Stewart v. M.D.F., Inc.

• Decision Date: 09 May 1996
• Docket Number: 95-2000,Nos. 95-1998,s. 95-1998
• Citation: 83 F.3d 247
• Parties: Betty Jane STEWART, Appellant/Cross-Appellee, v. M.D.F., INC., Appellee/Cross-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 247

83 F.3d 247

Betty Jane STEWART, Appellant/Cross-Appellee, v. M.D.F., INC., Appellee/Cross-Appellant.

Nos. 95-1998, 95-2000.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 10, 1996.

Decided May 9, 1996.

Appeals from the United States District Court for the Eastern District of Missouri, Hon. Steven Limbaugh, Judge.

Barry S. Ginsbury, Clayton, Missouri, argued (Burton W. Newman, on the brief), for appellant/cross-appellee.

Joseph Robert Swift, St. Louis, Missouri, argued (T. Michael Ward and Michelle M. Retzer, on the brief), for appellee/cross-appellant.

Before WOLLMAN, CAMPBELL, ^* and MURPHY, Circuit Judges.

LEVIN H. CAMPBELL, Senior Circuit Judge.

Plaintiff-appellant Betty Jane Stewart brought this diversity action against defendant-appellee, MDF, Inc., after she slipped and fell at a Wendy's Old Fashioned Hamburgers restaurant owned by MDF. ¹ Following a jury trial, Stewart was awarded $15,832.10 (75% of the total damages found, as she was held 25% responsible for her injuries). Plaintiff now contends that the district court erred in denying, without an evidentiary hearing, her motion to enforce a settlement agreement allegedly reached as the jury deliberated. Defendant cross-appeals from the district court's denial of its motion for judgment as a matter of law. We affirm the district court's handling of the settlement issue and its denial of the motion to enforce, and we also affirm the denial of defendant's motion for judgment as a matter of law.

I.

Stewart, seventy years old, entered a Wendy's restaurant in St. Louis and immediately slipped and fell in the vestibule area. She broke her left thigh bone, requiring surgery, an in-hospital stay of two weeks, and after-care, and her mobility has since been seriously impaired.

Trial commenced on January 3, 1995. During trial, the attorneys for the parties discussed settlement. On the first two days of trial, plaintiff's attorneys, Barry Ginsburg and Burton Newman, rejected on plaintiff's behalf offers of $35,000 and $50,000 made by defendant's attorney, Joseph Swift. The next day, before the jury began deliberating, plaintiff's attorneys rejected an offer of $60,000. Defendant's next offer of $75,000, made as the jury commenced deliberations, was also rejected. Thereafter, plaintiff's counsel told defense attorney Swift that the plaintiff was interested in a "high-low" arrangement, whereby she would receive $50,000 if the verdict were below that amount, at most $200,000 even if the verdict were higher, and the exact amount of any award between $50,000 and $200,000.

Defense attorney Swift called MDF's insurer, Essex Insurance Company, with whom he discussed settlement offers. What followed is disputed. As reported by Ginsburg and Newman, Swift told them that his client was willing to enter into a high-low arrangement of $50,000/$115,000. Swift, they said did not say he lacked authority to make the offer or use qualifying language (e.g., "my client might be willing to pay"), which occasionally had been used in previous discussions. Ginsburg and Newman allegedly told Swift that they would discuss the proposal with their client, who was in the courthouse hall. They spoke with her, and before they could tell Swift that she accepted the offer, he told them that the jury had returned. They followed Swift into the courtroom and stated that plaintiff accepted the high-low offer of $50,000/$115,000. Swift said that he had to call his client for authority. Plaintiff's counsel responded that Swift had made an offer to settle the matter and that it had been accepted.

Swift provides a different version of the exchange. He says that when he called MDF's insurer to ask about the $50,000/$115,000 high-low arrangement proposed by plaintiff that morning, his contact there said he did not have authority to allow Swift to enter into a high-low agreement at that time, but that Swift should continue negotiations with other figures. Swift then told plaintiff's counsel that his client was interested in negotiating the possibility of a high-low agreement, with a high of $115,000 instead of plaintiff's proposed $200,000. According to Swift, Newman immediately rejected the $115,000 amount, but said he would speak with his client. Swift indicates he did not make a definite offer of a high-low agreement, as he did not have authority. Shortly afterward, Swift heard that the jury had reached a verdict, and he notified plaintiff's counsel. Plaintiff's counsel then told him that their client accepted the $50,000/$115,000 offer. Swift responded that he did not have authority for the high-low agreement and had to call his client to discuss it. He called Essex Insurance Company. His contacts there did not give him authority to enter into a high-low agreement, but authorized him to reiterate the $75,000 offer. Accordingly, Swift reported to Ginsburg and Newman that he lacked authority for an agreement of $50,000/$115,000, but that his client would reiterate its last offer of $75,000. Plaintiff's counsel rejected the latter, claiming that plaintiff already had accepted MDF's high-low offer.

Before the jury announced its verdict, the district court asked counsel if either party wanted to make a record. Plaintiff's counsel stated that they believed a binding high-low settlement agreement of $50,000/$115,000 had been reached, but that defendant's counsel was now claiming he lacked authority to make such an offer. Defendant's counsel explained that he thought he had last offered $75,000, which was rejected; he disavowed having had authority to make the high-low offer that plaintiff claimed to have accepted. Newman stated that this dispute "may be a matter that would require some attention post-trial, ... and for purposes of the record at this point, I think I said what I want to say." The district court then denied the request by plaintiff's counsel to enforce settlement, reasoning that the jury verdict could be reported (since the alleged high/low settlement agreement turned on the amount of the jury award, in any case) and then the parties could make a further record. The court did not make express findings, but it said it doubted whether the asserted settlement agreement was enforceable: "[A]ssuming that the facts are as counsel for the plaintiffs have stated them, if in fact he [MDF's counsel] is now announcing in court, as an officer of the court, that he does not have the authority, even though he may have indicated to counsel that he did or impliedly did, I don't know [that] I could enforce it." The jury then returned and announced a verdict. This resulted in an award to Stewart of a total of $15,832.10.

Plaintiff promptly filed a motion to enforce settlement. She requested a hearing on the motion and enclosed affidavits of her counsel, Ginsburg and Newman. Defendant opposed the motion, submitting affidavits of its counsel, Swift, and two employees of Essex Insurance Company, with whom Swift discussed settlement offers. The affidavits essentially confirmed each side's version as earlier presented to the court prior to the verdict. The insurer backed Swift's assertion that it never gave him authority to make the offer described by Ginsburg and Newman. The district court denied plaintiff's motion without holding an evidentiary hearing or making findings.

II. Motion to Enforce Settlement: Evidentiary Hearing

Plaintiff contends that the district court erred in denying her motion to enforce settlement without first holding an evidentiary hearing. She argues that such a hearing was required as there was a substantial factual dispute concerning the existence and terms of a settlement agreement, and says that discovery, testimonial development, and cross-examination would have aided the court in resolving the facts. Defendant responds that the district court did not abuse its discretion in denying the request for an evidentiary hearing; alternatively, even if it did, the denial of a hearing did not materially affect the denial of the motion to enforce settlement, because plaintiff could not demonstrate by clear and convincing evidence that an authorized settlement agreement had been reached.

When a motion is based on facts not appearing of record, Fed.R.Civ.P. 43(e) provides that a district court "may hear the matter on affidavits presented by the respective parties," or "may direct that the matter be heard wholly or partly on oral testimony or deposition." This rule invests the district court with considerable discretion to tailor the proceedings to the practical realities surrounding the particular motion. This court has said, it is true, that as a general rule, an evidentiary hearing should be held when there is a substantial factual dispute over the existence or terms of a settlement. TCBY Systems, Inc. v. EGB Assocs., 2 F.3d 288, 291 (8th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 2104, 128 L.Ed.2d 665 (1994). But this rule presupposes that there are essential issues of fact that can only be properly resolved by such a hearing. See Sheng v. Starkey Labs., Inc., 53 F.3d 192, 194-195 (8th Cir.1995) (remanding for a hearing where the district court enforced a settlement agreement on an erroneous ground, and did not fully consider whether the disputed terms were material); Greater Kansas City Laborers Pension Fund v. Paramount Indus., Inc., 829 F.2d 644, 646 (8th Cir.1987) (remanding for an evidentiary hearing where counsel agreed to a settlement allegedly without consent from his client, who was not in court to object to its enforcement). There is no automatic entitlement to an evidentiary hearing simply because the motion concerns a settlement agreement. See Vaughn v. Sexton, 975 F.2d 498, 505 (8th Cir.1992), cert. denied, 507 U.S. 915, 113 S.Ct. 1268, 122 L.Ed.2d 664 (1993).

Here, even accepting plaintiff's version of what was said, there was little likelihood that the motion to enforce the alleged settlement agreement could be granted. Both def...