Bryan v. Erie Cnty. Office of Children & Youth

• Decision Date: 20 May 2014
• Docket Number: No. 12–4623.,12–4623.
• Citation: 752 F.3d 316
• Parties: Paul BRYAN; Bonnie Bryan, Husband and Wife, individually and as Parents and Natural Guardians on behalf of their minor child, KB, and KB, Kenneth Bryan v. ERIE COUNTY OFFICE OF CHILDREN AND YOUTH; Paul Cancilla, individually and as an employee of Erie County Office of Children and Youth; Carmen E. Merritt, individually and as an employee of Erie County Office of Children and Youth; Renie Skalko, individually and as an employee of Erie County Office of Children and Youth; Cindy Baxter, individually and as an employee of Erie County Office of Children and Youth; Cindy Lewis, individually and as an employee of Erie County Office of Children and Youth; Brigette Sullivan, individually and as an employee of Erie County Office of Children and Youth; John Petulla, individually and as an employee of Erie County Office of Children and Youth DPW Bureau of County Children and Youth Programs, Cindy Baxter and Renie Skalko, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

752 F.3d 316

Paul BRYAN; Bonnie Bryan, Husband and Wife, individually and as Parents and Natural Guardians on behalf of their minor child, KB, and KB, Kenneth Bryan

v.ERIE COUNTY OFFICE OF CHILDREN AND YOUTH; Paul Cancilla, individually and as an employee of Erie County Office of Children and Youth; Carmen E. Merritt, individually and as an employee of Erie County Office of Children and Youth; Renie Skalko, individually and as an employee of Erie County Office of Children and Youth; Cindy Baxter, individually and as an employee of Erie County Office of Children and Youth; Cindy Lewis, individually and as an employee of Erie County Office of Children and Youth; Brigette Sullivan, individually and as an employee of Erie County Office of Children and Youth; John Petulla, individually and as an employee of Erie County Office of Children and Youth DPW Bureau of County Children and Youth Programs, Cindy Baxter and Renie Skalko, Appellants.

No. 12–4623.

United States Court of Appeals,Third Circuit.

Argued: Jan. 22, 2014.

Opinion Filed: May 20, 2014.

Pamela V. Collins, Walsh, Barnes Collins & Zumpella, Pittsburgh, PA, Barbara S. Magen, Sheila A. Haren [Argued], Post & Schell, P.C., Philadelphia, PA, for Appellants.

Jay Paul Deratany [Argued], Chicago, IL, Jeffrey G. Mashni, Morton Grove, IL, Timothy D. McNair, Erie, PA, for Appellees.

Before: FUENTES and FISHER, Circuit Judges, and STARK, District Judge.^*

OPINION

FUENTES, Circuit Judge.

In the midst of trial in the District Court, the parties agreed to a high-low settlement. Regardless of the verdict, the Bryan family was to receive at least $900,000. And regardless of the verdict, defendants Cindy Baxter and Renie Skalko were to pay no more than $2.7 million. So when the jury returned an $8.6 million verdict for the Bryans, Baxter and Skalko tendered $2.7 million and asked the Bryans to end the action. The Bryans refused. They asserted that Baxter and Skalko had breached the settlement agreement's confidentiality clause and thereby rendered the deal unenforceable. The parties brought their dispute to the District Court. But the District Court refused to resolve it, reasoning that the Court lacked the subject matter jurisdiction to decide whether to enforce the parties' terms or the jury's verdict.

The District Court erred. The parties presented their dispute to the District Court in order to bring the action to a close. The case had not been dismissed, nor had the jury's verdict been marked satisfied. Indeed, the action remained active and ongoing: the parties continued to litigate the effect of the jury's verdict up to and after taking this appeal. The case should have remained with the District Court. Ancillary jurisdiction exists, for example, for post-judgment proceedings related to the enforcement of the judgment. Similarly, the District Court had jurisdiction to decide whether or not to enforce the parties' settlement agreement. A district court's jurisdiction does not terminate at the moment the jury's deliberations do.

The parties raise two other matters that we do not decide: (1) the merits of the Bryan family's allegation that Baxter and Skalko breached the settlement agreement and (2) Baxter and Skalko's argument that the District Court ought to have granted summary judgment in their favor. The District Court has not had an opportunity to consider the first issue and Baxter and Skalko have not addressed the second issue in light of the trial record. Accordingly, we remand for further proceedings before the District Court.

I. Background of the CaseA. After the Bryans adopted J.O., he assaulted one of their children.

During the summer of 2001, violence seized the Bryan family household. Their adopted son, J.O., repeatedly raped and molested his younger foster brother, K.B., in the room the boys shared together. After suffering through weeks of abuse, K.B. eventually told his parents, Paul and Bonnie Bryan. The Bryans then contacted the Erie County Office of Children and Youth (“ECOCY”)—the agency that facilitated J.O.'s adoption—and had J.O. removed from their home.

The Bryans blamed ECOCY for K.B.'s ordeal. Among others employed at ECOCY, the Bryans focused on Renie Skalko and Cindy Baxter. Skalko served as one of J.O.'s caseworkers. Baxter helped coordinate the Supportive Host Program, which aimed to transition institutionalized children, such as J.O., into foster homes. Through that program, Skalko and Baxter introduced J.O. to the Bryans and, eventually, helped facilitate the adoption. According to the Bryans, however, ECOCY and its employees concealed J.O.'s history during this process. ECOCY staff had reports of J.O.'s history of violent behavior and sexual misconduct, but did not disclose them to the Bryans.

B. Proceedings in the District Court

The Bryans sued ECOCY and seven of its employees pursuant to 42 U.S.C. § 1983 for a violation of their Fourteenth Amendment right to substantive due process. After an appeal to this Court for permission to amend the complaint, see Bryan v. Erie Cnty. Office of Children & Youth Servs., 293 Fed.Appx. 143 (3d Cir.2008), the case proceeded on a state-created danger theory. That theory of liability permits a plaintiff to recover from state actors when “the state's own actions create the very danger that causes the plaintiff's injury.” See Morrow v. Balaski, 719 F.3d 160, 167 (3d Cir.2013). The Bryans alleged that ECOCY employees had placed KB into harm's way.

The District Court granted summary judgment in favor of many defendants. But the Court did not grant summary judgment for Baxter and Skalko on the merits of the Bryans' state-created danger claim or on Baxter and Skalko's qualified immunity defense. The Court identified contested questions of fact that deserved the jury's attention. In particular, the Court described the conflicting evidence about how much of J.O.'s history Skalko and Baxter knew, how much they told the Bryans, and whether, in light of that knowledge, it was prudent to place J.O. into a foster home at all. (App'x 39–54, 69.)

C. During trial, the parties agreed to a high-low settlement.

The parties tried their case to a jury. During the trial, the parties reached a “Stipulated to High/Low Agreement.” This agreement constrained the parties' financial risks by stipulating a recovery range between the low of $900,000 and the high of $2.7 million. If the jury returned a verdict of $900,000 or less, the Bryans would receive $900,000. If the jury returned a verdict of $2.7 million or more, Skalko and Baxter would pay $2.7 million. If the jury returned a verdict between the high and the low, the parties had to accept that result. The agreement contemplated that payment would terminate the action: “Upon payment of any of the aforementioned amount by the Defendants, the verdict is deemed satisfied and any and all of Plaintiffs [sic] claims which are the subject of this lawsuit are dismissed forever and any and all appellate rights are hereby waived by all the Plaintiffs; and defendants.” (App'x 188.)

In addition to the high-low terms, the agreement also contained confidentiality provisions. Paragraph 11 required the Bryans to “limit their public comments about ECOCY and the individual ECOCY Defendants” and to “say that the ECOCY and Defendants did the right thing by [the Bryans' son] and the parties are satisfied with the outcome.” (App'x 188.) Paragraph 15 forbade the agreement from being disclosed to the jury. Paragraph 16 stipulated that “[t]his Agreement shall be CONFIDENTIAL subject to the duties, if any, of the ECOCY and/or its employees under the Pennsylvania Right to Know Act.” (App'x 189.) And Paragraph 18 required the parties to “put [the] Agreement on the record with the court to memorialize the same following entry of the verdict or court order disposing of the case.” (App'x 189.)

The jury returned a verdict of $8,654,769 in favor of the Bryan family. After the jury announced its verdict, the Court and the parties conferenced about what to do next. Skalko and Baxter stated their intention “to make an oral motion to mold the verdict consistent with our agreement to $2.7 million.” (App'x 742.) After discussingthe matter, however, the parties' attorneys and the Court agreed to enter a stipulation of dismissal instead:

[ECOCY's Attorney]: Why don't we do this. We have an agreement for a high/low that we previously signed, we're going to issue checks for $2.7 million to you. If you accept that, once we've issued the checks, we will file a stipulation of dismissal.

[Bryans' Attorney]: That's fine.

The Court: All right, we're done.

(App'x 743–44.) Shortly after the post-verdict conference, the District Court entered judgment in favor of the Bryans in the amount of $8,654,769.00.

Defendants' counsel then tendered $2.7 million to satisfy the agreement. The Bryans accepted the money “as only partial payment on the judgment.” (App'x 190.) In a letter to Skalko and Baxter, the Bryans questioned whether Baxter and Skalko had “violated the terms of the high/low agreement which would render the agreement void or voidable.” (App'x 190.) In particular, the Bryans alleged that Skalko and Baxter, or their agents, had disclosed the terms of the agreement to county councilmen.

In response, Skalko and Baxter filed a “Motion to Satisfy Pursuant to F.R.C.P. 60” and a “Motion for Leave to File Rule 59 Motions Under Seal.” (Doc. Nos. 361–62.) The Court directed the parties to brief the settlement dispute, and it denied Baxter and Skalko's motion to file the briefs under seal. The Court remarked: “I can't imagine for the life of me why it's appropriate to file anything under seal.” (App'x 750.) While briefing the Rule 60 motion, Skalko and Baxter also filed a “Motion to Alter or Amend Judgment Under Rule 59(e), or in the Alternative, Motion for New Trial Under Rule 59(a)(1)(A).” (Doc. No. 363.) This motion identified numerous trial errors. It also purported to renew Skalko and Baxter's argument that th...