Opinion
Civil Action No. 3:CV-02-0906.
February 12, 2004
MEMORANDUM
Before me is Defendants' Motion to Enforce the Settlement Agreement and Statement of Material Facts in Support Thereof. (Doc. 42). The facts are these. Plaintiff instituted an action on May 28, 2002, for breach of an insurance contract and bad faith. A settlement conference was held in my chambers on October 24, 2003. Counsel for each side was present at the conference, and Plaintiff and her son were present in the waiting area of my chambers. Indeed, as the conference progressed, Plaintiff's counsel caucused with Plaintiff in the waiting area, the hallway and/or the library. Plaintiff also was present in chambers for a short period toward the end of the conference. The process involved me talking with each side separately, with the Plaintiff's counsel talking privately to his client concerning the proposals made by Defendant, and Defendant making telephone calls in private to his client.
The negotiations closed after more than two hours with the Defendant at $90,000 and the Plaintiff at $105,000. Each side represented that the offers made would settle the case. After continuing to negotiate privately, during which the Plaintiff's counsel remained at $105,000 to settle, the Defendant advised the Plaintiff's counsel that the Defendant would accept the Plaintiff's offer and settle at $105,000. At this point, Plaintiff's counsel told Defendants' counsel that his client wanted more. During a scheduled telephone conference with the Court on November 20, 2003, in the hearing of Plaintiff, counsel confirmed the foregoing facts. The Court asked the Plaintiff in words or substance whether the $105,000 offer was a joke, to which she replied that it was. Plaintiff's counsel now advises that the Plaintiff's offer was $105,000 plus counsel fees, but concedes that this was never communicated to Defendants' counsel or the Court. This is puzzling as the Plaintiff herself indicated that $105,000 would settle the case when she was in my chambers on October 24, 2003. Moreover, on November 20, 2004, she disavowed the $105,000 offer as insincere, not as incomplete.
Defendant argues there is an agreement to settle at $105,000, and seeks to enforce that agreement. The Plaintiff contends there is no agreement because there was never a meeting of the minds.
The applicable law is aptly stated in Defendants' brief and the Plaintiff agrees with Defendants' recitation. Briefly, it is as follows. Because this Court's jurisdiction is based upon diversity of citizenship and the settlement involves state law claims, Pennsylvania law governs. Under Pennsylvania law, "[a]n agreement to settle a law suit, voluntarily entered into, is binding upon the parties, whether or not made in the presence of the court, and even in the absence of a writing." Green v. John H. Lewis Co., 436 F.2d 389, 390 (3d Cir. 1970). At the heart of any settlement agreement is a meeting of the minds. There must be a mutual assent to the terms and conditions of the settlement agreement. See Pugh v. Super Fresh Super Markets, Inc., 640 F. Supp. 1306, 1308 (E.D. Pa. 1986.) A settlement is binding even if a party had a change of heart between the time an agreement is reached and before those terms are reduced to writing, so long as there was a meeting of the minds. Id.
Was there a meeting of the minds? In my view there was. Each party dealt with the other, cloaked with the authority to act on behalf of their clients. Plaintiff's counsel proffers that his client, back as far as October 24, 2003, was unwilling to settle unless she received $105,000 plus counsel fees. However, I note the Plaintiff's failure to indicate such an intention when confronting me in my chambers on October 24, 2003, and on the telephone November 20, 2003. On October 24, 2003, Plaintiff advised me as well as counsel, that she would settle at $105,000. On November 20, 2003, she said she was not serious when she told me she would settle at $105,000. In neither instance did she say that her offer was $105,000 plus counsel fees. It is also significant that negotiations continued between counsel during the period October 20, 2003 to November 19, 2003 with offers coming in increments of several thousand dollars from the Defendant. Again, the Defendant was never advised the offer of $105,000 had been withdrawn, but rather it continued to be maintained as Plaintiff's settlement figure. It was only after the $105,000 offer of settlement was accepted by the Defendant did Plaintiff's counsel advise of his client's unwillingness to close the deal at what Defendant had every reason to believe was her wish.
It is not my concern whether the Plaintiff changed her mind when the offer was accepted, or her counsel was not conveying her true position during the negotiations. Insofar as the Court's exposure to the settlement negotiations, the former scenario is the Court's perception of the Plaintiff's position. It is also the Defendants' perception since counsel for Plaintiff never advised Defendants' counsel otherwise.
In either event, there is an agreement. It is simply unacceptable for a client to attempt to manipulate counsel, or more importantly, the Court. The enforceability of the settlement is premised on offer and acceptance. The Defendant made an offer and it was accepted-mutual assent was expressed orally by the parties to settle this action for $105,000.
Therefore, for the foregoing reasons, the parties reached an agreement to settle the case by the Defendants paying the Plaintiff $105,000, and consequently, I will order the enforcement of that agreement.
An appropriate Order follows.
ORDER
NOW, this 12th day of February, 2004, IT IS HEREBY ORDERED that:(1) Defendants' Motion to Enforce the Settlement Agreement and Statement of Material Facts in Support Thereof (Doc. 42) is GRANTED.
(2) Judgment in the amount of $105,000.00 is hereby entered in favor of the Plaintiff in this case.