United States District Court, N.D. Mississippi, Greenville Division
REPORT AND RECOMMENDATION
DAVID A. SANDERS, Magistrate Judge.
This matter is before the court on the motion of the defendants to enforce the settlement agreement and to dismiss this action with prejudice (# 35). After considering the motion and conducting an evidentiary hearing, the court recommends as follows:
The plaintiff filed the present action after being terminated from her employment with Winona Manor Healthcare, alleging, inter alia, that the defendants terminated her based on her race in violation of Title VII of the Civil Rights Act. On June 23, 2014, the court held a settlement conference in the present action, and after approximately five hours, the parties reached a settlement agreement. The settlement conference was a typical one, with the parties beginning in chambers before the court separated them and worked with each side individually throughout most of the remaining time. The parties spent the great majority of time attempting to agree to an amount of money that would satisfy all of them. Once the parties agreed to a particular sum, additional terms were discussed, and once everyone agreed to those terms, the court brought all parties and their counsel into the courtroom and dictated into the record what it believed the terms to be. Those terms were as follows:
1. The defendants agreed to pay an amount of money that would remain confidential.
2. The defendants would use their best efforts to get the funds to the plaintiff no more than fifteen days after she signed the settlement agreement.
3. The agreement was to be a global one - that is, the plaintiff would release both defendants from the present action.
4. All parties agreed they would not disparage the other.
5. The plaintiff agreed she would never again apply for a position with Winona Manor Healthcare.
6. That twenty percent of the proceeds would be treated as taxable income.
Once the court dictated these findings into the record, it asked whether the parties agreed, disagreed, or had anything to add. Defense counsel spoke first and explained that it intended to make its best efforts to get the funds to the plaintiff within fifteen business days, but wanted to clarify that it was fifteen days from the day it received the signed settlement agreement. Plaintiff's counsel agreed with this but explained he did not want the settlement agreement to include language such as, "receipt in hand, " meaning he did not want to sign the agreement (or have his client sign the agreement) with such language if the money was not given to him at that time. Defense counsel had not objection to that and agreed to make certain there was no such language in the agreement.
Defense counsel next pointed out that the parties had agreed to an indemnification provision that would apply should the IRS subsequently contact the defendant(s) and disagree that only twenty percent of the funds were taxable. Should that situation occur, defense counsel wanted to make certain it was on the record that the plaintiff would be responsible for any additional money owed to the IRS. With that, the court adjourned the proceeding and the parties and their respective counsel left the courtroom.
On July 15, 2014, the defendants filed the present motion to dismiss the action and enforce the settlement, and on August 25 the court held a hearing on the matter.
At the hearing on the present motion to enforce the settlement agreement, the plaintiff testified that she refused to sign the tendered settlement agreement. In support of her position, she testified that she believed counsel for both parties lied to her, but referenced the ad damnum clause of the complaint as if it were a guarantee of the outcome of the case. She also said that she did not "allege" anything, but spoke the truth about the defendants, clearly misunderstanding the phrase. She was also clearly upset about the standard denial of liability clause. Because she believed, wrongly as far as the court can perceive, that her own lawyer deceived her, he was apparently powerless to correct her misunderstandings. Plaintiff made it clear that she wished to have the agreement declared void so that she may proceed to trial. She did, however, admit that she agreed to the settlement as those terms were set out during the ...