MARGARET J. KRAVCHUK, United States Magistrate Judge.
Defendant OneBeacon America Insurance Company removed this matter from the Aroostook County Superior Court in August 2010. Plaintiff Northern Maine Transport's complaint recites three counts arising under Maine statutory law and alleging an entitlement to over $800,000 in insurance proceeds. On May 10, 2011, Defendant requested court enforcement of a purported settlement agreement. The parties have entered a limited consent authorizing the undersigned to hear evidence and resolve the pending motion to enforce. The matter came on for hearing October 12, 2011. I now make the following findings of fact and conclusions of law.
Plaintiff Northern Maine Transport LLC has two owners/managers, Paul Beaudry and Tyler Hallett. Plaintiff retained Attorney Alan Harding to represent it in its efforts to obtain insurance proceeds from Defendant OneBeacon America Insurance Company following a fire at Plaintiff's premises. Given multiple coverage options and various insured loses, Attorney Harding enlisted assistance from Shawn Manter, an independent insurance adjuster, to help Plaintiff calculate and advance its claim in the most advantageous manner possible.
On March 14, 2011, the parties participated in a mediation session with Eugene Coughlin serving as mediator. Messrs. Beaudry, Hallett, Harding and Manter appeared at the mediation on behalf of Plaintiff. Each of these men appeared as a witness at the hearing on the pending motion. Also present at the mediation were counsel for Defendant OneBeacon, Peter Marchesi, as local counsel, and William Stewart of Pennsylvania. Mr. Stewart appeared as a witness at the hearing. Although Defendant had personnel in attendance at the mediation, none of these individuals appeared to testify at the hearing. The hearing was conducted by Attorney Marchesi on behalf of Defendant/Movant, and by Attorney Roger Brunelle, Jr., on behalf of Intervenor Plaintiff Paul Beaudry, the sole party in opposition to the motion. Attorney Samuel Lanham, Jr., appeared on behalf of Intervenor Plaintiff Tyler Hallett, who joined in support of the motion. The testimony of the witnesses demonstrates, by a preponderance of the evidence, the following facts.
Paul Beaudry and Tyler Hallett are the two managers of Plaintiff Northern Maine Transport LLC. Neither man possesses exclusive authority to bind the company to a settlement agreement. They both agreed to hire Attorney Harding to represent Plaintiff, but based on Beaudry's testimony, as of the March 14, 2011, mediation session, Beaudry was considering that he might want to hire different counsel. The testimony of Beaudry, Harding, and Manter indicates that Beaudry's personal assumption about the value of Plaintiff's insurance claim was appreciably higher than the assessments of value indicated by Manter. Mr. Harding testified that the claims were complex and that it was difficult to assess how to value and distribute Plaintiff's various losses across multiple coverage provisions. According to Harding, Beaudry was not happy that maximum coverage could not be paid for "coverages that were not at stake." Similarly, Mr. Manter testified that Beaudry's expectations
Despite his frustrations, Beaudry agreed to go to the mediation with Hallett, Harding, and Manter. On March 14, 2011, they gathered at Coughlin's office and met with OneBeacon's representatives in a conference room that permitted some OneBeacon representatives to appear by videoconference. Mr. Coughlin later separated the parties by relocating Plaintiff's party to another room. The mediation then proceeded through a series of competing demands and offers. Mr. Beaudry participated in the process in a limited fashion. Mr. Manter described him as "noncommittal" and not very vocal, but indicated that Beaudry agreed to the value of some demands during the process. However, Beaudry was growing tired of the process when it got to the point at which their demand was in the $400,000 range. He abruptly stood up while Mr. Coughlin was in their room and began preparing to depart. Attorney Harding asked him where he was going and Mr. Beaudry replied that he was tired, had "had enough," and was going home. Mr. Beaudry did not tell the others or Mr. Coughlin that the mediation should cease. Instead, based on the testimony of Hallett, Harding, Manter, and Beaudry himself, Mr. Beaudry told them either "do whatever you want to do" or "do whatever you need to do." He then departed.
The testimonial evidence does not provide a clear picture of what was said to Mr. Beaudry by the others in the room prior to his indication that they should do whatever needed to be done.
After Beaudry's departure, those remaining at the mediation arrived at settlement terms mutually agreeable to Mr. Hallett and OneBeacon and these terms were reduced to writing by Attorney Marchesi. Defendant introduced the original handwritten settlement agreement during the testimony of Mr. Hallett and it was admitted without objection. (Def.'s Ex. 1.) The terms of the settlement agreement are incorporated into this order by reference. The parties then reconvened in one conference room and Mr. Manter reached Mr. Beaudry by cell phone. Mr. Manter told Beaudry that everyone was present and that he was on speaker phone. Then, Attorney Marchesi went over the terms of the agreement. There was conflicting testimony whether Mr. Marchesi read the agreement word-for-word or whether he described it term-by-term. In either event, everyone agrees that Mr. Marchesi described all of the terms found in the hand-written settlement agreement and Mr. Beaudry testified to the effect that they were made known to him. Those terms are described in the written agreement and require the following: payment of $299,000 by OneBeacon; payment of three identified creditors from the settlement proceeds; execution by Northern Maine Transport, Mr. Hallett, and Mr. Beaudry of a general release and indemnification agreement, a stipulation of dismissal, and any other documents necessary to finalize the settlement; an acknowledgment that the parties are bound by the settlement agreement; and a release and discharge by Northern Maine Transport, Mr. Hallett, and Mr. Beaudry of any and all related claims against OneBeacon. Mr. Marchesi communicated these terms to everyone present, including Mr. Beaudry by speakerphone. Marchesi asked if there were any questions. Beaudry did not raise any.
According to Mr. Hallett, Mr. Beaudry verbally agreed to these terms and said it was okay for Hallett or Attorney Harding to sign for him. According to Mr. Manter, Beaudry once again said "you do what you need to do," but he additionally expressed agreement to having Harding sign on his behalf. According to Attorney Harding, Beaudry was asked whether Mr. Hallett and Mr. Harding were authorized to sign the agreement on behalf of Northern Maine Transport and on his own behalf and Beaudry said "yes." Mr. Stewart, co-counsel for OneBeacon, testified that Beaudry's answer regarding the settlement was in the affirmative and that Beaudry granted authority to sign to Hallett and Harding. According to Mr. Stewart, it was repeatedly expressed that the agreement would be binding and Beaudry expressed his agreement. Mr. Coughlin testified that the terms were read to Beaudry and that he said he agreed. Mr. Coughlin made a post-mediation note to the file indicating that at the conclusion of the mediation all participants were in the room to hear Beaudry say on the telephone that he agreed to the terms of the settlement. (Def.'s Ex. 3.)
Following this exchange, Mr. Hallett signed the settlement agreement on behalf of Northern Maine Transport and on his own behalf. Attorney Harding signed the agreement as attorney-in-fact for Mr. Beaudry. Hallett and Harding also signed
Mr. Beaudry was the last witness to testify. His account differs in certain material respects from the accounts given by the other witnesses. His view is that Attorney Harding and Mr. Hallett should have understood that he did not want to participate any longer and he maintains that "at no time" did he "give anyone authority to sign" on his behalf. He explained that Mr. Manter reached him prior to the settlement agreement to keep the line open and that his response was merely "whatever." He testified that Mr. Marchesi expressed or explained the terms to him but that no one ever said there was a hand-written document to be signed or for him to authorize being signed. According to Mr. Beaudry, Mr. Marchesi indicated that he would have the papers typed up and sent to him. When questioned by Attorney Lanham, Beaudry was unwilling to say that Mr. Coughlin had erroneously described the verbal exchange on the telephone. He would only say that he has "questions" about how everything transpired. Beaudry did not disagree that the settlement was discussed with him or that the terms were in any respect divergent from what he had been told, but steadfastly asserted that he was never asked to authorize anyone else to sign a document. Beaudry maintains that he did not realize there would be any signatures on that day. Mr. Beaudry was not a persuasive witness. Even if his account were credited, he did not expressly counter the testimony of the other witnesses to the effect that he expressed assent to the terms of settlement. In any event, I find that the other witnesses provided more credible testimony and I credit their mutual representation that Beaudry expressed both (1) agreement to the settlement terms and (2) agreement to let Mr. Hallett and Mr. Harding sign the settlement agreement for both Northern Maine Transport and for himself.
Defendant OneBeacon initially raised the settlement issue by means of a counterclaim for breach of contract. (Doc. No. 20.) Following that pleading, Attorney Harding twice sought additional time to respond based on the inability of Mr. Hallett and Mr. Beaudry to agree as to how to respond and the possible need to involve separate counsel. (Doc. Nos. 23, 25.) Shortly thereafter, Defendant proposed in a status report that there be a short discovery cycle and an opportunity to present a motion for summary judgment in support of the counterclaim. (Doc. No. 27.) This course was adopted initially in a July 2011 report and order (Doc. No. 29), but following Attorney Harding's motion to withdraw (Doc. No. 31), it was determined in a further report and order that the counterclaim would proceed as a motion to enforce settlement (Doc. No. 34). Thereafter, on September 13, 2011, Mr. Brunelle entered his appearance for Mr. Beaudry. (Doc. No. 37.) Prior to the hearing, Mr. Brunelle and Mr. Marchesi, acting on behalf of their respective clients, and Mr. Hallett, then proceeding pro se, consented to allow the undersigned to exercise jurisdiction over and resolve the motion to enforce.
Where a settlement agreement arises in the course of litigation and the settlement collapses, the party seeking to enforce its terms should proceed by means of a motion to enforce. Fid. & Guar. Ins. Co. v. Star Equip. Corp., 541 F.3d 1, 5 (1st Cir.2008) (citing Malave v. Carney Hosp., 170 F.3d 217, 220 (1st Cir.1999)). Plaintiff's counterclaim for breach of contract has been converted into such a motion, as reflected on the electronic docket at item 20/36.
Stanton v. Univ. of Me. Sys., 2001 ME 96, ¶ 13, 773 A.2d 1045, 1050 (quotation marks omitted) (quoting Searles v. Trs. of St. Josephs's Coll., 1997 ME 128, ¶ 13, 695 A.2d 1206, 1211).
The question of whether an enforceable settlement agreement exists presents a mixed question of law and fact. Fid. & Guar. Ins. Co. v. Star Equip. Corp., 541 F.3d 1, 5 (1st Cir.2008). The Court has the power to enforce a settlement agreement, but where there exists a genuine dispute on a question of material fact, the Court must first hold an evidentiary hearing to resolve the contested factual issues. Id.; Malave v. Carney Hosp., 170 F.3d 217, 220 (1st Cir.1999). That hearing has been conducted and the factual findings have been set forth above.
An attorney may bind his client to a settlement agreement only if the attorney has actual authority to bind the client, as opposed to general authority to represent the client's interest. Malave, 170 F.3d at 221; Lane v. Maine C. Railroad, 572 A.2d 1084, 1084-85 (1990). When Mr. Beaudry left the mediation, he gave general authority for Attorney Harding and Mr. Hallett to represent the interest of Northern Maine Transport at the mediation. That was sufficient for the mediation to continue and an express delegation of actual authority to finally settle the case was not required. Thereafter, terms of a proposed settlement agreement were mutually agreed upon and Mr. Beaudry was reached by speakerphone and received notice of the material terms of that agreement. Mr. Beaudry verbally expressed his assent to those terms. That expression of assent was an act sufficient to bind Beaudry to the agreement.
The law does not require that an agreement be signed in order for contracting parties to be bound. "If that were so, for example, no party could ever
This case does not require a legal finding related to the agency concept of apparent authority. This is so because Beaudry himself expressed his assent to the terms of the settlement agreement. Beaudry contests the assertion that he authorized anyone to sign a writing on his behalf, but this argument is beside the point given his own expression of assent to the agreement. In any event, Beaudry not only expressed his assent to the terms of the settlement agreement, but also expressed his assent that the hand-written settlement agreement be signed on his behalf. This was, for all practical purposes, little more than a ritualistic event. Once both Beaudry and Hallett expressed their agreement to the settlement offer on behalf of Plaintiff Northern Maine Transport, Plaintiff became bound by that agreement. The hand-written document, though signed, simply memorializes the mutually agreed upon terms.
Defendant's motion to enforce settlement (Doc. No. 36) is hereby GRANTED pursuant to the consent authority