Polk v. Sherwin-Williams Co

Filing 27

ORDER. For the reasons set forth herein, Sherwin-Williams' Motion 20 is DENIED. An answer or other responsive pleading is due within 30 days. Signed by Judge Michael P. Shea on 3/29/17. (Tegeler, D.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

JOHN POLK,
Plaintiff,

No. 3:16-cv-1491 (MPS)

v.
SHERWIN-WILLIAMS COMPANY,
Defendant.
MEMORANDUM OF DECISION
Plaintiff John Polk filed this lawsuit against his former employer, the Sherwin-Williams
Company (“Sherwin-Williams”), claiming racial discrimination and retaliation in violation of the
Title VII of the Civil Rights Act, 42 U.S.C. §§ 2000e, et seq., and the Connecticut Fair
Employment Practices Act, Conn. Gen. Stat. 46a-60, et seq. (ECF No. 1.) On October 18, 2016,
Sherwin-Williams filed a “motion to enforce” an un-executed settlement agreement allegedly
entered into by the parties before the lawsuit was filed. (ECF No. 20.) As explained below, I treat
this motion as a motion for summary judgment based on a defense of release. And because a
reasonable juror could find that the parties did not intend to be bound by the settlement agreement
until it was signed, I DENY the motion.
I.

Legal Standard
A “motion to enforce” is not the proper vehicle for Sherwin-Williams’ argument regarding

the alleged settlement agreement, because the agreement was allegedly reached at a time when no
case was pending in any court. “‘A district court has the power to enforce summarily, on motion,
a settlement agreement reached in a case that was pending before it.’” Nieves v. Cmty. Choice
Health Plan of Westchester, Inc., 2011 WL 5533328, at *3 (S.D.N.Y. Aug. 31, 2011) (quoting
Meetings & Expositions, Inc. v. Tandy Corp., 490 F.2d 714, 717 (2d Cir.1974)) (emphasis added);
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see also Janus Films, Inc. v. Miller, 801 F.2d 578, 583 (2d Cir. 1986) (“A court's authority to
enforce a settlement by entry of judgment in the underlying action is especially clear where the
settlement is reported to the court during the course of a trial or other significant courtroom
proceedings.”) The court’s authority does not extend to agreements reached at a time it does not
have jurisdiction over the case. Indeed, after a case has been dismissed, “there are only two ways
in which a district court may retain ancillary jurisdiction to enforce the terms of a settlement
agreement: it may expressly retain jurisdiction over enforcement of the agreement in an order of
the court, or it may incorporate the terms of that agreement in such an order.” Hendrickson v.
United States, 791 F.3d 354, 359–60 (2d Cir. 2015) (citation, quotation marks, and alteration
omitted). Summary enforcement authority does not extend to a private settlement agreement
reached prior to the start of litigation, such as the agreement at issue here. See also Roberson v.
Giuliani, 346 F.3d 75, 80 (2d Cir. 2003) (“[T]he enforcement of a [private] settlement agreement
normally proceeds in state courts unless there is an independent basis for federal jurisdiction.”)1
Instead, I treat Sherwin-Williams’ motion as a motion for summary judgment, based on
what I anticipate will be a defense of release, although Sherwin-Williams has not yet filed an
answer. See, e.g. Ferguson v. Ferrante, 664 F. App'x 58, 60 (2d Cir. 2016) (summary order)
(reviewing defendant’s motion for summary judgment based on argument that prior settlement
agreement had released him from all claims in the action). Under Federal Rule of Civil Procedure
56(b), “a party may file a motion for summary judgment at any time until 30 days after the close
of all discovery,” including before filing an answer. See Advisory Committee’s Note to 1946
Amendment to Fed. R. Civ. P. 56; see also Weldon v. United States, 845 F. Supp. 72, 81 n.9

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There is no issue here about whether the Court has jurisdiction over this action, which includes
a federal claim under Title VII.
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(N.D.N.Y. 1994) (affirmative defenses may be presented in pre-answer motions). Where “matters
extrinsic to the pleadings have been presented to and not excluded by the court, and the parties
have been given reasonable opportunity to present all material pertinent to the issues raised by this
motion, the court will treat the motion as one for summary judgment.” Bloomquist v. Brady, 894
F. Supp. 108, 113 (W.D.N.Y. 1995). Here, the parties have presented evidence outside of the
pleadings regarding the purported settlement agreement, and have jointly stated that “neither
discovery, nor an evidentiary hearing, is required in advance of the Court’s consideration of
Defendant’s Motion.” (ECF No. 25 at 1.)
In reviewing Sherwin-Williams’ motion for summary judgment, I must “construe the facts
in the light most favorable to the nonmoving party and must resolve all ambiguities and draw all
reasonable inferences against the movant.” Caronia v. Philip Morris USA, Inc., 715 F.3d 417, 427
(2d Cir. 2013) (citation and quotation marks omitted). Summary judgment is appropriate only
when “the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The “party seeking summary
judgment bears the burden of establishing that no genuine issue of material fact exists.” Goenaga
v. Mar. of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995). An issue of fact is “material”
if it “might affect the outcome of the suit under the governing law.” Konikoff v. Prudential Ins.
Co. of America, 234 F.3d 92, 97 (2d Cir. 2000) (citation and quotation marks omitted). “A dispute
regarding a material fact is genuine if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Williams v. Utica Coll. of Syracuse Univ., 453 F.3d 112, 116
(2d Cir. 2006) (citation and quotation marks omitted).

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II.

Undisputed Facts2
Sherwin-Williams terminated Mr. Polk’s employment on February 24, 2015. (ECF No. 20-

2 at 2.) On April 17, 2015, Attorney Robert M. Fortgang, then counsel for Mr. Polk, wrote a letter
to Sherwin-Williams. (Id. at 2-4.) Mr. Fortgang claimed that Mr. Polk had been wrongfully
terminated and requested “negotiation, the ultimate objective of which would be the execution of
a Severance Agreement and Release of All Claims.” (Id. at 3.)
The parties apparently engaged in the requested negotiations, and on June 30, 2015, Mr.
Fortgang emailed Sherwin-Williams’ counsel, stating:
Our client has accepted Sherwin-Williams’ offer of: (1) one month of severance; (2)
outplacement counseling; and (3) reclassifying Mr. Polk’s reasons for termination from
“gross misconduct” to a “mutual voluntary separation from Sherwin-Williams.” In this
regard, kindly provide an agreement at your earliest convenience.
(Id. at 7.) Mr. Fortgang also requested “an employment reference that coincides with the agreement
that his separation was a mutual decision to voluntarily separate… as soon as possible.” (Id.)
Sherwin-Williams’ counsel replied the same day, asking how the severance should be allocated
and stating, “[a]s far as employment references go, we have work verification service that will
confirm his dates of employment and position held; we will not comment further. This is consistent
with Company policy.” (Id. at 6-7.) Fifteen minutes later, Mr. Fortgang responded, describing the
desired severance allocation and providing a copy of his law firm’s W-9. (Id. at 6.)
On July 10, 2015, an associate of Mr. Fortgang wrote to Sherwin-Williams’ counsel, “to
follow up on the status of Mr. Polk’s settlement agreement,” asking, “When can we expect said

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The following facts are based on the correspondence and draft agreements attached to SherwinWilliams’ motion (ECF No. 20). In his brief in opposition (ECF No. 21), Mr. Polk does not dispute
the accuracy of these documents, and the parties have jointly stated that “neither discovery, nor an
evidentiary hearing, is required in advance of the Court’s consideration of Defendant’s Motion.”
(ECF No. 25 at 1.) I therefore treat these facts as undisputed for purposes of the summary judgment
ruling.
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document?” Then, on July 22, 2015, Sherwin-Williams’ counsel responded by emailing a draft
settlement agreement to Mr. Fortgang. (Id. at 11-18.) In the body of the email, counsel wrote,
“Please let me know if you wish to discuss. Otherwise, please execute and return to me so I can
process the payment.” (Id. at 11.)
Mr. Fortgang replied with proposed revisions on July 27, 2015:
On June 30th I wrote to you on behalf of my client accepting Sherwin Williams’ offer of:
(1) one month of severance; (2) outplacement counseling; and (3) reclassifying Mr. Polk’s
reasons for termination from “gross misconduct” to a “mutual voluntary separation from
Sherwin-Williams.” As currently written, the Separation Agreement lacks any reference to
outplacement counseling and the reclassification of Mr. Polk’s termination. Can you please
revise the Agreement to reflect said terms.
(Id. at 20.)
On July 28, 2015, Sherwin Williams’ counsel sent a revised draft, which contained the
substantive provisions discussed via email: (1) an agreement to provide payment “[w]ithin
fourteen (14) days of [Mr. Polk’s] delivery of an executed copy of this Agreement to SherwinWilliams;” (2) an agreement to provide outplacement services “[w]ithin fourteen (14) days of Mr.
Polk’s execution and return of this agreement;” and (3) the reclassification of termination. (Id. at
21-22.)
Other provisions of the document remained from the July 22, 2015 draft. These included
agreements that Mr. Polk would (1) not seek reemployment with Sherwin-Williams or any of its
subsidiaries; (2) keep the agreement confidential, a provision described as “material… without it,
the Agreement would not exist”; (3) release “all claims, causes of action, suits, contracts, promises,
or demands of any kind, which [Mr. Polk] may now have up to the date of execution of this
Agreement, whether known or unknown, intentional or otherwise….”; and (4) represent that he
was unaware of any claim for which Sherwin-Williams “could be liable for medical expenses
incurred by him before or after the execution of this Agreement.” (Id. at 22-25).
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The document further provided that:
After executing this Agreement, [Mr. Polk] will have seven (7) days to revoke the release
of his age discrimination claim under the Age Discrimination in Employment Act (only)....
Mr. Polk's release of all other claims in this agreement is not revocable and shall be
immediately effective upon execution of this agreement.
(Id. at 25.) And it included a merger clause stating: “[t]he Parties agree that this Agreement is the
entire agreement and supersedes and replaces any prior or contemporaneous representations or
agreements, whether written or oral, except the Confidentiality Agreement into which Mr. Polk
previously executed with Sherwin-Williams.” (Id. at 24.) The parties agree that this written
agreement was never signed. Mr. Polk subsequently retained new counsel, and on September 1,
2016, filed this lawsuit. (ECF No. 1.)
III.

Discussion
Construing the facts in the light most favorable to Mr. Polk and resolving all ambiguities

in his favor, a reasonable juror could conclude that the parties did not intend to be bound by the
settlement agreement until it was executed. Therefore, based on the existing record, SherwinWilliams cannot succeed on an affirmative defense of release at summary judgment.
“A settlement agreement is a contract that is interpreted according to general principles of
contract law.” Powell v. Omnicom, 497 F.3d 124, 128 (2d Cir. 2007). To determine whether a
settlement is binding absent an executed document, a court “must consider (1) whether there has
been an express reservation of the right not to be bound in the absence of a signed writing; (2)
whether there has been partial performance of the contract; (3) whether all of the terms of the
alleged contract have been agreed upon; and (4) whether the agreement at issue is the type of
contract that is usually committed to writing.” Ciaramella v. Reader's Digest Ass'n, Inc., 131 F.3d

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320, 323 (2d Cir. 1997) (internal citation omitted).3 While “no single factor is decisive, where
there is a writing between the parties showing that one party did not intend to be bound a court
need look no further than the first factor.” Kaczmarcysk v. Dutton, 414 F. App’x 354, 355 (2d Cir.
2011) (summary order) (internal citations, quotation marks, and alterations omitted).
A. Express Reservation
As for the first factor, the unsigned written agreement itself provides evidence that the
parties reserved the right not to be bound in the absence of a signed writing. The Second Circuit
has explained that “wording in a settlement agreement that places great significance on the
execution date evinces an intent not to create a binding settlement until some formal date of
execution.” Kaczmarcysk, 414 F. App’x at 355 (quoting Ciaramella, 131 F.3d at 324) (alterations
omitted). Just as in Kaczmarcysk and Ciaramella, the unsigned agreement in this case contains a
merger clause (ECF No. 20-2 at 24)—“persuasive evidence that the parties did not intend to be
bound prior to the execution of a written agreement.” Id. And, just as in Kaczmarcyzk and
Ciaramella, the agreement provides that it is effective when it has been signed by all parties: “Mr.
Polk’s release of all other claims in this Agreement is not revocable and shall be immediately
effective upon execution of this Agreement.” (ECF No. 20-2 at 25.)4 “Finally, “execution” is used
as a key demarcation point in other places in the document—for example, payment and

3

As in Ciaramella, 131 F.3d at 322, I need not decide whether state or federal common law applies,
because the parties do not suggest there is any material difference between the applicable standards
and rely on the Ciaramella factors.
In his brief in opposition, Mr. Polk points to a section of the agreement that provides: “After
executing this Agreement, [Mr. Polk] will have seven (7) days to revoke the release of his age
discrimination claim under the Age Discrimination in Employment Act (only).” (ECF No. 20-2 at
25.) That particular text is not relevant to this case, because it applies only to claims under the Age
Discrimination in Employment Act, not the racial discrimination claims at issue here.
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outplacement services are to be delivered within 14 days of execution, and the release covers
claims “up to the date of execution.” (Id. at 21-22.)
The parties’ correspondence also suggests that they did not intend to bind themselves until
the agreement had been signed. As a preliminary matter, in his April 17, 2015 letter, Mr. Fortgang
described the “ultimate objective” as “the execution of Severance Agreement and Release of All
Claims”—suggesting that he envisioned a comprehensive settlement agreement signed by all
parties as the way to resolve the matter. (Id. at 3.) While “[t]he mere intention to commit an
agreement to writing will not prevent contract formation prior to execution,” Winston v. Mediafare
Entm't Corp., 777 F.2d 78, 80 (2d Cir. 1985), the letter nevertheless provides a clue to Mr. Polk’s
intent in later discussions.
Next, in an email on June 30, 2015, after telling Sherwin-Williams that “[o]ur client has
accepted Sherwin-Williams’ offer,” Mr. Fortgang stated, “kindly provide an agreement at your
earliest convenience.” (ECF No. 20-2 at 7.) That language is ambiguous: as Sherwin-Williams
argues, it could mean that the “agreement” will just be a memorialization of already-agreed-to
terms;5 or it could be that the “offer” and “accept” were just the basic skeleton, and all would be
subject to negotiation and signing of a comprehensive agreement. Other language in the same
email arguably suggests the latter interpretation, particularly when reasonable inferences are drawn
in Mr. Polk’s favor. First, in the same email, Mr. Fortgang made a new request—that SherwinWilliams provide contact information for someone who could confirm Mr. Polk’s prior
employment and report that the separation was a “mutual decision to voluntarily separate.” (Id.)
Perhaps more significantly, absent from the record—and from this email—is any indication of

See, e.g. Powell, 497 F.3d at 130 (where counsel stated at a hearing that “parties have agreed that
the formal settlement documents will incorporate the following terms and conditions,” the Second
Circuit held that “the settlement's reduction to writing was only a formality.”).
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what the other terms of the agreement might be. And while many of the terms ultimately proved
to be “boilerplate” (and thus would not have hindered enforcement by their absence), some were
arguably more important, the sort of terms that are often the subject of negotiation in settlements.
For example, the confidentiality provision was unilateral and explicitly stated that it was
“material,” the release was broad in scope, and the agreement provided that Mr. Polk could not
reapply for any future employment with Sherwin-Williams or its subsidiaries. (Id. at 22-24.)
Subsequent emails similarly imply that the negotiations had not concluded by the time Mr.
Fortgang wrote to “accept” the offer on June 30, 2015. Sherwin-Williams’ counsel’s response on
June 30, 2015 made clear that it would not agree to handle the reference quite in the same way that
Mr. Fortgang had requested: it would use an outside service to confirm only dates and position.
(Id. at 7.) In an email sent July 10, 2015, Mr. Polk’s counsel describes the “settlement agreement”
as the “document” they are waiting for—not as something that has already been agreed to and is
just being memorialized. (Id. at 11.) And when Sherwin-Williams’ counsel sent the first draft
agreement on July 22, 2015, she wrote: “Please see attached.... Please let know if you wish to
discuss. Otherwise, please execute and return to me so I can process the payment.” (Id.) A
reasonable juror could infer two things from this language: (1) the text of the agreement was open
to negotiation (“please let me know if you wish to discuss. Otherwise ...”)—in other words, it was
not a done deal; and (2) until the document was signed, Sherwin-Williams would not “process the
payment.” Both of these suggest the parties did not expect to be bound until the document was
executed. Admittedly, Mr. Fortgang’s last email, on July 27, 2015—objecting to the absence of
two provisions originally mentioned in his June 30, 2015 email—might suggest that he (on behalf
of his client) had no further objections, and thus that the July 28, 2015 draft addressing his

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objections should have been acceptable to him, but that is not a necessary inference. Nothing in
his email stated “everything else looks good” or “we have a deal” or anything else similar.
B. Partial Performance
As for the second factor, there does not appear to be any partial performance. There is no
evidence in the record to support Sherwin-Williams’ claim that they “took measures to change
[Mr. Polk’s] status from termination for ‘gross misconduct’ to ‘mutual voluntary separation.’”
(ECF No. 20-1 at 6.)
C. Terms Remaining to be Negotiated
The parties did agree to important material terms, such as payment and outplacement
counseling. However, as noted above, at least arguably material provisions of the agreement, such
as confidentiality, scope of release, and the re-application provision, were not agreed upon
beforehand. See Powell, 497 F.3d at 130 (“even minor or technical changes arising from
negotiations over the written language of an agreement can weigh against a conclusion that the
parties intended to be bound absent a formal writing. Such changes are relevant, however, only if
they show that there were points remaining to be negotiated such that the parties would not wish
to be bound.”) (citation and quotation marks omitted).
D. Type of Agreement
Finally, a severance agreement with a release following a threatened lawsuit is the type of
agreement that is ordinarily expected to be in writing. “Settlements of any claim are generally
required to be in writing or, at a minimum, made on the record in open court.” Ciaramella, 131
F.3d at 326. Sherwin-Williams argues that the agreement was reduced to writing, and cites a
district court case where an agreement was found to be enforceable because “even if the agreement
is the type that is typically reduced to writing, the written draft of the settlement had essentially

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been finalized, since [plaintiff’s counsel] had requested the draft adopt the… model format” used
in a prior case. Conway v. Brooklyn Union Gas Co., 236 F. Supp. 2d 241, 251 (E.D.N.Y. 2002).
However, in other decisions, such as Ciaramella, Winston, and Kaczmarcysk, the existence of a
draft agreement did not support enforcement. For example, the Ciaramella court held that the
fourth factor weighed against enforcement, even in a situation where “[plaintiff’s attorney] made
several suggestions for revision to [defendant] which were incorporated into a revised draft. After
reviewing the revised draft, [plaintiff’s attorney] asked for a few final changes and then allegedly
stated to [defendant’s] lawyer, ‘We have a deal.’” 131 F.3d at 321.
In short, a reasonable juror could find that the parties did not “intend[] to be bound in the
absence of a document executed by both sides.” Winston, 777 F.2d at 80. Therefore, SherwinWilliams cannot succeed on this record on an affirmative defense of release.
IV.

Conclusion
For the foregoing reasons, Sherwin-Williams’ Motion (ECF No. 20) is DENIED. An

answer or other responsive pleading is due within 30 days.
IT IS SO ORDERED.
/s/
Michael P. Shea, U.S.D.J.
Dated:

Hartford, Connecticut
March 29, 2017

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