United States District Court, M.D. Pennsylvania
February 12, 2004.
PATRICIA FRANTZ, Plaintiff,
LUMBERMENS MUTUAL CASUALTY COMPANY, t/a KEMPER INSURANCE COMPANIES, and AMERICAN PROTECTION INSURANCE COMPANY, t/a KEMPER INSURANCE COMPANIES, Defendants.
The opinion of the court was delivered by: A. RICHARD CAPUTO, District Judge
Before me is Defendants' Motion to Enforce the Settlement
Agreement and Statement of Material Facts in Support Thereof.
(Doc. 42). The facts are these. Plaintiff instituted an action on
May 28, 2002, for breach of an insurance contract and bad faith.
A settlement conference was held in my chambers on October 24,
2003. Counsel for each side was present at the conference, and
Plaintiff and her son were present in the waiting area of my
chambers. Indeed, as the conference progressed, Plaintiff's
counsel caucused with Plaintiff in the waiting area, the hallway
and/or the library. Plaintiff also was present in chambers for a
short period toward the end of the conference. The process
involved me talking with each side separately, with the
Plaintiff's counsel talking privately to his client concerning
the proposals made by Defendant, and Defendant making telephone
calls in private to his client. The negotiations closed after more than two hours with the
Defendant at $90,000 and the Plaintiff at $105,000. Each side
represented that the offers made would settle the case. After
continuing to negotiate privately, during which the Plaintiff's
counsel remained at $105,000 to settle, the Defendant advised the
Plaintiff's counsel that the Defendant would accept the
Plaintiff's offer and settle at $105,000. At this point,
Plaintiff's counsel told Defendants' counsel that his client
wanted more. During a scheduled telephone conference with the
Court on November 20, 2003, in the hearing of Plaintiff, counsel
confirmed the foregoing facts. The Court asked the Plaintiff in
words or substance whether the $105,000 offer was a joke, to
which she replied that it was. Plaintiff's counsel now advises
that the Plaintiff's offer was $105,000 plus counsel fees, but
concedes that this was never communicated to Defendants' counsel
or the Court. This is puzzling as the Plaintiff herself indicated
that $105,000 would settle the case when she was in my chambers
on October 24, 2003. Moreover, on November 20, 2004, she
disavowed the $105,000 offer as insincere, not as incomplete.
Defendant argues there is an agreement to settle at $105,000,
and seeks to enforce that agreement. The Plaintiff contends there
is no agreement because there was never a meeting of the minds.
The applicable law is aptly stated in Defendants' brief and the
Plaintiff agrees with Defendants' recitation. Briefly, it is as
follows. Because this Court's jurisdiction is based upon
diversity of citizenship and the settlement involves state law
claims, Pennsylvania law governs. Under Pennsylvania law, "[a]n
agreement to settle a law suit, voluntarily entered into, is
binding upon the parties, whether or not made in the presence of
the court, and even in the absence of a writing." Green v. John
H. Lewis & Co., 436 F.2d 389, 390 (3d Cir. 1970). At the heart of any settlement
agreement is a meeting of the minds. There must be a mutual
assent to the terms and conditions of the settlement agreement.
See Pugh v. Super Fresh Super Markets, Inc., 640 F. Supp. 1306,
1308 (E.D. Pa. 1986.) A settlement is binding even if a party had
a change of heart between the time an agreement is reached and
before those terms are reduced to writing, so long as there was a
meeting of the minds. Id.
Was there a meeting of the minds? In my view there was. Each
party dealt with the other, cloaked with the authority to act on
behalf of their clients. Plaintiff's counsel proffers that his
client, back as far as October 24, 2003, was unwilling to settle
unless she received $105,000 plus counsel fees. However, I note
the Plaintiff's failure to indicate such an intention when
confronting me in my chambers on October 24, 2003, and on the
telephone November 20, 2003. On October 24, 2003, Plaintiff
advised me as well as counsel, that she would settle at $105,000.
On November 20, 2003, she said she was not serious when she told
me she would settle at $105,000. In neither instance did she say
that her offer was $105,000 plus counsel fees. It is also
significant that negotiations continued between counsel during
the period October 20, 2003 to November 19, 2003 with offers
coming in increments of several thousand dollars from the
Defendant. Again, the Defendant was never advised the offer of
$105,000 had been withdrawn, but rather it continued to be
maintained as Plaintiff's settlement figure. It was only after
the $105,000 offer of settlement was accepted by the Defendant
did Plaintiff's counsel advise of his client's unwillingness to
close the deal at what Defendant had every reason to believe was
It is not my concern whether the Plaintiff changed her mind
when the offer was accepted, or her counsel was not conveying her true position
during the negotiations. Insofar as the Court's exposure to the
settlement negotiations, the former scenario is the Court's
perception of the Plaintiff's position. It is also the
Defendants' perception since counsel for Plaintiff never advised
Defendants' counsel otherwise.
In either event, there is an agreement. It is simply
unacceptable for a client to attempt to manipulate counsel, or
more importantly, the Court. The enforceability of the settlement
is premised on offer and acceptance. The Defendant made an offer
and it was accepted-mutual assent was expressed orally by the
parties to settle this action for $105,000.
Therefore, for the foregoing reasons, the parties reached an
agreement to settle the case by the Defendants paying the
Plaintiff $105,000, and consequently, I will order the
enforcement of that agreement.
An appropriate Order follows. ORDER
NOW, this 12th day of February, 2004, IT IS HEREBY ORDERED
(1) Defendants' Motion to Enforce the Settlement
Agreement and Statement of Material Facts in Support
Thereof (Doc. 42) is GRANTED.
(2) Judgment in the amount of $105,000.00 is hereby
entered in favor of the Plaintiff in this case.
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