On Certification from the United States Court of Appeals for the District of Columbia Circuit (No. 01-7029)
Before Terry and Ruiz, Associate Judges, and Nebeker, Senior Judge.
The opinion of the court was delivered by: Senior Judge Nebeker.
Dissenting opinion by Associate Judge RUIZ at p. 11.
Pursuant to D.C. Code § 11-723 (1995), the United States Court of Appeals for the District of Columbia Circuit ("Circuit") has certified the following question to this court:
Under District of Columbia law, is a client bound by a settlement agreement negotiated by her attorney when the client has not given the attorney actual authority to settle the case on those terms but has authorized the attorney to attend a settlement conference before a magistrate judge and to negotiate on her behalf and when the attorney leads the opposing party to believe that the client has agreed to those terms. *fn1
For reasons set forth below, we hold that a client is not bound by a settlement agreement negotiated by her attorney at an in-court proceeding when the client was not present absent actual authority granted to the attorney to reach the settlement.
We will paraphrase the Circuit's concise statement of the facts. In November 1998, Brenda Makins brought an action against the District of Columbia claiming sex discrimination and retaliatory firing, in violation of Title VII (42 U.S.C. §§ 2000e et seq.). Makins had been employed in the District's Department of Corrections from 1995 until her discharge in 1997. Her complaint sought reinstatement, compensatory damages, and attorney's fees.
Makins' attorney, John Harrison, began representing her in 1996, after she received notice of termination from the Department. Harrison and Makins did not have a written retainer agreement. In the summer of 2000, at a pre-trial conference, the district judge referred Makins' case to a magistrate judge "for settlement purposes only" and ordered the District to "have present at all settlement meetings . . . an individual with full settlement authority." A similar admonition was absent as to Ms. Makins. The judge set the case for trial in December 2000. A few days later, the magistrate ordered the "lead attorney(s) for the parties" to appear before him for a settlement conference; the order required that the "parties shall either attend the settlement conference or be available by telephone for the duration of the settlement conference."
The conference took place on September 12, 2000. Makins was not present. After two and half hours of negotiations, Harrison and the attorneys for the District reached an agreement. Makins would receive $99,000 and have her personnel records amended from "discharged" to "resigned" (to preserve her retirement benefits if she were able to attain other creditable employment). In return, Makins would dismiss her claims against the District. The attorneys "shook hands" on the deal and later reduced it to writing. A few days later, when Harrison presented Makins with a copy for her signature, she refused to sign it. The District then filed a Motion to Enforce Settlement. Makins retained another attorney, and the court held an evidentiary hearing in which Harrison, Makins, and the lead attorney for the District testified.
The testimony of Makins and Harrison was at odds. According to Makins, she never agreed to settle her case under the terms Harrison and the District negotiated because "getting [her] job back had to be part of any agreement." She admitted to wanting to settle the case and knowing that the correctional facility in which she had worked was closing. She claimed that Harrison waited until the night before the conference to alert her to it and specifically told her not to attend. She talked to Harrison several times during the settlement negotiations on September 12. But she insisted that she never agreed to the negotiated terms because, as she expressed to Harrison in one of their cell phone conversations that day, getting her job back was a condition to settling the case. Although Makins swore in an affidavit, filed before the hearing, that Harrison alerted her during the negotiations that he was discussing the $99,000 figure, she testified that she did not recall such a conversation.
Harrison disputed much of Makins' testimony. He said they had extensively discussed the possibility of settlement the day before the conference andthat he thought it made sense strategically for his client to remain at home so that "the Judge couldn't put pressure on her to settle." Harrison also testified that he discouraged Makins from insisting on getting her job back. According to Harrison, Makins gave him a ...