Cosby v. Huntington Ingalls Incorporated

Filing 28

Redacted MEMORANDUM ORDER. The Court GRANTS Defendant's motion to enforce the settlement, ECF No. 13 , and DENIES Plaintiff's motion to set aside settlement, ECF No. 9 . The Court also GRANTS Mr. Theuer's motion to withdraw. ECF No. 10 . Signed by District Judge Mark S. Davis and filed on 3/27/18. (tbro)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA

Newport News Division
J. GARY COSBY,

Plaintiff,
V.

Civil Action No; 4:17cvll2

HUNTINGTON INGALLS
INCORPORATED

Defendant.

MEMORANDUM ORDER

This

matter is before

the

Court on a motion

to set aside

settlement filed by Plaintiff J. Gary Cosby ("Plaintiff" or "Cosby"),
ECF No. 9, a motion to withdraw filed by James R. Theuer ("Plaintiff s
counsel"

or

"Theuer"),

settlement filed

ECF

No.

by Defendant

10,

and

Huntington

("Defendant" or "HII"), ECF No. 13.

a

motion

Ingalls

to

enforce

Incorporated

For the reasons stated below,

the Court GRANTS Defendant's motion to enforce the settlement, GRANTS
Mr. Theuer's motion to withdraw, and DENIES Plaintiff's motion to
set aside settlement.
I. BACKGROUND

In September 2017, Plaintiff filed the instant suit alleging
that HII had violated the Americans with Disabilities Act ("ADA")

by refusing to permit him to return to work after he became disabled.
Compl., ECF No. 1.

Prior to suffering a heart attack in January 2015,

Cosby had worked at HII as a machinist for twelve years.

Id. at f

8.

In July 2015, Plaintiff's cardiologist cleared him to return to

work, but HII refused to permit Plaintiff to return to work on the

ground that HII's worksite presented numerous unavoidable hazards
to Plaintiff's health.

Id. at HH 12-16.

Plaintiff asserts that he

is disabled within the meaning of the ADA and that HII has violated

his rights under the ADA by refusing to engage in a reasonable
accommodation process for employees returning from heart trauma with

installed devices.

Id. at HH 19-20.

On December 21, 2017, with the assistance of retired United

States Magistrate Judge F. Bradford Stillman

parties engaged in an all-day mediation.
Br. 1, ECF No. 18.

{"Mediator"), the

Def.'s Mot. Enf. Settle.

Among those present with Plaintiff at the

mediation were his counsel, Mr. Theuer, and Plaintiff's long-term
domestic

partner,

mediation.

Ms.

Defendant

Linda
made

an

Scalia.
offer

communicated to Cosby by the Mediator.

Id.
of

Id.

at

2.

During

the

which

was

settlement,

After conferencing with

Mr. Theuer and Ms. Scalia, Cosby accepted the agreement.

Id.

The

parties then prepared a document that records the terms of the
agreement that they titled "Term Sheet".

Id.

Plaintiff, Mr.

Theuer, and a representative for Defendant all signed the term sheet.
Id.

Later that night, the Mediator sent an email to counsel for both

parties congratulating them on the settlement of the matter.
at 4.

Id.

The following day, Plaintiff filed the instant motion to set

aside settlement.

ECF No. 9.

He asserts that he was "not supported

by his counsel at the mediation held by the parties on December 21,
2017."

Id.

He further states that "Plaintiff's counsel tried to

satisfy the Defendant at the mediation, and Plaintiff was misled by
his counsel such that his signature on the settlement term sheet was
a mistake."

Id.

Notably, Plaintiff acknowledges in his motion that

the parties in fact reached a settlement on the matter and refers
to the document he signed as "the settlement term sheet".

Id.

On that same day, Mr. Theuer filed his motion to withdraw.
No. 10.

ECF

He states that he cannot continue as Plaintiff's counsel

first because "the relationship between the Plaintiff and counsel

is irretrievably broken," and second because he is likely to be a
material witness in the resolution of the instant motion to set aside

settlement.

Id.

On January 2, 2018, Defendant responded to the

motion to withdraw stating it does not oppose such motion.
12.

ECF No.

Plaintiff has not filed any response to Mr. Theuer's motion to

withdraw.

On January 2, 2018, HII responded to Plaintiff's motion to set
aside settlement, ECF No. 11, and filed the instant motion to enforce

settlement, ECF No. 13.

In its brief in support of its motion to

enforce settlement, HII first notes that Plaintiff does not dispute

that the parties reached a settlement on the matter or that the
settlement is memorialized in the term sheet.

Id. at 1-2, ECF No.

18.

HII also points out that Plaintiff—^by asserting that he made

a "mistake" because he was "not supported" by his counsel, who
purportedly "tried to satisfy the Defendant at mediation"—has merely
alleged that he
mediation.

was provided inadequate representation during

Id. at 2 (quoting Pl.'s Mot. Set Aside Settle. 1).

Defendant asserts that an allegation of inadequate representation
is insufficient, in the absence of claims that the settlement is

"substantially unfair," for a court to set aside the settlement, and
therefore requests that the Court enforce the settlement agreement.
Id. at 2-3.

On January 10, 2018, Plaintiff

replied in opposition to

Defendant's motion to enforce the settlement.

ECF No. 19.

In his

response. Plaintiff again does not deny Defendant's assertion that
the parties reached an agreement to settle the case that was
memorialized in the term sheet, though he cryptically states that

"the information presented by Defendant at the mediation was
incorrect."

Id.

Having been fully briefed, the instant motions are ripe for
disposition.
II. ANALYSIS

The Court first addresses the parties' motions to enforce or

set aside the settlement agreement before turning to address Mr.
Theuer's motion to withdraw.

A. Motion to Enforce Settlement and Motion to Set Aside
Settlement

District courts possess "inherent authority, deriving from
their equity power, to enforce settlement agreements."

Hensley v.

Alcon Labs., Inc., 277 F.3d 535, 540 (4th Cir. 2002) (citing Millner

V. Norfolk & W. Ry. Co., 643 F.2d 1005, 1009 (4th Cir. 1981)).

Resolution of a motion to enforce a settlement agreement draws on
standard

contract

principles.

Id.

To

enforce

a

settlement

agreement, a district court must (1) find that the parties agreed
to settle the case, and (2) be able to determine terms of the

settlement.

Moore v. Beaufort Cty., N.C., 936 F.2d 159, 162 (4th

Cir. 1991).

Where a court finds that the parties entered into a

binding settlement agreement, it may summarily enforce the agreement
without a plenary hearing.

Hensley, 277 F.3d. at 540.

Where, on

the other hand, there is a material dispute about the existence of

a valid settlement agreement or of an attorney's authority to enter
a settlement agreement on behalf of his client, a district court must
conduct a plenary hearing to resolve the dispute.

Id.

A material dispute about the validity of a settlement agreement

does not exist where a party merely alleges inadequate representation
by his attorney during settlement discussions.
Corp., 849 F.2d 130, 133 (4th Cir. 1988).

Petty v. Timken

In such cases, "[u]nless

the resulting settlement is substantially unfair, judicial economy

commands that a party be held to the terms of a voluntary agreement."

Id.; see also Sherman v. Philip Morris, Inc.^ 960 F.2d 147 (4th Cir.

1992) (unpublished) (affirming district court's enforcement of a
settlement agreement and rejecting plaintiff's argument on appeal
that inadequate representation by plaintiff's attorney had rendered
his consent involuntary).

In the absence of a showing that an

agreement is substantially unfair, a valid settlement agreement will
not be set aside where a party merely has second thoughts about having
agreed to the settlement.

Petty, 849 F.2d at 133 ("At most. Petty

appears to have had second thoughts about the level of his recovery.
That does not, however, establish unfairness or justify setting aside
an otherwise valid [settlement] agreement."); see also Young v.

F.D.I.C., 103 F.3d 1180, 1195 (4th Cir. 1997) ("[H]aving second

thoughts about the results of a settlement agreement does not justify
setting aside an otherwise valid agreement.").

Here, there appears to be no dispute that the parties agreed
to settle the case.

Cosby freely admits in his motion that he signed

the "settlement term sheet", though he claims it was a "mistake" to
do so.

Pl.'s Mot. Set Aside Settle. 1, ECF No. 9.

Plaintiff has

also failed to deny any of Defendant's assertions about how he

accepted the settlement offer.

In addition. Defendant has submitted

the signed term sheet that verifies that the parties came to an
agreement to settle the case.

Ex. A, ECF No. 18-1.

The term sheet

is titled "Cosby HII Term Sheet 12/21/17", and it lists the key

provisions of the agreement.

Id.

It is also signed by Plaintiff,

Mr. Theuer, and a representative of HII.

Id.

The agreement thus

gives the appearance of being a document intended to memorialize an
agreement between the parties to settle the case.^

Plaintiff's only

statement that remotely suggests that the parties did not reach a

valid agreement is his statement that "the information presented by
Defendant at the mediation was incorrect."

Id., ECF No. 19.

In the

absence of some elaboration of that statement, the Court is unaware

of what information Plaintiff is suggesting was inaccurate and how
that might have prevented a true meeting of the minds between the
parties.

As detailed below, the terms of the agreement are plainly

discernable, and Plaintiff has not plausibly alleged that any kind
of fraud by Defendant induced him to accept the settlement.

Thus,

Plaintiff's vague statement about the inforroation presented by
Defendant at the mediation being inaccurate does not create a genuine
dispute about the validity of the agreement.

Plaintiff also has

alleged that his counsel rendered inadequate representation in

recommending that Cosby accept the settlement, but this is not a
proper ground for invalidating the agreement.
133.

Petty, 849 F.2d at

Because the undisputed facts stated above show that the parties

agreed to settle the case, and because Plaintiff has failed to

plausibly allege any basis for finding that the agreement is void.

^ Under Virginia law, a signed term sheet covering the essential terms of a
settlement constitutes an enforceable settlement agreement. LongView Int'1
Tech. Sols., Inc. v. Lin, No. 160228, 2017 WL 1396062, at *3 (Va. Apr. 13, 2017).

the Court concludes that there is no genuine dispute that the parties
agreed to settle the case.

The Court also finds that the terms of the agreement are readily

discernible.

Id.

The term sheet states that ''Defendant agrees to pay":

These terms plainly indicate the exact financial settlement

agreed to by the parties.

The agreement further states that it is

subject to the following "Additional terms":

Id.

While most of these additional terms are noted in bullet point

format, their meaning is readily apparent.

The Court notes that

Plaintiff has not complained that these terms do not accurately
capture the agreement or that they are too broadly worded to
constitute terms of a binding settlement agreement.

The Court also

notes

that

Plaintiff

has

not

argued

that

the

agreement

is

substantially unfair, and notes that, in any case, the Court has

reviewed the terms itself and finds that they are not substantially
unfair.

In light of the above, the Court finds that (1) the parties
agreed to settle the case, and (2) the terms of the agreement are
readily discernable.

The Court further finds that the agreement is

not substantially unfair and that there is no basis for finding that

the agreement is void.

Therefore, because the parties entered into

a valid agreement to settle the case, the Court GRANTS Defendant's
motion to enforce the settlement, ECF No. 13, and DENIES Plaintiff's
motion to set aside settlement, ECF No. 9.
B. Motion to Withdraw as Attorney

The withdrawal of appearance by an attorney is governed by Local
Civil Rule 83.1(G), which states:

(G) Withdrawal of Appearance: No attorney who has entered
an appearance in any civil action shall withdraw such
appearance, or have it stricken from the record, except
on order of the Court and after reasonable notice to the

party on whose behalf said attorney has appeared.
E.D. Va. Civ. R. 83.1(G).

Mr. Theuer complied with this rule when

he filed the motion to withdraw with the Court and certified that

he sent a copy of the motion to his client.
No. 10.

Mot. Withdraw 2, ECF

Because Plaintiff filed a motion on the same day as Mr.

Theuer's motion that accused Mr. Theuer of inadequate representation
during the settlement negotiations and thus implied that he wished

to terminate Mr. Theuer's services, the Court finds that Mr. Theuer

gave his client reasonable notice of his intent to withdraw.

The

Court also notes that Cosby has had ample opportunity to complain
about the timing of Mr. Theuer's motion to withdraw, but has not done
so.

The withdrawal of an attorney is also governed by the Virginia
State Bar Rules of Professional Conduct, which provide:

[A] lawyer may withdraw from representing a client if
withdrawal can be accomplished without material adverse
effect on the interests of the client if:

(1) the client persists in a course of action involving

the lawyer's services that the lawyer reasonably believes
is illegal or unjust;

(2) the client has used the lawyer's services to perpetrate
a crime or fraud;

(3) a client insists upon pursuing an objective that the

lawyer considers repugnant or imprudent;

(4) the client fails substantially to fulfill an
obligation to the lawyer regarding the lawyer's services
and has been given reasonable warning that the lawyer will
withdraw unless the obligation is fulfilled;

(5) the representation will result in an unreasonable
financial burden on the lawyer or has been rendered
unreasonably difficult by the client; or

(6) other good cause for withdrawal exists.
Va. Rules Prof'l Conduct 1.16(b).
10

In this case, Mr. Theuer is

claiming that good cause exists for his withdrawal because his
relationship

with

Plaintiff

is

"irretrievably

broken."

Mot.

Withdraw 1.

Because Plaintiff has not opposed this motion and

because he has accused his counsel of having rendered inadequate
performance during settlement negotiations, the Court agrees that
good cause exists for granting the motion. Va. Rules Prof'l Conduct
1.16(b)(6).

The Court also finds that Mr. Theuer's withdrawal will

not have a material adverse effect on Cosby.
GRANTS Mr. Theuer's motion to withdraw.

Therefore, the Court

ECF No. 10.

III. CONCLUSION

For the reasons stated above, the Court GRANTS Defendant's

motion to enforce the settlement, ECF No. 13, and DENIES Plaintiff's
motion to set aside settlement, ECF No. 9.
Mr. Theuer's motion to withdraw.

The Court also GRANTS

ECF No. 10.

The Clerk is REQUESTED to send a copy of this Memorandum Order
to all counsel of record.
IT IS SO ORDERED.

/s/TrUtr
Mark S. Davis
UNITED

Norfolk, Virginia
March

, 2018

11

STATES DISTRICT JUDGE