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Gibbons v. MONY Life Insurance Co.

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

October 25, 2017




         In June 2015, Clifford Sam Gibbons sued MONY Life Insurance Company and Disability Management Services, Inc. (DMS) after being denied benefits under his disability insurance policy. By October 2016, the Court had either dismissed as time-barred or granted summary judgment for the defendants on four of Gibbons's five claims, leaving only a claim for intentional infliction of emotional distress (IIED). In March 2017, the Court granted the defendants' motion to enforce a subsequent oral settlement agreement between the parties and dismissed the remaining claim with prejudice, over Gibbons's objection that he did not authorize his then-attorney, Joseph Pellis, to enter into a settlement. Gibbons then moved for relief from judgment under Federal Rule of Civil Procedure 60(b). The Court denied the motion in part and ordered an evidentiary hearing on the remaining issues. The hearing took place on September 8, 2017. For the reasons stated below, the Court denies the remainder of Gibbons's motion for relief from judgment.


         The factual background of this case is discussed in a number of prior opinions. See Gibbons v. MONY Life Ins. Co., No. 15 C 5352, 2017 WL 3421475 (N.D. Ill. Aug. 9, 2017); Gibbons v. MONY Life Ins. Co., 208 F.Supp.3d 925, 927 (N.D. Ill. 2016). The Court briefly summarizes the facts and procedural history relevant to the remaining issues in Gibbons's Rule 60(b) motion below and as necessary throughout this opinion.

         After the Court disposed of all of Gibbons's claims with the exception of his IIED claim, defense counsel and Pellis engaged in settlement discussions. In a January 15, 2017 e-mail to Gibbons, on which his wife, Terri Gibbons (Terri), was copied, Pellis informed Gibbons that defense counsel "has offered us their max settlement of $40K and they will waive pursuing any costs to dismiss" the remaining claim.[1] Defs.' Post-Hr'g Br., Ex. 2 at 5. Pellis recommended to Gibbons that he accept the proposed settlement. Id. Gibbons responded to Pellis the same evening via e-mail, again copying Terri. Gibbons told Pellis that "[t]his is a bitter pill to swallow, " and that he needed 24 hours "to reflect on [Pellis's] sound judgment." Id. at 4-5. Gibbons asked to set up a brief call between Pellis, Terri, and himself the following day. He stated, "I am not sure whether Terri and I will be in the same place and she definitely wants to be on the phone." Id. at 5. Gibbons closed the e-mail by asking, "I guess the bottom line with this insulting settlement offer is it enough to cover your fees?" Id.

         In a January 16 e-mail to Pellis, on which Gibbons does not appear to be copied, Terri told Pellis that she did not think there was a need to waste his time with another conference call. Id. at 3. On January 18, Pellis e-mailed Terri and asked "[c]an you confirm whether you and Cliff are willing to accept the settlement offer?" Id. at 2. Pellis told Terri in that e-mail that "[c]ounsel for MONY has indicated we have until Friday the 20th to accept the offer." Id. On January 19, at approximately 1:00 PM, [2] Terri responded, "It appears we have no other choice." Id. She instructed Pellis to "[s]end us the necessary paperwork to sign and enable both parties to move on and officially end the relationship." Id. Terri appears to have forwarded that portion of her correspondence with Pellis to Gibbons at 3:00 PM that same day. Id. at 1-2. At 6:09 PM on January 19, Pellis informed defense counsel via e-mail that Gibbons would accept the settlement offer. Defs.' Post-Hr'g Brief, Ex. 1 at 1.

         Later that evening, at 11:49 PM, Gibbons e-mailed Pellis, again copying Terri. In that e-mail, Gibbons told Pellis "[t]his settlement offer is all in your court at this stage." Defs.' Post-Hr'g Brief, Ex. 2, at 1. Gibbons further stated, "I would suggest you give it all you can with this ----- representing MONY/DMS. Whatever you can best negotiate is it." Id. He went on, "I would like only one thing at this stage and it cost [sic] no money. I want as a part of any settlement a certified letter from a C-level MONY executive that the four life insurance policies I have with MONY do not have the same spring trap of fraudulence that had [sic] been revealed in this case." Id. Finally, Gibbons stated, "So the bottom line is Joe - negotiate your best deal with these [redacted]. Because this is all you are getting . . . ." Id.

         In February 2017, Pellis informed defense counsel that Gibbons had changed his mind after reviewing the settlement agreement. Defendants then filed a motion to enforce the parties' agreement. During a March 2017 hearing on the motion, Gibbons appeared along with Pellis, and he stated that he never agreed to settle the case. The Court found that the January 2017 exchange of e-mails between defense counsel and Pellis, acting as Gibbons's agent, constituted an enforceable agreement. The Court granted defendants' motion to enforce and dismissed the case with prejudice in late March 2017 upon defendants' tender of the agreed-upon payment to Gibbons.

         In May 2017, Gibbons filed a motion for relief from judgment requesting relief not only from the Court's order enforcing the settlement agreement, but also from the partial grant of summary judgment in favor of defendants on two of his claims. The Court denied the motion with respect to the summary judgment ruling. With respect to the order enforcing settlement, the Court denied Gibbons's motion to the extent that it was based on a claim of fraud or misconduct by defendants, but it ordered an evidentiary hearing on three issues relevant to the question of whether Pellis erred or acted with excusable neglect when he accepted the proposed settlement on Gibbons's behalf:

(1) whether Pellis had authority from Gibbons to accept the proposed settlement before Pellis communicated that acceptance to defense counsel;
(2) whether Gibbons's wife Terri gave Pellis authority to accept the proposed settlement; and
(3) whether Gibbons subsequently ratified the acceptance.

         Gibbons contends that he did not give Pellis express authorization to accept the proposed settlement on his behalf and that he never gave Terri authority to tell Pellis to accept. Gibbons further contends that he did not ratify the acceptance of the proposed settlement but instead asked Pellis to make a counteroffer. Gibbons argues that Pellis's acceptance of the ...

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