JAMES S. GWIN, District Judge.
Both Plaintiffs
Defendants also request leave to file their version of the settlement agreement under seal.
Plaintiffs further seek an order holding that the settlement terms are no longer confidential or, in the alternative, leave to file the settlement agreement under seal.
Finally, Plaintiffs seek sanctions against Attorney Barry Freeman and his law firm.
For the reasons stated below, the Court
This Fair Labor Standards Act collective action settled at the final pretrial conference on August 2, 2017.
Nearly three months later, the parties reached out to the Court to discuss a settlement impasse.
The Court disagreed with both of Defendants' contentions.
Defendants then appealed the Court's findings from this November 2017 hearing to the Sixth Circuit.
Meanwhile, both during and after the pendency of Defendants' appeal, the parties have filed dueling motions seeking approval, in Defendants' case,
As a result of all this litigation surrounding the settlement agreement, none of which is sealed, Plaintiffs have moved for a ruling that the settlement terms are no longer confidential.
Plaintiffs also seek sanctions against Defendants' attorney, Barry Freeman, and his firm, Buckhingham, Doolittle & Burroughs LLC.
A federal court maintains jurisdiction to enforce a settlement agreement when the parties' obligation to comply with the settlement is "part of the order of dismissal-either by separate provision (such as a provision `retaining jurisdiction' over the settlement agreement) or by incorporating the terms of the settlement agreement in the order."
Before enforcing a settlement, a district court must conclude that agreement has been reached on all material terms.
The existence of a valid agreement is not diminished by the fact that the parties have yet to memorialize the agreement. When parties have agreed on the essential terms of a settlement, and all that remains is to memorialize the agreement in writing, the parties are bound by the terms of the oral agreement.
Courts generally give effect to the parties' expressed intentions in a contract, whereas intentions not directly expressed in the contract are deemed to have no existence.
The parties currently argue over two terms that they have both described as "nonmaterial":
The Court finds that neither of these terms was included by the parties as part of the settlement contract agreed to on the record during the August 2, 2017 final pre-trial conference. The parties agreed to a mutual release of claims that accrued on or before the date of the August 2, 2017 final pre-trial conference. The parties also agreed that Defendants would pay Plaintiffs a sum certain with no potential for a Defendant claw back.
Regarding the mutual release of claims, the record of those proceedings does not support Defendants' position that there was only a unilateral claim release.
"[O]ne of the primary purposes of a settlement agreement is to put an end to litigation."
Additionally, Defendants' argument that Defense Counsel was "cut off" during the final pre-trial conference is not well taken.
Similarly, the record is abundantly clear that Defendants did not include a claw back provision as part of the settlement. Defendants agreed to pay Plaintiffs a sum certain.
For those reasons, the Court finds that the parties formed a valid and enforceable settlement contract on the record at the August 2017 final pre-trial conference. This agreement did not include a one-sided release of claims and claw back terms that Defendants have attempted to add. Defendants' unwillingness to finalize the settlement agreement absent the addition of these two terms and subsequent failure to make payments to Plaintiffs constitutes a breach of that agreement.
Plaintiffs also seek attorney's fees and prejudgment interest stemming from Defendants' failure to finalize the settlement agreement.
The Sixth Circuit, while interpreting Ohio law,
Rohrer Corp. is directly on point. Defendants have breached the settlement contract by refusing to execute the settlement agreement according to the terms placed on the record during the August 2, 2017 hearing. As a result, Defendants have forced Plaintiffs to litigate this motion to enforce the settlement. Plaintiffs are therefore entitled to attorney's fees stemming from this additional litigation as compensatory damages.
Ohio law also entitles a prevailing party to receive prejudgment interest on a breach of contract action. "Once a plaintiff receives judgment on a contract claim, the trial court has no discretion but to award prejudgment interest under [Ohio Revised Code §] 1343.03(A)."
Plaintiffs contend that interest commenced to run on August 2, 2017, when the parties placed the settlement terms on the record. But, by the terms of the settlement, Defendants first payment would only become due thirty days after the settlement was committed to writing and approved by the Court.
As a result, the Court finds that, but for Defendants' attempts to insert the additional terms discussed above into the settlement, the Court could have approved the written settlement by October 17, 2017. By this date, the parties had apparently resolved all other issues relating to the settlement.
The parties have continuously represented that the two terms that are the subjects of this order are the only things preventing them from filing a written settlement agreement. Without time spent negotiating those two terms, the parties should have been able to file their agreement and have the Court's approval by the time they reached the impasse that led to this litigation. Therefore, by the terms of the settlement contract, interest began to accrue on November 16, 2017, thirty days after the Court could have approved the settlement.
Ohio Revised Code §§ 1343.03 and 5703.47 control the applicable interest rate for a breach of contract action. Plaintiffs will therefore calculate interest based on the rate provided for in those statutes.
The Court
Further, the Court
Plaintiffs argue that because Defendants discussed the settlement terms in open court, did not request that the Court seal the transcript of those discussions, ordered that unsealed transcript, and then attached that same transcript to their public appeal to the Sixth Circuit, the settlement terms are no longer confidential. Plaintiffs also contend that the settlement terms are no longer confidential because the Court must use the transcripts discussing those terms to adjudicate Plaintiffs' motion to enforce the settlement.
When the parties originally reached a settlement agreement, they agreed to a mutual confidentiality provision as part of that settlement.
Defendants did not heed this instruction. To date, Defendants have caused the material terms of the settlement to be placed into the public record four separate times: first, during the November 2017 settlement impasse hearing;
Plaintiffs request that the Court rescind the confidentiality provision from the settlement contract (or to modify the contract to exclude that provision). The Court will not do this. However, as Plaintiffs correctly argue, the public has a right to access court records, and so the Court will not allow the parties to file their final settlement agreement under seal.
Under Ohio law, "a settlement agreement may be enforced either through filing an independent action for breach of contract or by filing a motion to enforce the settlement in the same action . . . ."
Rescission of a single material term in a contract is not an available remedy for breach of contract in Ohio.
Similarly, although "[p]arties may implicitly modify an agreement by their actions," an implicit modification requires "[a] continued, different, course of performance between parties."
Plaintiffs' numerous citations to this Court's prior opinions do not suggest a different conclusion.
For those reasons, the Court will not hold that the confidentiality provision within the settlement contract is no longer effective.
However, the Court will not further aid the parties' attempts to keep the terms of their settlement confidential. In order to uphold the public's right to access court records, the Court will not allow the parties to file their settlement agreement under seal.
There is a strong, constitutionally based presumption that the materials the courts rely on in reaching their decisions will be made available to the public.
This right of access includes access to finalized settlement agreements.
Here, in order to decide the parties' motions, the Court must rely on and evaluate the settlement terms placed into the record during the August and November 2017 hearings. The Court must also evaluate and approve the final settlement agreement in order to ensure that it conforms to the Court's orders. Defendants have not presented any argument that suggests that the Court's refusal to aid them in maintaining the settlement's confidentiality will prejudice them, much less that they will suffer the types of harm that allow a court to seal documents from the public.
Additionally, Defendants' citations to case law are unavailing. Those cases dealt with protecting settlement negotiations from disclosure.
Therefore, in order to protect the public's right to access court records, the Court
Plaintiffs seek sanctions against Attorney Barry Freeman and his firm, Buckhingham, Doolittle & Burroughs, LLC, for their continued delay in finalizing the settlement.
There is some indication in the record that Attorney Freeman refused to finalize the settlement solely in order to strong arm Plaintiffs into agreeing to the two terms described above that the Court finds were not part of the original settlement agreement.
Nevertheless, the Court finds that Freeman's position was not so wholly unreasonable or obviously taken in bad faith that it warrants sanctions.
The Court
For those reasons, the Court
The Court
The Court also
IT IS SO ORDERED