Caplan v. Fellheimer Eichen Braverman & Kaskey
| Decision Date | 25 May 1995 |
| Docket Number | Civ. A. No. 94-7506. |
| Citation | 886 F. Supp. 498 |
| Parties | Maia CAPLAN v. FELLHEIMER EICHEN BRAVERMAN & KASKEY and David L. Braverman. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Lisa E. Brody, William H. Ewing, Carl Oxholm, III, Connolly, Epstein, Chicco, Foxman, Edelmyer and Ewing, Philadelphia, PA, for plaintiff Maia Caplan.
Suzanne M. Bohannon, Carolyn P. Short, Kenneth M. Kolaski, Philip W. Newcomer, Reed, Smith, Shaw & McClay, Helen Mandel Braverman, Fellheimer, Eichen and Braverman, P.C., Philadelphia, PA, for defendant Fellheimer Eichen Braverman & Kaskey.
Suzanne M. Bohannon, Carolyn P. Short, Kenneth M. Kolaski, Philip W. Newcomer, Reed, Smith, Shaw & McClay, Philadelphia, PA, Thomas A. Riley, Jr., Riley, Riper, Hollin & Colagreco, Paoli, PA, Helen Mandel Braverman, Fellheimer, Eichen and Braverman, P.C., Philadelphia, PA, for defendant David L. Braverman.
Linda A. Carpenter, McCann, Mailey & Geschke, Philadelphia, PA, for movant Linda Della Rocco.
Gregory B. Heller, Litvin, Blumberg, Matusow & Young, Philadelphia, PA, pro se.
Today we resolve Defendants' Emergency Motion to Declare Purported Settlement Null and Void and for other Ancillary Relief. This motion for injunctive relief is opposed by Plaintiff and accordingly, an emergency hearing was held by this Court on May 23, 1995. Following are Findings of Fact, a discussion, and Conclusions of Law.
1. Plaintiff, Maia Caplan, has brought a lawsuit against her former employer Fellheimer Eichen Braverman & Kaskey (the Firm) and the principal shareholder and managing partner of the Firm, David Braverman. Caplan's Amended Complaint alleges that Braverman and other members of the Firm created a hostile environment for women at the Firm and sexually harassed Caplan's female secretary. Caplan alleges that she was fired in retaliation for her protests against these actions.
2. Caplan's Amended Complaint asserts causes of action against both Braverman and the Firm for violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e — 2000e-17 (1994), as well as negligent and intentional infliction of emotional distress, tortious interference with existing and prospective contracts, libel, and defamation.
3. Both Defendants asserted counterclaims against Caplan for malicious abuse of process and civil conspiracy to maliciously abuse process. These counterclaims were dismissed by this Court for failure to state a claim upon which relief could be granted. The tort of malicious prosecution was discussed in both the briefs and this Court's memorandum, but this Court held that such a claim was untimely because the action had not terminated in Defendants' favor.
4. On February 9, 1995, Defendants' insurance carrier, the Vigilant Insurance Company, agreed to provide Defendants with a defense for this lawsuit under a complete reservation of rights. The duty to defend was triggered by the defamation claim in the Amended Complaint.
5. During the months of April and May, 1995, the parties engaged in settlement negotiations. Each side had a certain number of non-negotiable demands. The major focus of the settlement negotiations was Defendants' demand that any settlement would include a public retraction by Plaintiff of the allegations made in her Complaint.
6. In May, the settlement negotiations neared completion. On May 9, 1995, at 8:09 a.m., Plaintiff's attorney faxed a letter to Defendants' attorney indicating that Plaintiff had accepted certain retraction language proposed by Defendants the day before. This agreement was subject to certain conditions.
7. On May 10, 1995, Plaintiff's attorney faxed a letter to Defendants' attorney indicating that Plaintiff did not accept new language added by Defendants to the agreed-upon retraction.
8. On May 17, 1995, after more settlement discussions, Plaintiff's attorney faxed Defendants' attorney a letter confirming that no settlement had been reached between the parties, and that all Plaintiff's outstanding settlement offers had been withdrawn. This letter also indicates that Plaintiff had decided not to sign a public retraction, although she would be willing to settle without such a retraction.
9. Simultaneously with the settlement negotiations between Plaintiff and Defendants, Defendants were negotiating with their insurance carrier, Vigilant, for a full Settlement Agreement and Release of Insurance Agreement in exchange for $190,000.00.
10. On May 10, 1995, Vigilant forwarded a copy of a Settlement Agreement and Release of Insurance Agreement to Defendants for their signatures. Defendants did not accept this agreement, but proposed additional language.
11. On May 15, 1995, Vigilant agreed to the addition, and requested Defendants to forward a draft of that language for inclusion into the agreement. There is no indication that this language was ever prepared by Defendants.
12. Vigilant decided that Defendants' demand for a public retraction from Plaintiff was going to prevent a settlement with Plaintiff, and determined to negotiate directly with her. On May 17, 1995, Vigilant's attorney contacted this Court and indicated that a settlement was close, and requested a settlement conference with the Court.
13. Defendants' attorney immediately wrote this Court in response and indicated on behalf of both parties that no settlement had been reached. On Defendants' behalf, she informed the Court that Vigilant had no authority to communicate with the Court nor interfere with settlement issues.
14. Vigilant was aware of Defendants' concerns with the retraction requirement as well as Defendants' belief that Vigilant had no power to effect a settlement with Plaintiff because on May 4, 1995, Defendants' attorney had notified Vigilant's attorney in a letter of her concern that Vigilant was conducting settlement negotiations without her present. She informed Vigilant that she needed to participate in all negotiations and that no settlement would be agreeable to Defendants without certain features, including the public retraction.
15. A settlement conference was scheduled with Chief Magistrate Judge Powers for the morning of May 22, 1995. At the last minute, this conference was postponed, due to Braverman's attorney's vacation schedule.
16. Vigilant's attorney apparently did not learn of the postponement and arrived for the settlement conference. While he was there, Plaintiff's attorney called Chief Magistrate Judge Powers, and the two attorneys decided to continue settlement negotiations between themselves.
17. Pursuant to the meeting between Plaintiff's and Vigilant's attorneys on May 22, 1995, a settlement was reached in which Plaintiff executed a General Release and a Stipulation of Dismissal in exchange for $200,000.00.
18. Defendants promptly filed this emergency motion to prevent payment of the settlement proceeds and to prevent further settlement negotiations between Vigilant and Plaintiff.
Rule 65(a) of the Federal Rules of Civil Procedure establishes the federal standard governing requests for preliminary injunctions. Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 800 (3d Cir. 1989) (quoting System Operations, Inc. v. Scientific Games Dev. Corp., 555 F.2d 1131, 1141 (3d Cir.1977)). Injunctive relief is an extraordinary remedy that should be granted only in limited circumstances. Frank's GMC Truck Center, Inc. v. General Motors Corp., 847 F.2d 100, 102 (3d Cir.1988). At the trial level, the party seeking a preliminary injunction bears the burden of convincing the court that:
Campbell Soup Co. v. Conagra, Inc., 977 F.2d 86, 90-91 (3d Cir.1992); ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir.1987). Showing a risk of mere irreparable harm is not enough to warrant injunctive relief. A plaintiff must make a "clear showing of immediate irreparable (not merely serious or substantial) injury of a peculiar nature so that compensation in money cannot atone for it." Campbell Soup, 977 F.2d at 91-92; ECRI, 809 F.2d at 226; In re Arthur Treacher's Franchisee Litig., 689 F.2d 1137, 1145 (3d Cir.1982).
The merits we examine here are not the merits of the litigation between Plaintiff and Defendants, but the question whether Defendants can have the litigation settled for them by their insurance carrier. We recognize that the insurance carrier is not a party to this action, and indeed, only made a statement at the hearing over the objections of Defendants. Nonetheless, this question is central to the conflict before us, and accordingly, must be addressed.
The insurance contract between Defendants and Vigilant is not in evidence before us. It allegedly, however, has a clause which grants Vigilant the power to make such settlements as it thinks appropriate. We assume for the sake of this Motion that this clause is in the insurance contract. Similar clauses have been interpreted to grant almost unlimited power to insurance companies to settle a case within the policy limits. Bleday v. Oum Group, 435 Pa.Super. 395, 645 A.2d 1358, 1360 (1994), app. denied, 655 A.2d 981 (1995). Bleday is apparently the only Pennsylvania case to address the issue of whether an insurance company can settle a case over the objections of its insured.1
The Pennsylvania Superior Court examined the case-law of other states and determined that an insurance company settles in bad faith, even if it settles within the policy limits, if the settlement is "contrary to the intent and expectation of the parties." Id. at...
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Caplan v. Fellheimer Eichen Braverman & Kaskey, s. 95-1445
...The order declared null and void an agreement between Vigilant and Caplan, settling a civil action, entitled Caplan v. Fellheimer Eichen Braverman & Kaskey et al., 886 F.Supp. 498, which Caplan had brought in the Eastern District of Pennsylvania. The May 25 Order also enjoined Caplan from e......