Taylor v. Gordon Flesch Co., Inc., 85-2516

• Decision Date: 16 June 1986
• Docket Number: No. 85-2516,85-2516
• Citation: 793 F.2d 858
• Parties: 41 Fair Empl.Prac.Cas. 56, 41 Empl. Prac. Dec. P 36,542 Rayford L. TAYLOR, Plaintiff-Appellant, v. GORDON FLESCH COMPANY, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 858

793 F.2d 858

41 Fair Empl.Prac.Cas. 56, 41 Empl. Prac.

Dec. P 36,542

Rayford L. TAYLOR, Plaintiff-Appellant, v. GORDON FLESCH COMPANY, INC., Defendant-Appellee.

No. 85-2516.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 26, 1986.

Decided June 16, 1986.

Jacqueline Macaulay, Borns, Porter, Macaulay & Jacobson, Madison, Wis., for plaintiff-appellant.

Michael H. Auen, Foley & Lardner, Madison, Wis., for defendant-appellee.

Before CUMMINGS, Chief Judge, CUDAHY, Circuit Judge, and BARKER, District Judge. ^*

BARKER, District Judge.

Plaintiff, Rayford L. Taylor, filed a complaint against his former employer, Gordon Flesch Company, Inc. ("the Company"), alleging racial harassment, denial of training opportunities, promotions, and appropriate compensation, and constructive discharge in violation of Title VII of the Civil Rights Act, 42 U.S.C. Secs. 2000e-2000e-17 (1982), and 42 U.S.C. Sec. 1981 (1982). The Company filed a counterclaim seeking an order enforcing an alleged settlement agreement and moved for summary judgment on its counterclaim. Taylor also moved for summary judgment, alleging that the Company prevented him from discovery relating to the Company's counterclaim by invoking the attorney-client privilege. The District Court granted summary judgment to the Company and dismissed Taylor's complaint with prejudice. The District Court also ruled that Taylor's motion for summary judgment was not ripe. We AFFIRM.

I.

The facts, viewed in the light most favorable to Taylor, are as follows: On May 11, 1984, Taylor filed a race discrimination charge against the Company with the Madison Equal Opportunities Commission ("MEOC"). On June 27, 1984, the Company filed a written response with the MEOC disputing Taylor's claims.

The MEOC scheduled a fact-finding conference for July 18, 1984. Prior to that conference, Taylor reviewed the Company's response and discussed the case with his attorney, Agnes Rona ("Rona"). In evaluating Taylor's claim and his likelihood of recovery, Rona advised her client of her conclusion that Taylor had probably been badly treated, not because of his race, but because the Company was badly run, and that, in terms of a possible financial recovery against the Company, "the money just wasn't there."

When the parties arrived for the MEOC fact-finding conference, they entered into settlement discussions. Rona represented Taylor in these discussions. The Company was represented by Michael Auen ("Auen"). After some discussion, Auen proposed a settlement on the following terms:

1. Taylor would leave his job at Gordon Flesch Company and not seek reemployment with the Company.

2. Taylor would withdraw all pending charges and provide the Company with a full and complete release of all claims.

3. The Company would not contest Taylor's eligibility for unemployment compensation benefits.

4. The Company would pay Taylor $1,300.00.

5. The Company would furnish Taylor with a letter of reference satisfactory to his counsel.

6. The MEOC would not be a party to the settlement.

7. Taylor would not return to work except to turn in his tools.

With advice of his counsel, Taylor accepted the Company's oral settlement offer.

Rona agreed to prepare the initial draft of the settlement agreement and release. Upon notification that a settlement agreement had been reached, the MEOC cancelled the fact-finding conference and ceased processing Taylor's charge.

On July 18, 1984, in line with the settlement agreement, Taylor applied for unemployment compensation, and the Company did not contest his eligibility for benefits. Taylor drew benefits for the period beginning with the week ending July 20, 1984, through the end of December, 1984. Taylor did not return to work after July 18, 1984, except to turn in his tools on July 22, 1984.

Rona prepared a draft of the settlement agreement and submitted it to her client. Taylor signed it, and the draft was then sent by Rona to Auen.

Auen did not submit Rona's draft to his client to review or to sign. Instead, Auen proposed alternative settlement language and sent it to Rona. Auen's draft contained a variety of stylistic changes, but was nonetheless, in all material respects, identical to Rona's draft.

Rona sent Auen's draft to Taylor, but Taylor, noting some changes in the Auen draft, refused to sign it, allegedly because he was "bothered" by some of the changed language regarding the release of claims against the Company. (Appellant's Brief, p. 6).

Thereafter, by coincidence, Taylor met Auen when Taylor was testifying against the Company at an unemployment compensation hearing on behalf of another employee. In conversations between them, Taylor informed Auen that the settlement in his case had not been "finalized" and that Taylor was reluctant to sign Auen's draft. As of this time, Rona had also apparently regarded the settlement agreement as "not final." (Appellant's Brief, p. 7).

Sometime after the date of this unemployment compensation hearing, Taylor engaged the lawyer who had been representing his friend at that hearing, to replace Rona. Taylor's new counsel told Auen that Taylor had found the Company's proposed draft of the settlement agreement unacceptable and would not enter into a settlement which required a full release of all his claims against the Company. In addition, Taylor offered to return to work. (Appellant's Brief, p. 7).

In October, 1985, the Company filed with the MEOC its motion to enforce the settlement and dismiss the complaint. Taylor opposed the motion and obtained a notice of right to sue from the Equal Employment Opportunity Commission. Taylor then filed his lawsuit in the District Court. After opposing summary judgment motions were filed, the District Court granted summary judgment in favor of the Company, dismissed Taylor's judgment motion for lack of ripeness, and dismissed Taylor's complaint with prejudice. Taylor appeals from the Order granting summary judgment in favor of the Company. ¹

II.

We review a grant of summary judgment by applying the same standard that a District Court must: taking all of appellant's allegations as true and drawing all inferences from the underlying facts contained in the record in favor of appellant, are there any genuine issues of material fact to be resolved? If not, judgment may enter on the remaining legal issues as a matter of law. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Poller v. Columbia Broadcasting Sys., Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); Thornton v. Evans, 692 F.2d 1064, 1074 (7th Cir.1982). Applying this standard, we conclude, as did the District Court, that there are no genuine factual issues to be resolved and that the Company is entitled to judgment in its favor.

The four issues raised in this appeal are: 1) whether an oral settlement is binding in Title VII actions; 2) whether an enforceable oral settlement agreement was reached notwithstanding the parties' inability to agree on a written formulation of the settlement terms; 3) whether the claimed incompetence of Taylor's counsel prevented a knowing assent by Taylor to the agreement which made the contract enforceable; and 4) whether the alternative settlement language proposed by Auen amounted to a repudiation of the oral agreement.

In asserting the first issue, Taylor claims that Wisconsin Statute Sec. 807.05 requires that settlements be in writing in order to be binding upon the parties; thus, in this case, the oral agreement, if any existed, was not binding. However, we have previously held that federal law governs the enforceability of settlements in Title VII actions. See Lyles v. Commercial Lovelace Motor Freight, Inc., 684 F.2d 501, 504 (7th Cir.1982). And, under federal law, oral settlement agreements are enforceable. Id. Recently, in Glass v. Rock Island Refining Corp., 788 F.2d 450 (7th Cir.1986), a case presenting issues very similar to issues in this case, we upheld an oral settlement of Title VII claims, where the plaintiff entered into an oral settlement agreement, but later changed his mind and tried to withdraw from the agreement. We held that, if knowingly and voluntarily made, the oral settlement agreement was binding. Id., at 454. Likewise, here, if Taylor orally agreed to settle his claims, and it appears from the uncontroverted facts that he did, the agreement is binding.

We turn next to the issue of whether an oral settlement agreement was reached. To constitute an enforceable oral contract, there must be an offer, an acceptance, and consideration to support the formation of a legally enforceable agreement. Premier Electrical Constr. Co. v. Miller-Davis Co., 291 F.Supp. 295, 300 (N.D.Ill.1968), aff'd, 422 F.2d 1132 (7th Cir.), cert. denied, 400 U.S. 828, 91 S.Ct. 56, 27 L.Ed.2d 58 (1970). The offer, in order to be legally operative and to create a power of acceptance must contain all the terms of the contract to be made. Id. These terms must be "reasonably certain" and reasonably ascertainable from the acts and words of the parties. Id.

Resolution of this issue is simplified considerably by the fact that there is no dispute that the Company made an oral settlement offer which was accepted by Taylor and his counsel. However, Taylor argues that, because the written drafts of the verbal agreement which were exchanged between the attorneys differed, no final agreement was reached. Taylor's claim is without merit when considered in light of the undisputed facts of this case.

The respective drafts prepared by Taylor and the Company are very similar. The similarity evidences the intent of both parties that the settlement documents memorialize the agreement the parties had already reached. Each draft set forth the underlying facts upon which the agreement was reached, an acknowledgement that the parties continued to disagree on the merits of Taylor's claim, a statement that the Company would pay...