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Love v. Illinois Bell

November 7, 2005


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


Plaintiff Alisah Love filed a suit against her former employer, Illinois Bell, and her union, IBEW Local 21, contending that she had been terminated in violation of the collective bargaining agreement between the union and Illinois Bell and that the union had breached its duty of fair representation in handling her grievance. The Court appointed counsel to represent plaintiff. At a much later date, plaintiff sought permission to amend the complaint to add a new claim regarding denial of reinstatement, but the Court denied the motion on the grounds it was untimely. Plaintiff sought reconsideration of the denial. While that motion was under advisement, a series of settlement conferences were held, culminating in an agreement reached on September 7. As we will discuss below, a snag rose during the process of reducing the agreement to writing. The Court resolved that issue as well, but plaintiff then withdrew her agreement to the settlement, and defendant SBC (joined verbally by the union) moved to enforce the oral agreement. Plaintiff's appointed counsel has responded to the motion, and plaintiff has filed a pro se response.


The fact that the settlement was oral does not make it unenforceable. See, e.g., Lynch, Inc. v. Samatamason, Inc., 279 F.3d 487, 490 (7th Cir. 2002). Whether a particular oral settlement is enforceable is governed by state law. Id. Under Illinois law, an oral settlement is enforceable unless it is within the Statute of Frauds (which is not the case here), so long as there was an offer and acceptance to compromise the case, and there was a meeting of the minds as to the terms of the agreement. See, e.g., Lampe v. O'Toole, 292 Ill. App. 3d 144, 146, 685 N.E.2d 423, 424 (1997).

The requirements for enforceability have been met in this case. The Court conducted several settlement conferences at which plaintiff was present, along with her counsel and counsel for both defendants. At the third conference, held on September 7, 2005, an oral agreement was reached to settle the case by payment of $7,500 to plaintiff, in return for dismissal with prejudice of the suit, a general release, an agreement to keep the settlement terms confidential, and an agreement not to reapply for a job with Illinois Bell.*fn1 At a separate caucus the Court held with plaintiff and her counsel on September 7 before the final agreement was reached, plaintiff asked that the settlement funds be paid directly to the school she was attending, for reasons she did not describe. The Court overlooked this point in caucusing with the defendants' counsel. However, when the final joint meeting was held to confirm and review the terms of the settlement, this term was not mentioned, and plaintiff did not voice any objection.

The Court gave the parties time to draft a written agreement embodying the settlement's terms; we note, however, that no party asked that conclusion of a written agreement be made an express condition of the settlement. During the drafting process, plaintiff raised the issue about where to pay the settlement proceeds, and when this was brought to the Court's attention, we set the case for a further conference to try to iron out the issue. At that conference, it appeared that plaintiff's concern about where the settlement proceeds were to be paid involved an issue of taxability. The Court explained to plaintiff that whether the payment was made to her or to the school she attended likely would not affect whether or to what extent the payment was taxable, but nonetheless suggested to defendants that they agree to pay the funds directly to her school rather than to her.

The Court set the case for a telephone conference a few days hence, and verbally directed all present (plaintiff and each counsel) to participate. In that telephone conference, defendants reported they were willing to pay the funds to the school rather than to plaintiff -- though they would be required to issue the necessary IRS form to the plaintiff. Plaintiff did not participate in the telephone conference, however, and her attorney reported that she had had a change of heart about the settlement. The Court entered another order reflecting plaintiff's failure to participate in the telephone conference and directing all counsel and plaintiff to appear in court. On the date of that court appearance, defendant SBC presented the motion to enforce the settlement.

The evidence clearly reflects that there was a binding oral agreement to settle that was reached on September 7. There was an offer and acceptance and a meeting of the minds on the terms: payment of $7500, general release, dismissal of claims, confidentiality, and an undertaking not to reapply. When plaintiff raised the issue of where the funds were to be paid, asking that they be paid to the school she was attending, the defendants agreed to that point as well. But the fact that plaintiff raised this issue did not make the September 7 agreement any less enforceable.

Plaintiff's appointed counsel argues that this case is like Higbee v. Sentry Ins. Co., 253 F.3d 994 (7th Cir. 2001), in which the Seventh Circuit held that a purported oral settlement was unenforceable because the facts indicated there was no binding agreement. This case is nothing like Higbee. In that case, there was no meeting of the mind on the material terms, and the Court's comments "fueled [the plaintiff's] subjective belief that she had not yet entered a binding agreement." In this case there could be no such subjective belief. In the final, joint meeting on September 7, the Court announced to the parties that "we have settled the case" and proceeded to describe the terms. Neither side voiced any disagreement with what the Court stated. Though the Court gave the parties time to prepare a written agreement, nothing was said -- by the Court or anyone else -- to suggest that finalization of a writing was a condition of the settlement.

Plaintiff's counsel also argues that the fact that there was no finalization of the agreement due to the open issue about where the funds were to be paid. But as noted earlier, plaintiff did not voice any objection at the final meeting on September 7 even though the Court did not mention that issue in listing the terms of the agreement. And in any event, when plaintiff raised the issue later, the defendants agreed to her proposal.

In a pro se response to the motion, plaintiff argues that she was subjected to duress. The Court acknowledges that plaintiff's financial circumstances may have been difficult, but no duress, or anything approaching it, was employed by the Court or anyone else during the settlement conferences. Rather, the Court made it clear to the plaintiff numerous times during each of the three settlement conferences (August 18, August 27, and September 7) that it was entirely up to her to decide whether to settle. No arm-twisting or head-knocking was employed. Indeed, plaintiff asked for an adjournment of the conference so that she could discuss the matter with family members at an upcoming get-together, and the Court willingly gave it to her. After plaintiff had that discussion, she returned and agreed to settle the case.

Plaintiff also argues that her financial circumstances have now changed. That is not a legal basis to back out of a binding agreement. The time for plaintiff to change her mind was before concluding the agreement, and she did not do so.

Plaintiff also asks the Court to strike the language from the October 7 order indicating that she had failed to participate contrary to the Court's directive on October 3. The Court's recollection of the October 3 conference was that we made it clear that all who were present (plaintiff, her attorney, and each defendant's attorney) were to participate in the telephone conference, and for this reason the Court declines plaintiff's request to strike the language from the order. That said, the fact that plaintiff ...

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