Collins v. Educational Therapy Ctr., 98-3916

• Decision Date: 28 June 1999
• Docket Number: No. 98-3916,98-3916
• Citation: 184 F.3d 617
• Parties: (7th Cir. 1999) CHARLES COLLINS, Plaintiff-Appellant, v. EDUCATIONAL THERAPY CENTER, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 617

184 F.3d 617 (7th Cir. 1999)

CHARLES COLLINS, Plaintiff-Appellant, v. EDUCATIONAL THERAPY CENTER, Defendant-Appellee.

No. 98-3916

United States Court of Appeals, Seventh Circuit

Argued May 21, 1999

Decided June 28, 1999

Appeal from the United States District Court for the Southern District of Illinois. No. 94 C 644--Paul E. Riley, Sr., Judge.

Before FLAUM, KANNE, and ROVNER, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

This is a frivolous appeal. Appellant Charles Collins challenges the district court's order compelling him and his attorney, Laura Robinson, to sign documents reflecting the agreed upon terms of his settlement with the appellee and sequestering in the court registry the portion of the settlement due Robinson for her fees pending the resolution of a state-court dispute concerning her former co-counsel's claim to a share of those fees. We affirm with sanctions.

I.

Collins filed suit against the Educational Therapy Center ("ETC") and its director in 1994, alleging that ETC had reduced his employment from full- to part-time because of his race, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. sec.2000e-2(a)(1). The case proceeded to trial, at the conclusion of which a jury found that the defendants had indeed discriminated against Collins. The jury awarded Collins $96,034.80 in compensatory damages; the district court additionally ordered the defendants to reinstate Collins to full-time employment and to pay $54,943.75 in attorney's fees, $471 in court costs, and backpay equivalent to the wages and benefits Collins lost when he was reduced to part-time employment. On appeal last year, we affirmed the judgment of liability against ETC in favor of Collins, vacated the judgment against its director (who could not properly be sued in her individual capacity), and, in light of various evidentiary errors and the possibility of duplicative recoveries, vacated the jury's award of damages as well as the district court's award of backpay and ordered a new trial on damages. Collins v. Kibort, 143 F.3d 331 (7th Cir. 1998). The case was returned to the district court.

On August 25, 1998, the parties participated in a settlement conference and came to terms on a mutually satisfactory resolution of the case. ETC agreed to pay $100,000 to Collins and $80,000 in fees to his attorney, Robinson, while Collins agreed to resign from ETC's employ at once. The parties reported the terms of their agreement to the magistrate judge, and two weeks later, on September 8, the district court dismissed the case without prejudice and with leave to reinstate in the event that the settlement was not consummated. R. 83. The court also retained jurisdiction for purposes of enforcing the settlement. Id. By this time, Collins was no longer working for ETC, but ETC had not yet issued checks to Collins and Robinson.

On September 4, 1998, attorney R. Ronnae Black filed suit in Illinois state court against Collins, Robinson, ETC, and ETC's counsel claiming, pursuant to a contingent fee agreement, entitlement to approximately $48,000 in fees. R. 84 Ex. 4. Black had appeared at trial on Collins' behalf, although Robinson asserts that his participation in the trial and pre-trial proceedings was quite limited. In any case, Black sought and obtained a preliminary injunction from the Illinois court barring ETC and its counsel from releasing any money payable to Robinson under the settlement agreement. Id. Ex. 5. The injunction called for the $80,000 to be placed in a trust account. Id. at 3.¹

Shortly after Black filed the state lawsuit, ETC and Collins filed cross-motions in federal court to enforce the settlement agreement. R. 84, 85. In relevant part, Collins wanted the amounts agreed to in the settlement to be paid at once to himself and Robinson, notwithstanding the state court's injunction as to the moneys due Robinson. ETC, on the other hand, wanted the court to compel Collins and Robinson to sign the written settlement agreement, which they had not yet done, and to authorize ETC to dispose of the $80,000 as instructed by the state court or as the district court itself might see fit to direct.

Judge Riley referred the motions to Magistrate Judge Cohn, who recommended that ETC's motion be granted. ETC had prepared a settlement agreement and general release dated September 10, 1998 and forwarded the document to Robinson for execution. Judge Cohn found that both parties had agreed to the terms set forth in this version, inasmuch as it incorporated all of the changes that Robinson had previously requested. R. 89 at 1-2. He therefore saw no reason not to enforce the settlement by requiring Collins and Robinson to execute the September 10 settlement agreement and general release. Id. at 2. The pending dispute between Robinson and Black presented state rather than federal questions, Judge Cohn reasoned (id.), and could be accommodated by requiring ETC to pay the $80,000 due Robinson into the court registry subject to the state court's adjudication of Black's lawsuit (id. at 3). The $100,000 due to Collins would be paid to him directly. Id.

Judge Riley adopted the Magistrate Judge's report and recommendation over Collins' objection and ordered the $80,000 due Robinson to be paid into the court registry. R. 92. The judge rejected the entreaties of Collins and Robinson to have him block Black's lawsuit, noting:

Plaintiff, by and through his attorney Laura Robinson, has provided the Court with a litany of ramblings, pleas and allegations. Plaintiff, however, has not given the Court any substantive reason to interfere with a dispute that clearly belongs in state court.

Id. at 2-3.

II.

Although Collins purports to present ten issues for our review (see Collins Br. 1-2), there is only one subject that we need to address, and that is the propriety of the district court's decision to enforce the settlement agreement and to sequester the $80,000 payable to Robinson in the court registry pending resolution of the state litigation. Two of the issues Collins has identified relate to that question; each of the remaining eight concerns an off-the-record discussion that took place at the August 25th settlement conference. Prior to that conference, ETC's counsel apparently had been alerted to the possibility that attorney Black might be asserting a lien on any fees paid to Robinson. At the conclusion of the conference, after the terms of the parties' settlement had been summarized for the magistrate judge, ETC's counsel initiated an off-the-record discussion with the court concerning this possibility. Collins devotes a large portion of his brief to the accuracy of the representations that ETC's counsel made on this subject and to the propriety of the court allowing the discussion to proceed off the record. Yet, so far as the record and the briefs reflect, the magistrate judge took no action at that time based on any off-the-record representations that ETC's counsel may have made as to Black's possible lien. When the district court later did decide to sequester the funds that would otherwise have been paid directly to Robinson, it did so based on the state lawsuit that Black had filed after the August 25th settlement conference. Nothing in either the magistrate judge's report and recommendation or the district court's order adopting that report suggests that the court was in any way influenced by the off-the-record discussion that took place on August 25. Common sense suggests that Black's decision to file suit rendered entirely moot any predictions or representations ETC's counsel had previously made as to Black's possible course of action. Consequently, we see no need to address those representations.

The decision whether or not to enforce a settlement is one committed to the district court's discretion. As we explained in Carr v. Runyan:

Given that the power to implement a settlement agreement between the parties inheres in the district court's role as supervisor of the litigation, the exercise of that power is particularly appropriate for deferential review. Wilson v. Wilson, 46 F.3d 660, 664 (7th Cir. 1995). Thus, in considering a district court's decision whether to enforce a settlement agreement, including its threshold determination of whether the parties actually entered into a valid and enforceable agreement, we will not reverse unless the lower court abused its discretion. Id. Under this standard, we do not ask whether we would have ruled as the district court did were the question before us in the first instance, but rather whether under the circumstances the district court's decision was reasonable. Antevski v. Volkswagenwerk Aktiengesellschaft, 4 F.3d 537, 53940 (7th Cir. 1993).

89 F.3d 327, 331 (7th Cir. 1996), cert. denied, 519 U.S. 1117, 117 S. Ct. 962 (1997). Collins does not contest the proposition that the parties had, indeed, settled the case. Nor does he contend that the September 10, 1998 version of the settlement agreement and release that Collins and Robinson were ordered to sign inaccurately reflected the terms of that agreement. His sole contention in this respect is that the court improperly amended the settlement agreement by ordering the money due Robinson under that agreement to be paid instead into the court registry until such time as the state court determined Black's entitlement, if any, to a share of that money. That is an additional settlement term, Collins argues, to which he and Robinson would never have agreed.

We reject the notion, however, that the court effectively amended the settlement agreement by ordering the sequestration of the funds payable to Robinson. That order does not alter the terms of the settlement. ETC remains obliged under the agreement to pay...