Lee v. Trees, Inc., Case No. 3:15-cv-0165-AC

• Decision Date: 16 June 2017
• Docket Number: Case No. 3:15-cv-0165-AC
• Parties: SARAH LEE, Plaintiff, v. TREES, INC., a Delaware corporation, and PAUL SIMS, an individual, Defendants. PAUL SIMS, Counter Claimant, v. SARAH LEE, Counter Defendant.
• Court: U.S. District Court — District of Oregon

SARAH LEE, Plaintiff, v. TREES, INC., a Delaware corporation, and PAUL SIMS, an individual, Defendants.

PAUL SIMS, Counter Claimant, v. SARAH LEE, Counter Defendant.

Case No. 3:15-cv-0165-AC

UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION

June 16, 2017

FINDINGS OF FACT AND CONCLUSIONS OF LAW

ACOSTA, Magistrate Judge:

This lawsuit arises from plaintiff Sarah Lee's ("Lee") allegations of employment discrimination and sexual harassment against defendants Trees, Inc. ("Trees"), and Paul Sims ("Sims") (collectively, "Defendants"). Sims asserts that he and Lee entered into a binding settlement agreement resolving Lee's claims against Sims and Sims's counterclaims against Lee. Based on the purported settlement agreement, Sims filed alternative motions for summary judgment or for enforcement of the settlement agreement. (ECF No. 65.) Lee contends no enforceable settlement agreement exists. (ECF No. 70.)

The court has the equitable power to enforce a settlement agreement in any dispute before the court. Callie v. Near, 829 F.2d 888, 890 (1987). Where the existence or terms of a settlement agreement are in dispute, the court must allow the parties an evidentiary hearing to resolve disputes of material fact regarding an agreement to settle the case. Id. Based on the factual dispute, the court held an evidentiary hearing to determine whether Lee and Sims entered into a settlement agreement and, if so, upon which terms. (See Tr. of Evid. Hr'g (ECF No. 88).) The court heard testimony from attorneys Courtney Angeli ("Angeli"), Kristine Lambert ("Lambert"), and Eric Fjelstad ("Fjelstad").¹ Trees did not participate in the evidentiary hearing. Following the evidentiary hearing, Lee and Sims submitted to the court their respective proposed Findings of Fact and Conclusions of Law. Upon review of the pleadings, sworn testimony of witnesses, and other evidence introduced at the evidentiary hearing by the parties, the court makes the following Findings of Fact and Conclusions of Law regarding whether an enforceable settlement agreement exists between Lee and Sims.

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Findings of Fact

I. Parties and Counsel.

1. Lee filed a complaint against defendants Trees and Paul Sims alleging sexual harassment, sex discrimination, assault, battery and intentional infliction of emotional distress. (ECF No. 1.)

2. Trees and Sims each answered the complaint. (ECF Nos. 6, 8, 37.) Sims also asserted four additional counterclaims against Lee seeking money damages for intentional infliction of emotional distress, wrongful conversion of personal property, defamation, and intentional interference with a business relationship. (ECF Nos. 8, 37.)

3. Lee was represented by attorney Eric Fjelstad ("Fjelstad") when this lawsuit began. (ECF No. 1.) Fjelstad withdrew from his representation of Lee on April 21, 2016. (ECF No. 34.) Lee is now represented by attorneys Edwin A. Harnden and Tyler J. Volm. (ECF No. 54.)

4. Trees is represented by attorney Louis Santiago ("Santiago"). (ECF No. 6.)

5. Sims is represented by attorneys Courtney Angeli ("Angeli") and Kristine Lambert ("Lambert"). (ECF No. 8.)

II. January 2016 Conference.

6. In January 2016, Fjelstad, Santiago, Angeli, and Lambert met to discuss the status of this lawsuit. Sims and Lee did not attend this meeting, nor did a representative of Trees. (Tr. 13:2-17; 34:4-11; 47:17-48:10.)

7. Before the January 2016 meeting, Fjelstad discussed the upcoming meeting with Lee. Fjelstad told Lee he expected settlement might be a topic of the meeting. Lee and Fjelstad did not discuss what Fjelstad should do if Sims or Trees made a settlement offer. Fjelstad did not have any authorization from Lee to settle the case. (Tr. 51:9-15; 51:16-52:7.)

8. Angeli told Fjelstad about a recent expert report regarding Lee's mobile phone. Angeli believed the report called into question the veracity of Lee's allegations. (Tr. 13:2-10.)

9. At the end of the meeting, Angeli suggested a walkaway settlement, where Lee and Sims would dismiss their claims against each other. Santiago nonverbally indicated he thought Trees would be willing to walk away, although Trees did not have any counterclaims against Lee to dismiss. (Tr. 13:21-14:9; 38:23-39:10.)

10. Fjelstad thought about the case holistically, such that any resolution would dispose of all claims and parties. He did not express his approach to Angeli, Lambert, or Santiago. During the meeting, Fjelstad assumed, but did not tell Angeli, Lambert, and Santiago, that Lee required a global settlement. (Tr. 44:20-45:3; 52:8-12; 53:13-16.)

11. Fjelstad stated he would speak with Lee about how she wanted to proceed. (Tr. 14:15-17.)

III. Fjelstad and Lee discuss settlement.

12. After the January meeting, Fjelstad called Lee to discuss the information learned at the meeting and the prospect for a walkaway settlement. Fjelstad informed Lee that contesting the expert report would be expensive, and recommended settling the case. Lee requested more time to make a decision. (Tr. 53:21-55:5.)

13. Fjelstad and Lee consistently discussed settling the case with both defendants. Fjelstand and Lee never discussed the possibility of an individual settlement. (Tr. 53:13-16; 55:1-5.)

14. Lee and Fjelstad spoke on the phone 2-4 more times after their first post-meeting phone call. (Tr. 55:20-22; 57:1-18.)

15. Lee eventually gave Fjelstad authority to agree to a walkaway settlement with "them" — both Trees and Sims. (Tr. 55:20-24.)

IV. Fjelstad proposes settlement.

16. On March 4, 2016, Fjelstad left a voicemail message for Angeli regarding settlement. The message stated, in part: "I would like to talk to you about Sarah Lee and see if we can end this thing." Fjelstad asked Angeli to call him back. (Ex. 1; Tr. 14:20-16:16.)

17. At an unspecified time before March 4, 2016, Sims gave Angeli authority to settle the claims between him and Lee on a walkaway basis. (Tr. 18:8-11.)

18. Shortly after receiving Fjelstad's message, Angeli called Fjelstad. Fjelstad asked whether Sims was still amenable to the walkaway settlement discussed at the January meeting. Angeli responded that Sims remained willing to settle the case on a walkaway basis. Fjelstad then stated Lee wanted to do so. Angeli accepted Fjelstad's offer of a walkaway settlement. She then offered to prepare dismissal papers to file with the court. (Tr. 16:24-17:15; 39:17-22.)

19. Before ending the call, Fjelstad asked whether Santiago and Trees would be willing to settle on the same terms. Angeli replied that she thought Trees would agree to the same terms, but did not represent Trees. (Tr. 17:16-20; 45:4-7.)

V. Attempts to reach a written settlement agreement.

20. Sims filed a motion to compel discovery in January 2016, after the meeting. (ECF no. 23.) Lee's response to this motion was overdue by March 4. On March 7, Fjelstad notified the court that the matter had been settled, to eliminate the need for a response. (ECF No. 27.) The court entered a scheduling order noting that Fjelstad had notified the court that the matter was settled, and set a date for a final paper call. (ECF No. 27.)

21. On March 8, 2016, Santiago contacted Fjelstad via email to express his confusion regarding the court's scheduling order, as Trees had not yet responded to Lee's offer of a walkaway settlement.

Fjelstad responded that he understood that, based on Angeli's representation, Trees would accept a walkaway settlement. Fjelstad then offered to settle Lee's claims against Trees on a walkaway basis. (Ex. 3 at 3-4.)

22. Replying to Fjelstad's email, Santiago rejected a walkaway settlement as unduly vague. He stated he would send a written settlement agreement for Lee to consider. (Ex. 3 at 2.)

23. Santiago sent a written settlement agreement to Fjelstad with terms in addition to the provision that all parties dismiss their claims. One of the additional terms was a "no-rehire" clause precluding Lee from future employment with Trees. (Ex. 3 at 6-7.)

24. On March 22, Fjelstad sent Santiago an email stating Fjelstad's approval of the written agreement. Fjelstad stated he would send the agreement to Lee for her signature. (Ex. 2 at 1.)

25. Fjelstad knew from previous conversations with Lee that she was likely to oppose the no-rehire clause in the proposed written agreement. He believed that he would be able to convince Lee to accept the no-rehire clause, however. (Tr. 44:12-15.)

26. Fjelstad sent Lee the proposed settlement agreement via conventional mail because Lee did not have access to a computer at the time. (Tr. 42:22-43:9.)

27. Upon receiving the proposed settlement agreement, Lee contacted Fjelstad. She rejected the proposed agreement because of the no-rehire provision and a provision regarding non-party Joint Apprenticeship Training Committee ("JATC"). (Tr. 43:11-13.)

28. Fjelstad and Santiago were unable to reach a mutually acceptable settlement agreement. Lambert and Angeli learned of Lee's rejection of the Santiago-drafted settlement agreement on April 6, 2016. (Tr. 26:10-19; 29:23-25; 43:11-13.)

29. Lambert called Fjelstad on April 8. When she called Fjelstad, Lambert believed Lee and Simshad a binding oral settlement agreement based on the March 4 oral agreement between Angeli and Fjelstad. The purpose of Lambert's phone call was to finalize the walkaway settlement agreement between Lee and Sims. On April 8, Fjelstad did not answer. (Tr. 30:2-9.)

30. Lambert called Fjelstad again on April 12.² This time, Fjelstad answered. Lambert asked whether Lee remained willing to enter into an individual walkaway settlement agreement with Sims. Fjelstad stated that Lee remained interested in settling with Sims, and that she had rejected the proposed written agreement only because of the no-rehire provision and JATC release — provisions which had nothing to do with Sims. Fjelstad reiterated his acceptance of a mutual walkway settlement on Lee's behalf. Lambert offered to draft a standard short-form settlement agreement, and Fjelstad agreed that she could do so. (Tr. 30:11-24; 31:21-32:1.)

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