Peter Koehn v. Lauri Tobias, et al
Filed opinion of the court by Judge Bauer. AFFIRMED. William J. Bauer, Circuit Judge; Richard A. Posner, Circuit Judge and David F. Hamilton, Circuit Judge. [6859041-1]  [16-3482]
United States Court of Appeals
For the Seventh Circuit
LAURI TOBIAS and MARGARET
Appeal from the United States District Court for the
Northern District of Illinois, Western Division.
No. 3:12‐cv‐50321 — Philip G. Reinhard, Judge.
ARGUED JUNE 1, 2017 — DECIDED AUGUST 4, 2017
Before BAUER, POSNER, and HAMILTON, Circuit Judges.
BAUER, Circuit Judge. Plaintiff‐appellee Peter Koehn filed
suit under 42 U.S.C. § 1983, alleging that Defendants‐appel‐
lants Lauri Tobias and Margaret Segerston (Defendants), his
former employers, unlawfully retaliated against him for
exercising his First Amendment rights. After a series of failed
settlement negotiations, the case proceeded to trial, where
a jury found in favor of Defendants. After the trial, upon
Koehn’s motion, the district court ordered Defendants to pay
fees and costs associated with Koehn’s attorney’s preparation
for a settlement conference that proved to be unnecessary and
futile. This appeal followed.
Koehn filed his original pro se complaint on September 6,
2012. In June 2015, the case was referred to a magistrate judge
for purposes of facilitating settlement discussions. The magis‐
trate judge held a settlement conference on June 15, 2015,
and appointed counsel for Koehn for the limited purpose of
assisting in the settlement negotiations; the parties did not
reach a settlement. Shortly after that settlement conference,
Koehn obtained new counsel who continued to represent
him for the remainder of the case, including the trial.
The trial was set for June 6, 2016, and on May 13, 2016, the
district court held a telephonic status hearing, during which it
inquired about the history and current status of any settlement
negotiations. Defense counsel first explained that he was
relatively new to the case and was not personally involved
in the June 2015 settlement conference. He then stated that,
based on conversations with counsel who had previously been
handling the case for Defendants, he believed that Defendants’
insurer had proposed a settlement in the range of $150,000, and
that Koehn was seeking substantially more than that.
At this point in the hearing, Koehn’s counsel stated that
she had never heard the $150,000 figure and that, given that
information, a settlement conference might be productive.
Defense counsel agreed with that sentiment, and the court
scheduled a settlement conference for May 20, 2016.
At that settlement conference, however, Defendants did not
make an offer in the range of $150,000. Instead, they offered
less than half of that amount, which was in the range of what
Koehn had rejected during the June 2015 settlement confer‐
ence. Koehn rejected the offer again, so the case did not settle.
When the conference ended, the court entered an order, which
stated: “At the conclusion of the jury trial, counsel for the
Plaintiff may submit a request for attorney’s fees and costs
associated with the unnecessary settlement conference held
based upon defense counsel’s representations.”
Pursuant to that order, Koehn filed a motion for fees and
costs after he lost at trial, requesting $3,744 in fees and $552.85
in costs associated specifically with the preparation for and
attendance at the May 20, 2016, settlement conference. The
district court granted Koehn’s motion, holding that Federal
Rule of Civil Procedure 16 allows for the imposition of sanc‐
tions where a party’s failure to timely and candidly communi‐
cate a change in settlement posture results in the holding of
an unnecessary settlement conference. It found that, while
Defendants were free to change their settlement position
between the status hearing and the settlement conference, their
failure to notify the court or Koehn of that change made the
settlement conference a futile exercise. Therefore, pursuant to
Rule 16(f)(2), the court ordered Defendants to pay the re‐
quested fees and costs. They timely appealed.
Defendants submit two arguments on appeal, which are
somewhat intertwined. First, they argue that the court did not
apply the appropriate legal standard to impose sanctions
under Rule 16(f). Second, they argue that the facts of this case
simply do not support the imposition of sanctions under any
of Rule 16(f)’s standards.
Rule 16(f)(1) provides: “On motion or on its own, the court
may issue any just orders … if a party or its attorney: (A) fails
to appear at a scheduling or other pretrial conference; (B) is
substantially unprepared to participate—or does not partici‐
pate in good faith—in the conference; or (C) fails to obey a
scheduling or other pretrial order.” Fed. R. Civ. P. 16(f)(1). If a
party does not comply, the court must order it to pay the
reasonable fees and expenses incurred as a result of the
noncompliance. Fed. R. Civ. P. 16(f)(2). We review a district
court’s decision to impose sanctions under Rule 16(f) for an
abuse of discretion. Spain v. Bd. of Educ. of Meridian Comm. Unit
Sch. Dist. No. 101, 214 F.3d 925, 931 (7th Cir. 2000).
In support of their contention that the district court did not
apply an appropriate legal standard, Defendants argue that it
was unclear which of Rule 16(f)(1)’s subsections the court
relied upon to impose sanctions. We disagree. There are no
facts in the record to indicate—nor does the court’s order
suggest—that Defendants either failed to appear for the
settlement conference or failed to comply with an order of the
court. See Fed. R. Civ. P. 16(f)(1)(A) and (C). That leaves only
subsection (B). While the court did not employ the exact
language of that subsection, it is apparent from a reading of the
order that the court determined that Defendants did not
participate in the scheduled settlement conference in good
faith. See Fed. R. Civ. P. 16(f)(1)(B). We find no legal error, and
certainly no abuse of discretion, in the court’s reliance on that
subsection, particularly in light of the facts outlined in the
Defendants then argue that, even if the court relied on an
appropriate subsection, Rule 16(f) simply does not allow for
sanctions based on a party’s failure to inform the court or the
other party of a change in settlement position. They contend
that when defense counsel told the court that Defendants had
made a previous offer of $150,000, counsel did not intend
to communicate a current settlement position. Thus, the fact
that they arrived at the settlement conference with a different
posture does not, by itself, indicate a lack of good faith. They
also suggest that they believed the court wanted to have the
May 20, 2016, settlement conference regardless of the parties’
Those factual assertions, however, are contrary to the
district court’s findings of what transpired in the status
hearing. The appellate record, which does not include a
transcript of the status hearing, provides no basis for us to
question or disturb the district court’s factual findings. See
Ordower v. Feldman, 826 F.2d 1569, 1574 (7th Cir. 1987) (“When
reviewing for an abuse of discretion we keep in mind that
because the trial court alone has an intimate familiarity with
the proceedings it is in a far superior position to pass on an
attorney’s conduct than a reviewing court.”) (citation and
quotation marks omitted).
While it may be true that defense counsel did not intend to
communicate a current settlement position, it is clear that
neither Koehn’s counsel nor the court understood that to be the
case. Instead, immediately upon hearing the $150,000 figure,
Koehn’s counsel suggested that a settlement conference would
be beneficial, and defense counsel agreed. At that point,
defense counsel certainly should have realized that both
Koehn and the court expected that the upcoming negotiations
would involve numbers in the neighborhood of $150,000.
Rather than attempting to dispel that notion, Defendants
allowed Koehn to prepare for the settlement conference under
the assumption that the starting point for negotiations would
be significantly higher than what was offered and rejected a
year earlier. If Koehn—or the court—had known that Defen‐
dants intended only to make the same offer that Koehn had
rejected a year earlier, it is safe to presume that the May 20,
2016, settlement conference would not have proceeded.
It is clear that both Koehn and the court interpreted de‐
fense counsel’s representations at the status hearing as an
indication of Defendants’ current settlement posture. In fact,
the court’s order explicitly stated that the suggestion of a range
of $150,000 induced the court to schedule the conference. To
be sure, as the district court noted, Defendants were free
to change that posture before the settlement conference.
However, we cannot say that the district court abused its
discretion in finding that, by changing their position so
drastically without any indication that they intended to do so,
Defendants did not participate in the settlement conference in
For the reasons stated above, the order awarding attorney’s
fees and costs is AFFIRMED.
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