United States District Court, S.D. New York
OPINION & ORDER
SARAH NETBURN, Magistrate Judge.
On December 12, 2012, plaintiffs Habibur Rahman ("Rahman") and Raja Ahmed filed this action against Kaplan Cornelia, Inc., doing business as Papaya Dog, and individual defendants (collectively, the "defendants"), alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., and New York Labor Law.
On May 16, 2013, Rahman appeared for a settlement conference before the Court, along with the individual defendants, who had authority to bind Papaya Dog. Plaintiff Ahmed did not attend the conference. At the settlement conference, I recommended a settlement sum and requested that the parties, through their counsel, accept or reject the sum within 24 hours. The following day, all parties appeared to have accepted the Court's recommendation. Thereafter, however, Rahman objected and located new counsel, who insists that Rahman never authorized his former lawyer to accept the settlement proposal.
The defendants have moved to enforce the settlement agreement, purportedly accepted on May 17, 2013. Following a hearing on the matter, the Court finds that a binding and enforceable agreement was reached on May 17, 2013, and that former counsel had authority to accept the settlement agreement on behalf of Rahman. Accordingly, defendants' motion to enforce the settlement agreement is GRANTED, and Rahman's claims are dismissed.
The Settlement Conference
Rahman worked at the Papaya Dog in the West Village from approximately March 2005 until March 2013. He alleges he typically worked 72 hours each week and was paid a fixed weekly salary of $450, regardless of how many hours he worked. The defendants deny that Rahman worked more than 40 hours per week.
Following limited discovery, a settlement conference was held on May 16, 2013 in the courthouse. Rahman appeared with his former counsel, Peter Cooper of the firm Cilenti & Cooper, P.L.L.C., and defendants were represented by Michael DeLisa of the DeLisa Law Group, PLLC. Although the contents of the settlement conference were held off the record, defendants vigorously rejected Rahman's claims of minimum wage and over-time violations. The conference lasted nearly two and a half hours. Based on the positions of the parties and my assessment of the strength and weaknesses of the case, I made a recommendation for settlement and directed that the parties consider my recommendation and contact my chambers the following day.
On May 17, 2013, the parties, through their counsel, contacted my chambers and accepted the Court's recommendation. Accordingly, at 5:21 p.m. that afternoon, my law clerk sent counsel an email stating: "Counsel, The parties to Rahman v. Kaplan Cornelia, Inc., 12-cv-09095 (JMF)(SN), have accepted Judge Netburn's recommendation and, therefore, there is a settlement agreement. Thank you." The following day, Rahman's former counsel Peter Cooper sent an email to defendants' counsel stating "I am pleased we have a settlement agreement" and forwarded a draft memorialization of its terms, which reflected the terms that I had recommended at the conference and that the parties had accepted. See Michael C. DeLisa Decl., dated Dec. 2, 2013, at Ex. G. See also Peter H. Cooper Decl., dated May 31, 2013, at note 1.
On May 20, 2013, my law clerk contacted counsel regarding the need for a fairness hearing given that the case was settling FLSA claims. The parties were given the option, among several, to consent to my jurisdiction, at which time I would approve the settlement agreement as fair and reasonable, having presided over the settlement conference. The parties elected to consent to my jurisdiction. Mr. Cooper signed a Notice, Consent, and Reference of a Civil Action to a Magistrate Judge (the "Consent Notice") on behalf of Rahman on May 21, 2013, and Mr. DeLisa and the individual defendants signed it on May 28, 2013. It was approved by District Judge Jesse M. Furman on June 4, 2013.
On June 3, 2013, however, Mr. Cooper filed a motion to withdraw as counsel, citing "irreconcilable differences" with his client. Of relevance to the pending motion, Mr. Cooper stated Rahman "accepted the Court's recommendation" for settlement, but had since "indicated to our office that he wished to change his mind and not settle the case for the sum recommended by the Magistrate Judge." Peter H. Cooper Decl., dated May 31, 2013, at ¶ 4. Following an ex parte conversation with the Court - with notice thereof to defendants' counsel - the Court granted the motion to withdraw.
On July 8, 2013, the Lee Litigation Group PLLC appeared on behalf of Rahman. An amended complaint was filed on September 13, 2013.
The Motion and Hearing
The Court held an Initial Status Conference on October 18, 2013, at which time defendants' counsel indicated that it intended to file a motion to enforce the settlement agreement. Defendants' motion was filed on December 9, 2013, and was fully submitted on December 30, 2013.
Defendants filed a declaration from Mr. DeLisa, to which are attached several exhibits, including among other things: (i) the Peter H. Cooper Motion to Withdraw Declaration; (ii) the email from my law clerk confirming a settlement had been reached, and the follow-up email from my law clerk concerning court approval of the settlement; (iii) the executed Consent Notice; and (iv) a May 18, 2013 email from Mr. Cooper to Mr. DeLisa, expressing Mr. Cooper's satisfaction with the settlement and attaching a draft settlement agreement and release.
In addition to his memorandum of law, Rahman submitted a sworn declaration. He stated that on May 16, 2013, immediately following the settlement conference, he told Mr. Cooper that he was "dissatisfied with the offer, " that Mr. Cooper "pressured me to accept it" but also that Mr. Cooper gave him a day to think about it. Habibur Raham Decl., dated December 19, 2013, at ¶ 5. On May 17, 2013, Rahman "called Mr. Cooper and informed him that due to my dissatisfaction with the settlement amount, I did not accept the proposal. Mr. Cooper continued to pressure me to accept the settlement. I continued to inform him that I was not going to accept because the amount offered was not enough." Id. at ¶ 6. Rahman further stated that "[d]ays after I informed Mr. Cooper of my rejection of the settlement offer, he continued to insist that I agree to the amount proposed by Judge Netburn. I informed him that I would not accept the settlement offer and I fired him as my attorney." Id. at 117. Finally, Rahman states that "[o]n May 20, 2013, three days after firing Mr. Cooper, I retained Lee Litigation Group PLLC as my new counsel." Id. at ¶ 20.
In light of the disputed question as to whether Rahman directed his counsel to accept the Court's recommendation, the Court held a hearing on January 27, 2014. Rahman and Mr. Cooper both testified. At the hearing, an email, dated May 17, 2013 at 10:48 a.m., from Mr. Cooper to Rahman was introduced. In this email, Mr. Cooper reiterated the terms of the agreement, "strongly urged" Rahman to accept, but also stated that Rahman is "not required to accept the judge's recommendation, although you will need to really focus on your case if you don't." At the hearing, Mr. Cooper testified that his last admonition - that "you will need to really focus on your case" - was because Rahman had not been actively pursuing his claims and cooperating with counsel to date. Mr. Cooper testified that, later that day (May 17) and after this email was sent, Rahman and he spoke by telephone, and Rahman authorized Mr. Cooper to accept the settlement offer. He further testified that, thereafter, he proceeded as though the case had been resolved - by sending a draft agreement and release to Mr. DeLisa on May 18, and signing the Consent Notice on May 21. Mr. Cooper testified that he did not have any communication with his client between May 17 and May 30 despite repeated attempts. Mr. Cooper further testified that on May 30, Rahman called Mr. Cooper and said that he had changed his mind and refused the settlement. On May 31, Rahman appeared at Mr. Cooper's office, at which time Mr. ...