Ullmann v. Olwine, Connelly, Chase, O'Donnell & Weyher

123 F.R.D. 253, 1987 U.S. Dist. LEXIS 14310, 1987 WL 49382
District Court, S.D. Ohio·Decided September 14, 1987·No. Civ. A. No. C-3-85-233·Published·Cited by 2 cases

Opinion

MEMORANDUM OPINION AND DECISION GRANTING DEFENDANTS’ MOTION TO ENFORCE SETTLEMENT AGREEMENT AND FOR SANCTIONS AND DENYING PLAINTIFF’S MOTION FOR SANCTIONS

MICHAEL R. MERZ, United States Magistrate.

This case is before the Court upon motion of Defendants (Doc. # 111) to enforce [255] a settlement agreement between themselves and the Plaintiff.

Plaintiff commenced this action by filing a thirteen count Complaint in March, 1985. Defendants responded with a summary judgment motion and a motion for sanctions under Fed.R.Civ.P. 11 (Doc. # 6). In August, 1986, the parties consented to magistrate trial jurisdiction under 28 U.S. C. § 636(c)(Doc. ##29, 30, 31). The Court then ruled on the summary judgment motion by dismissing ten of the thirteen counts and Defendants filed a three count counterclaim. Two of those counts were dismissed and the case proceeded to trial on July 27, 1987, without a jury. In the claims remaining for trial, Plaintiff sought relief on two theories under Title VII of the Civil Rights Act of 1964 and a declaratory judgment that a prior settlement between her and the Defendants did not bar her from proceeding. Defendants sought damages in fraud related to the prior settlement.

Plaintiff was her own last witness. Near the end of her direct testimony and shortly before the usual lunch recess, the Magistrate inquired of both counsel if there was any possibility of settlement. Defendants’ counsel indicated his willingness to forego the counterclaim and request for Rule 11 sanctions in return for dismissal of the Complaint with prejudice and general releases of all persons involved in the case; he absolutely refused to consider paying any money to Plaintiff, expressing his confidence in the strength of Defendants’ position. Defendants’ counsel advised the Court and Plaintiff’s counsel that Defendants had expended approximately $80,000 in attorney fees prior to starting the trial; since he felt the entire case was frivolous, he stated to the Court and Plaintiff’s counsel his belief that the entire amount of such fees could be recovered under Rule 11.

Plaintiff’s counsel asked for time to discuss the matter with his client over the lunch recess and an extended recess (more than IV2 hours) was taken.

When the parties returned after lunch, Plaintiffs counsel indicated the proposal was acceptable in principle, but that details needed to be negotiated. The recess then continued for another IV2 hours until counsel advised the Court that an agreement had been reached.

Because of the acrimony between the parties, the Court insisted that the settlement be recited for the record. That record has now been transcribed and is filed at Doc. # 108; it shows that Court resumed at 3:00 P.M., proving that Plaintiff had over three hours to discuss the settlement, rather than the ten minutes she asserts in her motion papers. The record shows that Mr. Hoppe, Defendants’ counsel, carefully stated the terms as he understood them. Mr. Glasper, Plaintiff’s counsel, listened carefully and corrected one omission Mr. Hoppe had made. All parties stated on the record that what had been recited represented their agreement. (Defendant Job Taylor additionally asked that the record be sealed and all parties recognized this would have to be by separate motion to the Court.) Miss Ullmann explicitly said that she was settling the case and that she intended to settle the case (Doc. # 108, p. 6).

The arrangements for memorializing the settlement were that Mr. Hoppe was to prepare what he believed was the appropriate documentation and forward it to Mr. Glasper, which he did (Hoppe Affidavit, attached to Doc. # 111, Par. 2). Mr. Glasper was to review the paperwork, approve it, sign it, and forward it to his client, which he did (Hoppe Aff., Par. 3). Miss Ullmann was then to execute the documents, which she has refused to do (Hoppe Aff., Pars. 6 & 7), occasioning the instant motion.

Miss Ullmann concedes throughout her opposing papers that a settlement in fact was reached. She opposes its enforcement on three grounds:

1. Part of the consideration given by Defendants—waiver of their Rule 11 claims— either is so insubstantial that it should not count for consideration because Defendants did not have a colorable sanctions claim or should not legally be permitted to be consideration for a settlement in any case;

[256]*2562. The settlement was coerced by the threat of sanctions and insufficient time to consider the issues involvea and therefore was not voluntary on her part;

3. Assuming a valid agreement was reached, it has been rescinded by the acts of the parties to it.

Each of these grounds will be considered in turn.

A. CONSIDERATION FOR THE SETTLEMENT

1. Waiver of Rule 11 Sanctions as to Filing of the Complaint Itself

Part of the consideration for the settlement was Defendants’ waiver of their claims against Plaintiff under Fed.R.Civ.P. 11 (Doc. #108, p. 2). Reading Miss Ullmann’s motion papers, one would be led to believe that the issue of Rule 11 sanctions had been raised for the first time when the Magistrate interrupted her testimony, called counsel into chambers, and threatened to impose $80,000 to $100,000 in attorney fees unless she settled. Nothing could be further from the truth.

Defendants first sought Rule 11 sanctions in connection with their initial motion for summary judgment, filed in April, 1985, in response to the Complaint. Defendants asserted that the Complaint itself was sanctionable because unfounded in fact or law and filed for the purpose of harassment. (See Doc. #6).

When ruling on the motion for summary judgment, the Court reserved ruling on the Rule 11 motion. It was the Court’s position that discovery and trial would disclose whether there was a reasonable factual and legal basis for the Complaint (Doc. #44, p. 36). Therefore, a ruling on that sanctions motion was deferred until after trial. The parties were specifically advised in the final pre-trial order that the Court would take up that motion once the trial was concluded (Doc. # 100). If the Plaintiff prevailed on the merits or at least presented a colorable case, Defendants’ assertion the Complaint was baseless would obviously be moot. But if Defendants had an arguable Rule 11 motion that the Complaint itself was baseless, Plaintiff would still be entitled to a hearing on sanctions. Postponing the question until after trial served purposes of judicial economy and also the convenience of the parties, who could thereby make one trip to Dayton rather than two. No party ever objected to the postponement of the motion until after trial.

The Court has never indicated, verbally or in writing, on or off the record, that it had decided the merits of Defendants’ initial Rule 11 motion related to the filing of the Complaint. However, Plaintiff’s position that the original sanctions motion was so baseless that its dismissal is not adequate consideration for settlement now requires the Court to express some opinion on that motion.

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Ullmann v. Olwine, Connelly, Chase, O'Donnell & Weyher, 123 F.R.D. 253, 1987 U.S. Dist. LEXIS 14310, 1987 WL 49382 (S.D. Ohio 1987).

123 F.R.D. 253 (Ullmann v. Olwine, Connelly, Chase, O'Donnell & Weyher) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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