Air West East Communications, LLC et al v. State Farm Fire and Casualty Co.

Filing 107

ORDER AND OPINION denying without prejudice Defendant's 98 Motion to Enforce Settlement. This case is referred to a magistrate judge to conduct a settlement conference between plaintiff and the defendant. Signed by Judge Julie E. Carnes on 9/3/13. (ddm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

AIR WEST EAST COMMUNICATIONS,
LLC, et al.,
Plaintiffs,
CIVIL ACTION NO.
v.

1:10-cv-2767-JEC

STATE FARM FIRE AND CASUALTY
CO.,
Defendant.
ORDER AND OPINION
This case is before the Court on the defendant’s Motion to
Enforce Settlement [98].
arguments

of

the

The Court has reviewed the record and the

parties

and,

for

the

reasons

set

out

below,

concludes that the defendant’s Motion to Enforce Settlement [98]
should be DENIED WITHOUT PREJUDICE.
BACKGROUND
On July 28, 2010, Air West East Communications, LLC and Kevin E.
Dixon, Sr. (hereafter “plaintiff”)1 filed a complaint for damages
against State Farm Fire and Casualty Co. (hereafter “defendant”) in
Cobb County State Court.

1

(See Compl. attached to Def.’s Mot. to

As Air West East is, effectively, the alter ego of Kevin Dixon
and as it is Dixon who figures in the present dispute, the Court
refers to plaintiffs in the singular form.

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Remove [1-1].)

Defendant removed the suit to the United States

District Court for the Northern District of Georgia. (Def.’s Mot. to
Remove [1].)2 After multiple changes in his representation, plaintiff
was represented at the time of the purported settlement by David A.
Sapp and Daniel J. Moriarty of Green & Sapp, LLP.
Appearance [83] & [93].)

(Notice of

Defendant was and is represented by Thomas

Ward and Mark Dietrichs of Swift, Currie, McGhee, & Hiers, LLP.
(Def.’s Mot. to Remove [1].)
On

November

13,

2012,

plaintiff’s

counsel

Moriarty

sent

plaintiff Dixon an e-mail with a written update of the case, stating
that plaintiff should attempt to settle the suit quickly.3

(See Ex.

E attached to Pl.’s Obj. to Def.’s Mot. to Enforce Settlement (“Pl.’s
Obj.”) [104].)

Plaintiff responded on November 16, 2012, informing

his attorney that plaintiff was “willing to settle for the amount of
$587,000.00.”

(Id.)

2

Plaintiff Air West East Communications, LLC is incorporated
in the State of Georgia and has its principle place of business in
Georgia. (Def.’s Mot. to Remove [1] at ¶ 2.) Plaintiff Kevin Dixon
is a citizen of and domiciled in Georgia. (Id. at ¶ 3.) Defendant
is incorporated in the State of Illinois and has its principle place
of business in Illinois. (Id. at ¶ 4.)
3

Neither plaintiff nor defendant have submitted affidavits
setting out the course of events. Instead, each party has merely
attached e-mails as exhibits to their pleadings. The absence of a
full narrative of the interactions between the pertinent individuals
has led to an incomplete understanding of what exactly happened here.
Accordingly, the Court’s recitation of the facts is necessarily taken
from the attached e-mails.
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On November 26, 2012, defense counsel Dietrichs sent plaintiff’s
counsel Sapp an e-mail containing an offer from defendant to settle
the suit.

(Def.’s Mot. to Enforce Settlement [98].)

Defendant’s

offer stated that defendant was “prepared to pay the Plaintiffs
$9,978 in return for a full release and dismissal with prejudice of
the lawsuit.” (Id. at 2.) Plaintiff’s counsel Moriarty relayed this
message to plaintiff on November 28, 2012, informing plaintiff that
his

law

firm

would

waive

all

remaining

attorney

fees

plaintiff in return for $4,978 of the settlement fund.
recommended that plaintiff accept defendant’s offer.

owed

by

Counsel

(See Ex. E

attached to Pl.’s Obj. [104].) The e-mail from Moriarty included the
warning:

“State Farm indicates that if we counter-offer, that they

will treat that counter-offer as a rejection of the $9,978, and . .
. file a motion for summary judgment thereafter.”

(Id.)

Plaintiff Dixon responded the next day to his attorney and
implicitly declined the offer.
regarding

your

recommendation

(Id.)
to

The e-mail read “[d]ear Sirs,

move

forward

with

settlement

negotiation with State Farm. We are willing to settle for the amount
of $587,000.00 . . . .”

(Id.)

Next, on December 5, 2012, plaintiff’s counsel Moriarty sent an
e-mail to plaintiff confirming a recent phone conversation between
plaintiff and Moriarty.

(Id.)

The e-mail noted that plaintiff had

agreed that his attorney would make a counter-offer for $15,000 and
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that counsel would be “authorized to accept anything higher than
$14,000.”

(Id.)

Subsequently, on December 10, at 3:29 p.m.,

plaintiff emailed his attorney, stating, “the counter offer should
consist of personal property and property damages that we incurred
attorney fees and bad faith . . . there (sic) letter dated on
Nov.26.2012 take it or leave it I strongly feel we can make more
realistic than $9,978.00.”

(Pl.’s Resp. in Opp’n to Def.’s Mot. to

Enforce Settlement (“Pl.’s Resp.”) [105])(emphasis in original).
Notwithstanding that directive by his client, two hours later,
plaintiff’s counsel sent a confirmation e-mail to defense counsel
Ward, stating: “AirWest and Kevin Dixon have agreed to accept State
Farm’s settlement offer of $9978.00, and all of the other terms that
accompanied this offer . . . .”
Settlement at Ex. D [98-4].)

(See Def.’s Mot. to Enforce

Defense counsel Ward acknowledged

plaintiff’s acceptance of the offer the next day, on December 11.
(Id.)
Later

that

same

day,

defense

counsel

Ward

again

e-mailed

plaintiff’s counsel, stating that he had since “reviewed the file for
possible attorney liens” and had found “Tom Bound filed a lien for
$6210.83.”

(Id. at Ex. C [98-3].)

The record contains no response

from plaintiff’s counsel regarding Bound’s lien.

Further, the

drafted Release of plaintiff’s claim makes no reference to Bound’s
lien, but instead refers only to a lien by a Theodore Salter &
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Associates.4

(Id. at Ex. E [98-5].)

The proposed settlement check

lists “Green & Sapp LLP & Theodore Salter Jr. & Associates & Air West
East Communications, LLC and Kevin E Dixon, Sr.,” but does not
include Bound.
On

(Def.’s Reply Br. [103-1].)

December

13,

an

e-mail

from

defense

counsel

Ward

to

plaintiff’s counsel confirmed a conversation between the two to the
effect that plaintiff was “now not willing to honor the settlement
agreement.” (See Def.’s Mot. to Enforce Settlement at Ex. D [98-4].)
Defense counsel warned that defendant would file a motion to enforce
settlement if plaintiff did not honor the settlement.

(Id.)

Defendant filed its Motion to Enforce Settlement on December 14,
2012.

([98].)

Plaintiff’s counsel Sapp filed a response to this

motion, but made no argument in opposition to defendant’s motion,
instead admitting “[t]he Plaintiffs do not have any factual or legal
grounds to oppose State Farm’s motion.”
to

Enforce

Settlement

(“Pl.’s

Reply”)

(Pl.’s Reply to Def.’s Mot.
[99].)

Plaintiff

Dixon

independently filed his own response to defendant’s motion, on
December

31,

stating

that

plaintiff

had

“not

agreed

to

this

settlement offer with State Farm or our attorneys Green & Sapp,LLP

4

While other evidence in the record reveals Tom Bound works for
Theodore Salter & Associates, defense counsel has not filed
sufficient documentation to permit the Court to know whether this
lien is based on Bound’s work. Instead, defendant has provided only
vague references to its existence.
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(sic) . . . .”

(Pl. Dixon’s Reply [102].)
DISCUSSION

Defendant argues that it made a settlement offer to plaintiff
Dixon

and

accepting

that
this

plaintiff’s
offer

counsel’s

constituted

a

December
valid,

(Def.’s Mot. to Enforce Settlement [98].)

10,

binding

2012

e-mail

settlement.

Defendant contends that

because an attorney’s consent to an agreement is binding on his
client, plaintiff has no factual or legal basis to oppose enforcement
of the settlement.

(Id.)

Further, defendant seeks reasonable costs

and attorney’s fees associated with filing the motion.

(Id.)

The construction of agreements to settle pending lawsuits is
typically governed by principles of state contract law.

Hayes v.

Nat’l Serv. Indus., 196 F.3d 1252, 1254 (11th Cir. 1999)(citing Blum
v. Morgan Guar. Trust Co. of N.Y., 709 F.2d 1463 (11th Cir. 1983)).
State law also governs the scope of an attorney’s authority to settle
a suit.

Id. (citing Glazer v. J.C. Bradford and Co., 616 F.2d 167,

168 (5th Cir. 1980)).

Defendant asserts that Georgia law applies to

the present dispute concerning the enforcement of the settlement
agreement.

Because Plaintiff does not disagree, the Court will

therefore assume that Georgia law applies.
While plaintiff Dixon asserts that he “[has] not agreed to this
settlement offer with State Farm or [his] attorneys Green & Sapp,LLP
(sic),” (Pl. Dixon’s Reply [102]), it is undisputed that plaintiff’s
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attorney sent an e-mail to defendant’s attorney confirming the
settlement agreement.

(See Def.’s Mot. to Enforce Settlement at Ex.

D [98-4].) Plaintiff does not disagree that his attorney and defense
counsel made an agreement.

He resists enforcement, however, because

he did not agree to this settlement.

The question before the Court

then is whether plaintiff is bound by his attorney’s agreement to
settle, even though plaintiff never authorized his attorney to so
agree.
The Georgia Supreme Court has held that “[u]nder Georgia law an
attorney of record has apparent authority to enter into an agreement
on behalf of his client and the agreement is enforceable against the
client by other settling parties.”

Brumbelow v. N. Propane Gas Co.,

251 Ga. 674, 674 (1983)(citing Glazer, 616 F.2d at 167 & Stone
Mountain Confederate Monumental Ass’n v. Smith, 170 Ga. 515 (1930)).
The attorney’s authority to effectuate agreements with opposing
parties is “determined by the contract between the attorney and the
client and by instructions given the attorney by the client . . . .”
Potomac Leasing Co., Inc. v. First Nat’l Bank of Am., 180 Ga. App.
255, 258 (1986)(citing Davis v. Davis, 245 Ga. 233 (1980)).
An attorney’s authority may be considered “plenary” by opposing
parties unless it is “limited by the client and that limitation is
communicated to opposing parties.”

Omni Builders Risk, Inc. v.

Bennett, 313 Ga. App. 358, 361 (2011)(citing Rodenbaugh v. Robbins,
7

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180 Ga. App. 338, 339 (1986)).

Yet, “in the absence of knowledge of

express restrictions on an attorney’s authority, the opposing party
may deal with the attorney as if with the client, and the client will
be bound by the acts of his attorney within the scope of his apparent
authority.”

Brooks

v.

Ironstone

Bank,

314

Ga.

App

(2012)(emphasis added)(quoting Brumbelow, 351 Ga. at 675).

879,

880

See also

Glazer v. J.C. Bradford and Co., 616 F.2d 167, 168 (5th Cir.
1980)(stating that a client is “bound by his attorney’s agreement to
settle a lawsuit, even though the attorney may not have had express
authority to settle, if the opposing party was unaware of any
limitation on the attorney’s apparent authority.”); Ford v. Citizens
and S. Nat’l Bank, Cartersville, 928 F.2d 1118, 1120 (11th Cir.
1991).5
The first question before the Court is whether plaintiff’s
attorneys qualify as “attorneys of record” such that they possessed
the authority to make an agreement on behalf of the plaintiff.
answer: they clearly do.

The

Sapp served a Notice of Appearance for

plaintiff on May 7, 2012 and Moriarty served his Notice of Appearance
on July 30, 2012.

(Pl.’s Not. of Appearance [83] & [93].)

5

Counsel

A party whose attorney has exceeded his actual authority by
is not without a remedy. According to Georgia law, when restrictions
on an attorney’s authority to effectuate agreements on behalf of his
client are not communicated to the opposing party, “[t]he client’s
remedy . . . is against the attorney who overstepped the bounds of
his agency, not against the third party.” Brumbelow, 251 Ga. at 675.
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for

defendant

was

representation.

notified

(Id.)

electronically

of

each

counsel’s

Plaintiff does not disagree that Sapp and

Moriarty were his attorneys of record at the time the alleged
settlement was reached.
Further, plaintiff does not allege that his contract with Sapp
and Moriarty forbade either of them from negotiating on plaintiff’s
behalf.

To the contrary, plaintiff requested specifically that

Moriarty bargain with, and assert counteroffers, to defendant on
plaintiff’s behalf. (Pl.’s Obj. [104] & Pl.’s Resp. in Opp’n [105].)
Thus, Sapp and Moriarty had plaintiff’s verbal consent to act on his
behalf, at the least, to negotiate the settlement.
On the other hand, it is not clear that counsel had plaintiff’s
authority to finalize a settlement agreement.
submitted

by

plaintiff

arguably

support

an

Indeed, e-mails

inference

that

attorney had only limited authority to settle the suit.

his

First,

plaintiff’s e-mail to Moriarty on November 16, 2012 indicated that
plaintiff was willing to settle for $587,000.00, and it did not
authorize Moriarty to agree to less than that amount.

(Pl.’s Obj.

[104].)

defendant’s

Second,

plaintiff’s

implicit

rejection

of

settlement offer in his November 29, 2012 e-mail also suggests that
he had not yet authorized a settlement.
accept

defendant’s

first

offer

of

That is, when pressed to
$9,978,

plaintiff

Dixon

reemphasized he was willing to settle for his original request of
9

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$587,000.00.

(Id.)

Third, an e-mail sent on December 5, 2012 from counsel Moriarty
to plaintiff Dixon confirmed a prior conversation between the two
regarding settlement agreements. This e-mail suggests that plaintiff
had advised his attorney of the minimum amount necessary for him to
settle the case, as he stated that counsel was “authorized to accept
anything higher than $14,000.”

(Id.)

From this e-mail, one could

reasonably infer that plaintiff had not authorized a settlement below
that $14,000 figure.

(Id.)

Fourth, plaintiff’s e-mail to Moriarty

on December 10, just two hours prior to Moriarty’s acceptance of
defendant’s settlement offer, also suggests a limitation on counsel’s
authority to settle.

In that e-mail, plaintiff stated “. . . the

counter offer should consist of personal property and property
damages . . . I strongly feel we can make more realistic than
$9,978.00.” (Pl.’s Resp. in Opp’n [105].) Although this last e-mail
does not state explicitly that counsel cannot accept Defendant’s
$9,978 offer, it does suggest, when coupled with the prior e-mails
discussed above, that plaintiff intended to limit his attorney’s
authority to settle for any amount he chose.
Yet, regardless of what limitations plaintiff had placed on his
counsel’s actual authority to settle, the question here is whether
his attorneys had apparent authority to agree to a settlement on
behalf of his client.

If they did, defense counsel was permitted to
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rely on that apparent authority. As noted, Georgia law provides that
an attorney is deemed to have “plenary” authority,6 insofar as
opposing

parties

are

concerned,

unless

any

limitation

on

that

authority has been communicated to the opposing party or his counsel.
See Hayes, 196 F.3d at 1254 (“[t]he client is therefore bound by his
attorney’s agreement to settle a lawsuit, even though the attorney
may not have had express authority to settle, if the opposing party
was

unaware

of

any

limitation

on

the

attorney’s

apparent

authority.”)(internal quotations omitted)(quoting Ford, 928 F.2d at
1120); Pembroke State Bank v. Warnell, 266 Ga. 819, 821 (1996)(“from
the perspective of the opposing party, in the absence of knowledge of
express restrictions on an attorney’s authority, the opposing party
may deal with the attorney as if with the client, and the client will
be bound by the acts of his attorney within the scope of his apparent
authority.”)(emphasis added)(quoting Brumbelow, 251 Ga. at 674-75).
As neither party has provided affidavits setting out exactly who
said what when, the undersigned has a very fragile grip on exactly
just what happened here in the course of this settlement negotiation.
Of course, the Court could try to fill in the missing information by
guessing, from the e-mails, what probably happened.

6

But it should

The Georgia Court of Appeals has defined “plenary” as
“‘complete in every respect: absolute, perfect, unqualified.’”
DeKalb Cnty. v. DRS Invs., Inc., 260 Ga. App. 225, 226 n.4 (2003)
(quoting WEBSTER’S THIRD NEW INT’L DICTIONARY 1739 (1976)).
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not have to do so, nor is it appropriate for it to do so.
Now, it is true that, under Georgia law, it is plaintiff’s
burden to show that defense counsel was on notice of any limitation
in the authority of plaintiff’s counsel to settle.

Yet, plaintiff

has provided no affidavit or other evidence satisfying this burden.
As a pro se litigant, however, plaintiff might have been unaware that
he had such a burden or that he needed to produce an affidavit to
satisfy this burden.

Indeed, in its short brief seeking enforcement

of the settlement agreement, defendant eschewed any “complex legal
analysis,” “[g]iven the straightforward nature of the dispute.”
(Def.’s Mot. to Enforce Settlement [98] at 4.)

Citing only to two

decisions written by the undersigned, which “outlined the law,”
defendant left it to the Court to figure out the legal analysis that
has earlier been set out in this Order.

(Id. at 5.)

Thus, plaintiff would not have been aware from defendant’s
abbreviated motion that it was his burden to demonstrate that defense
counsel was on notice of his attorney’s lack of authority to settle
the case. Similarly, he would have been unaware that he was required
to produce an affidavit setting out his version of events, as the
defendant had likewise submitted no affidavit in support of the
version of facts it recounted in its initiating motion.

See LR

7.1(A)(1), NDGa (“If allegations of fact are relied upon, supporting
affidavits must be attached to the memorandum of law.”)
12

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Besides the absence of any affidavit from defense counsel
indicating their own unawareness of any limitations on the authority
of plaintiff’s counsel to negotiate a settlement, the record also
suggests that defendant may possibly have been on some notice of the
unlikelihood that plaintiff would have agreed to this settlement.
That is, defense counsel’s e-mail to plaintiff’s counsel on December
11, 2012 shows that defense counsel was aware that a Tom Bound had
filed a lien on the case for $6,210.83.

(See Def.’s Mot. to Enforce

Settlement at Ex. C [98-3].) Further, by making the settlement check
out to Green & Sapp, LLC, defense counsel must have known that
additional money from the settlement would also have to be paid to
plaintiff’s current counsel.

(Def.’s Reply Br. [103-1].)

Adding

together the two payments, these two separate attorney’s fees would
likely have exceeded the settlement figure of $9,978, meaning that
plaintiff would wind up owing money to one of his attorneys.
While that may well have been the smart thing for the plaintiff
to agree to, given the diminished value of his case and the large
amount of attorney’s fees he had amassed, defense counsel were aware
that plaintiff has been quite contrary throughout the case and has
demonstrated a greatly-inflated view of its value.

Given the

difficulties that everyone has had in dealing with the plaintiff, it
obviously would have been prudent for defense and plaintiff’s counsel
to insure that plaintiff had signed onto the settlement agreement.
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They did not and, unsurprisingly, we now have this collateral
litigation.
In short, it may well be that defendant will ultimately prevail
on this motion. Yet, defendant is the movant, and, at this juncture,
its sparse briefing has not yet persuaded the court that its motion
should

be

granted.

Thus,

defendant’s

motion

to

enforce

the

settlement agreement is DENIED WITHOUT PREJUDICE.
Plaintiff should not get emboldened by the Court’s ruling on
this current motion, however, because it may be but a temporary
victory. Defendant will have an opportunity to refile its motion and
correct the deficiencies in the original motion.

At best, even if

defendant’s second motion to enforce settlement is denied, plaintiff
will still have to litigate this case on its merits.

Yet, as a

result of plaintiff’s misconduct, the magistrate judge earlier struck
the only claim that had the potential to result in substantial
damages for plaintiff.

(See Order [96] at 14.)

This means that

plaintiff’s potential recovery is quite modest.
Moreover, as defendant has correctly pointed out, plaintiff has
consistently engaged in gamesmanship and a breach of his discovery
obligations.

(See Def.’s Mot. to Enforce Settlement [98] at 1.)

Thus, it is not unreasonable to expect that plaintiff will garner
further sanctions should he continue to litigate this case in the
manner he has done so far.

(Id. at 15.)
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As it would be prudent for

plaintiff to attempt to settle this matter now with the defendant
before engaging in sanctionable conduct that may ultimately result in
his owing money to defense counsel, in addition to the fees he
already owes to his own previous attorneys, the Court directs that
this case be referred to a magistrate judge to conduct a settlement
conference between plaintiff and the defendant. Plaintiff is warned
that should he fail to appear at this settlement conference, his case
will be subject to dismissal for failure to obey the Order of the
Court.
If the case is not settled, defendant will be permitted to
refile a motion to enforce settlement, correcting the defects in its
initial motion.
CONCLUSION
For the above reasons, the Court DENIES WITHOUT PREJUDICE
defendant’s Motion to Enforce Settlement [98]. This case is referred
to a magistrate judge to conduct a settlement conference between
plaintiff and the defendant.

SO ORDERED, this 3rd day of September, 2013.

/s/ Julie E. Carnes
JULIE E. CARNES
CHIEF UNITED STATES DISTRICT JUDGE

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