Cook v. The Hughston Clinic, P.C. et al
ORDERED as follows: 1. Plaintiff's Pro Se Objection to the Settlement (Doc. # 79 ), Plaintiffs Objection to the Recommendation (Doc. # 95 ), and Defendants' Objection to the Recommendation (Doc. # 96 ) are SUSTAINED to the extent that th e settlement agreement, assuming that it was valid and enforceable when signed, will not be enforced because it was rescinded. 2. The Recommendation (Doc. # 91 ) is REJECTED as moot. 3. Defendants' motion to dismiss (Doc. # 78 ) is DENIED. 4. Plaintiff's counsels motion to withdraw (Doc. # 81 ) is GRANTED. 5. Plaintiff has until November 16, 2015, to find new counsel and to have said counsel make an appearance in this matter, or to state in writing to this court her intention to rep resent herself as a pro se plaintiff. Failure of Plaintiff to comply with this directive may result in the dismissal of her case. 6. This action is STAYED until further order of the court with the exception that Defendants' oral motion for sanct ions is REFERRED to the Magistrate Judge Moorer pursuant to 28 U.S.C. § 636.7. The Clerk of the Court is DIRECTED to furnish this Order to Plaintiff at the address on file with the court. Signed by Chief Judge William Keith Watkins on 10/15/2015. (kh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
THE HUGHSTON CLINIC, P.C, et
) CASE NO. 3:14-CV-296-WKW
MEMORANDUM OPINION AND ORDER
On August 11, 2015, the Magistrate Judge filed a Recommendation based
upon a referral pursuant to 28 U.S.C. § 636. The Magistrate Judge concludes that
the parties entered into a valid and enforceable settlement agreement, that
Defendants’ motion to dismiss be denied as moot, and that counsel for Plaintiff’s
motion to withdraw be granted. (Doc. # 91.) Plaintiff Lorraine Cook filed a timely
Objection (Doc. # 95), and Defendants The Hughston Clinic, P.C., and Fred C.
Flandry (collectively “Flandry”) also filed a timely Objection (Doc. # 96). After
de novo consideration of those portions of the Recommendation to which the
parties object in light of the record, the applicable law, and the arguments, the
court finds that the Recommendation is due to be rejected as moot, the objections
(Docs. # 95, 96) are due to be sustained in part and overruled in part, Defendants’
Motion to Dismiss (Doc. # 78) is due to be denied, and that the motion to withdraw
submitted by counsel for Plaintiff is due to be granted.
I. STANDARD OF REVIEW
A party’s timely written objections to a magistrate judge’s report and
recommendation require this court’s de novo review of those portions of the report
to which the party objects. See 28 U.S.C. § 636(b). After completing its review,
the court may accept, reject, or modify the report, in whole or in part. See id.
On April 15, 2015, at the parties’ request, the court ordered mediation of this
case. (Docs. # 72 & 73.) Mediation resulted in a written agreement, which the
parties signed and dated.
(Doc. # 93, at 3–4.)
After mediation, the parties
informed the court on June 8, 2015, that they had reached a settlement agreement,
and the court ordered the parties to file a joint stipulation of dismissal by June 19,
2015. (Doc. # 75.) Subsequently, Plaintiff filed a motion to extend the deadline to
file the joint stipulation (Doc. # 76), which was granted to June 26, 2015 (Doc.
Plaintiff did not file the joint stipulation, but instead sent a pro se letter to
the court objecting to the settlement agreement. In her letter, which was entered
into the record on June 30, 2015, Plaintiff claimed she was “unhappy with [her]
lawyer’s services” and that she was “basically forced to sign” the settlement
agreement. (Doc. # 79.) Also, on June 30, 2015, Defendants filed a motion to
dismiss (Doc. # 78) based upon Plaintiff’s failure to file the joint stipulation of
dismissal.1 Plaintiff’s attorneys filed a motion to withdraw as counsel of record
(Doc. # 81) on July 6, 2015. Plaintiff’s pro se objection to the settlement (Doc.
# 79), Defendants’ motion to dismiss (Doc. # 78), and the motion to withdraw
(Doc. # 81)2 were referred to the Magistrate Judge for further proceedings and
determination or recommendation. (Doc. # 83.)
The Magistrate Judge held a hearing on the matters and decided that,
because the motion to dismiss was based upon Plaintiff’s “failure to honor the
settlement agreement and comply with the Court’s order to submit the [parties’]
joint stipulation of dismissal,” that he should determine whether the settlement
agreement was enforceable. (Doc. # 91, at 5.) At the hearing, the Magistrate
Judge heard oral argument and Plaintiff’s testimony concerning the circumstances
surrounding her signing of the settlement agreement.
In the Recommendation, the Magistrate Judge ruled that Plaintiff failed to
establish that her counsel, Defendants’ counsel, or the mediator “exerted such
pressure as to overcome her will and thereby coerce her into signing the settlement
agreement.” (Doc. # 91.) Finding insufficient evidence of duress, the Magistrate
Judge concluded that the settlement agreement was valid and binding and should
The pro se letter was received on June 26, 2015, but not entered into the record until
June 30, 2015. Defendants filed the Motion to Dismiss prior to being served Plaintiff’s pro se
The Magistrate Judge recommends that the court grant the motion to withdraw. As
neither party objects to this recommendation, the motion to withdraw will be granted without
be enforced. He recommended that Plaintiff’s pro se objection (Doc. # 79) be
overruled, Defendants’ motion to dismiss (Doc. # 78) be denied as moot, and that
the parties be required to submit a joint stipulation of dismissal. (Doc. # 91.) Both
parties have objected to portions of the Recommendation.
The Valdity of the Settlement Agreement
The parties’ objections align in that, oddly, contrary to the Recommendation,
neither Plaintiff nor Defendants contend that the parties ever entered into a valid
and enforceable agreement that settled this case. If there was one, Defendants
argue alternatively, among other things, that the parties by mutual consent have
rescinded that agreement.
Defendants’ alternative argument is persuasive.
Accordingly, for the reasons that follow, it is not necessary to address the
Recommendation’s finding that there was a valid and enforceable settlement
agreement. Assuming arguendo that the settlement agreement initially was valid
and enforceable, the court finds that based upon the conduct of the parties, they
mutually rescinded the contract.3
Defendants assert several arguments against the enforcement of the settlement
agreement. Those arguments include that Plaintiff was under duress, that no party is seeking
enforcement of the agreement, that the agreement has been rescinded, that Plaintiff repudiated
the agreement, that the agreement cannot be enforced due to a change in circumstances that has
made performance impracticable, and that the agreement is voidable at Dr. Flandry’s option. It
is not necessary for the court to reach all the arguments because one is dispositive, namely, that
any agreement between the parties has been rescinded.
Under Alabama law, a settlement “agreement may be set aside upon any
ground that would warrant rescission of a contract.” Nero v. Material Sales Co.,
340 So. 2d 454, 456 (Ala. Civ. App. 1976). “[A] contract may be rescinded or
discharged by acts or conduct of the parties inconsistent with the continued
existence of the contract and mutual assent to abandon a contract may be inferred
from the attendant circumstances and conduct of the parties.” San-Ann Serv. Inc.
v. Bedingfield, 293 So. 2d 374, 472 (Ala. 1974). In order “[t]o rescind a contract,
however, the minds of the parties thereto must meet in an agreement or mutual
release fully settling all rights under the contract.” Id. at 473. “‘The effect of
setting aside the compromise is to place the parties in the original position; and all
rights which are transferred, released, or created by the agreement are revested,
restored, or discharged by the avoidance.’” Coaker v. Wash. Cnty. Bd. of Educ.,
646 So. 2d 38, 43 (Ala. Civ. App. 1993) (quoting 15A C.J.S. Compromise &
Settlement § 43 (1967)).
Applying the foregoing principles, the court finds that the parties mutually
have abandoned any settlement agreement. Plaintiff first objected to the agreement
in her pro se letter (Doc. # 79) and reasserted her opposition by filing an objection
to the Recommendation. (Doc. # 95.) She also failed to sign the release and return
it to Defendants’ counsel and failed to file the joint stipulation of dismissal. (Doc.
# 96, at 14.) In their objection to the Recommendation, Defendants likewise have
made it clear that they have no desire for any settlement agreement to be enforced,
as all their arguments are against enforceability of the agreement. Additionally,
Defendants’ counsel submitted an email to Plaintiff’s counsel, stating that, if
Plaintiff did not deliver an executed release to Defendants’ counsel by 5:00 p.m. on
June 25, 2015, then “all bets are off and our settlement agreement will not be
applicable.” (Doc. # 96, Ex. A.)
Both Plaintiff’s and Defendants’ words and actions are inconsistent with the
continued existence of the settlement agreement. Even if it is assumed that the
settlement agreement was valid and binding on the date on which it was signed, the
record demonstrates that the parties have since mutually rescinded the agreement
so that it is no longer enforceable. Accordingly, based upon the rescission of the
settlement agreement, the parties are restored to their respective litigation positions
prior to the mediation. See Coaker, 646 So. 2d at 43.
Defendants’ Motion to Dismiss
Defendants’ motion to dismiss this action with prejudice is based solely
upon Plaintiff’s failure to file the joint stipulation of dismissal by the courtimposed deadlines and is not a motion to enforce the settlement agreement.
Accordingly, Defendants’ motion is tantamount to one requesting that sanctions be
imposed against Plaintiff for not following a court order. (Doc. # 78.) A court
should not dismiss an action with prejudice unless “there is a clear record of delay
or willful contempt.” Goforth v. Owens, 766 F.2d 1533, 1535 (11th Cir. 1985)
(citation and internal quotation marks omitted). While it is within the court’s
discretion to dismiss an action for failure to follow a court order, dismissal with
prejudice is a harsh sanction and, thus, is considered “a sanction of last resort.” Id.
Although Plaintiff failed to comply with the extended June 26, 2015
deadline for filing a joint stipulation of dismissal, the court finds that the
circumstances surrounding her failure do not rise to the level of a clear record of
delay or willful contempt. Plaintiff did not blatantly ignore the original deadline
for filing the joint stipulation of dismissal, but instead timely moved for an
unopposed extension of the deadline. She also was cognizant of the new deadline,
and, rather than disregard it entirely, Plaintiff, whose counsel were contemplating
withdrawing as counsel, filed a pro se objection to the settlement agreement on
June 26. These is not a clear record to support a finding that Plaintiff’s requested
extension, which Defendants did not oppose, and Plaintiff’s filing of an objection
to the settlement agreement, rather than a joint stipulation of dismissal, amounts to
a clear record of delay.
The totality of the circumstances mitigates against
imposing the harsh sanction of dismissal with prejudice, particularly when the joint
stipulation would have resulted in the dismissal of her case based on a settlement
agreement that ultimately both parties would reject.
For these reasons,
Defendants’ motion to dismiss (Doc. # 78) is due to be denied.
Defendants’ Motion for Sanctions
There is a final matter to address. At the hearing held on July 28, 2015,
Defendants also moved in open court for other sanctions under Federal Rule of
Civil Procedure 37. (Doc. # 93, at 36.) The Recommendation did not address this
motion; therefore, the oral motion for sanctions will be referred to the Magistrate
Judge for further proceedings.
Accordingly, it is ORDERED as follows:
Plaintiff’s Pro Se Objection to the Settlement (Doc. # 79), Plaintiff’s
Objection to the Recommendation (Doc. # 95), and Defendants’ Objection to the
Recommendation (Doc. # 96) are SUSTAINED to the extent that the settlement
agreement, assuming that it was valid and enforceable when signed, will not be
enforced because it was rescinded.
The Recommendation (Doc. # 91) is REJECTED as moot.
Defendants’ motion to dismiss (Doc. # 78) is DENIED.
Plaintiff’s counsel’s motion to withdraw (Doc. # 81) is GRANTED.
Plaintiff has until November 16, 2015, to find new counsel and to
have said counsel make an appearance in this matter, or to state in writing to this
court her intention to represent herself as a pro se plaintiff. Failure of Plaintiff to
comply with this directive may result in the dismissal of her case.
This action is STAYED until further order of the court with the
exception that Defendants’ oral motion for sanctions is REFERRED to the
Magistrate Judge Moorer pursuant to 28 U.S.C. § 636.
The Clerk of the Court is DIRECTED to furnish this Order to Plaintiff
at the address on file with the court.
DONE this 15th day of October, 2015.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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