In the
United States Court of Appeals
For the Seventh Circuit

No. 99-4007

MICHAEL G. POHL,

Plaintiff-Appellant,

v.

UNITED AIRLINES, INCORPORATED,

Defendant-Appellee.



Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. 97 C 1246--Sarah Evans Barker, Chief Judge.


Argued April 7, 2000--Decided May 10, 2000



  Before BAUER, EASTERBROOK, and ROVNER, Circuit
Judges.

  ROVNER, Circuit Judge. Some litigants in
pursuing settlement of their claims hold the
belief that they can change their mind at any
time before they actually sign the settlement
agreement. As this case illustrates, that
perception is often unfounded in the law.

  The genesis of this case was a lawsuit by
Michael Pohl, an aircraft inspector for United
Airlines, against United alleging violations of
the Uniformed Services Employment and
Reemployment Rights Act (USERRA). The complaint
included three counts, alleging discrimination
based on his military status (Count 1),
retaliation (Count 2), and failure to properly
credit Pohl’s employee stock ownership ("ESOP")
account for time spent fulfilling his duties in
the Reserves (Count 3). Eventually, the parties
began to discuss settlement, although there is a
wide divergence between Pohl’s perception of the
discussions and that portrayed by his attorney
and opposing counsel. What is undisputed is that
the attorneys engaged in a number of settlement
discussions by telephone between December 15,
1998, and March 8, 1999, and eventually informed
the court that they had reached a settlement of
the entire case. Shortly thereafter, Pohl called
the court himself, and expressed surprise when
informed of the news of a full settlement. The
judge convened a status conference, at which time
Pohl reviewed the written settlement proposal for
the first time and refused to sign it. United
then brought a motion to enforce the settlement,
which Pohl opposed on the ground that his
attorney did not have the authority to negotiate
the settlement.

  After holding an evidentiary hearing on the
issue, the district court entered an opinion
which granted enforcement of the settlement.
Unfortunately, the court did not enter a separate
judgment in the case as is required under Fed. R.
Civ. P. 58. At oral argument, however, the
parties both agreed that the opinion by the
district court disposed of all issues, and that
a separate judgment would merely have reflected
the language in the opinion. Specifically, they
agreed that enforcement of the settlement
required dismissal of the case with prejudice,
and that the settlement agreement itself would
not have been incorporated into the judgment.
Accordingly, under Bankers Trust v. Mallis, 

(1978) we may proceed to consider the
appeal despite the technical violation of R. 58.

  Pohl asserts that his attorney lacked the
authority to negotiate a settlement of his case.
Issues regarding the formation, construction, and
enforceability of a settlement agreement are
governed by local contract law, Carr v. Runyan,

(7th Cir. 1996), and therefore we
must look to the law of Indiana in deciding this
claim. As the Indiana Supreme Court held in Koval
v. Simon Telelect, 

, 1301 (Ind.
1998), in order to bind a client to a settlement,
an attorney must have either express, implied, or
apparent authority, or must act according to the
attorney’s inherent agency power. The Koval court
further held, however, that retention of an
attorney does not, in itself, confer implied or
apparent authority to settle. 

to settle, therefore, derives from other actions
of the client with respect to the attorney or
third parties, including but not limited to
express grants of actual authority. For instance,

[t]he client may not intend for the attorney to
settle a claim but may nonetheless imply that
intention to the attorney. If so, the client is
bound by a resulting settlement. Further, both
apparent authority and inherent agency power may
be created by actions of the client in its
dealings with third parties even if the attorney
knows there is no actual authority. Under these
circumstances, the client is bound even if it is
a breach of the attorney’s professional
obligations to make the commitment.

n.6. The district court determined
that Pohl’s attorney had actual authority to
settle, and we review that decision only for
abuse of discretion. 

; Wilson
v. Wilson, 

, 664 (7th Cir. 1995). The
court reached that conclusion after conducting an
evidentiary hearing, and the history of the
negotiations and of the communications between
Pohl and his attorney establishes that the
court’s determination is well-supported by the
record.

  The relevant history begins at a December 15,
1998, settlement conference with Magistrate Judge
Shields. The discussions turned to Count 3, and
United agreed to look into whether the ESOP
account had been properly credited. The other
counts were not discussed at any length. Pohl
claims that was because they could not reach a
consensus on those counts, but the attorneys
maintain that the talks centered on Count 3
because the other counts had turned out to have
little merit. It is of little import who is
right. The parties left the settlement conference
with the understanding that United would contact
Pohl’s attorney with the ESOP calculations.
United did so, and agreed that the ESOP account
had not been properly credited. The attorneys
then discussed language for a settlement
agreement. Among other provisions, the settlement
required United to: agree to credit Pohl’s ESOP
account and provide documentation regarding the
credits; promise not to retaliate against Pohl
for filing the litigation; and pay Pohl’s
reasonable attorneys’ fees. In return, Pohl would
dismiss the entire complaint, release United from
any liability for claims arising from the facts
in the complaint except to the extent that those
facts formed the basis for a claim under the
Americans With Disabilities Act, 42 U.S.C.
sec.sec. 12101 et seq., and maintain the
confidentiality of the agreement.

  The billing records from Pohl’s attorney
document ten phone calls between Pohl’s attorney
and either Pohl or his wife in the time period
from December 15, 1998, to March 8, 1999. The
records further reveal that before or after each
one of those calls, Pohl’s counsel was in contact
with opposing counsel. On March 8, 1999, Pohl’s
attorney sent Pohl a letter confirming "the
settlement of [Pohl’s] current federal court case
against United Airlines." It further discusses
the recovery of attorneys’ fees for the "military
discrimination suit," and mentions that it does
not include fees for a separate ADA claim that
was not part of that case. According to Pohl’s
testimony at the evidentiary hearing, his
reaction to the letter was "I thought, okay,
great, they settled it, but what exactly is the
settlement? Show me the settlement and show me
the proof. . . ." He claims that he still did not
think that the settlement included all of the
counts. Although he spoke with his attorney a
number of times after receipt of the letter,
including a meeting with him, Pohl never
expressed any concerns regarding the possibility
of a settlement, other than to request it in
writing and to request the documentation
concerning his ESOP account. As mentioned
earlier, Pohl eventually refused to sign the
settlement when it was presented to him at the
status conference.

  Based on that history, the district court
rejected Pohl’s claim that the settlement was
reached without authority from him. The court
specifically relied on the objective evidence of
communications between Pohl and his counsel,
which supported the testimony of Pohl’s counsel
that Pohl was informed of each aspect of the
settlement and approved of each one. During the
negotiation period from December 15 until March
8, there is an absolute correlation between phone
calls by Pohl’s counsel to opposing counsel, and
calls by Pohl’s counsel to Pohl on the same day.
That supports the testimony of Pohl’s counsel
that he constantly communicated the proposed
settlement terms to Pohl. Moreover, Pohl failed
to register any objection with his counsel when
informed by letter that the "case" was settled,
even though he testified that when he first read
the March 8 letter confirming the settlement he
thought it might include the whole case. In fact,
his first reaction was "okay, great, they settled
it;" that is hardly the reaction one would expect
of someone who has not given his attorney the
authority to settle the case. Furthermore, as the
court in Koval recognized, Pohl may be bound by
the settlement if he implied an intention to
settle the claim to his attorney, regardless of
whether he actually intended to settle the claim.

n.6. The testimony of
Pohl’s attorney, which the court credited, would
have been enough to establish implied authority
to settle, even if express authority had not been
found. In light of the record, the district court
certainly did not abuse its discretion in holding
that the settlement was obtained with actual
authority from Pohl and that Pohl was bound by
it.

  Pohl counters, however, that he believed that
he had the ultimate authority to approve or
disapprove the settlement, and that he was not
bound until he signed off on it. Pohl points to
a clause in the retainer agreement with his
counsel, which he altered ostensibly to retain
that authority. In Part X, the retainer agreement
granted the Firm the "Power of Attorney to
execute all documents connected with the claim .
. . including . . . settlement agreements . . .
." Pohl added the handwritten language "with my
authorization" in the margin next to that clause
because he and his wife "did not like the idea of
[the Firm] having total authority to settle this
matter without [their] intervention." That
provision, however, merely specifies that his
attorney may not settle the case without his
authority. It does not require written
authorization of a settlement. As we have already
noted, the district court did not err in holding
that Pohl authorized his attorney to settle the
case. That oral authorization satisfied the
handwritten clause, and provided his attorney
with the actual authority to settle the case.
Pohl’s misplaced belief that he could back out of
the settlement at any time prior to signing it
does not entitle him to legal relief from a
settlement negotiated with actual authority by
his attorney.

  Finally, Pohl attempts to raise a new argument
on appeal, that the June 2 settlement agreement
cannot be enforced because even if there was a
meeting of the minds regarding settlement on
February 24, the June 2 agreement did not
properly memorialize that agreement. Pohl
concedes that he never raised this issue in the
district court, but argues that he was then
arguing that there was no authority to enter into
the February 24 agreement, and he had no reason
at that time to argue that the June 2 agreement
failed to reflect the terms agreed to on February
24. That argument is nonsensical. The issue
before the district court was whether it should
enforce the June 2 agreement. Pohl should have
raised at that time any claims that he had that
would affect the enforceability of that
settlement agreement. It certainly should have
been foreseeable to Pohl that he could lose on
his argument regarding lack of authority, and
that he should present any alternative arguments
at that time. This circuit has held numerous
times that arguments against the enforceability
of settlement agreements are waived if not raised
in the district court. 

;

; Laserage Technology Corp.
v. Laserage Laboratories, Inc., 

, 804
(7th Cir. 1992). In fact, even arguments raised
in the district court may be waived if not
presented in a timely manner, such as those
raised for the first time in a motion for
reconsideration. 

. Pohl did
not raise this argument at any time in the
district court, and in fact expressly limited the
issue before the court, stating: "I think we all
understand that the only issue today is whether
or not attorneys for Mr. Pohl had the authority
to enter into this deal." Transcript of
Evidentiary Hearing at 105. There are no
extraordinary circumstances present to avoid
waiver. 

. Accordingly,
that argument is waived. We note, however, that
the uncontradicted testimony of both attorneys
was that the written agreement simply
memorialized the terms agreed upon orally in
February, and thus his claim would have been
meritless even if properly raised.

  Accordingly, the decision of the district court
is

AFFIRMED.