Opinion
Civil Action 4:22-cv-3669-SAL-TER
05-31-2024
CHARLES RAY THOMAS II, aka ALI ADEBISI, Plaintiff, v. TRANS UNION, LLC and EQUIFAX INFORMATION SERVICES, LLC Defendants.
REPORT AND RECOMMENDATION
Thomas E. Rogers, III, United States Magistrate Judge
I. INTRODUCTION
Plaintiff, who is proceeding pro se, brings this action for alleged violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. Presently before the court is Defendant Equifax Information Services, LLC's (Equifax) Motion to Enforce Settlement Agreement (ECF No. 78). Plaintiff did not file a Response. All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Rule 73.02 (B)(2)(e), DSC. This Report and Recommendation is submitted for review by the District Judge. II. DISCUSSION
Plaintiff filed this lawsuit on October 21, 2022, against Equifax alleging violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”). Plaintiff and Equifax, through its attorney, settled the matter in principle over a telephone call on June 19, 2023. Following the call, counsel for Equifax emailed Plaintiff:
Mr. Adebisi, Thank you for the call today. This email is to confirm that Equifax agrees to settle
this case for [an agreed-upon price and non-monetary terms], in exchange for dismissal and release of your claims against Equifax, and confidentiality. As discussed, we will file a notice of settlement with the Court tomorrow to advise them of the parties' settlement, and I will circulate a draft of the settlement agreement and a current copy of your Equifax credit file for your review this week.
Email dated June 19, 2023 (ECF No. 78-1). Plaintiff responded to the email the same day, stating “This is confirmation of settlement.” Id. Counsel for Equifax prepared a Joint Notice of Settlement, which Plaintiff reviewed, signed, and returned to Equifax for filing on June 21, 2023. See Notice of Settlement (ECF No. 62). On June 30, 2023, counsel for Equifax provided Plaintiff with a standard settlement agreement and general release form. Equifax requested that Plaintiff review and return the signed agreement, his completed W-9, and the signed dismissal. Emails Regarding Settlement (ECF No. 78-2).
On July 27, 2023, Plaintiff emailed: “I have a couple of concerns about this settle agreement. When would be a good time to give you a call?” Id. Equifax asserts that its counsel contacted Plaintiff over the phone on August 1, 2023, to discuss his concerns. On August 21, 2023, Equifax, through counsel, emailed Plaintiff that it would accommodate his requested name for the payee, and agreed to remove an undisclosed paragraph from the draft settlement agreement. Id. Counsel for Equifax requested that Plaintiff send a copy of his W-9 so that the payee information in the agreement could be updated accordingly, and further stated that “[o]nce we receive the W-9, we'll make the changes to the settlement agreement and send you the updated version.” Id.
Equifax asserts that Plaintiff had concerns with the choice of law provision in the original settlement agreement and that it agreed to remove said provision.
After not hearing from Plaintiff for over a week, Equifax's counsel emailed Plaintiff on August 31, 2023, requesting that he send a copy of his W-9 as soon as possible so that the parties may finalize the settlement agreement and begin processing Plaintiff's settlement payment. Id. On September 14, 2023, Plaintiff provided Equifax with completed and signed W-9 forms. Id. On September 20, 2023, Equifax's counsel circulated a revised version of the settlement agreement for Plaintiff to execute with the changes Plaintiff had previously requested (i.e., removal of the choice of law provision and changes to the method of payment). Id.
Equifax notes that the W-9 form was dated June 19, 2023, the date the parties originally entered into their agreement. Id.
Plaintiff has not signed the revised version of the settlement agreement and, on October 27, 2023, he filed a Notice of Termination of Settlement (ECF No. 72) with the court. He does not specifically state the reason for the termination of settlement. However, within the same document, Plaintiff asks the court to reconsider its previous order denying his first motion for summary judgment based on “newly found evidence of fraud” - namely an Equifax data breach in 2017. There is no indication in the record that the data breach is relevant to terms of the settlement agreement reached by the parties in this action.
Following Plaintiff's Notice of Termination of Settlement, Equifax filed the present motion to enforce the settlement. Plaintiff did not file a response.
In the Fourth Circuit, “[o]nce a settlement agreement is reached, a district court judge possesses ‘the inherent authority to enforce a settlement agreement and to enter judgment based upon an agreement without a plenary hearing.'” U.S. ex rel McDermitt, Inc. v. Centex-Simpson Const. Co., 34 F.Supp.2d 397, 399 (N.D.W.Va. 1999) (citing Petty v. The Timken Corp., 849 F.2d 130, 132 (4th Cir.1988)), affd sub nom. United States v. Centex-Simpson Const., 203 F.3d 824 (4th Cir. 2000); Young v. F.D.I.C., 103 F.3d 1180, 1194 (4th Cir. 1997). “[T]he court cannot enforce a settlement until it concludes that a complete agreement has been reached and determines the terms and conditions of the agreement.” Hensley v. Alcon Laboratories, Inc., 277 F.3d 535, 540 (4th Cir.2002). “[I]f an agreement for complete settlement of the underlying litigation, or part of it, has been reached and its terms and conditions can be determined, the court may enforce the agreement summarily as long as the excuse for nonperformance of the agreement is “comparatively insubstantial.” Id. (citing Millner v. Norfolk & W. Ry. Co., 643 F.2d 1005, 1009 (4th Cir.1981)). The burden of proof is on the party moving to enforce the settlement agreement. Saza, Inc. v. Zota, No. 3:11-CV-363, 2012 WL 527370, at *5 (E.D.Va. Feb. 16, 2012) (citing Ozyagcila v. Davis, 701 F.2d 306, 308 (4th Cir.1983)). “One who attacks a settlement must bear the burden of showing that the contract he has made is tainted with invalidity, either by fraud practiced upon him or by a mutual mistake under which both parties acted.” Callen v. Pennsylvania R. Co., 332 U.S. 625, 630 (1948).
Federal law governs the enforceability of settlement agreements reached in federal cases. Gamewell Manufacturing, Inc. v. HVAC Supply, Inc., 715 F.2d 112, 116 (4th Cir. 1983). In Gamewell, the Fourth Circuit stated that
[s]ettlements and releases assertedly entered into in respect of federal litigation already in progress implicate federal procedural interests distinct from the underlying substantive interests of the parties. Once a claim-whatever its jurisdictional basis-is initiated in the federal courts, we believe that the standards by which that litigation may be settled, and hence resolved short of adjudication on the merits, are preeminently a matter for resolution by federal common law principles, independently derived.Id. at 115.
“South Carolina common law requires that, in order to have a valid and enforceable contract, there must be a meeting of the minds between the parties with regard to all essential and material terms of the agreement.” Player v. Chandler, 299 S.C. 101, 105, 382 S.E.2d 891, 893 (1989). “[F]or a contract to be binding, material terms cannot be left for future agreement.” Stevens & Wilkinson of S.C., Inc. v. City of Columbia, 409 S.C. 568, 578, 762 S.E.2d 696, 702 (S.C. 2014). As set forth above, the record reflects that Plaintiff and Equifax, through its attorney, settled the matter in principle over a telephone call on June 19, 2023, which was then memorialized in writing via email. In the email exchange, counsel for Equifax stated,
Although, as stated above, federal law controls the enforceability of settlement agreements reached during federal litigation, “federal courts may apply state law-not because of any compulsion to do so ... but because federal interests would not be impaired by doing so, state law is ‘already there,' people are familiar with it, and the state rule is not inimical to federal interests.” Charles Alan Wright et al., Federal Practice & Procedure § 4514, at 474-76 (1996). “Courts generally should apply ordinary state-law principles governing contract formation in deciding whether such an agreement exists.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 939, 115 S.Ct. 1920, 1921, 131 L.Ed.2d 985 (1995).
Thank you for the call today. This email is to confirm that Equifax agrees to settle this case for [an agreed-upon price and non-monetary terms], in exchange for dismissal and release of your claims against Equifax, and confidentiality. As discussed, we will file a notice of settlement with the Court tomorrow to advise them of the parties' settlement, and I will circulate a draft of the settlement agreement and a current copy of your Equifax credit file for your review this week.
Email dated June 19, 2023 (ECF No. 78-1). Plaintiff responded to the email the same day, stating “This is confirmation of settlement.” Id. Counsel for Equifax prepared a Joint Notice of Settlement, which Plaintiff reviewed, signed, and returned to Equifax for filing on June 21, 2023. See Notice of Settlement (ECF No. 62). “[A] contract is an obligation which arises from actual agreement of the parties manifested by words, oral, or written, or by conduct.” Sadighi v. Daghighfekr, 66 F.Supp.2d 752, 759 (D.S.C. 1999) (internal citations omitted). “[I]n deciding whether a settlement has been reached, the Court looks to objectively manifested intentions of the parties.” Sadighi, 66 F.Supp.2d at 759 (internal citations omitted). Plaintiff's agreement to the terms of the settlement as set forth by counsel for Equifax was manifested by words both when he responded to the email confirmation of the offer by saying “This is confirmation of settlement,” and when he signed the Joint Notice of Settlement. In Sadighi, the court found that a contract existed between the parties based on the existence of two letters, one signed by defendants and constituting an offer, the other, signed by Plaintiff's counsel and acknowledging acceptance. Sadighi, 66 F.Supp.3d at 760. The offer and acceptance in Sadighi were supported by valuable consideration in the form of a cash payment from the defendants and the plaintiff's release of all claims against the defendants. Id. at 761; see also California Sun Tanning USA, Inc. v. Elec. Beach, Inc., 369 Fed.Appx. 340, 347 (3d Cir. 2010) (holding that a notice of settlement filed with the court “[r]etir[ed] any lingering doubt on the issue” of whether the parties evidenced “mutual assent and intention to be bound by the material terms of the contemplated agreement”).
Further, “[a]n intent to memorialize a contract in a subsequent writing will not prevent a reviewing court from finding an enforceable contract so long as the parties intended to be bound by the earlier documents.” Id. at 763. Thus, the fact that the settlement agreement had not yet been drafted at the time Plaintiff manifested his intent to be bound by the agreement is of no consequence because the parties manifested their intent to be bound by the material terms of the agreement in the email exchange. Though Plaintiff took issue with a few terms of the written settlement agreement, none of those terms were material, and Equifax agreed to his requests. There is no evidence in the record that Plaintiff sought to change any of the terms of the settlement agreed upon in the previous phone conversation and email exchange. See id. at 761 (holding that the unilateral addition of a proposed clarification was not sufficient to allow a party to repudiate the material, agreed-upon terms of the settlement).
Even if Plaintiff's requested changes could be considered a counter-offer (which it was not because Plaintiff agreed to the initial, material terms of the settlement), Equifax accepted the counter-offer by incorporating Plaintiff's requested changes into the written settlement agreement.
“Having second thoughts about the results of a valid settlement agreement does not justify setting aside an otherwise valid agreement.” Young v. FDIC, 103 F.3d 1180, 1195 (4th Cir.1997). Here, Equifax has presented evidence that the parties entered into a valid settlement agreement. Plaintiff failed to respond to Equifax's motion, and thus Plaintiff has failed to show any reason why he should not be bound to it. Therefore, it is recommended that Defendant Equifax's motion be granted.
III. CONCLUSION
For the reasons discussed above, it is recommended that Defendant Equifax's Motion to Enforce Settlement (ECF No. 78) be granted and this case be dismissed.
A Stipulation of Dismissal (ECF No. 65) has already been filed as to the only other Defendant in this case. If the district judge accepts this recommendation, all other pending motions will be moot.