Gray v. Wal-Mart Stores, Inc. et al

Filing 10

MEMORANDUM OPINION AND ORDER by Judge John G. Heyburn, II on 3/9/2012 denying 4 Motion to Dismiss for Failure to State a Claim or in the alternative forsummary judgment cc:counsel (DAK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
CIVIL ACTION NO. 3:11-CV-367-H

WALTERENE GRAY

PLAINTIFF

v.
WAL-MART STORES INC. and
SANDIE COUSINS,

DEFENDANTS

MEMORANDUM OPINION AND ORDER
Plaintiff, Waltrene Gray (“Gray”), filed this suit against Wal-Mart Stores, Inc. (“WalMart”) and Sandie Cousins (collectively, “Defendants”) alleging causes of action under federal
and state civil rights statutes and state tort law for alleged discriminatory treatment she suffered
while employed at a Wal-Mart store. Defendants have moved to dismiss the Complaint,
claiming that Plaintiff entered into a settlement agreement releasing these claims. Plaintiff
disputes that she ever entered into such an agreement with Defendants.
I.
The Court must treat Defendant’s motion to dismiss as a motion for summary judgment
because it relies on a matter outside of the pleadings. Fed. R. Civ. P. 12(d). The Court views the
facts in the record in a light most favorable to the non-moving party. Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Defendants must carry the burden of
showing the absence of a genuine issue of material fact and that they are entitled to relief as a
matter of law. Fed. R. Civ. P. 56; Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382,
1389 (6th Cir. 1993).
After Plaintiff filed a complaint with the Equal Employment Opportunity Commission

(“EEOC”), Defendants offered to pay $12,500 in consideration for settling the claims. Gray
rejected the offer. She received a notice of dismissal from the EEOC on April 1, 2011 and
subsequently retained Kevin M. Monsour to represent her in pursuing her claims against
Defendants. Monsour sent a letter to Defendants on May 5, 2011 with an offer to settle the case
for $14,500. Defendants rejected this offer in a May 13, 2011 letter and reiterated that its offer
stood at $12,500. According to Plaintiff’s brief, Monsour attempted to persuade Gray to accept
Defendant’s offer in a telephone conversation on May 16, 2011. Gray expressed reluctance to
accept the same offer she had previously rejected, especially because she would now have to pay
one-third of the settlement to Monsour pursuant to their representation agreement. She also
indicated she did not feel Monsour was “for her” and she needed to think about the offer.
Two relevant events occurred on May 17, 2011 and the current record is unclear as to
their order. According to Defendants, Monsour left a voicemail message with Wal-Mart’s
attorney in which he said, “I spoke to my client and she is willing to accept your all’s $12,500
with $2,000 allocated and do an indemnity, confidentiality, etc.” These terms referenced the
same terms Defendants outlined in their May 13, 2011 letter. Plaintiff contends she met with
Monsour on May 17, 2011, expressed her lack of confidence in him, and requested her file so
that she could seek new counsel. Monsour wrote a letter to Plaintiff that same day, indicating his
surprise that she was “no longer interested in pursuing a settlement.” Pl.’s Resp. in Opp’n to
Defs.’s Mot. to Dismiss Ex. 5. The letter mentioned that Monsour had recommended accepting
Defendants’ offer in telephone conversation and that Plaintiff “indicated that if [he] thought it
was the right thing, [Plaintiff] would accept the offer.” Id.
Kentucky law requires actual, express authority from a client to create an enforceable

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settlement agreement. Clark v. Burden, 917 S.W.2d 574, 576 (1996). Only when a third party
demonstrates it has been substantially and adversely affected will an attorney possessing
apparent, but not actual, authority bind a client to a settlement agreement. Id. at 577. The Court
finds that the current record shows genuine issues of fact exist as to whether Monsour had actual
authority from Plaintiff when he communicated to Defendants her willingness to accept the
$12,500 offer. Likewise, Defendants have not shown any substantial adverse effect that would
place this case outside the ordinary circumstances in which the Clark rule requiring actual
authority applies. This is not to say Defendants may not ultimately demonstrate actual authority,
but the current pre-discovery factual record cannot support summary judgment.
Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Defendants’ motion to dismiss, or in the alternative for
summary judgment, is DENIED.

March 9, 2012

cc:

Counsel of Record

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