United States Court of Appeals,
Fifth Circuit.
No. 94-40079
Summary Calendar.
Marshall D. BELL, Sr., Individually & on Behalf of Yolanda M.
Bell, et al., Plaintiffs-Appellants,
v.
Dema Thomas SCHEXNAYDER, et al., Defendants-Appellees.
Oct. 27, 1994.
Appeal from the United States District Court for the Western
District of Louisiana.
Before REAVLEY, DAVIS and DeMOSS, Circuit Judges.
REAVLEY, Circuit Judge:
The only issue we face is whether the district court erred in
denying attorney's fees to appellants under 42 U.S.C. § 1988 after
settlement was announced. We affirm.
BACKGROUND
Yolanda Bell and her parents, Marshall and Charlene Bell,
brought this suit against Dema Schexnayder and the Saint Mary
Parish School Board. It was brought pursuant to Title IX, 20
U.S.C. §§ 1681-88 (which prohibits discrimination in education
programs on the basis of sex), and sought compensatory and punitive
damages, as well as attorney's fees under § 1988. Two insurance
companies, National Union Fire Insurance Company and State Farm
Fire & Casualty Company, were added as third-party defendants.1
1
The original defendants and the third-party defendants are
collectively referred to below as the defendants.
1
The record reveals the following. The case was scheduled for
trial on October 4, 1993. The Bells offered to settle the case for
$85,000. On September 21, 1993, National Union, on behalf of
defendants, rejected this offer and instead offered by letter to
settle "all claims existing in the above referenced litigation
and/or arising out of the subject incident" for $2500 plus the
waiver of all discovery sanctions which had been imposed on
plaintiffs. Counsel for the Bells wrote back on September 24,
1993, rejecting this offer and submitting "a counteroffer of
$30,000 to settle these claims." On September 30 counsel for the
Bells reduced their settlement demand to $18,000. On October 1,
with trial only three days away, the parties agreed by telephone to
settle for $10,000 plus a waiver of sanctions. That same day
counsel for the school board wrote the other counsel, advising them
that he had informed the district judge "that the matter has been
settled and should be removed from his docket." He further
requested immediate notification if that counsel's understanding
was incorrect.
On October 14, the court signed a sixty day order of
dismissal. The order states that the court, "having been advised
by counsel for the parties that the above action has been settled,"
was dismissing the case "without prejudice to the right, upon good
cause shown within sixty (60) days, to reopen it if settlement is
not consummated and seek summary judgment enforcing the
compromise."
On November 24, counsel for the Bells filed an attorney's fee
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application under § 1988, seeking $19,991 in fees. Counsel
identified himself, rather that the Bells, as the movant. Prior to
filing the fee application plaintiffs and their counsel had never
indicated that any issue remained for the trial court to resolve or
that the settlement was exclusive of attorney's fees. On December
10 defendants filed a motion to enforce the settlement, and a
memorandum in support of the motion to enforce settlement and in
opposition to the attorney's fee application.
On January 13, 1994, the district court held a hearing on the
fee application and motion to enforce settlement. It concluded
that all claims in this matter had been settled and therefore
denied the request for fees. The only sworn evidence before the
court was the affidavit of counsel for National Union, which stated
that "at all times during settlement negotiations, it was made
clear that any and all settlement offers were made in settlement of
all claims asserted in the litigation and/or arising out of the
subject incident including but not limited to the claim for
attorney[']s fees asserted in the original petition under 42 U.S.C.
§ 1988."
The Bells complain that the district court erred in denying
the request for fees and granting the motion to enforce settlement.
DISCUSSION
Attorney's fees under § 1988 are not necessarily precluded in
cases that are resolved by settlement or otherwise resolved without
a full trial on the merits. See Smith v. Robinson, 468 U.S. 992,
1006, 104 S.Ct. 3457, 3465, 82 L.Ed.2d 746 (1984) ("Congress did
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not intend to have that authority [of courts to award attorney's
fees] extinguished by the fact that the case was settled or
resolved on a nonconstitutional ground."). However, our review of
district court rulings on § 1988 fee applications is highly
deferential. As we explained in Associated Builders & Contractors
of Louisiana, Inc. v. Orleans Parish School Bd., 919 F.2d 374 (5th
Cir.1990):
When a district court awards a fee pursuant to section 1988 of
42 U.S.C., we review the award only for an abuse of
discretion.... "A request for attorney's fees should not
result in a second major litigation".... We cannot
overemphasize the concept that a district court has broad
discretion in determining the amount of a fee award. This
tenet is "appropriate in view of the district court's superior
understanding of the litigation and the desirability of
avoiding frequent appellate review of what essentially are
factual matters."
Id. at 379 (quoting Hensley v. Eckerhart, 461 U.S. 424, 437, 103
S.Ct. 1933, 1941, 76 L.Ed.2d 40 (1983)).
In addition to its broad discretion to award attorney's fees,
a district court has inherent power to recognize, encourage, and
when necessary enforce settlement agreements reached by the
parties. Lyles v. Commercial Lovelace Motor Freight, Inc., 684
F.2d 501, 504 (7th Cir.1982) ("Where a party has knowingly and
voluntarily agreed to settle his claims and no change of
circumstances warrants repudiation of the agreement, the courts
will enforce the settlement agreement."); Aro Corp. v. Allied
Witan Co., 531 F.2d 1368, 1371 (6th Cir.)2 ("It is well
2
In Langley v. Jackson State University, 14 F.3d 1070 (5th
Cir.1994), we disagreed with Aro insofar as it held that a
district court has jurisdiction to hear a post-dismissal motion
to enforce a settlement agreement. We held that "once a court
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established that courts retain the inherent power to enforce
agreements entered into in settlement of litigation pending before
them."), cert. denied, 429 U.S. 862, 97 S.Ct. 165, 50 L.Ed.2d 140
(1976); CIA Anon Venezolana de Navegacion v. Harris, 374 F.2d 33,
35-36 (5th Cir.1967) ("Federal courts have held under a great
variety of circumstances that a settlement agreement once entered
into cannot be repudiated by either party and will be summarily
enforced.... We are constrained to view the proceedings as a
hearing by the District Court in the exercise of its inherent power
to summarily enforce settlement agreements entered into by parties
litigant in a pending case.").
Young v. Powell, 729 F.2d 563 (8th Cir.1984), addressed
similar facts. The plaintiff in that case filed a civil rights
action alleging racial discrimination by the defendants. He sought
injunctive relief and attorney's fees. In exchange for a cash
settlement of $3,000 he joined with defendants in filing a
stipulation of dismissal of his suit. Following dismissal,
plaintiff's attorney filed an application for fees under § 1988.
Id. at 564-65. In affirming the district court's denial of the fee
dismisses an action with prejudice because of a settlement
agreement, and the agreement is neither approved of nor
incorporated by the court in its decree or order and the court
does not indicate any intention to retain jurisdiction, an action
to enforce the settlement agreement requires federal jurisdiction
independent of the action that was settled." Id. at 1074. The
Supreme Court later reached the same conclusion in Kokkonen v.
Guardian Life Ins. Co. of America, --- U.S. ----, 114 S.Ct. 1673,
128 L.Ed.2d 391 (1994). Langley and Kokkonen are distinguishable
from our case, since here the district court's order of dismissal
expressly provided that the parties could, within 60 days, move
to reopen the case to enforce the settlement. Defendants so
moved within 60 days of the dismissal order.
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request, the Eighth Circuit explained:
The case before us does not involve a situation wherein a
settlement was finalized by a consent decree or wherein the
parties stipulated to a dismissal, reserving the question of
attorney's fees. Rather, the parties agreed (1) that the
disputed issues had been resolved; and (2) that the case as
it then stood would be dismissed upon the payment to the
plaintiff of a specific sum of money. Furthermore, we have
carefully examined the record and have found no indication
that the stipulation of settlement and dismissal was entered
into as a result of fraud, misconduct of the defendants,
mutual mistake, or any other reason that might justify
modification or reformation of the settlement agreement or
relief from the order and judgment of dismissal. There is no
reason offered why the parties should not be bound by their
agreement under basic principles of contract.
Id. at 566-67 (footnotes omitted).
Under the facts of our case we do not believe that the court
abused its discretion in denying the fee request and enforcing the
settlement agreement. Evidence was presented that, by all outward
appearances, the settlement negotiations were intended to resolve
all claims and release the defendants from all liability relating
to the subject matter of the suit. To the extent that plaintiffs'
counsel harbored a secret intent to seek attorney's fees—after the
parties had agreed on a settlement amount, after the case had been
removed from the docket, and after the district court had entered
a dismissal order—that intent was concealed from defendants. On
this record, the district court could conclude that plaintiffs'
counsel knew that his request for attorney's fees in an amount
nearly twice the amount of the settlement was totally unanticipated
by defendants, and came as a complete shock to them. The district
court acted properly in denying the fee request. Holding otherwise
would run counter to three important goals encouraged by our
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judicial system: voluntary settlements of disputes, the
enforcement of agreements according to the objective intent of the
parties, and an end to litigation.
AFFIRMED.
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