2006 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 2-22-2006 

# H e nry v . M e rri l l L ynch P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 05-1241

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w . vi l l a no va . e du/thir dc ir c uit_2006/1554NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N O . 05- 1241 RO BI NS ON K. HE NR Y, A ppel l ant v. M ERR I LL LYNCH O n A p p ea l Fro m the U n it ed S tat es D istri ct C o u rt

For t he D i s t r i ctof N ew J er s ey ( C i v. N o. 00- cv- 3688) D istri ct Ju d g e: H o n o rab le Jo sep h A . G ree n aw ay , Jr. Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

J A N U A R Y 25, 2006 B efor e: R O T H , R E N D E L L A N D A M B R O , C i r cui tJ udges

( Fi l ed February22, 2006)

OP I NI ON

_______________________ P E R C UR I AM R obi ns on K . H enryfi l ed thi s empl oy m entdi s cr i m i nat i on act i on i n t he Super i or C o u rt o f N e w J e rs e yin M a rc h 2 0 0 0 , a g a in s t h is f o rm e r e m p lo y e r, M e rr ill L yn c h & C o ., I n c . ( “ M e r r i l l L yn c h ” ) . M e r r i l l L yn c h r e mo v e d t h e c a s e t o t h e Di s t r i c tCo u r t , wh e r e t woT h is le tter w a s n o t d o c k e ted , b u t co p ies w e re a p p a re n tlyse n t to b o th M e rrill 1 L ynch and W egods ky . See A ppel l ee’ s A ppendi x atA - 22. 2 s e t t l e me n tc o n f

e r e n c e s we r e c o n d u c t e d o n F e b ru a r y2 0 , 2 0 0 2 , a n d M a r c h 8 , 2 0 0 2 . On M a r c h 1 3 , 2 0 0 2 , t h e Di s t r i c tCo u r te n t e r e d a s e t t l e me n to r d e rd i s mi s s i n g t h e c a s e . On A ug ust1, 20 03 , JayW ego dsky , H enry ’s at t orneyt hroug ho ut the set t l em ent nego t i at i on s, w r ot e t o i nfor m t he D i s t r i ctC our tt hatH enryhad nots i gned the s et t l ement agr eementand t o r eques ta s t atus confe r ence . T he docke tr epor ti ndi cat es t hata s t atus confe r ence w as hel d on Sept ember 30, 2003, butt hatno fur t heract i vi t yt ook pl ace unt i l A ugus t19, 2004, w hen M err i l l L ynch fi l ed a mot i on t o enfor ce the s et t l ement agr eement . I n r es pons e, H enryw r ot e t o t he D i s t r i ctC our ton Sept ember 9, 2004, oppos i ng t he enf or cement m ot i on and as s er t i ng t hatno agr eementexi s t ed bec aus e he ha d nei t hercons ent ed t o t he t er m s of t he pr opos ed s et t l ement norauthor i zed W egods kyt o s et t l e on hi s behal f. 1 W i t houthol di ng a hea r i ng, t he D i s t r i ctC our tgr ant ed M err i l l L ynch’ s m ot i on t o compel enfor cementi n an or derent er ed D ece m ber13, 2004, and or der ed H enryt o exec ut e the sett lem en t agre em en t and g en era l r elea se. H en ryap p ea ls from this ord er, pro ce ed ing p ro s e. T h e D istric t C o u rt h a d ju risd ictio n b a se d o n th e p a rties ’ d iv e rsityo f c iti z e n sh ip u n d e r2 8 U . S . C . § 1 3 3 2 . We h a v e a p p e l l a t e j u r i s d i c t i o n u n d e r2 8 U . S . C . § 1 2 9 1 . We r evi ew t he D i s t r i ctC our t ’ s s um m aryenfor cementof the s et t l ementagr eementus i ng t he s ame pl enarys t andar d forr evi ew i ng a gr antof s um m aryj udgm ent . See Ti ernan v.3

D evoe, 923 F. 2d 1024, 1031- 32 & n. 5 ( 3d C i r . 1991) . U ndert hats t andar d, w e tr eat H en ry ’s asse rt ion s b ef

o re the D istri ct C o u rtas true an d w il l aff irm the D istri ct C o u rt ’s j ud gm ent onl yi f t he record show s that M err i l l L ynch i s ent i t l ed to enfo rcem ent as a m a tte r o f la w . S e e id . T he keyi s s ue i n t hi s cas e i s w hethera s et t l ement agr eementexi s t s . W e appl yN ew Jerse yco n tr ac t l aw in o u r rev iew , see E d w ard s v . B o rn, Inc . , 7 9 2 F . 2 d 3 8 7 , 3 8 9 (3d C ir . 1986) , not i ng t hatt he fa ctt hatt he part i es have notexec ut ed a w r i t t en agr eementdoes not r es ol ve thi s i s s ue. See Pas car el l a v. B ruck, 462 A . 2d 186, 191 ( N . J . Super . C t . A pp. D i v. 1983) . W e al s o obs er ve thatt he bur den of pr ovi ng t he exi s t ence of the s et t l ement agreem ent l i es w i t h M err i l l L ynch . S ee A m atuzzo v. K ozm i uk , 70 3 A . 2d 9, 12 (N . J. S u p er. C t. A p p . D iv. 19 9 7 ). H e n rya rg u e s th a t h e d id n o t co n se n t to o r a u th o riz e a se ttl e m e n t, eith e r o ra llyo r in w r i t i ng, and that , t her efor e, no agr eementexi s t s . I n hi s l et t erm ot i on oppos i ng e n f o rc e m e n t, H e n ry c la im e d th a t th e re w a s n o “ d u ly n e g o tia te d s e ttle m e n t a g re e m e n t,” and thatW egods ky ’ s contr aryas s er t i on w as “ei t heri nacc ur at e orm us thave oc curr ed wi t h o u tmyk n o wl e d g e , c o n s e n t , a n d / o ra u t h o r i z a t i o n . ” S e e Ap p e l l e e ’ s Ap p e n d i x a tA22. O n appea l , H enrycl ai m s t hatt he di s cus s i ons of s et t l ement t er m s occurr ed betw een t he att or ney s w i t h t he i nvol vement of the D i s t r i ctJ udge, butw i t houtH enry ’ s par t i ci pat i on oras s ent , and thati f t he j udge w as t ol d t hathe agr eed t o t he s et t l ement offe r , t hatt hi s w asH en ryraises se v era l new arg u m en ts i n h is ap p ell ate b ri ef an d att em p ts t o su p p o rt 2 t hes e ar gum ent s w i t h var i ous exhi bi t s r ecount i ng hi s ver s i on of eve nt s fol l ow i ng t he se c o n d se ttl e m e n t co n f

e re n c e . W e a g re e w ith M e rrill L yn c h th a t m o st o f th e se e x h ib its sh o u ld n o t be c o n side red o n ap p ea l, as th eyw ere n o t m ad e p art of the D istri ct C o u rt re c o rd . S e e , e .g ., F a s s e tt v . D e lta K a p p a E p s ilo n , 8 0 7 F .2 d 1 1 5 0 , 1 1 6 5 (3 d C ir . 1 9 8 6 ). 4 a mi s r epr es ent at i on. 2 M e rrill L yn c h a rg u e s th a t an a g re e m e n t ex ists b yv irtu e o f W e g o d sk y ’s a u th o rityto s et t l e on H enry ’ s behal f, and thatH enryi s now m er el yat t empt i ng t o change hi s m i nd ab o u t th e term s o f th e se tt lem en t he p rev iou slyag ree d to. B o th the D istri ct C o u rt ’s or i gi nal s et t l ement or derand s ubs equentenfor cementor deri m pl i ci t l yacknow l edge the exi s t ence of an a gr eement . I n t he s et t l ement or der , t he courts t at ed that“i thas been r epor t ed t o t he C our tt hatt he above - capt i oned mat t erhas been s et t l ed. ” See H enryv. M err i l l L ynch, C i v. N o. 00- cv- 03688 ( or derent er ed on M ar ch 13, 2002) . I n t he enfor cementor der , t he courtnot ed, w i t houtel abor at i on, t hat“i tappea r [ed] t hatPl ai nt i ff agr eed t o exec ut e the conf i dent i al s et t l ement agr eementand gene r al r el eas e. ” See i d. (ord er e n tered o n D ec . 1 3 , 2 0 0 4 ). T h e g en era l ru le un d er N ew Jerse ylaw is th at t h e c o n sen t of the c li en t i s n ec essa ry t o s et t l e the ca s e unl es s t he cl i ents peci fi cal l yauthor i zes an att or neyt o s et t l e. See A m atuzzo, 703 A . 2d at12. A n at t or neym ays et t l e a l aw s ui ton behal f of a cl i enti f the att o rne yh as e ith er a ctua l auth o ri ty(ex p ress o r i m p li ed ) or a p p are n t auth o ri ty . N ew ark B ran ch , N A A C P v . T o w n sh ip o f W est O ran g e, N . J. , 7 8 6 F . S u p p . 4 0 8 , 4 2 3 (D . N . J. 1 9 9 2 ); U n ite d S ta te s P lyw o o d C o rp . v . N e id lin g e r, 1 9 4 A .2 d 7 3 0 , 7 3 4 (N .J . 1 9 6 3 ) ( p e r c u ri a m ).5

M erril l L yn ch b ea rs t h e b u rde n o f d em o n str ati n g the e x ist en ce o f W eg o d sk y ’s appar entauthor i t y . See N A A C P, 786 F. Supp. at423; M er cerv. W ey erhaeus erC o. , 735, A . 2d 576, 592 ( N . J . Super . C t . 1999) . A ppar entauthor i t yi s m ani fes t ed i f the cl i ent“by w or ds orconductcomm uni cat ed t o t he adve r s e att or ney , engende r s a r eas onabl e bel i ef t hatt he att or neypos s es s es author i t yt o concl ude a s et t l ement . ” A m atuzzo, 703 A . 2d at 12. M err i l l L ynch s ugges t s t hatW egods ky ’ s r epr es ent at i on of H enrys i nce the t i m e the compl ai ntw as fi l ed s how s t hathe pos s es s ed appa r entauthor i t y . H ow ever , m er e r et ent i on of an at t orneyi s i nsuff

i ci ent t o d em on strat e app arentauthori t yt o set t l e. S ee S eacoa st R e a lty C o . v . W e s t L o n g B ra n c h B o ro u g h , 1 4 N .J . T a x 1 9 7 , 2 0 3 (N .J . T a x C t. 1 9 9 4 ). M err i l l L ynch nextas s er t s t hatH enry ’ s bei ng “pr es enti n C our t ” demonstr at es W ego dsky ’s app arentauthori t y . W i t ho ut m ore det ai l s, such as w hethert he att orney s’ dis cussi on s w ere hel d in t he sam e room or w i t hin ear shot of H enry , w e cann ot as sess w hetherH enry ’s “presence i n C ou rt ” con st i tutes a “vo l un t aryact ” requi red t o m anifest appar entauthor i t y . See N ei dl i nger , 194 A . 2d at734. W e not e thatH enry ’ s s t r enuous as s er t i on i n hi s oppos i t i on l et t ert hathe had no know l edge of t he s peci fi c t er m s of the p r o p o s e d s e t t l e m e n ta p p e a r s t o c o n t r a d i c tt h e i m p l i c a t i o n t h a tH e n r yw a s “ p r e s e n t . ” We r efr ai n fr om fur t herdi s cus s i on of t hi s appar entcontr adi ct i on, how ever , as i ti s notour r o l e t o ma k e c r e d i b i l i t yd e t e r mi n a t i o n s o rd e t e r mi n e d i s p u t e d f a c t s . S e e S c u l l yv . US W A T S , Inc . , 2 3 8 F . 3 d 4 9 7 , 5 0 6 (3d C ir . 2 0 0 1 ); S ew ak v . IN S , 9 0 0 F . 2 d 6 6 7 , 6 7 3 (3d C ir . 1 9 9 0 ).6

M err i l l L ynch cont ends t hati t s couns el negot i at ed w i t h t he expe ct at i on t hat W egods kyhad the author i t yt o s et t l e. W e r ecogni ze thatr el i ance bya thi r d par t yi s one es s ent i al component of appa r entauthor i t y . See, e. g. , Sear s M or t g. C orp. v. R os e, 634 A .2 d 7 4 , 8 0 (N .J. 1 9 9 3 ); B a h rle v . E x x o n C o rp ., 6 5 2 A .2 d 1 7 8 , 1 8 8 (N .J. S u p e r. C t. 1995) . T hatr el i ance m us tbe r eas onabl e undert he ci r cumst ance s , how ever . See Shadel v. S hell O i l C o. , 47 8 A . 2d 12 62 , 12 65 (N . J. S up er. C t . 19 84 ). T he record i n thi s case does notpr es enta cl earpi ctur e of the ci r cumst ance s s ur r oundi ng t he s et t l ement negot i at i ons and hamper s anyeval uat i on of w hetherM err i l l L ynch’ s r el i ance w as re a s o n a b le . In a d d iti o n to its a p p a re n t au th o ritya rg u m e n ts, M e rrill L yn c h a lso a p p e a rs to s ugges tt hatW egods ky ’ s A ugus t1, 2003, l et t ert o t he D i s t r i ctC our ts uppor t s a fi ndi ng of e ith e r e x p re ss o r im p lied a c tu a l au th o riz a tio n to se ttl e . T h e lette r re a d s, in p e rtin e n t p a rt: “Y ou m ayr eca l l m yr epr es ent at i on of Pl ai nt i ff i n t he above capt i oned pr ocee di ngs . T he p a rties h a d ten tativ e lyc o n su m m a ted a se ttl e m e n t in Y o u r H o n o r’s p re se n c e in A p ril, 2002. ” See A ppel l ee’ s A ppendi x atA - 7. W hi l e thi s l anguage m ayacc ur at el yr efl ect W egods ky ’ s per cept i on of w hatoccurr ed att he end of t he s econd s et t l ement confe r ence , i tdoes defi ni t i vel yr es ol ve the ques t i on w hetherW egods kypos s es s ed ei t herexpr es s or i m pl i ed author i zat i on fr om H enry . N ei t hercan thi s l et t ers et t l e anyques t i on of appa r ent a u th o rity , as it w a s s e n t b yW e g o d sk y , n o t H e n ry , an d w a s s e n t to th e c o u rt, n o t to M e rrill L yn c h ’s a tto rn e y . S e e A m a tu z z o , 7 0 3 A .2 d a t 1 2 ; E d w a rd s , 7 9 2 F .2 d a t 3 9 0 -9 1 .7

O n th e re c o rd b e f

o re u s, w ith o u t tran sc rip ts o f tes tim o n yo r o th e r d o c u m e n ts cont ai ni ng r el evantfac t s , i ti s i m pos s i bl e t o det er m i ne the exi s t ence and ext entof W ego dsky ’s authori t yi n H enry ’s set t l em ent nego t i at i on s. C on si dered i n a li gh tm ost fa v o rab le t o H en ry , w e h o ld tha t th e re co rd e v iden ce is no t so o n e-side d as to su p p o rt j udgm enti n favorof M err i l l L ynch and thatan evi dent i aryhear i ng i s nece s s aryi n or der to e s ta b lis h th e re le v a n t f a c ts . S e e A m a tu z z o , 7 0 3 A .2 d a t 1 1 ; T ie rn a n , 9 2 3 F .2 d a t 1 0 3 1 . A ccor di ngl y , w e w i l l vaca t e the D i s t r i ctC our t ’ s s um m aryenfor cementor derand r emand forfur t herpr ocee di ngs cons i s t entw i t h t hi s opi ni on.