MEMORANDUM OPINION AND ORDER

Joan B. GOTTSCHALL, Judge

Plaintiff has moved to enforce a settlement allegedly entered into by the parties and memorialized in a letter from defense counsel to plaintiff's counsel on December 22, 1999. For the reasons stated below, the motion is denied.

The complaint in this class action arising under the Fair Debt Collection Practices Act was filed on August 24, 1999. Defendant appeared on September 24, 1999. During the fall of 1999, the parties engaged in settlement negotiations. On December 22, 1999, defense counsel wrote to plaintiff's counsel as follows:

This correspondence shall serve to confirm that the above-captioned matter has been settlement [sic] under the following terms:

Statutory damages to class $3,075.00 Payment to named plaintiff $ 500.00 Attorneys' fees $2,000.00

In addition, defendant will pay the administrative costs associated with providing class notice and settlement checks to the class members. My client has asked that I prepare the settlement agreement/release. However, I would appreciate your office drafting the motion for preliminary approval, class notice and motion for final approval.

If this correspondence fails to set forth accurately the terms of our agreement in this regard, please contact the undersigned immediately.

Consistent with the parties' mutual understanding that a settlement had been reached, on December 22, "pursuant to settlement agreement," plaintiff withdrew her motions for class certification and for entry of a document preservation order.

On January 4, 2000, defense counsel transmitted to plaintiff's counsel a 10-page Class Settlement Agreement. Paragraph 23 was captioned "Other claims" and stated:

Plaintiff Margaret Walker and her counsel Edelman, Combs Latturner represent and warrant that they presently (i) have no claim or cause of action against Commercial Recovery Systems, Inc. which was not asserted in this lawsuit, and (ii) have no actual knowledge of any claim or cause of action against Commercial Recovery Systems, Inc. held by any person or entity that is not a party to this lawsuit.

Plaintiff's counsel sent the agreement back with a number of changes. Among the substantive changes requested by plaintiff's counsel were a provision stating that returned checks would be distributed to the class or a charity, rather than returned to the defendant (as defendant's draft had provided), an excision of a confidentiality clause and an excision of clause (i) of the "Other claims" section. In return correspondence dated February 15, defense counsel refused to agree to the provision requiring redistribution of returned checks, refused to agree to a requested amendment to the "Release" section which would have limited the release to liabilities "that arise out of the complaint," refused to agree to the removal of the "Confidentiality" section and questioned plaintiff's counsel's emendations in the "Other claims" section, stating, "I cannot tell whether you have stricken this information or not. However, any changes are unacceptable as Defendant wants some assurance that your firm does not have another case in the wings. Otherwise, Defendant has no incentive to settle."

In a letter dated March 27, plaintiff's counsel memorialized that the parties had agreed to many of the matters raised by the suggested revisions. As to the "Other claims" section, plaintiff's counsel wrote that the parties had agreed on the following language: "Plaintiff Margaret Walker and her counsel Edelman, Combs Latturner represent that they have no claim or cause of action against Commercial Recovery Systems, Inc. that arise [sic] from the collection letter that is the subject of this litigation, or based upon the same violation (e.g. Colorado notice) alleged in the complaint in this case."

Defense counsel sent back what he termed a "FINAL" version of the agreement on May 1, 2000, asserting that he had made "slight changes to the language" in paragraph 23, the "Other claims" section. The language he proposed was as follows:

Plaintiff Margaret Walker and her counsel Edelman, Combs Latturner represent that they (i) have no knowledge of any claim or cause of action against Commercial Recovery Systems, Inc. that arises from the collection letter that is the subject of this litigation, or based on the same violation (e.g., Colorado notice) alleged in the Complaint in this case, and (ii) have no actual knowledge of any claim or cause of action against Commercial Recovery Systems, Inc. held by any person or entity that is not a party to this lawsuit.

The parties' papers are replete with recriminations and charges of ethical misconduct. Plaintiff claims that defendant was looking for an excuse to renege on the settlement agreement in light of the Seventh Circuit's decision in White v. Goodman, 200 F.3d 1016 (7^th Cir. 2000), and that defendant was insisting on a clause that unethically sought to limit plaintiff's counsel's ability to practice law. Defendant dredges up every unsavory bit of information it can find about plaintiff's law firm. Let it simply be said that when plaintiff's counsel tells this story as if it stopped on December 22, and defendant's counsel tells the story as if it started on January 4, 2000, neither side deserves any award for candor. As is frequently the case when ethical charges fly around, the parties appear to deserve each other.

In the court's view, there was no enforceable settlement agreement in this case on or about December 22, although the court is persuaded that both parties subjectively believed they had reached a settlement. The agreement as memorialized in the December 22 letter explicitly left certain matters to be reduced to writing and failed to include any indication of any agreement on many of the terms that are a necessary part of a class action settlement, including such matters as disposition of unclaimed proceeds and the scope of the release, which, in a class action context, may be considerably more complicated than a simple agreement by the named plaintiff to dismiss her case. And when it became clear, at the drafting stage, that the parties were in disagreement about these matters, both parties proceeded to demonstrate by their conduct that these issues mattered and had not been part of the parties' earlier agreement. Significantly, when defense counsel sent the first draft of the agreement and plaintiff's counsel disagreed with the proposed language concerning, among other things, confidentiality, disposition of unclaimed proceeds and the possibility of other claims, plaintiff's counsel did not write back asserting that defense counsel was trying to alter the parties' agreement. Rather, both parties set to work trying to reach agreement on these issues, demonstrating by their conduct that these issues had not been resolved by their prior negotiations and were material to both sides.

The parties both appear to believe that the law of Illinois applies to this dispute, although this case arises under federal law, and federal law, rather than Illinois law, governs the plaintiff's motion. See United States v. Orr Construction Co., 560 F.2d 765, 769 (7^th Cir. 1977); see also Wilson v. Wilson, 46 F.3d 660, 667 (7^th Cir. 1995). It appears from these cases that federal law may require a higher standard of definiteness to enforce a settlement, but the court sees no reason, on the facts before it, not to follow Illinois law as the parties have described it.

The parties in this case clearly intended to reduce their agreement to writing, but that fact alone is insufficient to render their oral agreement, to the extent they had one, unenforceable. The law of Illinois is clear that "where the parties have assented to all the terms of the oral agreement the mere reference to a future written document does not negate the existence of a present contract." Ceres Illinois, Inc. v. Illinois Scrap Processing, Inc., 500 N.E.2d 1, 5 (Ill. 1986). The question under Illinois law is rather whether the parties intended to be bound absent a writing. Id. In making that determination, courts look to a number of factors including whether the contract is one usually put into writing, whether the amount of money involved is large or small, whether the agreement requires a formal writing for the full expression of the covenants and whether the negotiations themselves indicated that a written document was contemplated as their conclusion. Id. Where the anticipated written document is never executed, "the parties' conduct and statements subsequent to the oral agreement may be decisive of the question whether a contract had been made." Id.

In order for a settlement to be an enforceable contract, the essential terms must be definite and certain. Midland Hotel Corp. v. Reuben H. Donnelley Corp., 515 N.E.2d 61, 65 (Ill. 1987). Whether an agreement which does not define its essential terms is too vague to be enforced may depend on whether the court is able, using rules of construction and equity, to ascertain what the parties intended to do. Id. In the present case, while the parties clearly agreed on most of the key points of an agreement, it is clear that the parties understood that there could be no legally binding settlement absent a writing, given that a written settlement agreement had to be submitted to the court and published to the class for objections before any settlement could be final. In addition, the letter of December 22, which memorialized the parties' oral agreement, explicitly noted that releases and other documents had to be prepared. A class action settlement agreement is a contract usually put into writing (by necessity) and requires a formal writing, if not for the full expression of the covenants, then to give notice to all interested parties and the court. The negotiations plainly indicated that a written document was contemplated as their conclusion.

Moreover, in the class action situation, the formal settlement documentation must address a number of detailed matters, such as what to do with unclaimed settlement proceeds, that are significant and appear not to have been addressed in the oral negotiations in this case. The December 22 letter is wholly inadequate to provide the court with a basis for enforcing a settlement, given that a class action settlement must encompass many provisions other than the payment of money.

The main factor favoring the plaintiff's position under the Ceres test is that the amount of money involved is small, but that factor, the court assumes, reflects the sense that parties to a modest monetary resolution may not care much about a detailed writing. That is surely not the case in the class action situation, where written notice of the terms of the settlement to members of the putative class and the court is essential.

Finally, as the court in Ceres noted, the parties' conduct following the oral agreement may be a good indicator of whether they intended to be bound by their oral agreement. Here, the parties' conduct following the December 22 letter does not support the contention that there was a binding settlement as of that date. When disagreements arose over various provisions of the proposed written settlement agreement, the parties attempted to negotiate the resolution of those terms, both orally and in writing, over a number of months. This correspondence reveals no surprise or shock on the part of either party that terms remained to be negotiated and that those terms mattered to both parties. There were no accusations until months later that anyone was trying to add to or change the agreement.

The December 22 letter was, as far as the court can tell, the parties' agreement as to certain key terms and an agreement that they would negotiate in good faith to finalize the remaining terms of the agreement. Whether or not the defendant did so, once the Seventh Circuit altered the legal landscape, is something this court cannot definitively determine on this record. But the December 22 letter, memorializing an agreement as to the monetary payments necessary to the settle the case, hardly contains all the material elements necessary to the settlement of a class action case, and the parties could not have understood otherwise. A writing was essential, the parties understood it was essential, the December 22 letter explicitly referred to matters that remained to be drafted and the parties' conduct following the December 22 letter demonstrates that they so understood. While the court can understand plaintiff's frustration at having taken defendant at its word and acted accordingly in withdrawing various matters pending in the litigation, the court cannot find on this record that the parties believed on December 22 that they had a binding settlement agreement. The motion to enforce the settlement is accordingly denied.

To this point, the court has been able to rely, as the parties appear to rely, on their various letters to determine whether or not an agreement was reached. The court notes, however, that in his letter of March 27, plaintiff's counsel wrote that the parties had reached an agreement with respect to the outstanding matters such as other claims. Defendant then sent back a counteroffer. The court cannot tell from the parties' correspondence whether or not plaintiff can make the case that between December 22 and March 27 an enforceable oral agreement was reached, If plaintiff believes she can make such a case, the court will schedule a hearing.

The motion to enforce the settlement, subject to the possibility of a hearing to determine if a settlement was reached after December 22, is denied. Plaintiff's opposition to the motion to dismiss is based only on the existence of a settlement, and that motion, unless plaintiff can demonstrate that a settlement was reached between December 22 and March 27, will be granted.