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SORENSEN v. CONRAIL

January 28, 1998

DAVID SORENSEN, Plaintiff,
v.
CONSOLIDATED RAIL CORPORATION, Defendant.



The opinion of the court was delivered by: HOMER

 Defendant Consolidated Rail Corporation ("Conrail") has moved to enforce an oral settlement agreement allegedly reached with plaintiff David Sorensen ("Sorensen"). Docket No. 17. For the reasons which follow, that motion is granted.

 I. Background

 Sorensen commenced this action on January 2, 1996 by filing a complaint seeking damages against Conrail under the Federal Employers' Liability Act, 45 U.S.C. § 51 et seq.; the Federal Safety Appliance Act, 45 U.S.C. § 2; and the Federal Boiler Inspection Act, 45 U.S.C. § 22 et seq. Docket No. 1. Sorensen alleged that while employed by Conrail on March 22, 1993, he was injured in the course of his employment due to the negligence of Conrail. Sorensen was represented by the law firm of McClung, Peters & Simon ("McClung Peters"). On August 6, 1996, Sorensen retained new counsel to represent him in this case. Docket No. 7. On November 1, 1996, Sorensen once again retained McClung Peters to represent him. Docket No. 8. Jeremy R. Feedore, Esq. of McClung Peters assumed responsibility for the case.

 The case was eventually scheduled for trial commencing August 25, 1997. Docket No. 15. On July 3, 1997, a settlement conference was held in the chambers of the undersigned. Sorensen was present with Feedore as was Gary M. Baker, Senior Claim Agent for Conrail, and Conrail's attorney. The conference concluded without agreement. Sorensen's final demand for settlement during the conference was $ 10,000. Conrail's last offer was $ 5,000.

 On August 1, 1997, Feedore, Baker and Conrail's attorney discussed the settlement of this case in a conference telephone call. Feedore advised Baker that Sorensen would agree to resolve the case for $ 7,500. Baker accepted. According to both Feedore and Baker, the oral agreement reached on August 1 consisted of Conrail's agreement to pay Sorensen $ 7,500 in full satisfaction of the claims asserted in the complaint and Sorensen's agreement to sign a release and to dismiss this action with prejudice. Baker and Feedore agreed that Baker would meet Feedore and Sorensen at Feedore's office on August 5, 1997 at 4:30 p.m. to exchange the check and the release. Baker appeared on August 5 with the check and a release for Sorensen to sign. Sorensen, however, telephoned Feedore shortly after 4:30 and advised that he would be unable to come to Feedore's office because he was at the dentist for emergency treatment. Another meeting was scheduled for August 8 at 2:30.

 On August 6, Sorensen telephoned Feedore's office and left a message with Feedore's secretary that he "elected to go to trial." Ex. S. Feedore was on vacation, however, and it does not appear that anyone else was given the message. Thus, on August 8, Baker again appeared at Feedore's office with the settlement check and release in hand. Stephen Kerwin, Esq., substituted for Feedore. When Sorensen did not appear, Kerwin caused a telephone call to be placed to Sorensen. Sorensen advised that he again would be unable to meet Baker that day but said nothing about intending to proceed to trial. The meeting was again rescheduled for the following Monday, August 11, at 4:00.

 Baker appeared again on August 11 with the settlement check and release. When Sorensen had not appeared by 4:30, Baker departed. Baker left the release with Linda Battiste, Esq., the attorney substituting for Feedore, who was still on vacation. Like Kerwin, Battiste was unaware of any details of the case. Baker asked Battiste to have Sorensen sign the release and Baker would then exchange the settlement check for the release later in the week.

 Shortly thereafter, Sorensen appeared at McClung Peters accompanied by Cassandra Channing, Esq. Channing is an attorney with an office in Catskill. She was admitted to practice in New York in 1995, engages in a general civil and criminal practice which includes litigation, but is not admitted to practice in federal court. She became close friends with Sorensen in June 1997 and thereafter agreed to assist him in this case by accompanying him to all meetings and to be present for all telephone conversations with his attorney. Battiste presented the release to Sorensen for his signature. Sorensen expressed surprise that a settlement agreement had been reached, declined to sign the release, insisted that he intended to go forward with the trial and restated to Battiste several complaints he had with how his case had been handled by McClung Peters. *fn1" On August 12, McClung Peters notified Conrail's counsel that Sorensen would not sign the release. This motion followed.

 After Conrail filed this motion, McClung Peters moved to withdraw as Sorensen's counsel. Docket No. 20. That motion was granted and Sorensen was allowed time to obtain new counsel. Docket No. 27. Sorensen failed to do and has since proceeded pro se. *fn2" An evidentiary hearing was held on January 20, 1998. This decision constitutes findings of fact and conclusions of law concerning Conrail's motion.

 II. Discussion

 A. Attorney's Authority to Settle

 A district court has the authority to enforce a settlement agreement reached in a case pending before it. Cruz v. Korean Air Lines Co., Ltd., 838 F. Supp. 843, 845-46 (S.D.N.Y. 1993) (citing Meetings & Expositions, Inc. v. Tandy Corp., 490 F.2d 714, 717 (2d Cir. 1974). It is clear that the decision to settle a case is the client's alone. United States v. Beebe, 180 U.S. 343, 350-53, 45 L. Ed. 563, 21 S. Ct. 371 (1901); Fennell v. TLB Kent Co., 865 F.2d 498, 501-02 (2d Cir. 1989). A client does not automatically confer upon an attorney the authority to settle a case on his or her behalf. In re Artha Management, Inc., 91 F.3d 326, 329 (2d Cir. 1996). However, an attorney may have actual or implied authority to enter a binding settlement and in a federal question case, the scope of an agent's authority is a question of federal law. Id. at 328. When the attorney of record enters into a settlement agreement, there is a presumption that the attorney had authority to do so. Id. at 329. The party seeking to prove a lack of settlement authority "bears the burden of proving by affirmative evidence that the attorney lacked authority." Id. That burden is not insubstantial. United States v. Int'l Bhd. of Teamsters, 986 F.2d 15, 20 (2d Cir. 1993).

 Actual authority "may be inferred from words or conduct which the principal has reason to know indicates to the agent that he is to do the act." Id. (citations omitted). Apparent authority is "the power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from or in accordance with the other's manifestations to such third persons." Restatement (Second) of Agency § 8 (1958). Only the principal can act to bestow apparent authority upon an agent. The agent cannot unilaterally obtain this authority. Fennell, 865 F.2d at 502. However, "if an attorney has apparent authority to settle a case, and the opposing counsel has no reason to doubt that authority, the settlement will be upheld." Id.

 Here, Sorensen contends that he never authorized Feedore to settle this case and always made known his intent to proceed to trial. Ex. 2. *fn3" This testimony directly conflicts with that of Feedore. Feedore testified that on August 1, he spoke with Sorensen. Sorensen had reconsidered his position on Conrail's $ 5,000 offer and authorized Feedore to settle the case for that amount or for whatever amount over $ 5,000 could be obtained. Feedore then telephoned Baker and Conrail's counsel and obtained agreement to settle the case for $ 7,500 as per Sorensen's instructions. Ex. B.

 Sorensen has failed to meet his burden of proof. First, the evidence offered to support his claim lacks sufficient credibility. Sorensen himself testified that shortly prior to August 1, he made arrangements for surgery for August 26, 1997 when his trial was still scheduled to proceed. He did not cancel this surgery until sometime after August 1. This conduct is inconsistent with his avowed intent throughout to proceed to trial on August 25 as scheduled. Moreover, the credibility of Sorensen's testimony was substantially impeached by contradictory evidence and inconsistencies. For example, Sorensen and Channing testified that Sorensen failed to ...


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