United States Court of Appeals
For the First Circuit
No. 98-1718
MARIE M. MALAVE,
Plaintiff, Appellant,
v.
CARNEY HOSPITAL, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
Before
Selya, Circuit Judge,
Bownes, Senior Circuit Judge,
and Lipez, Circuit Judge.
Robert LeRoux Hernandez for appellant.
Michael F.X. Dolan, Jr., with whom Robert H. Morsilli and
Murphy, Hesse, Toomey & Lehane were on brief, for appellees.
March 9, 1999
SELYA, Circuit Judge. This appeal stems from a
discrimination suit filed by plaintiff-appellant Marie M. Malave
against her quondam employer, Carney Hospital (the Hospital). In
the underlying case, Malave alleged disparate treatment on the
basis of disability, race, and national origin. In the midst of
discovery, the opposing lawyers agreed to a $15,000 settlement.
Nevertheless, when the Hospital's counsel forwarded a proposed
settlement agreement, the appellant refused to execute it, claiming
that she had never authorized her attorney to settle the case for
less than $30,000.
The Hospital asked the district court to enforce the
purported settlement. The court granted the motion without holding
an evidentiary hearing. This appeal followed.
A party to a settlement agreement may seek to enforce the
agreement's terms when the other party reneges. If, at the time of
the claimed breach, the court case already has been dismissed, the
aggrieved party may bring an independent action for breach of
contract. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375,
381-82 (1994). If, however, the settlement collapses before the
original suit is dismissed, the party who seeks to keep the
settlement intact may file a motion for enforcement. See United
States v. Hardage, 982 F.2d 1491, 1496 (10th Cir. 1993) ("A trial
court has the power to summarily enforce a settlement agreement
entered into by the litigants while the litigation is pending
before it.") (citations omitted); Mathewson Corp. v. Allied Marine
Indus., Inc., 827 F.2d 850, 852-53 (1st Cir. 1987) (similar). In
a federal court, such a motion at least when the underlying cause
of action is federal in nature is determined in accordance with
federal law. See Michaud v. Michaud, 932 F.2d 77, 80 n.3 (1st Cir.
1991); Fennell v. TLB Kent Co., 865 F.2d 498, 501 (2d Cir. 1989);
Mid-South Towing Co. v. HarWin, Inc., 733 F.2d 386, 389 (5th Cir.
1984); Gamewell Mfg., Inc. v. HVAC Supply, Inc., 715 F.2d 112, 115-
16 (4th Cir. 1983).
As a general rule, a trial court may not summarily
enforce a purported settlement agreement if there is a genuinely
disputed question of material fact regarding the existence or terms
of that agreement. In such circumstances, the cases consentiently
hold that the court instead must take evidence to resolve the
contested issues of fact. See Murchison v. Grand Cypress Hotel
Corp., 13 F.3d 1483, 1486 (11th Cir. 1994); TCBY Sys., Inc. v. EBG
Assoc., Inc., 2 F.3d 288, 291 (8th Cir. 1993) (per curiam);
Hardage, 982 F.2d at 1496; Bamerilease Capital Corp. v. Nearburg,
958 F.2d 150, 153 (6th Cir. 1992); Tiernan v. Devoe, 923 F.2d 1024,
1031 (3d Cir. 1991); Petty v. Timken Corp., 849 F.2d 130, 132 (4th
Cir. 1988); Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987); Mid-
South Towing, 733 F.2d at 390; Autera v. Robinson, 419 F.2d 1197,
1203 (D.C. Cir. 1969). It is against this backdrop that we assess
the record here.
When the Hospital filed its motion to enforce, it
tendered an unsigned copy of a draft settlement agreement and its
counsel's affidavit explaining its version of the attendant
circumstances. The lawyer, Michael F.X. Dolan, Jr., recounted
"back and forth" conversations with his opposite number, Matthew
Cobb, during which Cobb made a settlement demand of $15,000. Dolan
stated that he agreed to pay the demanded sum in return for a
stipulation of dismissal and a general release. He then
transmitted a proposed agreement to Cobb both by facsimile and by
mail. Though the agreement seems prolix and covers a multitude of
subjects (e.g., a waiver of any right to reemployment; a covenant
not to comment on the payment or to speak ill of the releasees),
the Hospital takes the position that it was boilerplate.
There is no way that these materials, standing alone,
would justify summarily enforcing a settlement agreement. Evidence
supplied by one side to the dispute, especially nontestimonial
evidence not subject to cross-examination, ordinarily will not
suffice to ground enforcement of an ostensible settlement. SeeHardage, 982 F.2d at 1497; Callie, 829 F.2d at 891. But the
district court had before it more than this one submission. Four
days after the Hospital served its motion, Cobb filed a response.
It is evident from even a cursory glance that this pleading did not
purport to represent the appellant's views, protect her interests,
or advance her position. To the contrary, its contents made
manifest that Cobb (who wished to consummate the settlement) and
his client (who wished the litigation to proceed) were at swords'
point.
Even though the document that Cobb filed declared that he
had received authority from Malave to effectuate a $15,000
settlement, it went on to state that Malave's son, on Malave's
behalf, had called Cobb within a day or two to make sure that Cobb
understood that he did not have authority to settle the case for
that sum. This recitation ought to have alerted the district court
that something had gone awry, and that the extent of Cobb's
authority was open to question. We cannot conceive of a more
fundamental dispute concerning the existence vel non of a
settlement agreement than occurs when a litigant and her lawyer
wrangle over whether the former imbued the latter with authority to
settle.
Moreover, this was not an instance in which the existence
of the settlement had somehow been conceded previously by both
parties or in which the court had been able to acquire personal
knowledge through, for example, a settlement conference or a
hearing. See Murchison, 13 F.3d at 1487; Petty, 849 F.2d at 132-
33; Autera, 419 F.2d at 1200. Prudence dictates the a trial court,
confronted with so tenebrous a record, should withhold summary
enforcement and instead probe for better evidence on which to base
an informed determination as to whether the parties had in fact
reached a binding agreement. This is all the more true where, as
here, the motion papers clearly contemplated that an evidentiary
hearing would be held, and the response to the motion explicitly
requested such a hearing.
Setting the nature and quality of the requisite evidence
to one side, the Hospital argues that the purported settlement must
stand because it (the Hospital) relied on Cobb's representations
about his authority. In mounting this argument, the Hospital draws
upon the doctrine of apparent authority, under which third parties
who detrimentally rely on an agent's unauthorized representations
sometimes may hold the principal to the consequences of such
reliance. See, e.g., Veranda Beach Club Ltd. Partnership v.
Western Surety Co., 936 F.2d 1364, 1377 (1st Cir. 1991). As
suggested by our earlier analysis, the doctrine of apparent
authority may not be invoked in these purlieus. Under hoary
principles of federal common law, a general retainer, standing
alone, does not permit an unauthorized attorney to settle claims on
his client's behalf. See United States v. Beebe, 180 U.S. 343, 352
(1901); Michaud, 932 F.2d at 80; see also Holker v. Parker, 11 U.S.
(7 Cranch) 436, 452 (1813).
This rule rests on the salutary proposition that the
decision to settle litigation belongs to the client, not the
lawyer. See Michaud, 932 F.2d at 80; Fennell, 865 F.2d at 501-02.
The rule logically implies that a settlement agreement entered into
by an attorney is ineffective if the attorney did not possess
actual authority to bind the client, and the cases so hold. SeeMorgan v. South Bend Community Sch. Corp., 797 F.2d 471, 478 (7th
Cir. 1986); Luis C. Forteza & Hijos, Inc. v. Mills, 534 F.2d 415,
418 (1st Cir. 1976); see also Garabedian v. Allstates Eng'g Co.,
811 F.2d 802, 803 (3d Cir. 1987) (per curiam) (tacitly adopting
actual authority requirement). Since actual authority is the
barometer and the evidence before the district court did not compel
a conclusion that Cobb possessed actual authority to conclude a
settlement, the Hospital's motion for summary enforcement could not
be granted. See Millner v. Norfolk & W. Ry. Co., 643 F.2d 1005,
1009-10 (4th Cir. 1981) (holding that the existence of a dispute
over an attorney's authority to settle renders summary enforcement
inappropriate).
There is also the Hospital's contention, emphasized at
oral argument, that we should overlook all else because there has
been an accord and satisfaction. In its most familiar iteration,
accord and satisfaction envisions that the parties will settle a
dispute on terms requiring payment by one party of a sum greater
than that which he admits he owed and receipt by the other party of
a sum less than that which she claims is due, thereby extinguishing
the underlying claim. See, e.g., Cadle Co. v. Hayes, 116 F.3d 957,
962 (1st Cir. 1997). The Hospital attempts to invoke the doctrine
on the basis nowhere reflected in the district court record
that Malave (or Cobb, on her behalf) accepted and cashed a check
for $15,000 that constituted the consideration for the purported
settlement. This initiative fails for two reasons.
First, in this context, an accord and satisfaction
requires a voluntary, mutually assented to exchange of money for a
release. See id. There is absolutely no evidence of voluntariness
or mutuality here, and what little we know points the other way.
As the Hospital itself admits in its brief, it sent a check to
Cobb, for Malave, pursuant to the instructions set forth in the
district court's enforcement order. That order was the functional
equivalent of a mandatory injunction. These circumstances hardly
bespeak either voluntariness or mutuality.
The second basis for rejecting the Hospital's accord and
satisfaction argument relates to the bedrock rule of appellate
practice that, except in the most extraordinary circumstances (not
present here), matters not raised in the trial court cannot be
hawked for the first time on appeal. See National Ass'n of Soc.
Workers v. Harwood, 69 F.3d 622, 627 (1st Cir. 1995); Teamsters
Union, Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 21 (1st
Cir. 1992); McCoy v. Massachusetts Inst. of Tech., 950 F.2d 13, 22
(1st Cir. 1991). The Hospital's attempt to raise an accord and
satisfaction defense offends this rule.
The fact that the purported accord and satisfaction took
place after the district court entered the enforcement order does
not relieve a litigant who wishes to rely on it of the obligation
to bring that matter first to the trial court's attention. Accord
and satisfaction is a fact-based defense and one important reason
for the rule requiring litigants to broach matters initially with
the trial court is that adherence to it allows the parties to
develop the relevant facts. In turn, this gives a court which
possesses a factfinding capability an opportunity to resolve new
issues in an informed manner a praxis that provides invaluable
assistance when the appellate court thereafter performs its
reviewing function. Here, there are no facts in the record
concerning the ostensible accord and satisfaction merely
assertions. We cannot intelligently decide cases on so problematic
a basis.
We need go no further. Summary enforcement of arm's-
length settlements is a useful device to hold litigants to their
word, but the procedure ought to be reserved for situations in
which a struck bargain is admitted or proved, and the basis for
nonperformance is insubstantial. Thus, when a district court
purposes summarily to enforce a settlement, it first must ascertain
whether or not a binding agreement in fact existed. The evidence
before the district court in this case raised too many unanswered
questions as to the existence vel non of such an agreement.
Therefore, the court ought not to have granted the Hospital's
motion to enforce the purported settlement without taking evidence
and resolving the disputed issues of material fact.
The order enforcing the putative settlement is vacated
and the case is remanded to the district court for further
proceedings.