Martina Beverly v. Abbott Laboratories, Incorpora
Filing
Filed opinion of the court by Judge Williams. AFFIRMED. Frank H. Easterbrook, Circuit Judge; Michael S. Kanne, Circuit Judge and Ann Claire Williams, Circuit Judge. [6736165-1] [6736165] [15-1098]
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In the
United States Court of Appeals
For the Seventh Circuit
No. 15-1098
____________________
MARTINA BEVERLY,
Plaintiff-Appellant,
v.
ABBOTT LABORATORIES,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 12 CV 3216 — Edmond E. Chang, Judge.
____________________
ARGUED SEPTEMBER 9, 2015 — DECIDED MARCH 16, 2016
____________________
Before EASTERBROOK, KANNE, and WILLIAMS, Circuit Judges.
WILLIAMS, Circuit Judge. Martina Beverly sued her former
employer, Abbott Laboratories (Abbott), for employment
discrimination and retaliation. During a private mediation,
the parties signed a handwritten agreement stating that Beverly demanded $210,000 and mediation costs in exchange for
dismissing the lawsuit. Abbott later accepted Beverly’s de-
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mand and circulated a more formal settlement proposal. After Beverly refused to execute this draft proposal, Abbott
moved to enforce the original handwritten agreement.
The district court found that the parties entered into a
binding settlement agreement and granted Abbott’s motion
to enforce. Beverly appeals this decision, arguing that Abbott
intended to be bound only by the terms of the typewritten
proposal and that the handwritten agreement omits certain
material terms.
However, we find that the handwritten agreement was
valid and enforceable, since the agreement’s material terms
were clearly conveyed and consented to by both parties, and
the existence and content of the draft proposal do not affect
enforceability. Therefore, we affirm the district court’s grant
of Abbott’s motion to enforce.
I. BACKGROUND
Beverly is a former Abbott employee whose employment
was terminated on October 20, 2010. A year and a half later,
she filed suit against Abbott. She alleged that during her
employment with the company, Abbott had discriminated
and retaliated against her on the basis of her German nationality in violation of Title VII of the Civil Rights Act, as well
as on the basis of her disabilities in violation of the Americans with Disabilities Act. The district court denied Abbott’s
motion for summary judgment as to Beverly’s national
origin claims and certain of her disability claims, and the
parties engaged in a private mediation. 1
1 Beverly’s husband, Henry, is also a named plaintiff in the lawsuit
against Abbott. The district court granted Abbott’s motion for summary
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A day before the mediation took place, Abbott’s counsel
sent Beverly’s counsel a “template settlement agreement” in
order to avoid “any surprises in the event that [the parties]
are able to resolve the matter.” This template included six
typewritten pages and provided, among other things, that
Beverly had twenty-one days to review the document and
seven days to revoke her acceptance; that Beverly would release and waive any and all claims against Abbott and its
affiliates; that Abbott would send two separate checks to
Beverly and a third check to Beverly’s attorneys for unspecified amounts; and that Abbott would pay all mediation
costs.
The mediation session lasted approximately fourteen
hours and both parties were represented by counsel the entire time. Near the end of the session, both parties and their
counsel signed a handwritten agreement that stated:
I Jon Klinghoffer will commit that my client will communicate to its internal business client the fact that Abbott/AbbVie has offered $200,000 + Abbott/AbbVie pays
cost of mediation to resolve this matter and that Martina
Beverly has demanded $210,000 + Abbott/AbbVie pays
cost of mediation to resolve this matter. Both parties
committ [sic] that their offer and demand will remain
open until Tuesday, July 22, 2014, 3:00 PM central.
On the following day, Abbott’s counsel emailed Beverly’s
counsel and stated, “My client has accepted Martina Beverly’s demand to resolve her claims in the above referenced
matter for $210,000 plus the costs of yesterday’s mediation. I
judgment as to all of Henry’s claims; however, this appeal does not concern that decision or any of Henry’s claims. Unless otherwise specified,
all references to “Beverly” in this opinion concern Martina.
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have attached a draft settlement agreement for your review.” This draft was largely identical to the template settlement agreement sent two days earlier, with three exceptions: (1) the replacement of “Abbott” with “AbbVie” 2; (2)
the inclusion of the precise dollar amounts to be paid to Beverly ($23,000 for damages, $23,000 for backpay) and to her
attorneys ($164,000); and (3) the exclusion of a provision
preventing Beverly from disparaging Abbott or AbbVie.
Approximately five minutes after receiving the email
from Abbott’s counsel, Beverly’s counsel responded via
email and stated, “Oh happy days! Best $10,000 Abbott has
ever spent. You are a gem.” Several minutes later, Beverly’s
counsel forwarded the Abbott counsel’s email and draft
proposal to Beverly for review. Beverly ultimately declined
to sign the proposal.
Abbott filed a motion to enforce the handwritten agreement. In the motion, Abbott argued that the agreement was
enforceable because an offer, acceptance, and meeting of the
minds had occurred, and that the parties’ subsequent inability to execute the typewritten proposal was irrelevant. In response, Beverly argued that the handwritten agreement was
merely a preliminary document that captured the parties’
intention to execute a binding settlement agreement in the
future. She also contended that the omission of multiple ma2 In January 2013, Abbott split into two separate publicly traded
companies. One company (the “new” Abbott) primarily focuses on the
production of medical devices, diagnostic products, and infant formula,
while the other company (AbbVie) primarily focuses on the research and
development of certain pharmaceutical products. The parties do not call
attention to this corporate distinction, and it does not appear to be relevant for purposes of this dispute.
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terial terms from the handwritten agreement illustrated its
non-binding nature.
The district court granted Abbott’s motion, finding that
the parties had entered into a binding settlement agreement
that included all material terms—specifically, the dismissal
of the case in exchange for $210,000 and mediation costs.
Beverly appeals this decision.
II. ANALYSIS
On appeal, Beverly argues that the district court erred by
granting Abbott’s motion to enforce the handwritten settlement agreement. We disagree. We review the district court’s
decision to enforce the settlement agreement for abuse of
discretion. Hakim v. Payco-Gen. Am. Credits, Inc., 272 F.3d 932,
953 (7th Cir. 2001). However, the question of whether a settlement agreement exists is a question of law that we review
de novo. Newkirk v. Village of Steger, 536 F.3d 771, 774 (7th
Cir. 2008).
A. Handwritten Agreement Enforceable
State contract law governs issues concerning the formation, construction, and enforcement of settlement agreements. Sims-Madison v. Inland Paperboard & Packaging, Inc.,
379 F.3d 445, 448 (7th Cir. 2004) (citing Pohl v. United Airlines,
Inc., 213 F.3d 336, 338 (7th Cir. 2000)). Both parties rely on
Illinois law to support their arguments, so we too will look
to that body of substantive law. Under Illinois law, the existence of a valid and enforceable contract is a question of law
when the basic facts are not in dispute. Echo, Inc. v. Whitson
Co., 121 F.3d 1099, 1102 (7th Cir. 1997). A settlement agreement is enforceable if there was a meeting of the minds or
mutual assent to all material terms. Abbott Labs. v. Alpha
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Therapeutic Corp., 164 F.3d 385, 387 (7th Cir. 1999) (citing SBL
Assoc. v. Village of Elk Grove, 617 N.E.2d 178, 182 (Ill. 1993)).
Material terms are sufficiently definite and certain when
they enable a court to ascertain what the parties agreed to
do. K4 Enters., Inc. v. Grater, Inc., 914 N.E.2d 617, 624 (Ill.
App. Ct. 2009) (citing Midland Hotel Corp. v. Reuben H. Donnelly Corp., 515 N.E.2d 61, 65 (Ill. 1987)).
Illinois follows the objective theory of intent whereby the
written records of the parties’ actions—rather than their subjective mental processes—drive the inquiry. Newkirk, 536
F.3d at 774; see also Int’l Minerals & Chem. Corp. v. Liberty
Mut. Ins. Co., 522 N.E.2d 758, 764 (Ill. App. Ct. 1988) (“The
paramount objective is to give effect to the intent of the parties as expressed by the terms of the agreement.”).
When a settlement agreement concerns federal claims in
the employment discrimination context, we typically inquire
whether the agreement was knowingly and voluntarily executed based on the totality of the circumstances. Dillard v.
Starcon Int’l, Inc., 483 F.3d 502, 507 (7th Cir. 2007). This inquiry is unnecessary here, however, since Beverly did not
contend during the district court proceedings, and does not
contend on appeal, that she executed the handwritten
agreement involuntarily or unknowingly. See Milligan v. Bd.
of Trs. of S. Ill. Univ., 686 F.3d 378, 386 (7th Cir. 2012) (“Milligan did not make that argument, either here or in the district
court. His failure to do so forfeits the argument.”).
We find that the district court correctly concluded that
the handwritten agreement was enforceable because the
agreement sufficiently defines the parties’ intentions and obligations. The material terms in the agreement clearly provide that Beverly offered to “resolve this matter”—i.e., vol-
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untarily dismiss her alienage and disability claims—if Abbott paid $210,000 and mediation costs. See Elustra v. Mineo,
595 F.3d 699, 709 (7th Cir. 2010) (“We find that the material
terms were definite and certain: defendants would pay
$6,000 to the Elustras in exchange for their dismissal of the
lawsuit.”). It also states that Abbott had five days within
which to accept Beverly’s offer, which it did the following
day. Both parties and their respective attorneys signed the
agreement, further demonstrating their intent to be bound
by the terms of the document. And the elated response of
Beverly’s counsel to Abbott’s acceptance further underscores
the parties’ understanding that the handwritten agreement
would settle Beverly’s claims.
Beverly contends that the district court erred in relying
on cases such as Elustra v. Mineo that involve oral agreements because the agreement at issue here was handwritten,
not oral. But Beverly fails to cite a single case to support this
contention, much less explain why the oral-versus-written
distinction is relevant here. This failure amounts to forfeiture. See United States v. Berkowitz, 927 F.2d 1376, 1384 (7th
Cir. 1991) (holding that “perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent
authority,” are forfeited on appeal). Forfeiture aside, our cases counsel that the relevant inquiry is whether the agreement
at issue is sufficiently clear regarding its material terms, not
whether the agreement was captured in writing. Compare
Abbott Labs., 164 F.3d at 388 (involving preliminary written
agreement), and Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547,
564 (7th Cir. 2012) (same), with Elustra, 595 F.3d at 708–09
(involving preliminary oral agreement), and Dillard, 483 F.3d
at 507–08 (same).
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B. Typewritten Proposal Does Not Affect Enforceability
Beverly argues that the twenty-one-day consideration period and the seven-day revocation period in the typewritten
proposal demonstrate that Abbott intended to be bound only if the typewritten proposal was executed. But this argument ignores the fact that the “anticipation of a more formal
future writing does not nullify an otherwise binding agreement.” Abbott Labs., 164 F.3d at 388 (citing Dawson v. Gen.
Motors Corp., 977 F.2d 369, 374 (7th Cir. 1992)). Indeed, we
have observed that “Illinois courts have not been shy about
enforcing promises made in the context of ongoing negotiations and often involving preliminary or ‘incomplete’
agreements.” Dawson, 977 F.2d at 374 (collecting cases). We
agree with the district court that the parties’ failure to execute the typewritten proposal simply left the handwritten
agreement’s enforceability undisturbed.
Beverly’s reliance on Ocean Atlantic Development Corp. v.
Aurora Christian Schools, 322 F.3d 983 (7th Cir. 2003), is misplaced. Ocean Atlantic involved two offer letters that, instead
of triggering certain key obligations and events themselves,
merely anticipated the triggering of these obligations and
events by the future execution of an anticipated contract. Id.
at 997–99 (observing that both offer letters stated they “will
serve to set forth some of the parameters for an offer,” and
that inspection, default, and refundability of the earnest
money deposit all depended on the future execution of a
contract and not of the offer letters). Here, however, neither
the text of the handwritten agreement nor the parties’ prior
dealings demonstrate that the parties believed their mutual
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obligations were dependent upon the future execution of a
final contract with additional terms.
Beverly also argues that the handwritten agreement is
not enforceable because it omits certain purportedly material
terms that appear in the subsequent draft proposal. We disagree.
A settlement agreement may be enforceable despite the
omission of certain terms so long as those terms are not material. See Wigod, 673 F.3d 547, 564 (7th Cir. 2012) (observing
that “[a] contract may be enforced even though some contract terms may be missing or left to be agreed upon” (citing
Acad. Chi. Publishers v. Cheever, 578 N.E.2d 981, 983–84 (Ill.
1991))); Pritchett v. Asbestos Claims Mgmt. Corp., 773 N.E.2d
1277, 1282 (Ill. App. Ct. 2002) (“Every feasible contingency
that might arise in the future need not be provided for in a
contract for the agreement to be enforceable…. Ambiguity
will prevent the enforcement of a contract only where the
ambiguity affects the material terms of the contract.”).
Beverly appears to concede—as she must—that the payment of $210,000 and mediation fees and the dismissal of the
case are material terms. But she argues that additional terms
were required to communicate the parties’ fundamental obligations—specifically, provisions relating to indemnification, future cooperation between the parties, Beverly’s future
employment options with Abbott, the precise allocation of
settlement funds, and express language concerning release
and waiver. However, these various provisions, taken together, constitute nearly the entire six-page typewritten proposal; certainly they are not all equally essential. See Rose v.
Mavrakis, 799 N.E.2d 469, 473–74 (Ill. App. Ct. 2003) (stating
that “[t]he lack of nonessential details … will not render a
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contract unenforceable”); Dillard, 483 F.3d at 508 (“The materiality of additional written terms introduced after an oral
agreement is reached is not established simply by one party’s intransigence or ‘refusal to budge’ on the new terms.”).
Beverly implicitly acknowledges this when she refers to indemnification, cooperation, and future employment in cursory fashion, with no attempt to explain how any of these
issues are so vital that the parties would not have settled the
dispute without them. We therefore reject Beverly’s suggestion that the handwritten agreement is unenforceable due to
its silence regarding indemnification, cooperation, and future employment. See Berkowitz, 927 F.2d at 1384.
It bears mentioning that a transcript (or some other recording) of the private mediation session here may have
provided important clarity regarding the parties’ beliefs and
intentions relating to the handwritten agreement and the
draft proposal. We encourage future litigants to record any
communications that directly relate to final settlement
agreements.
We now turn to the remaining provisions concerning
waiver and allocation that Beverly contends are material.
Beverly argues that the handwritten agreement was not intended to be final because it lacked the waiver-and-release
language that the typewritten proposal describes as “an essential and material term of this Agreement and that, without this provision, no agreement would have been reached
by the parties.” But the handwritten agreement states that
Beverly demanded $210,000 and mediation costs “to resolve
this matter.” Though perhaps inartful, this phrase adequately conveys Beverly’s offer to abandon her claims against Abbott; the use of formal terms such as “waiver,” “release,”
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and “covenant not to sue” was unnecessary—at least regarding the claims Beverly alleged in her complaint. See Wilson v.
Wilson, 46 F.3d 660, 667 (7th Cir. 1995) (holding that a settlement agreement in which the plaintiff agreed to drop all
claims against the defendants in exchange for a specific sum
of money was enforceable, despite the fact that the agreement did not specify whether the plaintiff’s promise would
take the legal form of a release or a covenant not to sue).
The other purportedly material term that Beverly focuses
on is allocation. Specifically, she contends that the allocation
of the $210,000 between backpay (which is taxable) and
damages (which are not taxable) is a material term, and that
the handwritten agreement’s silence on this issue renders it
unenforceable. We conclude, however, that Beverly forfeited
this argument by failing to raise it with the district court. In
its motion to enforce the settlement agreement, Abbott stated that at the mediation, the parties agreed that a portion of
the settlement amount would be paid directly to Beverly’s
attorneys, and that the remaining amount would be split
equally between backpay and damages. In her opposition
brief, Beverly failed to rebut this statement or otherwise reference allocation, and the only purportedly “material” terms
she identified were, by her own admission, non-financial in
nature. This failure amounts to forfeiture for purposes of this
appeal. See Milligan, 686 F.3d at 386.
Beverly proffers several arguments for why forfeiture has
not occurred, but none are availing. Beverly suggests that
the district court considered and ruled on the allocation issue because the typewritten proposal, which contains an allocation provision, was included as an exhibit in Beverly’s
opposition brief. But neither party expressly referenced this
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provision in its briefs, and the district court was under no
obligation to identify and analyze every possible way in
which the provision could be employed to either party’s
benefit. See Williams v. Dieball, 724 F.3d 957, 963 (7th Cir.
2013) (“Judges are not clairvoyant, and if they were required
to go out of their way to analyze every conceivable argument not meaningfully raised, their work would never
end.”). Nor was the allocation issue preserved simply because Abbott briefly raised the issue. See id at 962 (reasoning
that “to find that one party’s argument was preserved because his opponent defended against it out of an abundance
of caution would be to punish the opponent for being more
thorough”). In addition, Beverly invites us to interpret the
list of purportedly material provisions she identified in her
opposition brief as non-exhaustive, and to read allocation
into that list. We decline to do so. See Fednav Int’l Ltd. v.
Cont’l Ins. Co., 624 F.3d 834, 841 (7th Cir. 2010) (emphasizing
that “a party has waived the ability to make a specific argument for the first time on appeal when the party failed to
present that specific argument to the district court, even
though the issue may have been before the district court in
more general terms”).
Beverly suggests that, despite her failure to raise the allocation issue with the district court, we may nevertheless
reach the issue by exercising our discretion. “We may consider a forfeited argument if the interests of justice require it,
but it will be a ‘rare case in which failure to present a ground
to the district court has caused no one—not the district
judge, not us, not the appellee—any harm of which the law
ought to take note.’” Russian Media Grp., LLC v. Cable Am.,
Inc., 598 F.3d 302, 308 (7th Cir. 2010) (quoting Amcast Indus.
Corp. v. Detrex Corp., 2 F.3d 746, 749–50 (7th Cir. 1993)). Here,
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Beverly’s failure to raise the allocation issue with the district
court precluded the parties from further developing the record on the issue, and reasonably permitted the district court
to infer that the issue was not so important to the parties as
to constitute a material term. Beverly does not offer any reason on appeal that warrants the exercise of discretion here,
and we decline to invent one. See S.E.C. v. Yang, 795 F.3d 674,
679 (7th Cir. 2015) (holding that discretionary review was
improper, in part, because the party “made no attempt to
demonstrate why his case qualifies as one of these” rare cases).
III. CONCLUSION
The judgment of the district court is AFFIRMED.
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