In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 06-3140

ELANA M. NEWKIRK, et al.,

Plaintiffs-Appellants,

v.

VILLAGE OF STEGER, et al.,

Defendants-Appellees,

and

CHARLES TIERI, et al.,

Plaintiffs-Appellees.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 02 C 9077—Rebecca R. Pallmeyer, Judge.

____________

ARGUED JANUARY 7, 2008—DECIDED AUGUST 6, 2008

____________

Before POSNER, ROVNER, and WOOD, Circuit Judges.

WOOD, Circuit Judge. Eight employees of the Village

of Steger’s police department sued the Village under a

number of federal statutes, raising claims including race

discrimination, sex discrimination, disability discrimination, and retaliation based on political affiliation. See

the Racketeer Influenced and Corrupt Organizations Act

(RICO), 18 U.S.C. § 1962; the Americans with Disabilities

Act, 42 U.S.C. § 12131 et seq.; the Civil Rights Act, 42 U.S.C.
2 No. 06-3140

§§ 1981 and 1983; and Title VII of the Civil Rights Act of

1964, 42 U.S.C. § 2000 et seq. The question before us is

whether the parties settled their litigation in August 2005,

when they agreed in open court to a settlement agreement

subject to the approval of the Village Council.

At a status conference in September, one of the plaintiffs,

Scott Osantowski, became concerned about the wording

of the settlement to which he had agreed. Among other

things, the agreement said that he would be given a paid

leave of absence up to his retirement date. The problem

was that he was no longer sure whether he would be

allowed to retire at 20 years of service or with 20 years of

creditable service, according to the rules of his pension

plan. The magistrate judge, recognizing that this was an

important issue to Osantowski but not one explicitly

addressed in the settlement, asked the defendants to

come up with some assurance that Osantowski would

get credit for the paid leave of absence. The judge also

warned him that he would retire “at” 20 years and “he’ll

live with that.”

Unfortunately, ascertaining what the settlement agreement really meant turned out to be more difficult than

anyone anticipated. The pension board asked for an

opinion about Osantowski’s situation from the Illinois

Department of Financial and Professional Regulation

(IDFPR), which issued an opaque response that

simply reiterated the requirements for creditable time.

Rather than taking that as an answer, and in light of

several other issues that he felt needed to be ironed out,

Osantowski declared that he could not accept the August

settlement.

In December 2005, another written version of the settlement was presented to the magistrate judge. This version

promised Osantowski a new position instead of paid
No. 06-3140 3

leave; the agreement was subject to his receipt of a letter

from the State of Illinois confirming that this new position would count as creditable service. There were still

other open issues with regard to Osantowski, however,

and so no verification letter was sent.

In April 2006, the defendants moved to enforce the

August settlement or, in the alternative, the December

agreement. A month later, four of the plaintiffs joined

this motion (Plaintiffs-Appellees in this court, or the

“Settling Plaintiffs”). The remaining plaintiffs (the appellants in this court, to whom we refer as the “Objectors”),

including Osantowski, asserted that neither the August

nor the December arrangement amounted to an enforceable settlement agreement.

On June 15, 2006, the district court concluded that the

August agreement was properly accepted by all parties

and that the relevant terms were all memorialized. It

therefore ordered the case dismissed with prejudice in

accordance with the settlement. Osantowski and the other

Objectors appeal from this decision, claiming first that no

agreement was reached in August because there was no

meeting of the minds, and, in the alternative, if the parties

did reach an agreement in August, the December agreement operates as a novation and replaces the August

agreement. We find that the district court did not abuse

its discretion when it concluded that the parties reached

an enforceable agreement in August, and also that it

reasonably found that there was no novation in December

that would warrant superseding the earlier agreement.

I

We review an order enforcing a settlement only for

an abuse of discretion. Dillard v. Starcon Int’l Inc., 483 F.3d
4 No. 06-3140

502, 506 (7th Cir. 2007). The first question, however, is

whether there was any agreement at all among the

parties; that is an issue of law that we review de novo.

A settlement agreement is a particular kind of contract,

and so contract law (here, the law of Illinois) governs. See

Laserage Technology Corp. v. Laserage Laboratories, Inc., 972

F.2d 799, 802 (7th Cir. 1992). Although federal law requires that a settlement of a Title VII suit must be knowing

and voluntary, see Pierce v. Atchison, Topeka & Santa Fe Ry.

Co., 65 F.3d 562, 571 (7th Cir. 1995), in the absence of a

showing of fraud, duress, or other circumstances suggesting that the settlement was not knowing or voluntary, the district court need not examine the circumstances surrounding the settlement, Baptist v. City of

Kankakee, 481 F.3d 485, 491 (7th Cir. 2007). Because that

showing has not been attempted here, we assume that

this settlement was knowing and voluntary and return

to Illinois law for the rest of the analysis.

When a “meeting of the minds” question arises, Illinois

follows the objective theory of intent. See Village of

South Elgin v. Waste Mgt. of Ill., Inc., 810 N.E.2d 658, 670 (Ill.

App. Ct. 2004). An Illinois court would therefore look first

to the written records, not to mental processes. Laserage

Tech., 972 F.2d at 802 (citing East Richland Educ. Ass’n v. Ill.

Educ. Labor Rel. Bd., 528 N.E.2d 751, 768-69 (Ill. App. Ct.

1988)). “Secret hopes and wishes count for nothing. The

status of a document as a contract depends on what the

parties express to each other and to the world, not on

what they keep to themselves.” Skycom Corp. v. Telstar

Corp., 813 F.2d 810, 814-15 (7th Cir. 1987). Thus, regardless

of other expressions, this court must look first to the

written records of what took place to figure out what the

parties have done.
No. 06-3140 5

II

On August 15, 2005, the parties went before the magistrate judge and presented an agreement. There was a

“Settlement Checklist,” which was completely filled out.

In the “Effective Date” space, the parties had filled in “a

binding agreement today subject to Board Approval.” On

the checklist, a handwritten entry specified a “paid leave

of absence for Scott Osantowski, to 20 year anniversary

(approx. $180,000), date to be vested at 20 years;

Osantowski will retire at 20 years of service.” Counsel for

the plaintiffs read the agreement into the record, and

each plaintiff—including Osantowski—affirmed in open

court, on the record, that he or she agreed to the terms

of the settlement. No question whatsoever was raised

with regard to how to count the years of creditable service.

This affirmation is “what the parties express[ed] to each

other and to the world . . . .” Skycom Corp., 813 F.2d at 814-

15. Under an objective view of intent, which Illinois law

follows, this is what we must look to, rather than any

hidden doubts or questions that “[the parties] keep to

themselves.” Id. At first blush, therefore, there is little

room to argue that the district court was wrong in

finding that the parties had at that moment reached a

binding agreement, much less a claim that it abused its

discretion in so finding.

Nevertheless, Osantowski argues that the uncertainty

that remained after the August 15 status conference

proved that there was no meeting of the minds on

August 15. He asserts that an assurance that his time

would be properly credited was a condition precedent

to the conclusion of a final agreement, and that he only

realized this condition had not been met as a result of

later proceedings. This, however, is one of the hidden
6 No. 06-3140

doubts to which a court may not refer: on paper, the

only condition precedent to the conclusion of a final

settlement was agreement by the Village Council. All

parties agree that the Council properly gave its consent.

At the time of the settlement it would not have been

reasonable for Osantowski to think that the defendants

could guarantee what his pension level would be. The

level of an officer’s pension is determined solely by the

pension board, which is independent from the police

department, see 40 ILCS 5/3-101, 3-108.3, 3-128, 3-131, and

3-133, and an accounting of creditable time cannot be

made before retirement. Osantowski was expecting, in

effect, that the IDFPR would make an exception in his

case and guarantee ex ante what his pension would be.

This was not a reasonable expectation. Instead, predictably, the IDFPR did no such thing; it merely reiterated

what the definition of creditable time was. This was all

that Osantowski could have hoped for. It is unreasonable

to think that a promise of creditable service could be a

condition precedent to the August agreement (or any other

agreement); it should come as no surprise, then, that the

agreement—on paper and as expressed by the parties in

court—did not reflect such a promise.

Based on the written documents before us, including

the transcripts of the open-court affirmation of the settlement, the district court did not abuse its discretion in

ordering the enforcement of the August agreement.

III

Osantowski’s alternative argument is that even if the

August agreement is valid, the December agreement

superseded it by novation. This argument was raised as a
No. 06-3140 7

side-issue by the defendants in the district court proceedings: the Objectors, including Osantowski, did not

bring it up. Novation is an affirmative contract defense

in Illinois. Phillips & Arnold, Inc. v. Frederick J. Borgsmiller,

Inc., 462 N.E.2d 924, 929 (Ill. App. Ct. 1984). “Ordinary

civil practice does not allow a forfeited affirmative defense whose underlying facts were not developed below

to be raised for the first time on appeal.” Day v.

McDonough, 547 U.S. 198, 217 (2006) (citing Weinberger

v. Salfi, 422 U.S. 749, 764 (1975); Metropolitan Housing

Development Corp. v. Arlington Heights, 558 F.2d 1283,

1287 (7th Cir. 1977)); see also FED. R. CIV. P. 8(c) (requiring

affirmative defenses to be pleaded). Because Osantowski,

the one who should have raised novation in the district

court, did not do so, we consider the argument forfeited.

Nothing in this record suggests that we should reach

out and address the merits.

IV

Ironically, one month before issuing its order enforcing

the August agreement, the district court offered

Osantowski and the other Objectors the option of an

agreed order enforcing the December agreement; they

refused. A month later, after the district court found that

the August agreement was fully enforceable, Osantowski

and the Objectors changed their minds and wanted the

December agreement after all.

Buyer’s remorse, however, cannot undo a contract to

which all parties have given their assent and for which all

of the conditions precedent have been fulfilled. We are

satisfied that the district court did not commit legal error in

finding that the parties reached a valid and binding
8 No. 06-3140

contract in August. Therefore the district court did not

abuse its discretion in dismissing this case with prejudice based on the settlement agreement. 

AFFIRMED

USCA-02-C-0072—8-6-08