Glass v. Rock Island Refining Corp.

• Decision Date: 14 April 1986
• Docket Number: No. 85-1219,85-1219
• Citation: 788 F.2d 450
• Parties: 40 Fair Empl.Prac.Cas. 963, 39 Empl. Prac. Dec. P 36,077 James F. GLASS, Plaintiff-Appellant, v. ROCK ISLAND REFINING CORP. and the Oil, Chemical & Atomic Workers International Union, Local 7-535, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 450

788 F.2d 450

40 Fair Empl.Prac.Cas. 963,

39 Empl. Prac. Dec. P 36,077

James F. GLASS, Plaintiff-Appellant, v. ROCK ISLAND REFINING CORP. and the Oil, Chemical & Atomic

Workers International Union, Local 7-535,

Defendants-Appellees.

No. 85-1219.

United States Court of Appeals, Seventh Circuit.

Submitted Jan. 14, 1986.

Decided April 14, 1986.

Kathleen A. Dayson, Kenneth T. Roberts & Assoc., Indianapolis, Ind., for plaintiff-appellant.

David N. Shane, Baker & Daniels, Roberta Sabin Recker, Indianapolis, Ind., for defendants-appellees.

Before CUDAHY, COFFEY and FLAUM, Circuit Judges.

COFFEY, Circuit Judge.

The plaintiff, James F. Glass ("Glass"), appeals from an order of the district court finding that he knowingly and intelligently waived his Title VII claims against the defendant, Rock Island Refining Corp. ("Rock Island"), and dismissing his complaint with prejudice. We affirm.

I

In December 1979, Glass filed a complaint in the United States District Court for the Northern District of Indiana alleging, inter alia, that Rock Island Refining Corp. discriminated against him because of race in violation of 42 U.S.C. Sec. 2000e (Title VII) in discharging him from his employment in April 1979. The plaintiff sought reinstatement in his former job with Rock Island, an award of backpay, compensatory and punitive damages, and attorneys' fees. When the defendant filed its answer to the complaint, it also filed a third-party complaint against Stuart Bench, Glass' attorney, alleging the plaintiff's complaint to be unreasonable, frivolous, vexatious and thus justified an award of attorneys' fees and costs against Bench. Not long thereafter, in May 1980, Rock Island voluntarily dismissed its third-party complaint against Bench without prejudice pursuant to Fed.R.Civ.P. 41(a). Following two years of pre-trial litigation, the court set a trial date of May 13, 1982 to try the only issue remaining in the plaintiff-appellant Glass' case--whether Rock Island violated Title VII in discharging him because of race.

Attorney Bench and counsel for the defendant met with the district judge in his chambers on the morning of May 13 in a final effort to reach a settlement before trial. The official reporter's transcript of the settlement proceedings reveals that the district judge suggested a possible settlement amount of $3,000 and after a brief discussion between Bench and the district judge, Bench agreed to talk to Glass "one more time" to give him an opportunity to accept a $3,000 settlement. After the settlement conference recessed, Attorney Bench was given an opportunity to discuss the proposed settlement with his client. When the settlement conference reconvened in the judge's chambers some twenty minutes later, Bench reported, "we will take the 3,000.... He [Glass] is reluctant, but he will take it. He would like some more money, to be honest with you. 'See if you can get five,' is what he told me." The judge stated that he would call Glass' case in open court and ask the plaintiff on the record if he were settling his case, but would not ask him the amount of the settlement. The settlement conference adjourned and shortly thereafter the court called Glass' case for trial in open court, at which time the following exchange occurred:

"THE COURT: The Court discussed the settlement aspects of this case also with counsel, and the court has been informed that a figure has been reached which would result in the plaintiff signing certain releases and that that will take some time for preparation and presentation, and when the court is so notified that the releases have been effected, that this case will then be dismissed as settled.

Is that a fair resume of the situation at this time, Mr. Bench?

MR. BENCH: Yes, it is, Your Honor. We have reached an agreement.

THE COURT: Is that a fair representation of the situation, Mr. Shane?

MR. SHANE: Yes, Your Honor, it is.

THE COURT: All right. The Court now addresses the plaintiff in this case, Mr. James F. Glass. Mr. Glass, you are here with your attorney. Are you settling your case on the basis of Mr. Bench's discussion with you?

MR. GLASS: Yes, I am.

THE COURT: All right. The Court now considers that a contract has been executed between the parties, that the releases on every matter transpiring up to this date will be executed and this case will then be handled in the fashion just described by the Court."

On the next day, Bench received a release prepared by Rock Island counsel for Glass to sign providing for a $3,000 payment to Glass in consideration of his agreement: (1) to pay Bench's attorney fee and all court costs out of the $3,000 payment; (2) not to seek reinstatement or future employment with Rock Island; and (3) to stipulate to a dismissal of his action against Rock Island with prejudice. After unsuccessfully attempting to contact Glass by telephone, Bench sent him a letter dated May 24, 1982 requesting that he sign the release. Glass responded to Bench's May 24 letter in writing on May 28 stating that the terms set forth in the release were not the terms he agreed to, and stating, "The figure quoted to me [on May 13] was not $3,000 as you stated in your letter of May 24, 1982. I was offered over $10,000 over a year ago; I did not accept it. Why should I settle for $3,000 now?" Glass sent copies of this letter to the district judge and counsel for Rock Island. The plaintiff Glass sent a second letter again rejecting the $3,000 settlement to Attorney Bench on June 25, again sending copies to the district judge and Rock Island's counsel.

On August 4, 1982 Rock Island filed a petition in the district court to confirm the settlement and dismiss Glass' action with prejudice, and on the same day the district court entered an order finding that the settlement was final on May 13, confirming the settlement and dismissing the plaintiff's claim. Glass appealed and the Seventh Circuit reversed and remanded to the district court for a full evidentiary hearing, concluding that the record failed to demonstrate that the plaintiff knowingly and voluntarily consented to the settlement of his Title VII claim, and thus failed to satisfy the requirements of Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), that an employee's consent to settle a Title VII claim be voluntary and knowing. On remand, the district court heard testimony from Attorney Bench (who withdrew as Glass' counsel following his refusal to execute the release) and Glass.

At the evidentiary hearing, Bench testified that following the initial conference on the morning of May 13, 1982 with counsel for Rock Island and the district judge he met with Glass in the hallway outside the courtroom and explained the settlement terms offered by Rock Island: (1) a $3,000 cash payment to Glass; (2) Glass would not be reinstated to his former position at Rock Island; (3) Rock Island would provide Glass with a neutral letter of reference; (4) Rock Island would "purge" Glass' file so that future employers would not have access to derogatory information concerning him in Rock Island's files; (5) Rock Island would not seek court costs or attorneys' fees from Glass; (6) Rock Island would permit Glass to resign rather than be fired; and (7) Glass would release all of his claims against Rock Island. Attorney Bench also discussed with his client (Glass) the improbabilities of success in his case against Rock Island and explained that if the defendant prevailed at trial, it (Rock Island) might be entitled to recover fees and costs of at least $7,500 from Glass. Bench stated he then went over all of the terms of the settlement agreement with his client for a second time. Bench recounted that Glass acknowledged that he would not receive the entire $3,000 because his fee contract with Bench provided that Bench would receive one-third of a settlement plus his out-of-pocket expenses. Bench further related that he advised Glass that he would reduce his fee to $750.00 and no expenses, and wrote the calculation out on a legal pad ($3,000 minus $750 equals $2,250) in order to demonstrate to Glass how he came up with the cash figure. According to Bench, Glass asked him how long it would be before he would receive the cash settlement and Bench replied that it would be a week or two. Bench further testified that in his discussions with Glass on May 13, he never mentioned a figure other than $3,000 as the cash value of the settlement nor did he ever represent that reinstatement to his former job would be included in the settlement agreement and stipulation to dismiss. Attorney Bench related that after his conversation with Glass in the corridor, he returned to the judge's chambers and informed the judge and Rock Island's counsel that "we had an agreement as to the $3,000 and the other terms." Bench recited that after the judge informed him that he was going to make the settlement a part of the record in open court, he returned to the hallway to talk with his client and explained the terms of the settlement to Glass for a third time, specifically reciting the $3,000 cash maximum amount of money to be paid in settlement. According to Bench, Glass stated that he understood each of the conditions of the settlement and agreed to them. At this time, Bench testified, he explained that if Glass had any questions about the settlement he should ask them now because once the court accepted the settlement and made it part of the record, the settlement would become a binding contract and he (Glass) would thus be bound by it. Glass asked no further questions and proceeded into the courtroom and accepted the settlement offer on the record. As they were leaving the courthouse, Glass again asked Attorney Bench "about the $3,000 and when it would be received," specifically identifying the settlement amount as $3,000. According to Bench, the plaintiff on May 13 never expressed any disagreement over the settlement terms, and...