Negron Gaztambide v. Hernandez Torres
| Decision Date | 25 February 1998 |
| Docket Number | No. 97-1858,97-1858 |
| Citation | 145 F.3d 410 |
| Parties | Olga G. NEGRON GAZTAMBIDE, Plaintiff, Appellee, v. Zaida HERNANDEZ TORRES, et al., Defendants, Appellees. Hon. Charlie Rodriguez, etc., et al., Appellants. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Pablo Landrau Pirazzi, with whom Aldarondo & Lopez Bras, Claudio Aliff Ortiz, were on brief for appellant Rodriguez and Manuel J. Perez Garcia, was on brief, for appellant Misla and Figueroa.
Carlos Del Valle Cruz with whom Ricardo L. Torres Munoz was on brief, for appellees.
Before SELYA, Circuit Judge, CAMPBELL, Senior Circuit Judge, and STAHL, Circuit Judge.
Defendants-appellants Edison Misla Aldarondo ("Misla"), President of the House of Representatives of Puerto Rico; Jose Figueroa ("Figueroa"), Director of the Legislative Service Office; and Charlie Rodriguez ("Rodriguez"), President of the Senate, each of whom has been sued solely in his capacity as an officeholder of the Commonwealth of Puerto Rico, appeal from an order of the district court enforcing a $300,000 settlement agreement between plaintiff-appellee Olga G. Negron Gaztambide ("Negron") and the Commonwealth. 1 Because we find that the attorneys who entered into the putative settlement agreement did not have the actual authority to do so on behalf of the Commonwealth, we vacate and remand.
In late January or early February 1993, Negron was discharged from her position as a librarian in the Legislative Library, which is managed by the Legislative Service Office of the Commonwealth of Puerto Rico. She was informed of her discharge in a letter signed by Nelida Jimenez Velazquez ("Jimenez"), then the Director of the Legislative Service Office. At the time, Zaida Hernandez Torres ("Hernandez") was the Speaker of the House of Representatives, and Roberto Rexach Benitez ("Rexach") was the President of the Senate.
On June 22, 1993, Negron brought this section 1983 action alleging, inter alia, that Jimenez, Hernandez, and Rexach had terminated her employment because of her political affiliation with Puerto Rico's Popular Democratic Party in violation of the First Amendment. Negron sued the three defendants in both their personal and official capacities, seeking monetary damages and reinstatement. The district court dismissed Negron's claims on the ground that the defendants were entitled to legislative immunity. We reversed, holding that the challenged actions were administrative and thus not subject to an absolute immunity defense. See Negron-Gaztambide v. Hernandez-Torres, 35 F.3d 25 (1st Cir.1994). 2
After remand, the case was eventually scheduled for trial on November 25, 1996. Pursuant to a defense and indemnification statute commonly referred to as "Law 9," see P.R. Laws Ann. tit.32, §§ 3085, 3 the Commonwealth's Department of Justice ("DOJ") provided the defendants with legal representation. Attorney Antonio Montalvo ("Montalvo") represented defendants Hernandez and Jimenez, and counsel Miguel Pagan ("Pagan") represented Rexach. 4 On the day the trial was to commence, the attorneys held settlement negotiations in the chambers of the district court. In order to obtain Law 9 funds to indemnify the defendants for the costs of the settlement, the attorneys made several calls to the DOJ during the course of the negotiations. DOJ procedures require that settlements be submitted to a Settlement Committee, which then makes a recommendation regarding approval to the Commonwealth's Attorney General ("AG"), prior to the allocation of Law 9 funds. By the conclusion of the negotiations, approval from the AG had not yet been obtained. Nonetheless, the parties informed the district court that an agreement had been reached and that they were in the process of obtaining the required approval. 5
With the settlement conference concluded, the district court questioned counsel on the record regarding the terms of the oral agreement the parties had reached. Attorney Pagan began by stating that "the agreement that the attorneys have reached is pending approval by the Commonwealth of Puerto Rico Department of Justice." Pagan then described the settlement, stating that the defendants (without specifying whether in their official or personal capacities) had agreed to provide monetary damages in the amount of $300,000, that the district court record in this case would be sealed, and that Negron would be reinstated to her job with certain retirement benefits after the AG accepted the settlement. As for the source of the funds, Pagan made the following opaque statement:
The Senate of Puerto Rico and its President, Roberto Rexach Benitez will pay by stipulation the amount of $150,000. The House of Representatives and defendant Zaida Hernandez Torres, now the Superior Judge of Puerto Rico, Honorable Nelida Jimenez will pay also the amount of $150,000.
The district court specifically asked both defense attorneys, Pagan and Montalvo, whether they had authorization from their clients to propose the settlement, and both replied affirmatively. The district court then stated, "[B]oth counsel are working under my orders to get the settlement committee to approve this as soon as possible, at least to consider it as soon as possible with your recommendations."
In January 1997, new leadership took power in the Puerto Rico legislature. Rodriguez was sworn in as the new President of the Senate; Misla, as Speaker of the House of Representatives; and Figueroa, as Director of the Legislative Service Office. Pursuant to Fed.R.Civ.P. 25(d)(1), Rodriguez, Misla and Figueroa were automatically substituted as defendants in their official capacities to the official capacity claims Negron had brought against Hernandez, Jimenez and Rexach. At that point, therefore, there were two sets of defendants: the official capacity defendants (Rodriguez, Figueroa, and Misla) and the personal capacity defendants (Hernandez, Jimenez and Rexach). 6
The change in legislative leadership may have prompted a change in heart about the settlement. On March 13, 1997, the district court required representatives from the DOJ to attend a status conference on the settlement agreement. An attorney representing the AG explained that monies to satisfy the settlement would come from Law 9 funds, but took the position that the defendants had not followed the proper procedure to obtain the statutory funds. The attorney explained that a petition for the funds had to go to the Settlement Committee at the DOJ first, and then to the AG for his approval. The district court then granted the AG until March 26, 1997, to decide if the settlement would go forward as planned; otherwise, a jury trial would commence on May 12, 1997.
On March 25, 1997, the AG filed an informational submission stating that Hernandez, still a defendant in her personal capacity, had contacted the AG and claimed that she had not been aware of the details of the settlement and would not approve it until all the details were made known to her. The AG informed the court that, as a result, he would not make a decision concerning payment of the settlement from Law 9 funds until all parties were in agreement, and until a proper settlement request had been prepared and submitted to the DOJ.
On March 31, 1997, plaintiff filed a motion requesting the district court to enter judgment in accordance with the stipulation entered by Attorneys Montalvo and Negron. The motion requested (1) entry of judgment consistent with the November 25, 1996, settlement agreement; (2) additional back pay; (3) a default judgment against Hernandez plus sanctions; (4) $25,000 in attorney's fees; (5) a contempt order against appellants in their official capacities; and (6) any other remedies that the court deemed proper. The official capacity defendants opposed this motion, arguing that the settlement was contingent upon AG approval.
On June 16, 1997, the district court granted the plaintiff's motion in part. The district court found that, as far as the court was concerned, "a valid and enforceable settlement agreement was reached on November 25[, 1996] and that there is no issue as to the parties' consent." The court described how it understood the oral agreement that had been reached between the parties:
It is the Court's recollection that the only snag in the settlement negotiations was whether the sum agreed upon as damages would be paid out of the General Fund pursuant to Law 9 (for which the DOJ approval process was necessary) or by the Legislature. During the settlement discussions that took place on November 25, the Court stated to the parties that the source of the funds was not the Court's concern. Based on ... representations made during these discussions, which included telephone calls made from the [district court's chambers] to the DOJ, the Court assumed that the settlement would be paid from the General Fund.... The Court's understanding ... was not that the settlement was contingent on approval by the DOJ in the sense that the agreement would be off were the DOJ not to grant approval. Rather, the court's understanding was that if the DOJ did not accept the settlement, the Legislature would assume the payment.
The district court thus directed the Commonwealth's Attorney General to "make a determination with respect to the settlement," and then ordered that if the AG declined to pay, the legislature would fulfill the defendants' end of the settlement. The district court granted plaintiff's motion for entry of judgment, but denied the request to find defendants in contempt and for sanctions. The Commonwealth now appeals this order. Two defendants in their personal capacities (Rexach and Jimenez) have supported the plaintiff's appeal with affidavits claiming that they had consented to the settlement agreement.
As always, we have a duty to question our jurisdiction to hear this appeal. On September 10, 1997, the district...
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