is unenforceable  for three

            reasons.   First, Sawyer contends  that the agreement  is not

            binding  vis-a-vis  the Town  because  the  Town provided  no

            consideration as part of the settlement.  Absent a showing of

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any contrary  authority, we think that  the controlling issue

            was  whether the agreement as a whole was supported by mutual

            consideration.   Here, Sawyer  bargained for and  received an

            agreement to  place him  in a residential  treatment program.

            This was  sufficient consideration  to render the  settlement

            agreement effective.

                 Second, Sawyer  asserts that the oral  agreement was not

            enforceable  because the parties  did not intend  to be bound

            until that agreement was reduced to writing.  See generally 1
                                                          _____________

            Farnsworth  on  Contracts,    3.8, at  178-86.   He provides,
            _________________________

            however, no evidence of this beyond the subjective intentions

            of his counsel as articulated in a post hoc affidavit.  As we

            have noted  above, however,  such intentions  cannot overcome

            the district  court's finding that the  objective behavior of

            the  parties at  the  September 30  conference manifested  an

            intent to be bound by the oral agreement. 

                 Finally, Sawyer argues that the oral agreement cannot be

            enforced because the parties failed to reach agreement on all

            material terms--specifically, because the issue of attorneys'

            fees had not yet been resolved.  Our recognition that parties

            often settle the merits of a case while leaving the fee issue

            for  later disposition  cuts both  ways.   Even if  we accept

            Sawyer's position  that fees  were a  separate issue  in this

            case, Sawyer is still left with the district  court's finding

            that  the  merits  were  definitively settled.    As  already

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explained,  that leaves  Sawyer  with no  basis for  claiming

            attorneys' fees under section 1988.

                 Affirmed.
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