Sloan v. CoreCare Behavioral Health Mgmt.
| Decision Date | 05 April 2023 |
| Docket Number | Civil Action 22-cv-04703 |
| Parties | SLOAN, Plaintiff, v. CORECARE BEHAVIORAL HEALTH MANAGEMENT, INC. et al Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
The issue before the Court is whether a pre-litigation settlement agreement between Katerry Sloan (“Plaintiff”) and CoreCare Behavioral Health Management, Inc. and CoreCare Systems, Inc., d/b/a Kirkbride Center (collectively “Defendants”) is enforceable. This issue has been fully briefed and an evidentiary hearing was held on February 7, 2023. For the reasons set forth below, the Court deems the settlement agreement enforceable and, accordingly, will dismiss this action in its entirety.
Plaintiff was employed by Defendants until February 7, 2022. ECF No. 1 at ¶ 88. In April 2022, Plaintiff filed a charge with the Equal Employment Opportunity Commission (“EEOC”) regarding allegations of employment discrimination in violation of Title VII. Id. at ¶ 5. The EEOC issued a Determination and Notice of Rights letter to Plaintiff on August 25, 2022. Id. at ¶ 6. Prior to Plaintiff filing suit against Defendants, and at Defendants' request, the parties agreed to participate in private mediation. Id. at ¶ 27.
Mediation took place via Zoom on November 2, 2022 and was attended by Ms. Cimini, Esq. (Mediator), Plaintiff and Plaintiff's counsel, and Mr. Fleming (Defendants' corporate representative) and Defendants' counsel. Id. at ¶ 29. However, Defendants' corporate representative left the Zoom call while mediation was ongoing. ECF No. 6 at ¶ 46. Subsequently, Defendants' counsel conveyed a “final offer” of $100,000, which Plaintiff accepted. ECF No. 1 at ¶¶ 31-46. Defendants' counsel worked to finalize a memorandum of understanding (“MOU”) and, once the MOU was finalized, represented that “on behalf of myself and Defendants we accept these terms.” Id.; ECF No. 1-7 at 2.
Following mediation, however, Defendants refused to pay the $100,000 as outlined in the MOU. ECF No. 1 at ¶ 48. Accordingly, Plaintiff initiated this action on November 23, 2022. Plaintiff's Complaint alleges breach of contract (Count I), promissory estoppel (Count II), and fraudulent inducement (Count III) for Defendants' failure to abide by the terms of the MOU. ECF No. 1 at ¶¶ 25-62. Plaintiff also brings the employment-related claims initially contemplated (Counts IV-X). Id. at ¶¶ 63-118. Defendants maintain that Defendants' counsel acted beyond the scope of her authority and that the MOU is therefore unenforceable. See generally, ECF No. 6.
Upon review of the allegations set forth in the Complaint, it was apparent that moving forward on the action required an evidentiary hearing, at the outset, as to whether the matter had been settled. If the dispute had indeed been settled, it would have negated the need to move forward with the litigation. On January 24, 2023, the Court ordered both parties to brief the issue of whether this action should proceed given that the settlement had been accepted in writing. ECF No. 9. The Court also scheduled a hearing on the issue for February 7, 2023 and ordered that Ms. Moreland, Mr. Fleming, Ms. Di Ottavio, Mr. O'Riorden, Mr. Hennelly, and Ms. Cimini appear at the hearing. Id. On January 30, 2023, to avoid conflict of interest issues, counsel from Ms. Moreland's firm withdrew their representation of Defendants. ECF No. 10. Accordingly, Mr. O'Riordan, who is not associated with Ms. Moreland's firm, entered his appearance. Id. Both parties filed their respective briefs regarding the enforceability of the settlement agreement on February 1, 2023 and their respective responses on February 3, 2023. ECF Nos. 11-14.
On February 7, 2023, the Court held a hearing on the enforceability of the settlement agreement. At the hearing, Plaintiff presented Ms. Cimini, Mr. Hennelly, and Ms. Moreland for direct and cross examination and entered ten supporting exhibits into the record, which were subsequently filed on the docket. ECF Nos. 17-18. Defendants presented Mr. Fleming for direct and cross examination and did not enter any additional exhibits. ECF No. 18. Following the hearing, the Court ordered each party to file proposed findings of fact and conclusions of law. ECF No. 16. Plaintiff filed proposed findings of fact and conclusions of law and an accompanying brief on February 21, 2023. ECF Nos. 20-21. Defendants also filed proposed findings of fact and conclusions of law on February 21, 2023. ECF No. 22. On March 3, 2023, both parties filed briefs in opposition to the opposing proposed findings of fact and conclusions of law. ECF Nos. 23-24.
Upon consideration of the testimony presented at the February 7, 2023 hearing and the record evidence, the Court makes the following findings of fact[1]and conclusions of law.
1. Plaintiff alleged employment discrimination against Defendants and, in July 2022, conveyed to Defendants that she would not settle for below six figures.
2. On July 27, 2022, Plaintiff made a demand of $210,000.
3. In August 2022, Defendants proposed participating in pre-litigation mediation.
4. The parties selected Ms. Cimini, Esq. as their mediator.
5. Mediation was held on November 2, 2022, via Zoom conference call.
6. At all relevant times, Plaintiff was represented by Mr. Manes, Esq. (“Plaintiff's counsel”).
7. At all relevant times, Defendants were represented by Ms. Moreland, Esq. (“Defendants' counsel”).
8. Defendants' counsel is a Partner at Marks, O'Neill, O'Brien, Doherty & Kelly.
9. Defendants' counsel has over twenty years of experience as a practicing attorney.
10. Defendants' counsel has successfully settled hundreds of cases on behalf of clients.
11. Ms. Cimini is an experienced mediator who routinely facilitates settlement negotiations and agreements.
12. Mr. Fleming served as Defendants' representative at mediation and was appointed with full authority to settle Plaintiff's claims.
13. Defendants were insured against Plaintiff's claim by RSUI Group, Inc. (“RSUI”) under a policy with a $1,000,000 claim limit, a $75,000 Self-Insured Retention (“SIR”), and a consent to settle provision.
14. RSUI assigned Ms. Vogt as the Adjuster, who was overseen by Mr. Hennelly.
15. On November 1, 2022, one day prior to mediation, Defendants' counsel met with Ms. Vogt and Mr. Fleming to discuss mediation strategy and settlement authority.
16. In the November 1, 2022 strategy meeting, Mr. Fleming gave Defendants' counsel express authority on behalf of Defendants to settle Plaintiff's claims for an amount exceeding $75,000 (the SIR amount for which Defendants were responsible). At the February 7, 2023 hearing, the parties presented conflicting evidence as to whether this express authority was granted, however, the Court deems the testimony of Ms. Moreland credible and does not find Mr. Fleming credible on this issue.
17. In the November 1, 2022 strategy meeting, Ms. Vogt gave Defendants' counsel authority to settle for up to $25,000 in excess of the $75,000 SIR.
18. Accordingly, in the November 1, 2022 strategy meeting, Defendants' counsel, Mr. Fleming, and Ms. Vogt agreed that the maximum settlement authority for the following day was $100,000 and Defendants' counsel was vested with affirmative and express authority to settle for an amount up to that maximum. At the February 7, 2023 hearing, the parties presented conflicting evidence as to whether express authority was granted for the total settlement amount of $100,000, however, the Court deems the testimony of Ms. Moreland credible and does not find Mr. Fleming credible on this issue.
19. Ms. Vogt memorialized this authority via RSUI's internal files.
20. For the majority of mediation, the parties and their counsel were in separate “breakout” Zoom rooms, which allowed each party to communicate with counsel at length.
21. While in the breakout rooms together, Mr. Fleming did not revoke the express authority granted to Defendants' counsel nor did he indicate that the scope of her authority was in any way modified.
22. Prior to and during mediation, Defendants' counsel reviewed the standard terms of MOUs with Mr. Fleming, to which Mr. Fleming did not object. At the February 7, 2023 hearing, the parties presented conflicting evidence as to whether Mr. Fleming was aware of and agreed to the standard MOU terms, however, the Court deems the testimony of Ms. Moreland credible and does not find Mr. Fleming credible on this issue.
23. At mediation, the parties exchanged demands and offers as follows.
24. At some point between 1:00 p.m. and 2:00 p.m., while mediation was still underway, Mr. Fleming left the mediation.
25. When Mr. Fleming left the mediation, Defendants had offered to settle the case for nearly the full sum of Defendants' SIR (either $70,000 or $75,000).
26. Mr. Fleming did not indicate that the last offer for which he was present, of either $70,000 or $75,000, was Defendants' best and final offer or approaching the limit of Defendants' counsel's authority.
27. Mr Fleming's departure did not signify the end of mediation efforts, and...
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