United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, UNITED STATES DISTRICT JUDGE.
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.
Background
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 ...