Ledet v. Northland Insurance Co et al

Filing 73

REPORT AND RECOMMENDATIONS re 35 MOTION to Enforce Settlement filed by Rickey Boatner, Sr, Southern County Mutual Insurance Co, Northland Insurance Co. For the foregoing reasons, IT IS RECOMMENDED that defendants motion to enforce settlement be GRANTED. Objections to R&R due by 7/20/2009. Signed by Magistrate Judge C Michael Hill on 7/2/09. (crt,Roaix, G)

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF LOUISIANA L A F A Y E T T E -O P E L O U S A S DIVISION B R Y A N T LEDET VERSUS N O R T H L A N D INSURANCE CO., E T AL. * * * C I V I L NO. 07-0683 J U D G E DOHERTY M A G I S T R A T E JUDGE HILL

F IN D I N G S AND REPORT AND RECOMMENDATION ON MOTION TO E N F O R C E SETTLEMENT AGREEMENT

B e f o re the court is the Motion to Enforce Settlement filed by defendants Rickey B o a tn e r, Sr., d/b/a Boatners Transport, Southern County Mutual Insurance Company, and N o rth la n d Insurance Company (hereinafter "Boatner") on February 3, 2009. [rec. doc. 3 5 ]. On March 27, 2009, plaintiff filed an Opposition to the Motion. [rec. doc. 55]. On M a rc h 30, 2009, defendants filed a Supplemental Brief in Support of the Motion. [rec. d o c . 58]. An evidentiary hearing was held before the undersigned Magistrate Judge on A p ril 22, 2009, and the matter was taken under advisement. [rec. doc. 69]. For the f o llo w in g reasons, it is recommended that the motion be GRANTED. F I N D IN G S AND CONCLUSIONS B a c k g ro u n d B o a tn e r alleges that it entered into a settlement agreement with plaintiff Bryant L e d e t (hereinafter "Ledet"), through his counsel of record, Jim Gates (hereinafter " G a te s" ), on January 14, 2009. Boatner's counsel, Janice M. Reeves (hereinafter " R e e v es " ), understood that Gates had met at length with Ledet about his case and that

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L e d e t had accepted Boatner's offer of settlement. The agreement called for Ledet to d is m is s his claim and the lawsuit against all defendants in exchange for the payment of th e total lump sum of $75,000.00. T h e agreement to settle was reduced to writing and signed by counsel of record for b o th parties on January 15, 2009. A copy of that settlement letter is attached as Exhibit " A " to Boatner's motion. Thereafter, also on January 15, 2009, Gates sent a letter to R e e v e s guaranteeing that all medical liens would be paid out of the settlement proceeds.1 G a te s also sent a letter to the Court on January 15 th advising that the case was settled.2 On Ja n u a ry 20, 2009, Reeves transmitted a settlement check for $75,000.00 made payable to G a te s and Ledet along with a Receipt, Release and Indemnity Agreement and Motion and O rd e r of Dismissal.3 On the same day, Reeves also sent a letter to the Court advising that th e case had been settled.4 A 60-day Order Of Dismissal was entered accordingly on Jan u ary 22, 2009. [rec. doc. 34]. C o u n se l for plaintiff never returned the signed Receipt, Release and Indemnity A g re e m e n t nor the Motion and Order of Dismissal. Defense counsel filed its Motion to E n f o rc e on February 3, 2009. [rec. doc. 35]. Gates then sent a letter to Reeves on F e b ru a ry 10, 2009, wherein he stated that "[m]y position was - and is - that we settled
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Copy of letter is attached to instant motion as Exhibit "B." Copy of letter is attached to instant motion as Exhibit "C." Copy of these documents attached to instant motion as Exhibit "D." Letter is attached to instant motion as Exhibit "E."

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B ryan t Ledet's case, as indicated in your Motion To Enforce Settlement (emphasis in o rig in a l)." 5 On February 23, 2009, Gates sent a letter to the undersigned stating in part that "[m]y settlement of this case was accomplished after consultation with my client. In tw e n ty-th re e plus years of practice, I have yet to be in this situation and can only represent to the Court those facts which are true. . . . I further wish to make clear that my continued re p re se n ta tio n of [Ledet] is not precluded, should he change his mind and decide to honor th e settlement agreement which he gave me the authority to consummate. " 6 P la in tif f , pro se, filed a deficient Motion of Reinstatement of All Claims on F e b ru a ry 19, 2009. [rec. doc. 38]. On March 31, 2009, plaintiff's Motion to Substitute A tto rn e y was granted by the undersigned; Gates was officially terminated, and new p la in tif f 's counsel Jacob Bryan Fusilier and J. Wendel Fusilier were added. [rec. doc. 6 5 ]. The sole issue presented by this motion is whether or not Gates had the requisite a u th o rity from Ledet to agree to the settlement as set forth in the letters exchanged b e tw e e n counsel.7 E v id e n tia ry Hearing T h re e witnesses testified at the evidentiary hearing: Bryant Ledet, James Steven G a te s, and Janice Marie Reeves. Various exhibits, including copies of emails and the le tte rs exchanged by counsel, were introduced at the hearing.
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Copy of letter is attached to instant motion as Exhibit "G." Copy of letter is attached to instant motion as Exhibit "H." Ledet acknowledged at the Evidentiary Hearing that the writings were sufficient under Louisiana law.

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L e d e t testified that he went to Gates' office on the night of January 12, 2009, to d is c u ss several legal matters. Ledet testified that he and Gates had "a few" beers, perhaps a s many as three or more. In addition to discussing making an offer to settle this case, L e d e t and Gates discussed certain criminal charges against Ledet which were pending. These included battery, identity theft and insurance fraud. Ledet testified that because the d is c u ss io n of the then pending criminal charges made him nervous, he agreed that Gates s h o u ld make an offer to Reeves to settle the case for $100,000. L e d e t testified that he was "not happy" with the $100,000 figure, and that "since I h a d been drinking a lot" he had "very little" understanding of what was occurring. Ledet co n firm ed that Gates composed an e-mail to Reeves that night; Ledet also remembers ta lk in g to Reeves on Gates' speakerphone. Ledet testified that he called Gates the next day and told him, Gates, that he was u n h a p p y with the $100,000 offer. Ledet testified that he did not remember Gates asking h im , Ledet, to go to Gates' office that day. Similarly, Ledet testified that he did not recall g o in g to Gates' office that night, nor talking to Reeves again on the telephone. Ledet te stif ie d that he did remember some discussion about "overnighting" the settlement proceeds. L e d e t testified that he first learned about the $75,000 settlement agreement when h e received a copy of the confirmation letter. Ledet testified that he was "furious." Ledet s a id that he went to Gates's office on the following Monday, picked up his file, and then

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c a lled Reeves to tell her that he was firing Gates. Ledet confirmed that Reeves refused to ta lk to him because she believed that he was still represented by Gates. That week, Ledet to ld Gates that his, Ledet's, brother had said that he should not settle the case for $ 1 0 0 ,0 0 0 ; Ledet said that Gates told him that he, Gates, could not "undo" the settlement a g re e m e n t. Ledet denied ever agreeing to settle the case for $100,000, much less $75,000, and s a id that the beer that he had drunk with Gates "affected his ability to understand" what G a te s told him. G ates testified that he called Ledet and arranged a meeting with Ledet on January 1 2 , at 7:00 p.m. Gates testified that he and Ledet discussed Ledet's case for an hour or tw o , and they decided to make a settlement offer of $100,000. Ledet verbally consented to making the settlement offer, and he sat next to Gates and watched Gates write the em a il to Reeves offering to settle the case for that amount. Gates denied that he or Ledet h a d anything to drink at Gates' office that night. T h e next day, Reeves called Gates and offered to settle the case for $75,000; she in d ic a te d that this was the maximum amount that was going to be available for settlement. Gates then called Ledet to arrange a meeting for that night to discuss the counter-offer. Gates testified that Ledet, again, arrived at his office about 7:00 p.m. Gates said that he a n d Ledet discussed the $75,000 counter-offer for a long time. Gates informed Ledet that

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R e e v es had said that this amount was the final offer, and that no further offer would be made. G a te s recommended that Ledet accept the offer. Gates made his recommendation to Ledet, in part, because of the pending criminal charges, especially considering in c rim in a tin g testimony which Ledet had given in his deposition which, if made at trial, c o u ld be used against Ledet in the pending criminal prosecutions. Gates testified that, a f te r much discussion with Ledet, Ledet told Gates to "go ahead and settle." W ith Ledet still in the office, Gates called Reeves on her cell phone and confirmed th e agreement to accept the $75,000 in full settlement of Ledet's claims. Gates testified th a t he believed that Ledet spoke to Reeves during a telephone call. Gates testified that a f ter he hung up the telephone, and with Ledet still in his office, he dictated the letter to R e e v es confirming the acceptance of the $75,000 offer. Gates testified that he and Ledet th e n walked into the kitchen at the office and each drank one beer. Gates was adamant th a t at no time during that telephone call, or later in the evening, did Ledet ever say that h e had changed his mind about accepting the $75,000 settlement offer G a te s said that on Friday, January 16, Ledet called and said that he was having d o u b ts about the settlement. On Monday, January 19, Gates testified that Ledet went to h is office and said that he was not comfortable with the settlement and would not sign any s e ttle m e n t documents. Gates testified that Ledet contacted him several times during that w e e k asking him to "undo the settlement." Gates testified that he told Ledet that he could n o t file pleadings, ethically, to "undo" the settlement, and that he, Ledet, would have to

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re ta in different counsel in order to challenge the settlement agreement. Thereafter, on F r id a y, January 23, Ledet picked up his file from Gates' office, indicating to Gates that he w a s trying to find a lawyer to challenge the settlement agreement. R e e v es testified that she received a telephone call from Gates and Ledet on J a n u a ry 12, 2009, during which an offer to settle Ledet's case for $100,000 was made. Reeves testified that she knew that Ledet was on the speakerphone because he said hello to her. Reeves testified that she told Gates and Ledet that she had no authority to settle, a n d that she would call back the next day. After talking to her client, Reeves said that she c a lle d Gates' office the next morning and offered to settle the case for $75,000. Gates in f o r m e d her that he would talk to Ledet that night and thereafter call her with a response to her offer. R e e v e s testified that Gates called her back sometime after 8:00 p.m. that night, a g a in using a speakerphone, and told her that he and Ledet, after another very long c o n v e rs a tio n , agreed to accept the $75,000 offer. Gates told Reeves that Ledet was in the o ff ice at that time and was participating in the telephone call. Reeves said that she heard so m e o n e in the background, but she could not recall what exactly was said; Reeves could n o t identify Ledet as the person that she had heard in the "background." Gates wanted to k n o w how fast he could receive the settlement proceeds, and Reeves told him that she w o u ld overnight the check and settlement documents to him within three or four days.

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R e e v es testified that Ledet called her directly, later that week, and told her that he n e e d e d more money to settle. Reeves testified that she told Ledet that she could not talk to him since he was represented by counsel, and she hung up the telephone. Immediately th e re a fte r, Reeves called Gates to tell him of Ledet's call, and to ask the status of the se ttle m e n t. Gates told Reeves that Ledet had been talking about his case with some of his f rie n d s, who were on disability, and that they had advised him, Ledet, that he should get m o re than $75,000 for his case. Reeves testified that Gates characterized Ledet as having " b u ye rs ' remorse." A few days later, Reeves testified that it became apparent that Ledet w a s not going to honor the settlement agreement, and she prepared the motion to enforce th e settlement. C o n s id e rin g the exhibits, testimony and the demeanor of all the witnesses, the u n d e rs ig n e d finds the testimony of Gates and Reeves to be credible and the testimony of L e d e t to be not credible. The undersigned finds that the Ledet participated in both tele p h o n e calls with Reeves and knowingly and voluntarily authorized Gates to offer to s e ttle his case for $100,000, and to accept Reeves' counter-offer of $75,000. This is clear f ro m the testimony of Reeves, that, on both telephone calls by speakerphone, two parties w e re present on the other end of the line, and the testimony of Ledet himself who a c k n o w le d g e d that something was said during the one telephone call in which he a c k n o w le d g e d participating about "overnighting" the settlement proceeds. The statement a b o u t overnighting the settlement check was not made until after the settlement had been

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a g re e d to. Accordingly, Ledet must have been present, and then able to hear Gates and R e e v es consummate the settlement for $75,000. There was no objection expressed by L e d e t at that time. This testimony is consistent with Ledet authorizing Gates to accept the $75,000 o ff er of Reeves, and it supports the finding of the undersigned in that regard. Ledet's te stim o n y that he did not understand what was going on because he had three "or more" b e e rs is completely self-serving, uncorroborated and frankly unbelievable. The u n d e rs ig n e d gives no weight to that testimony. I t is apparent to the undersigned that Ledet, after talking to some other persons, a p p a re n tly had second thoughts and tried to "undo" the settlement to which he had earlier a g re e d . By that time, however, the letters between counsel, which are clearly legally su f f icie n t to bind the settlement, had been exchanged. In short, when Ledet tried to w ith d ra w his consent, the settlement had already been agreed to and was binding on him. A n a l y sis The district court has jurisdiction over the settlement because the settlement is the f in a l adjudication between the parties of the claims involved in the case. White Farm E q u ip m e n t Co. v. Kupcho, 792 F.2d 526, 529 (5th Cir.1986). In White, the Fifth Circuit h e ld :

"Whether it is a valid contract between the parties is determined by reference to s ta te substantive law governing contracts generally. . . . Federal courts have the in h e re n t power to enforce settlement agreements entered into by the parties litigant

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in a pending case, to determine compliance with procedural prerequisites, and to d e te rm in e when, if ever, a party may repudiate a contractually binding settlement a g re e m e n t." Id.

In their Motion, defendants correctly state that for a settlement agreement to be v a lid and enforceable under Louisiana law, it must either be recited in open court and c a p a b le of being transcribed from the record or be in writing and signed by the parties or th e i r agents (emphasis added). See La. Civ. Code Art. 3072. In this case, there is a w ritten agreement signed by counsel for both parties evidencing the mutual intent to settle the case for the lump sum of $75,000.00. As described above, there are several letters w ritten by counsel for both parties after the settlement agreement was signed which are e v id e n c e that a settlement agreement was executed. See Harvey Ford v. Tomasevic, 979 S o . 2d 521 (La. App. 3 rd Cir. 2008). A t the Evidentiary Hearing on this Motion to Enforce, attorneys for all parties a g re e d on the record that the settlement agreement at issue is a valid written contract u n d e r Louisiana law. T h u s , the only issue is whether plaintiff authorized his attorney to settle the case f o r $75,000.00. Whether the plaintiff actually agreed to the terms of the settlement is a f a c tu a l issue. As such, the plaintiff, Ledet, bears the burden of proof since he seeks to n u llif y the settlement agreement. City of Baton Rouge v. Douglas, 984 So. 2d 746 (La. A p p . 1 st Cir. 2008). Louisiana law strongly favors a compromise agreement between the p a rtie s . Id. As to Ledet's claim that he never expressly authorized Gates, his attorney at

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th a t time, to settle the case for $75,000.00,8 the overwhelming weight of the evidence is d ire c tly to the contrary. For the reasons set out above, the undersigned finds, as fact, that Gates was a u th o riz e d to act as attorney and agent for plaintiff in this matter with regard to the $ 7 5 ,0 0 0 .0 0 settlement. The sworn testimony of Reeves, Gates and Ledet make it clear to th e undersigned that Ledet was an active participant the in the ongoing settlement n e g o tia tio n s leading up to, and including the agreement to settle. Thus, the undersigned concludes that the evidence presented at the Evidentiary H e a rin g conclusively shows that Ledet authorized the settlement and that Gates had L e d e t's authority to settle the case for $75,000.00. C o n c lu s io n F o r the foregoing reasons, IT IS RECOMMENDED that defendants' motion to e n f o rc e settlement be GRANTED. Under the provisions of 28 U.S.C. § 636(b)(1)(c) and Fed.R.Civ.P. 72(b), the p a rties have ten (10) days from receipt of this Report and Recommendation to file s p e c if ic , written objections with the Clerk of Court. Counsel are directed to furnish a c o u rte sy copy of any objections or responses to the district judge at the time of filing. F a ilu r e to file written objections to the proposed factual findings and/or the p r o p o s e d legal conclusions reflected in this report and recommendation within ten

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S e e Plaintiff's Opposition brief at p. 2. [rec. doc. 55].

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(1 0 ) days from the date of its service, or within the time frame authorized by F e d .R .C iv . P. 6(b), shall bar an aggrieved party from attacking the factual findings o r the legal conclusions accepted by the district court, except upon grounds of plain error. See Douglass v. U n ited Services Automobile Association, 79 F.3d 1415 (5th Cir. 1996). S ig n e d at Lafayette, Louisiana, on July 2, 2009.