SANDERS v. CONNAN'S PAINT AND BODY SHOP, LLC et al
Filing
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ORDER granting 22 Motion to Dismiss Plaintiff's Complaint WITH PREJUDICE and we approve the settlement including with regard to his FLSA claim. Judgment shall now enter accordingly. Signed by Judge Sarah Evans Barker on 9/28/2015. (CBU)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
BOBBY SANDERS,
Plaintiff,
vs.
CONNAN’S PAINT AND BODY SHOP,
LLC,
BRYAN CONNAN,
Defendants.
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1:14-cv-01725-SEB-DKL
ORDER ON DEFENDANTS’ MOTION TO APPROVE AND
ENFORCE SETTLEMENT AGREEMENT AND GENERAL RELEASE AND TO
DISMISS WITH PREJUDICE
This matter comes before us on Defendants Connan’s Paint & Body Shop, LLC and
Bryan Connan’s Motion to Approve and Enforce Settlement Agreement. [Dkt. No. 22.]
Having considered the parties’ memoranda and arguments, we GRANT Defendants’
Motion to Dismiss WITH PREJUDICE.
Facts and Background
Plaintiff Bobby Sanders was employed by Defendant Connan’s Paint and Body
Shop, LLC for thirteen years during which tenure he was paid on an hourly basis and
commissions and at least as of the conclusion of his employment in August, 2014, he
received $12.50 per hour. [Compl. at ¶ 9; Answer at ¶¶ 11-13.] Mr. Sanders filed this
action on October 21, 2014 alleging that Defendants failed to pay him overtime wages for
the hours he worked over 40 hours in a given work week. [Compl. at ¶ 16.] Mr. Sanders
also alleges that Defendants failed to pay him minimum wage for the hours he worked and
did not pay him for all the regular hours he worked at the correct amount and in a timely
fashion. [Id. at ¶¶ 18-19.] Defendants deny these allegations. [See generally Answer.]
In addition to this Complaint, Mr. Sanders has filed a claim for race discrimination
against Connan’s Paint & Body Shop, LLC with the Indiana Civil Rights Commission
(“ICRC”) (Charge Number EMra14080638).
On November 19, 2014, the ICRC 1
conducted a mediation session with the parties, which Mr. Sanders and his sister attended
in person as did Bryan Connan and his daughter, Deanna Connan. Neither party was
represented by counsel at the mediation; however, at the time of the mediation, both parties
had retained counsel. [Ronald E. Weldy Affidavit (“Weldy Aff.”) at ¶ 4 (stating that he
agreed to represent Mr. Sanders “with regard to this matter on September 25, 2014”); id.
at ¶ 5 (stating that Matthew Derringer entered his Appearance on October 21, 2014 “with
regard to the Charge filed with the” ICRC).]
The November 19, 2014 mediation was successful following several hours of
negotiation. Ultimately, the parties agreed on the terms and conditions of a Settlement
Agreement and General Release (“Settlement Agreement”) which was executed the day of
the mediation. [Dkt. No. 23-2.] Mr. Sanders’s counsel was unaware of the Settlement
Agreement until November 24, 2014 – five days after the agreement was executed. [Weldy
Aff. at ¶ 6.] The Settlement Agreement provides, in relevant part, as follows:
1
A dispute exists as to the identity of ICRC representative who mediated the parties’
dispute. Defendants claim that the Deputy Director of the ICRC and attorney Akia A. Haynes
conducted the mediation [Declaration of Bryan Connan (“Connan Decl.”) at ¶ 4]; Mr. Sanders
claims that the mediation was conducted by non-lawyer Diana Graves [Graves Decl. at ¶ 4]. This
dispute is immaterial, however, for purposes of enforcing the Settlement Agreement.
2
WHEREAS, Complainant [Bobby Sanders] and Respondent [Connan’s Paint
and Body] now desire fully, completely, and finally to compromise and settle
any and all differences and claims between them.
...
1.
Respondent agrees to pay to Complainant the total sum of
$3,750.00 (three-thousand seven-hundred fifty dollars On [sic] Thursday,
November 20, 2014. . . .
...
3.
Complainant agrees to drop the pending civil suit against
Respondent filed via Ronald Weldy of Weldy and Associates as cause
number 1;14-CV-1725 [sic].
4.
The parties agree that the above referenced payment is
compensation for complainant’s lost wages and the car that Complainant was
purchasing from Respondent, 2 and is not compensation for the above
referenced civil suit.
5.
In consideration of the commitments made by the parties in
paragraphs 1-4 above, Complainant does hereby irrevocably and
unconditionally release, acquit, and forever discharge Respondent, its
owners, stockholders, predecessors, successors, assigns, agents, directors,
officers, employees, representatives, attorneys, insurers, and all persons
acting by, through, under or in concert with any of them, from any and all
charges, complaints, claims liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorneys’ fees and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or
unsuspected, which Complainant has against them arising directly or
indirectly out of the above referenced complaint or the facts surrounding the
complaint. The foregoing would also apply to complaints covered under title
VII of the Civil Rights Act.
...
2
A dispute between the parties arose regarding Mr. Connan’s alleged sale of a 2011 Honda
Accord for a purchase price of $2,042 to Mr. Sanders in April 2014. [Compl. at ¶ 21.] Mr.
Sanders’s claim with regard to the sale of this vehicle was undisputedly settled between the parties.
[See Counts III and IV.]
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7.
. . . . Complainant further understands and acknowledges that
the participation of Respondent in this Agreement constitutes nothing but a
good faith effort by Respondent to accomplish a full and complete resolution
of the matters raised in the lawsuit and arising out of the relationship between
Complainant and Respondent.
...
10.
The parties represent that they have read this Agreement; that
they fully understand each and every provision of this Agreement; that they
have not relied upon any representation or statement made by the other party
or the other party’s agents, representatives, or attorneys with regard to the
subject matter, basis or effect of this Agreement; and that they have
voluntarily executed this Agreement.
11.
This Agreement does not include a release or waiver of rights
or claims that may occur after the Agreement is executed.
On November 20, 2014, Mr. Sanders received the payment of $3,750.00 at
Connan’s office. [Connan Decl. at ¶ 7; see also id. at Ex. B (copy of the check) and Ex. C
(receipt for the check signed by Mr. Sanders).] On November 19, 2014, Mr. Sanders filed
a request with the ICRC to have his Complaint withdrawn against Connan’s Paint and
Body. Akia Haynes, Deputy Director of the ICRC, thus dismissed the ICRC Complaint
with prejudice with notice to the parties. [Dkt. No. 23-5.] Despite the reportedlysuccessful mediation results and the broadly-worded settlement agreement between the
parties, Plaintiff has not dismissed the Complaint in this action. We therefore must address
the pending motion to dismiss filed by Defendants.
Analysis
1.
Counts II, III, IV of Plaintiff’s Complaint.
Defendants move to dismiss Counts II (Wage Payment Statute violation), III
(Defamation), and IV (Breach of Contract) of the Complaint based in large part on
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“Plaintiff’s counsel[’s admission] that the Settlement Agreement is enforceable as to
Counts II through IV of Plaintiff’s Complaint for Damages, . . . .” [Dkt. No. 23 at 2.]
Somewhat surprisingly, Mr. Sanders agrees, stating:
Given that Mr. Sanders has not tendered the $3,750.00 paid to him back to
Connan’s, Plaintiff cannot and does not contend that Counts II, III and IV of
Plaintiff’s Complaint should not be dismissed. [sic] Counsel for Plaintiff
has never argued otherwise in this case.
[Dkt. No. 26 at 3.] Consequently, we GRANT Defendant’s Motion to Dismiss with
Prejudice Counts II, III, and IV of the Complaint.
Plaintiff’s counsel should have voluntarily dismissed these counts given his client’s
concessions here. Counsel is reminded that 28 U.S.C. § 1927 imposes “a continuing duty
upon attorneys to dismiss claims that are no longer viable.” Jolly Group, Ltd. v. Medline
Indus., Inc., 435 F.3d 717, 720 (7th Cir. 2006); 28 U.S.C. § 1927 (“Any attorney . . . who
so multiplies the proceedings in any case unreasonably and vexatiously may be required
by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably
incurred because of such conduct.”).
Section 1927 requires more than counsel’s
representation that Plaintiff does not dispute that certain counts may be dismissed.
Plaintiff’s counsel has an affirmative duty to dismiss those claims rather than force
Defendants to bear the cost and burden of moving to dismiss. Plaintiff’s counsel has plainly
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failed to take such responsibility to withdraw what are clearly futile or non-viable claims
here. 3
2.
Count I – FLSA Overtime Claim.
Mr. Sanders attempts to resuscitate his Fair Labor Standards Act (“FLSA”) claim,
despite his Settlement Agreement and acceptance of the settlement payment.
The
Settlement Agreement provides that “the above referenced payment is compensation for
Complainant’s lost wages and the car that Complainant was purchasing from Respondent,
and is not compensation for the above referenced civil suit.” This excerpt, Mr. Sanders
contends, establishes that the settlement was unrelated to his FLSA claim. [Dkt. No. 26 at
4.]
Mr. Sanders’s argument hangs on a weak thread. We suspect that his belated theory
reflects a case of settler’s remorse, perhaps egged on by his lawyer who was relegated to
the role of bystander when the settlement was negotiated by his client. Mr. Sanders’s
position that the settlement excludes his FLSA claim ignores the fact that the settlement
payment was, at least in part, to compensate him for “lost wages.” [Id. at ¶ 4.] His
argument is plainly inconsistent with his express agreement that the parties’ settlement
included a resolution of his claims under Count II for violations of the Wage Payment
Statute based on Defendants’ alleged “fail[ure] to pay Plaintiff his wages due and owing
in a timely fashion.” [See Compl. at ¶¶ 37-41.] If the Court were to adopt Mr. Sanders’s
3
Defendants have not sought sanctions against Plaintiff’s counsel for violating § 1927, but
they may choose to in a post judgment motion. We will therefore say nothing further on this matter
at this time.
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argument, we would have to disregard the language in the agreement wherein Mr. Sanders
promised to “drop the pending civil suit” (identified as cause number 1:14-CV-1725) and
“irrevocably and unconditionally” release the Defendants from all claims and controversies
“of any nature, known or unknown, suspected or unsuspected, which Complainant has
against them arising directly or indirectly out of the above referenced complaint or the facts
surrounding the complaint.” [Settlement Agreement at ¶¶ 3, 5.] The Settlement Agreement
recites that the parties were seeking a “full and complete resolution of the matters raised in
the lawsuit and arising out of the relationship between [Mr. Sanders and Connan’s Paint &
Body Shop].” [Id. at ¶ 7.] 4 This includes his FLSA claim.
“Indiana strongly favors settlement agreements and if a party agrees to settle a
pending action, but then refuses to consummate his settlement agreement, the opposing
party may obtain judgment enforcing the agreement.” MH Equity Managing Member, LLC
v. Sands, 938 N.E.2d 750, 757 (Ind. Ct. App. 2010). 5 Here, all the evidence before us
4
Although neither party raises the issue, the fact that the Settlement Agreement is between
Bobby Sanders and Connan’s Paint and Body, rather than Bryan Connan personally by name, is
of no significance. The Settlement Agreement expressly releases Connan Paint and Body’s
“owners, . . . directors, officers, employees, and representatives.” [Settlement Agreement ¶ 5.] It
is undisputed that Bryan Connan is the owner and manager of Connan’s Paint & Body Shop.
[Compl. at ¶¶ 4-5; Answer at ¶¶ 4-5 (admit).] Consequently, any and all claims against Mr. Connan
personally were released pursuant to the terms of the Settlement Agreement.
5
Mr. Sanders draws our attention to certain paragraphs of the Settlement Agreement that
were requested by Connan (as opposed to the ICRC). [Dkt. No. 26 at 4.] No party has argued that
the Settlement Agreement is ambiguous. Well-settled Indiana law provides that courts “may not
construe unambiguous language” in a contract. Simon Prop. Group, L.P. v. Michigan Sporting
Goods Distrib., Inc., 837 N.E.2d 1058, 1070 (Ind. Ct. App. 2005). Consequently, we need not
address issues of construction of an agreement against the drafter because the agreement is not
ambiguous.
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indicates that the parties unequivocally agreed to settle all of their claims, including
specifically those in the action pending before this court – which encompasses Mr.
Sanders’s FLSA claim.
The parties agree that their settlement resolved a bona fide dispute between them.
It thus should be approved by the court. 6 Based on the fairness of the parties’ settlement
negotiation process and the substance of their resulting agreement, we hold that their
agreement reflects a fair and reasonable settlement of Mr. Sanders’s FLSA claim. 7
Whatever the merits of their initial dispute, the parties engaged in a good faith, arms-length
negotiation overseen by a neutral third party – the ICRC – whose knowledge of the pending
FLSA claim likely explains its inclusion in the overall Settlement Agreement. 8
The parties did not apportion the settlement amount to Mr. Sanders’s individual
claims. Instead, they negotiated a single settlement amount to resolve all of Mr. Sanders’s
existing claims including his FLSA claim. Defendants paid him a total of $3,750, the
6
The Seventh Circuit has ruled that judicial approval of FLSA settlements is necessary to
prevent parties from establishing “sub-minimum wages” resulting from employers’ bargaining
with employees over minimum wages and overtime compensation. Walton v. United Consumers
Club, Inc., 786 F.2d 303 (7th Cir. 1986); see also Campbell v. Advantage Sales & Mktg. LLC, No.
1:09-CV-01430-LJM, 2012 WL 1424417, at *1 (S.D. Ind. Apr. 24, 2012) (“FLSA collective action
settlement agreements require judicial approval.”). “Normally, a settlement is approved where it
is the result of contentious arm’s length negotiations, which were undertaken in good faith by
counsel . . . and serious questions of law and fact exist such that the value of an immediate recovery
outweighs the mere possibility of further relief after protracted and expensive litigation.”
Campbell, 2012 WL 1424417, at *1 (citations and quotation marks omitted).
7
The parties’ dispute over whether Mr. Sanders worked overtime and received
commissions on the cars he cleaned was also resolved by their Settlement Agreement. We need
look no further at the factual merits of the parties’ respective claims.
8
Though neither party was represented by counsel at the mediation, both were
accompanied by supportive family members.
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fairness of which amount is better understood if that amount is interpreted as $250 for each
of the 15 days he alleges he worked overtime. Viewed otherwise, this settlement amount
can be construed to take into account 300 additional hours of straight time compensation
(at $12.50 per hour) or 150 hours of time and a half (at $18.25 per hour). Since Defendants
maintain that Mr. Sanders’s time records do not reflect that he worked any overtime, the
settlement is more than fair. Indeed, Mr. Sanders’s counsel has himself endorsed it, saying:
“Connan’s paying $3,750.00, or some part thereof, for these 15 weeks of overtime wages
is reasonable and fair.” Counsel’s view that Mr. Sanders “could have reached a more
favorable settlement” had he been involved in the settlement discussions is pure
speculation and more than a little pride on his part. [Dkt. No. 26 at 5.] For all these reasons,
we have no difficulty concluding that the settlement was fair, adequate, and reasonable and
should be enforced.
Conclusion
The parties reached a settlement of all of Plaintiff’s claims against Defendants,
including Plaintiff’s FLSA claim. The parties’ settlement embodies fair and reasonable
terms which accomplished their stated goal to resolve their dispute in its entirety.
Accordingly, we approve the settlement including with regard to his FLSA claim and
GRANT Defendants’ Motion to Dismiss Plaintiff’s Complaint WITH PREJUDICE.
Judgment shall enter accordingly.
9/28/2015
Date: _____________
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Distribution:
Michael L. Schultz
PARR RICHEY OBREMSKEY FRANDSEN & PATTERSON LLP
mschultz@parrlaw.com
Matthew D. Derringer
WELDY & ASSOCIATES
mattderringer@yahoo.com
Ronald E. Weldy
WELDY LAW
weldy@weldylaw.com
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