Seymour v. Hug

• Citation: 413 F.Supp.2d 910
• Decision Date: 08 November 2005
• Docket Number: No. 04 C 2041.,04 C 2041.
• Parties: Donna L. SEYMOUR, Plaintiff, v. Carol HUG and Roger Hug, d/b/a Remax Team 2000; Patricia Brown-Wyrick; Cendant Mobility Corp., a Corporation; and Curtis Castle and Carol Castle, Defendants.
• Court: U.S. District Court — Northern District of Illinois

413 F.Supp.2d 910

Donna L. SEYMOUR, Plaintiff, v. Carol HUG and Roger Hug, d/b/a Remax Team 2000; Patricia Brown-Wyrick; Cendant Mobility Corp., a Corporation; and Curtis Castle and Carol Castle, Defendants.

No. 04 C 2041.

United States District Court, N.D. Illinois, Eastern Division.

November 8, 2005.

Motion for Reconsideration November 10, 2005.

COPYRIGHT MATERIAL OMITTED

F. Willis Caruso, Lewis W. Powell, III, John Marshall Fair Housing Clinic, Leslie Valerie Matlaw, Law Offices of Leslie V. Matlaw, P.C., Chicago, IL, for Plaintiff.

Mark David Howard, Law Offices of Mark D. Howard, Manuel Sanchez, Camille A. Cribaro-Mello, Gerald Michael Dombrowski, Sanchez & Daniels, Paige C. Donaldson, Sanchez Daniels & Hoffman, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER¹

COLE, United States Magistrate Judge.

INTRODUCTION

This case has its genesis in Donna L. Seymour's unsuccessful attempt to purchase a home in a suburb of Chicago from realtors, Roger and Carol Hug, Patricia Brown-Wyrick and H & H Realty, Inc. (collectively "Realtor Defendants"), and Cendant Mobility Corp. and Curtis and Carol Castle (collectively "Owner Defendants"). According to Ms. Seymour, although she had successfully negotiated a contract for the purchase of the home, the defendants "sold it out from under her" when they discovered she was African-American. On March 18, 2004, Ms. Seymour filed a complaint alleging unlawful discrimination against her on the basis of race in violation of the Fair Housing Act, 42 U.S.C. §§ 3604, 3605, 3617, and breach of contract under Illinois state law. A week later, she amended her complaint, and she did so again on August 20, 2004. Discovery ensued as did intensive settlement discussions.

On May 24, 2005, the parties filed a Joint Status Report, stating that they "were in the process of finalizing an agreed settlement," and that they had "agreed in principle to a settlement of all claims. A condition of the settlement is that plaintiff must seek approval from the Surrogate's Court in New York, the state of residence of plaintiff and her children, in order to procure a valid release of any potential claims of her minor children." (Id.)² On June 20, 2005, counsel for certain of the defendants reported at a status hearing that the case was settled, and that the execution of the formal settlement agreement by all parties was imminent. Accordingly, I dismissed the case with leave to reinstate within 60 days in the event of any unanticipated problem and retained jurisdiction to enforce the settlement agreement.³

Apparently, over the course of the next week, the defendants, concluded that they had been had—and rather badly at that— by the plaintiff and her lawyers. They demanded that Ms. Seymour make further application to the Surrogate's Court and provide the Court with the information they insisted she had withheld. The plaintiff s lawyers refused. On June 29, 2005, Ms. Seymour filed this present Motion to Enforce the Settlement Agreement or, in the Alternative, to Vacate Dismissal, Reinstate Case, and Enter Judgment on the Agreement. On July 15, 2005, the defendants filed a Cross Motion to Enforce Settlement and For Fees, in which they contend that Ms. Seymour failed to comply with the terms of the parties' March 14, 2005 settlement agreement. The motion argued that Ms. Seymour and her lawyers had deceived the defendants and the Surrogate's Court in New York into approving the settlement of the instant case and authorizing a release of the claims of Ms. Seymour's children.⁴ Ms. Seymour's view of the matter is, predictably, quite different. She denies that there was any settlement on March 14^th and insists that the settlement is that contained in a document prepared by the defendants on April 28, 2005, which required that she obtain a release of the childrens' claims. For her, form is substance, and having obtained on May 20, 2005 an order of the Surrogate's Court approving the settlement and releasing any claims of her children, her obligations have been fulfilled.

The difficulty, however, is that form is not substance, and Ms. Seymour's contention that she has complied with the terms of the settlement agreement merely by securing an order of the Surrogate's Court, regardless of the circumstances under which the order was obtained, is plainly mistaken. Under New York law, the Surrogate's Court had to be "fully apprised" of all the relevant facts and circumstances in order to make an informed determination of whether the approval of the settlement was in the children's "best interest." Unless that occurred, the defendants would be subject to precisely the risks of future litigation by Ms. Seymour's children that the settlement agreement was designed to avoid. Only the "latitudinarian attitude of Alice in Wonderland towards language," National Mutual Insurance Co. v. Tidewater Transfer Co., 337 U.S. 582, 69 S.Ct. 1173, 93 L.Ed. 1556. 654 (1949)(Frankfurter, J., dissenting), could support the plaintiff's contention that the petitions Ms. Seymour filed in New York fully and properly informed the Court of the nature of the children's claims and the allegations made by Ms. Seymour in the underlying action. The disquieting reality is that the Surrogate's Court was ill-served by Ms. Seymour and her legal advisors, and that by failing to comply with New York law in her presentation to the Surrogate's Court, Ms. Seymour breached the settlement agreement she made with the defendants.

I. FACTUAL BACKGROUND

A.

The Complaints, Discovery, And Early Settlement Demands

All of Ms. Seymour's pleadings repeatedly referred to her "family" and "children." The complaint and amended complaint charged that she "celebrated with her children having successfully negotiated for their new home." (Compl., at ¶ 60; Am. Compl., at ¶ 57). She also alleged that she brought her children to see the home. (Am. Compl., at ¶ 49). All three versions of her complaint alleged that the defendants' actions caused Ms. Seymour "and her family economic injury, consequential damages and personal harm," (Compl., at ¶¶ 77, 80, 82, 84; Am. Compl., at ¶¶ 102, 105, 107, 109; 2nd Am. Compl., at ¶¶ 111, 114, 116, 118)(emphasis supplied), and requested compensatory and punitive damages "for discrimination against her and her children." (Compl., at ¶ 84 Prayerd; Am. Compl., at ¶¶ 102 Prayer (d), 105 Prayer (d), 107 Prayer (d); 2nd Am. Compl., at ¶para; 111 Prayer (d), 114 Prayer (d), 116 Prayer (d))(emphasis supplied).

Consistent with these allegations of harm to her children, in the complaints, Ms. Seymour demanded in August 2004 that in addition to payment of $150,000 in damages to her, her two children were entitled to $50,000 "to compensate them for defendants' illegal actions, and the resulting emotional distress." (Defendants' Brief Ex. B). Ms. Seymour's insistence that her children were harmed by the defendants' actions—and thus had their own claims—continued into discovery. When asked at her deposition in December 2004 to explain what damages were being claimed, Ms. Seymour said that it had been "a very painful experience for myself, for my children," and that she relocated "my family because of this occurrence." (Defendants' Br. Ex. C at 34). When counsel for the owner defendants, asked if Ms. Seymour understood that her children were not party to this lawsuit, Ms. Seymour responded that while her children were not parties, "my children have been affected by the discrimination that this lawsuit is about. . . ." Id. at 35. When asked if she was making a claim on behalf of her children, Ms. Seymour declared: "My children's lives have been forever altered as a result of this lawsuit, which was us having to relocate across the country. I have not chosen at this time to file a lawsuit on their behalf." Id. (Emphasis supplied). There then followed this telling exchange between Ms. Donaldson and Ms. Seymour:

Q: Are you making a claim in this lawsuit for damages that you claim were suffered by your children as a result of this transaction?

A: I'm making a claim in this lawsuit that my children's lives have been affected by what has occurred in this transaction.

Q: And you're making that claim despite the fact that your children are not plaintiffs and this action is not brought on their behalf.

A: That's correct.

Id. at 36. (Emphasis supplied).

It is thus clear that Ms. Seymour was of the view that her children had their own independent, substantial claims, and, although they were not being asserted "in a lawsuit" "at this time," the specter of future litigation by the children loomed like a brooding omnipresence. From any prudent perspective, a settlement with Ms. Seymour had to include the children's unpled claims. That, at least, was the defendants' non-negotiable position.

B. The Early Settlement Negotiations

The unpled claims of Ms. Seymour's children remained a central issue as the settlement negotiations continued into early 2005. On March 11, 2005, Mark Howard, counsel for the realtor defendants, emailed the terms of defendants' settlement offer to William Caruso, one of Ms. Seymour's counsel. (Defendants' Br. Ex. D1). The first two of five terms predictably dealt with the children's claims:

1) Plaintiff to amend complaint to include minors' claims prior to dismissal pursuant to settlement, and to petition [Magistrate Judge] Levin in accordance [with] N.Y. state law Chapter 308, section 1207 (reproduced below) and allocate a reasonable amount to the minor's [sic] claims, and in the event Levin declines to exercise jurisdiction, then plaintiff will institute a special proceeding in NY;

2) $37,500 total offer divided among the plaintiff and her children in the manner approved by the appropriate court, inclusive of any and all attorneys fees and costs . . .

Id. (Parenthesis in original). Mr. Howard sent along a copy of § 1207 of the New York Civil Practice Law and Rules, adding emphasis to the portions he believed pertinent:

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