Appeal from a final judgment of the United States District Court for the Southern District of New York, Louis L. Stanton, Judge, entered on June 16, 1987 dismissing plaintiff's action and approving a $10,000 settlement agreement.
Feinberg, Meskill and Mahoney, Circuit Judges. Feinberg, Circuit Judge (concurring).
This is an appeal from a final judgment of the United States District Court for the Southern District of New York, Louis L. Stanton, Judge, entered on June 16, 1987 which dismissed plaintiff's action and approved a $10,000 settlement agreement.*fn1 The attorneys for the parties negotiated a settlement and reported it to the court by telephone. Based on this conference call, the district court entered an order on January 20, 1987 which dismissed the action with prejudice, but provided that "within sixty days of the date of this order any party may apply by letter for restoration of the action to the calendar of the undersigned." Plaintiff's counsel requested that the action be restored to the calendar on March 20, 1987. After a hearing on June 16, 1987, the district court dismissed the action and approved the settlement, finding that plaintiff's attorney had had apparent authority to settle the case and plaintiff was accordingly bound by the settlement agreement.
Plaintiff-appellant Louis Fennell commenced this action in the United States District Court for the Southern District of New York on January 7, 1985 against his employer,*fn2 alleging wrongful discharge because of his race and age in violation of 42 U.S.C. § 1981 (1982). Fennell was represented by C. Vernon Mason and several of his associates, including Fred K. Brewington.
The case was on Judge Stanton's ready calendar on January 6, 1987. On January 16, 1987, however, Brewington and Eugene Frink, defendants' attorney, agreed to settle the case for $10,000 during a telephone conversation. The settlement was reported to the court by both attorneys in a telephone conference call on January 20, 1987. The district court issued an order of dismissal on the same day which provided that either party could apply to the court by letter to restore the case to the court's calendar within sixty days of the order. The settlement was conditioned upon Fennell signing a general release and a stipulation of discontinuance being filed with the court, which never occurred.
Fennell expressed his dissatisfaction with the settlement in a letter to the district court dated March 28, 1987. Fennell there contended that he had told Brewington on January 16, 1987 that he would not approve a $10,000 settlement, but he was willing to settle the case out of court "with the intentions of getting it out of the way and behind me." He also claimed that he had told Mason on January 20, 1987 that $10,000 was not a satisfactory settlement, and that he had tried several times in early February, 1987 to contact Mason's office by telephone about the case, but elicited no response. Fennell further stated that he had gone to Mason's office on February 20, 1987, at which time Mason informed him that the case has been settled for $10,000, whereupon Fennell reiterated his dissatisfaction with that settlement.
On February 27, 1987, Fennell wrote Mason expressing his dissatisfaction with the settlement agreement and indicating that he had "no further use of [Mason's] services." A copy of this letter was sent to the district court and received there on March 3, 1987. On March 20, 1987, Brewington wrote to the district court requesting that the "matter be restored to the calendar as the settlement which was authorized and accepted by our client is no longer acceptable to him," and that Mason and his associates be released by the court as counsel to Fennell.
Following a status conference on June 5, 1987, the district court held a hearing on June 16, 1987 to determine whether Fennell's case should be restored to the calendar. At the conclusion of the hearing, the district court dismissed the action and approved the settlement. This ruling was based upon a finding that Fennell's attorney had been clothed with "apparent authority" when he settled the case, and the court's expressed view that "to allow a client to reject a settlement which has been agreed upon by his attorney with apparent authority is to open the door to a mild form of chaos."
On appeal, Fennell asserts that it was an abuse of discretion for the district court not to have vacated its order of dismissal pursuant to Fed. R. Civ. P. 60(b)(1). Appellees contend that since Fennell's attorney was clothed with apparent authority to settle the case, Fennell is bound by that settlement.