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United States District Court, S.D. New York

January 5, 2004.


The opinion of the court was delivered by: CONSTANCE MOTLEY, Senior District Judge


Plaintiff Jorge A. Quiroz brings this action against the United States Postal Service ("USPS") and its Postmaster General, for alleged violations of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. ("Title VII"), in the form of discrimination on the basis of national origin. This matter comes before the court on a motion by defendants for summary judgment, or, in the alterative, to dismiss for failure to prosecute. For the following reasons, defendants' motion is denied.


  Plaintiff is an Ecuadorian male, employed as a mechanic by USPS currently and at all relevant times. On December 26, 2000, plaintiff filed the complaint in the instant case, alleging that he had been subjected to discriminatory treatment by defendants on the basis of his national origin, and to retaliation for his having filed complaints with the Postal Service Equal Employment Opportunity ("EEO") office regarding his treatment. On May 9, 2001, plaintiffs counsel sent a letter to Judge Batts, before whom this case was pending until its transfer to the undersigned on October 15, 2003, requesting that the action be placed on the suspense calendar. The letter stated that on or about March 9, 2001, plaintiff had filed new EEO claims of discrimination and retaliation, and requested that the instant action be placed on the suspense calendar "until the Agency issues a Final Decision regarding plaintiffs new claims so that they can be brought under the jurisdiction of this court." The letter also stated that upon the issuance of a Final Decision plaintiff wished "to file his claims in federal court and consolidate all matters." Despite defense counsel's objections, Judge Batts granted this request on May 23, 2001. Page 2

  On January 28, 2002, plaintiff signed a Settlement Agreement with his union and USPS. The agreement referenced four grievances, and included the following sentence: "It is understood that this agreement is in full complete settlement of all outstanding administrative EEO complaints or appeals, in this or any other forums, filed by the grievant."

  In a letter dated February 14, 2002, Mitchell Sturman, the manager of EEO Compliance and Appeals with USPS, New York Metro Area, wrote a letter to plaintiffs counsel, attaching the settlement agreement. The letter quoted the portion of the agreement that we quoted in the previous paragraph, and made the following statements: "A check of our records indicates that there is one complaint, case no. 1 A-103-0022-01, filed on October 18, 2001, which was pending a determination to accept or dismiss the complaint when the above mentioned agreement was executed. It should also be noted that I have been advised that during the settlement discussion that your client was in fact in telephone communication with you and that the agreement signed [sic] with your concurrence. Based on the foregoing, case no. 1A-103-0022-01 is now closed as is any other complaints [sic] initiated prior to January 28, 2002. If you disagree with any of the information set forth, you are afforded 7 calendar days from receipt of this letter to respond. Absent any response, this matter will remain closed with no rights of appeal." Neither plaintiff nor plaintiffs counsel responded to the letter.

  On December 10, 2002, plaintiffs counsel wrote a letter to Judge Batts, which was apparently not copied to defense counsel. In that letter, he noted that "[p]laintiff requested that this matter be placed on the suspense calendar due to other pending EEO matters filed with the postal agency," and stated that "Currently, I am awaiting the issuance of the Agency's Final Decision so that plaintiff can file the additional claims in federal court." He repeated his intention, upon issuance of a final decision, to "request that the above referenced matter be placed on the active calendar" and to "move the court to consolidate all cases." He concluded that "I expect to received [sic] the Agency's Final Decision by January 31, 2003."

  On June 3, 2003, defendants' counsel wrote to plaintiffs counsel, enclosing a proposed stipulation and order, dismissing the instant action with prejudice. The letter referenced the January 28, 2002, settlement, and asked that plaintiffs counsel sign the stipulation "in order to administratively close this matter." Plaintiffs counsel did not respond.

  On July 18, 2003, plaintiffs counsel made the following statements in a letter to Judge Batts: "The court placed this matter on the suspense calendar because of outstanding administrative complaints pending in the Postal Agency's EEO. Such outstanding complaints have been recently disposed of. Currently there are no administrative EEO matters pending. Accordingly, I respectfully request that the court order the above referenced matter be placed on the court's active calendar and schedule a conference to set up a discovery schedule." By an order of the same date, Judge Batts directed the Clerk of the Court to remove the case from the court's suspense calendar.

  By letter dated July 23, 2003, defendants' counsel requested permission to move to dismiss the action, or, in the alternative, for a pre-motion conference. The settlement agreement and a failure by plaintiffs counsel to prosecute the case were given as twin reasons supporting dismissal. Page 3 On October 15, 2003, the case was reassigned to the undersigned. On the same day, the court ordered the parties to appear at a pre-trial conference on November 3, 2003. By order dated October 27, 2003 the court granted defense counsel's request for permission to move to dismiss the action. In the court established a briefing schedule for the motion. Plaintiff's counsel failed to appear at the November 3, 2003, pre-trial conference, at which the court set November 14, 2003, as the date by which defendants' counsel was to serve and file the motion to dismiss. In a fax dated November 3, 2003, plaintiffs counsel informed the court that in the light of the court's October 27, 2003, order granting leave to file a motion to dismiss, he had "assumed the conference would not proceed as initially scheduled."


  A. Summary Judgment

  Defendant has moved for summary judgment on the ground that plaintiffs claims in the instant action are unambiguously waived by that portion of the settlement agreement that reads "It is understood that this agreement is in full complete settlement of all outstanding administrative EEO complaints or appeals, in this or any other forums, filed by the grievant." Plaintiff argues in response that the settlement does not apply to the instant action.

  A settlement is a contract, that once entered into is binding and conclusive. Janneh v. GEF Corp., 887 F.2d 432, 436 (2d Cir. 1989), cert. denied, 498 U.S. 865, 111 S.Ct. 177 (1990), abrogated on other grounds, Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 114 S.Ct. 1992(1994). The proper interpretation of a contract is a question of law for the court. Harris Trust & Sav. Bank v. John Hancock Mut. Life Ins. Co., 970 F.2d 1138, 1147-48 (2d Cir. 1992); see Walk-In Med. Ctrs., Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir. 1987) ("The determination of whether a contract term is ambiguous is a threshold question of law for the court."). "Where the intention of the parties is clearly and unambiguously set forth, effect must be given to the intent as indicated by the language used." Slatt v. Slatt, 64 N.Y.2d 966, 967, 488 N.Y.S.2d 645, 646, 477 N.E.2d 1099, 1100 (1985), quoted in Olin Corp. v. Consol. Aluminum Corp., 5 F.3d 10, 15 (2d Cir. 1993).

  We disagree with defendants' assertion that the disputed portion of the settlement agreement unambiguously bars plaintiff from proceeding with his federal claims, and therefore we deny the summary judgment motion. The agreement constitutes a settlement of all "outstanding administrative EEO complaints or appeals." At the time that the settlement was signed, as now, the claims at issue in the instant action were neither "administrative EEO complaints" nor "appeals." While it may be true that plaintiffs instant claims originated as administrative complaints, they left the administrative sphere when they were included in the federal judicial complaint. They became judicial claims, pursued through a system separate from the administrative one, and not one accurately described as an "appeals" process for the administrative system. Indeed, exhaustion of administrative remedies is a precondition to the bringing of a Title VII claim in federal court. See. e.g., Legnani v. Alitalia Linee Aeree Italiane, S.P.A., 274 F.3d 683, 686 (2d Cir. 2001). Page 4

  Nor does the phrase in this and all other forums contradict the clear limitation of the agreement's scope to "administrative EEO complaints or appeals," since the of appeal from an EEC determination takes place in a non-judicial ""other" forum.*fn1 The court agrees with plaintiff that the settlement agreement could have been phrased so as to make clear that it encompassed a settlement of pending judicial, as opposed to merely administrative, complaints. The court notes that in the district court case McKoy, described by defense counsel as a "virtually identical case," Defs.' Mem. Supp. Summ. J. at 9, and "both controlling and persuasive," Defs.' Reply Mem. at 5, the settlement agreement held to bar the plaintiffs Title VII claim is distinguished by the fact that the agreement, by its terms, "constitute[d] a full and final settlement of all issues arising out of the subject matter" rather than simply of administrative complaints and appeals. McKoy v. Potter, 2002 WL 31028691 at *3 (S.D.N.Y. 2002) (emphasis added).

  Finally, the letter sent by Mitchell Sturman to plaintiffs attorney following the settlement does not change the scope of the agreement. Despite the fact that Mr. Sturman wrote that "any other complaints initiated prior to January 28, 2002" were now "closed," he lacked the authority to expand, by means of this letter, the scope of the agreement so that it would encompass federal judicial claims. He also, of course, lacked the authority to "close" any federal actions. It would not have been unreasonable for plaintiff to interpret that statement, as he claims he interpreted the agreement, as not including federal judicial complaints, and thus for him not to respond. Mr. Sturman may have, as defense counsel states, put plaintiff and his attorney "on notice of the binding nature of the Settlement," Defs' Mem. Supp. Summ. J. at 10, but all that was binding was that to which the parties to the agreement had agreed. Accordingly, the motion for summary judgment is denied.

  B. Failure to Prosecute

  Defense counsel states that "assuming arguendo that this case were excluded from the purview of the Settlement, it should still be dismissed because plaintiff failed to take any action, even to reinstitute this case, for more than one-and-a-half years since the Settlement." Defs.' Mem. Supp. Summ. J. at 10. Page 5

  A federal district court possesses "broad inherent power to protect the administration of justice by levying sanctions in response to abusive litigation practices." Penthouse Int'l, Ltd. v. Playboy Enters., Inc., 663 F.2d 371, 386 (2d Cir. 1981). In addition, pursuant to Rule 41(b) of the Federal Rules of Civil Procedure, "[f]or failure of the plaintiff to prosecute . . . a defendant may move for dismissal of an action . . ." Fed.R.Civ.P. 41(b). However, dismissal is "a harsh remedy, not to be utilized without a careful weighing of its appropriateness." Dodson v. Runyon, 86 F.3d 37, 40 (2d Cir. 1996). A district judge "should employ it only when he is sure of the impotence of lesser sanctions." Chira v. Lockheed Aircraft Corp., 634 F.2d 664, 665 (2d Cir. 1980).

  The more a delay was "occasioned by plaintiffs personal obstruction, or was designed to benefit the plaintiffs strategic interests, the more suitable the remedy of dismissal. Conversely, the more the delay was occasioned by the lawyer's disregard of his obligation toward his client, the more this factor argues in favor of a less drastic sanction imposed directly on the lawyer." Dodson, 86 F.3d at 40 (commending to district judges the "sound practice" of imposing sanctions directly on dilatory lawyers in appropriate cases). The Second Circuit has listed the following factors as pertinent to the question whether dismissal is an appropriate remedy:

"[1] the duration of the plaintiffs failures, [2] whether plaintiff had received notice that further delays would result in dismissal, [3] whether the defendant is likely to be prejudiced by further delay, [4] whether the district judge has taken care to strike the balance between alleviating the court calendar congestion and protecting a party's right to due process and a fair chance to be heard, and [5] whether the judge has adequately assessed the efficacy of lesser sanctions." Id. (quoting Alvarez v. Simmons Mkt. Research Bureau, Inc., 839 F.2d 930, 932 (2d Cir. 1988)) (internal quotations omitted).
  We disagree with defendants' claim that the "harsh remedy" of dismissal is warranted. While this court has grave concerns, as discussed below, concerning the justifications given by plaintiffs counsel for the retention of the case on the suspense calendar between January 28, 2002, and July 18, 2003, we note that it is on this period of the case's history that our attention is particularly focused, rather than on the whole three years that have passed since the filing of the complaint. For, contrary to defense counsel's claim that the filing of the complaint was "[i]n essence," plaintiffs "first and only step to pursue his rights in this case," Defs.' Mem. Supp. Summ. J. at 2, plaintiffs counsel's letter to the court of July 18, 2003, did request that the court "schedule a conference to set up a discovery schedule," thus evidencing at least some attempt to move the case forward. In connection with [2], we disagree with defendants' contention that Mr. Sturman's letter to plaintiffs counsel constituted notice that plaintiffs case would be dismissed. As previously stated, plaintiff would not have been unreasonable in interpreting that letter, as he claims he interpreted the agreement, as not including judicial proceedings. In connection with [3], we note that defense counsel's arguments concerning prejudice are primarily addressed to past, rather than the likelihood of future, prejudice, and that this factor does not weigh heavily in defendants' favor. In connection with the balancing test required by [4], we find that the fact that this case was, until October 15, 2003, before Judge Batts, and thus that we were not able to observe firsthand the progression, or lack of it, of this action, makes us particularly solicitous of the need to protect plaintiffs "right to due process and a fair chance to be heard." Finally, we note that sanctions have been neither threatened nor imposed upon plaintiffs counsel hitherto, and we Page 6 decline to assume that the ultimate sanctions is the only appropriate remedy in this case. Thus, defendants' motion for dismissal of the case is denided

  However, the contents of the letters sent to the court by plaintiffs counsel on December-2002, and July 18, 2003, to justify the case's presence on the suspense calendar, provoke reason for concern that goes beyond mere delay. Like defense counsel, we query the use of the term "recently" in the letter dated July 18, 2003, 40 describe the conclusion of administrative matters that had in fact been reached eighteen months earlier. More worryingly, in the letter dated December 10, 2002, roughly eleven months after the signing of the settlement agreement, plaintiffs counsel claimed not only that he was awaiting "issuance of the Agency's Final Decision so that plaintiff can file the additional claims in federal court," but also that he "expect[ed] to received [sic] the Agency's Final Decision by January 31, 2003." Given that plaintiff's counsel was, at the latest, put on notice of the contents of the settlement agreement by the letter from Mitchell Sturman dated February 14, 2002,*fn2 there is no apparent justification for plaintiffs counsel's statement that he was awaiting an administrative decision, let alone for his claimed "[expectation]" that he would receive that decision by January 31, 2003. For this reason, we hereby ORDER plaintiffs counsel to show cause, at the conference currently scheduled for January 14, 2004, why, due to the contents of the aforementioned letters to the court, some sanction "less drastic" than dismissal should not be imposed "directly on the lawyer." Dodson, 86 F.3d at 40.


  For the foregoing reasons, defendants' motion is denied.


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