The opinion of the court was delivered by: MOTLEY
Defendant Robert Fitzgerald has made a motion for reconsideration of the court's earlier ruling that no binding settlement agreement had been reached between the parties. Defendant has alleged, and plaintiff Thomas America Corporation ("Thomas America") has admitted, that plaintiff's Chief Executive Officer (CEO), Mr. Thomas Pacconi, mischaracterized a particular piece of evidence upon which the court relied in making its decision. Thus, for this reason as well as the other reasons provided below, the motion for reconsideration is granted and this case is dismissed pursuant to the terms of the settlement agreement. Moreover, as this court has previously ordered, defendant's counsel is directed to appear on July 17, 1997 to show cause why sanctions should not be imposed against him, and Mr. Pacconi is also directed to appear to show cause why he should not be held in contempt.
The facts of the underlying dispute are set forth in this court's previous decision in this case denying defendants' motion for a change of venue and familiarity therewith is assumed. See Thomas America v. Fitzgerald, 1994 U.S. Dist. LEXIS 11193, 1994 WL 440935 (S.D.N.Y. 1994). To summarize the protracted and muddled history of this case briefly, there have been three prior actions between the parties. In the first action, Fitzgerald and his licensee TT Systems Corporation brought suit in this court against Thomas America alleging violation of one of Fitzgerald's design patents, United States Design Letters Patent No. Des. 297,532 (the "'532 Patent"). See Fitzgerald v. Thomas America Corp., 92 Civ. 3835 (CBM). This action was voluntarily dismissed by the plaintiffs therein in early fall 1992. Shortly after Fitzgerald brought the first action, Thomas America filed a declaratory judgment action against Fitzgerald and TT Systems Corporation in the United States District Court for the District of New Jersey. See Thomas America Corp. v. Fitzgerald, 2:92 CV 02351 (HLS). In that action, Thomas America sought declarations of the invalidity and non-infringement of both of Fitzgerald's design patents, the '532 Patent and United States Design Letters Patent No. Des. 297,533 (the "'533 Patent"). However, the complaint in that action was dismissed as against Fitzgerald for lack of personal jurisdiction on April 21, 1993. In the same month, Fitzgerald filed the third action in the United States District Court for the District of Colorado alleging that Thomas America had infringed both the '532 Patent and one of Fitzgerald's trademarks, United States Trademark Registration No. 1,479,454 ("The Country Store Telephone"). See Fitzgerald v. Thomas America Corp., Civil Action No. 93-M-889. On January 6, 1994, this action was dismissed for lack of personal jurisdiction over Thomas America. The instant action is concerned with Fitzgerald's trademarks in two models of telephones, "The Country Store Telephone" and "The Country Line Telephone."
At a pretrial conference held on October 31, 1996, defendant submitted a letter, dated August 28, 1995, which he had written to Mr. Pacconi. The letter proposed a settlement wherein defendant would release plaintiff from any past, present and future claims it might have against plaintiff, and in return, plaintiff would dismiss the present action with prejudice. The offer was to remain open for 48 hours. Mr. Pacconi claimed to have initialed his approval of the terms by writing "I agree. Put it in writing" on the agreement itself. In response to this, the court granted each party approximately one month to submit proposed findings of fact and conclusions of law on the issue of whether a valid settlement agreement was reached. The court marked a number of documents introduced at the pretrial conference as exhibits, but no testimony was taken.
As part of its proposed findings of fact and conclusions of law, plaintiff argued that the offer contained in the August 28 letter had lapsed before it was accepted. To buttress this claim, plaintiff introduced an allegedly more complete version of the August 28 letter, which is identical to the one submitted by defendant to the court on October 24, 1996, except that it includes a "fax post-it" from a Ms. Pam Meyer to defendant which is dated August 31, 1995. Plaintiff claimed that Ms. Meyer was Mr. Pacconi's secretary and that it was she who sent the fax to defendant on August 31 after Mr. Pacconi had written the words "I agree" on the letter. Mr. Pacconi stated in his declaration (sworn to under penalty of perjury) that he was the person who attached the "fax post-it" on the letter. Pacconi Decl. P4. Thus, it seemed as if the offer, which was made on August 28, 1995 and was to be valid for only 48 hours, was accepted three days later, after it had lapsed. However, because defendant had never been given an opportunity to respond to the new evidence introduced by plaintiff, the court did not rule at that time but rather gave both parties leave to answer the previously submitted findings of fact and conclusions of law. Though defendant did submit papers, he did not address the issue of lapse, and the court accordingly ruled by order and opinion dated March 27, 1996 that no settlement agreement had been reached and that the parties were to appear for a pretrial conference on April 18, 1997.
After the court had made this ruling, defendant made a request for reconsideration, claiming that the letter introduced by plaintiff was a "fraud" because the "fax post-it" on the letter was not written by Mr. Pacconi or his secretary, but rather was written by defendant's secretary. According to defendant, Mr. Pacconi sent the letter on August 30 to defendant's office, at which time defendant's secretary received it and sent the letter a day later along with a "fax post-it" to defendant, who was in Illinois at the time. Defendant has submitted as part of its request for reconsideration an affidavit from Ms. Meyer which basically corroborates defendant's version of events. Plaintiffs counsel has admitted that this is the case, but has indicated that Mr. Pacconi did not deliberately intend to mislead the court, a rather baffling statement since he must have known that he could not have attached the fax post-it if it came from defendant's secretary and not his own.
In light of the facts recently established, it seems fairly obvious that the contention that the offer had lapsed is no longer a valid one. However, plaintiff has essentially two other grounds upon which he relies in declaring that no valid settlement agreement has been reached
First, he argues that there has been no meeting of the minds, and second, he argues that the bankruptcy had already commenced when Mr. Pacconi made this alleged agreement and that he did not have the authority to bind plaintiff when it was in bankruptcy.
Under American law generally, "a contract is formed when all of the contracting parties express an intent to be bound and where all of the essential terms of the agreement have been spelled out." International Minerals and Resources v. Pappas, 96 F.3d 586, 593 (2d Cir. 1996). Plaintiff argues that the letter did not reveal an intent to be bound by the terms indicated therein and that subsequent actions taken by the parties demonstrated this. Plaintiff points specifically to the fact that defendant sent a proposed settlement agreement to Mr. Pacconi on September 6, which he would not have done had an agreement been formed in late August. Furthermore, plaintiff argues, throughout 1995 and early 1996, defendant's counsel made repeated references to "settlement negotiations" and "settlement proposals" in correspondence with this court and the bankruptcy trustee. Finally, plaintiff states that defendant would not have requested mediation in April of this year had he truly believed that a settlement was formed; rather, he would have brought this matter up with the court directly.
However, plaintiff would need far more evidence than that with which he has provided the court in order to succeed on this ground. The letter clearly makes an offer which any reasonable offeree would understand to be legally binding if accepted
The strongest evidence that the letter is intended to be a legally binding offer is the final sentence of the letter, in which defendant indicates that the offer would be valid for 48 hours. Such a statement is nonsensical if the letter was not intended to be legally binding upon acceptance. Thus, while it is true that defendant's counsel later made references to pending "settlement negotiations" and that he did request mediation in April of 1996 rather than move to ...