a confidentiality requirement. Boutwell said he would convey these offers to his client and
discuss it with O’Meara.

15. On May 20, O’Meara called Burns to follow up on the settlement discussions.
O’Meara had been updated by Boutwell. Burns and O’Meara reviewed the two alternatives.
O’Meara told Burns that he believed Khan would prefer to leave HLS and suggested that
Khan would be willing to accept $200,000 in exchange for a resignation and a full release.

16. On May 22, after not being able to reach O’Meara for several days, Burns left
Boutwell a voice-mail message on behalf of HLS offering Khan $80,000 in exchange for a
full release and resignation. Burns later left voice-mail messages for both O’Meara and
Boutwell asking them to respond as soon as possible because Burns was leaving town for the
Memorial Day weekend.

17. OnMay 22, Boutwell mailed Burns a letter enclosing a first draft of the pretrial
order and a counter-offer to the $80,000 offer. (DX1). The counter-offer was for a $180,000
lump-sum payment and other conditions. Although Boutwell’s letter stated “Mr. Khan would
agree to accept a lump sum of $180,000...,” in fact neither Boutwell nor O’Meara had
received such authority from Mr. Khan as of May 22. Khan was not sent a copy of
Boutwell’s letter.

18. After receiving Boutwell’s letter of May 22 on May 28, Burns contacted his
client to discuss settlement. Burns called Boutwell on May 28 and left a voice-mail message

offering to split the difference and settle the case for $130,000 and indicating that his client


ea rait  a

attorney’s authority. If opposing counsel fails to
make inquiry or to demand proof of the attorney’s
authority, opposing counsel is put on notice to
ascertain the attorney’s authority. If opposing
counsel fails to make inquiry or to demand proof
of the attorney’s authority, opposing counsel deals
with the attorney at his or her peril. McClintock,
168 Ill. at 392, 48 N.E. 145.

36. The Brewer case is directly on point. In Brewer, the Illinois Supreme Court
reversed the lower court decisions enforcing a settlement agreement requiring the plaintiff
to resign his position as part of the settlement of the case. Although the settlement was
reached in the judge’s chambers, plaintiff was in the courthouse but was not present in
chambers during the negotiations. Affidavits were filed that plaintiff never agreed to quit
his job and plaintiff never authorized his attorney to make such an agreement and no one ever
told plaintiff that his resignation was a settlement term. The Supreme Court rejected the
lower court’s presumption that plaintiffs attorney spoke for plaintiff on the issue of
plaintiff’s resignation. The Court held “an attorney’s general authority to represent the client
in litigation does not extend so far as to permit the attorney to waive the rights of the client.”
Id., 165 I11.2d at 106, 649 N.E.2d at 1334,

37. Neither O’Meara nor Boutwell received express authority from Khan to accept
the settlement terms including his resignation.

38. The Court recognizes the frustration all counsel must feel in this case.
Although they all may believe the proposed settlement is in Khan’s best interests, the

decision to accept or reject the settlement ultimately rests with the client. In this case, where

Khan has difficulties expressing himself in English, Khan’s counsel recognized the


22. On May 30, O’Meara called Burns to discuss whether there was a way to
minimize the tax consequences of any settlement to Khan. O’Meara advised Burns that he
planned to talk to a tax lawyer in the hope a way could be found to minimize the tax
consequences of any settlement to Khan.

23. With the deadline for the final pretrial order staring the parties in the face,
Burns was extremely anxious to conclude the settlement. On May 30, he once again faxed
a letter to O’Meara and Boutwell urging them to respond to the outstanding settlement offer
and reviewing the history of the negotiations to date. He also requested Plaintiff's counsel
to file a motion to extend the final pretrial order date. (DX3).

24, On May31, O’Meara called Burns to say he would be meeting with Khan that
afternoon and expected to wrap up the settlement.

25. OnJune 3, O’Meara called Burns to advise him he had not met with Khan on
May 31* but expected to meet with him later that day. O’Meara advised Burns that Khan
wanted only $30,000 of any settlement to be allocated to back pay and also requested a
neutral letter of reference. Burns advised O’Meara for the first time that his client was now
willing to pay $160,000 to settle the case. No agreement was reached in this phone
conversation because Burns was aware O’Meara intended to review all terms with Khan.

26. On June 3, Burns once again faxed a letter to O’Meara and Boutwell
confirming Defendant’s willingness to treat $30,000 of any settlement payment as back pay

and agreeing to provide neutral references. The letter ended with the following paragraph:


did not have a problem with any of the other terms. He then faxed a letter on May 28 to both
Boutwell and O’Meara confirming the voice-mail message and urging them “to contact your
client and call me so that we can see if [settlement] is possible.” (DX2).

19. O’Meara met with Khan and one of his daughters sometime between May 22
and May 28. Khan advised O’Meara that he was not interested in a settlement in which he
would net less than $100,000 while resigning.

20. On May 28, Burns spoke by telephone with O’Meara. O’Meara stated
$130,000 was not good enough. Burns told O'Meara $180,000 was too high. Both attorneys
agreed to go back to their clients to discuss the possibility of settling the case for a lump-sum
payment of $150,000. O’Meara indicated he was scheduled to meet with his client that
afternoon and would call Burns after the meeting.

21. OnMay 239, after not hearing from O’Meara, Burns called Boutwell. Boutwell
told Burns that he did not believe O’Meara and Khan had met on the 28", Boutwell told
Burns that $150,000 was not acceptable but believed his client would accept $160,000, which
Burns rejected. Burns believed Boutwell had authority to settle the case for $160,000. Burns
also rejected Boutwell’s overtures to settle the case at $155,000. Burns told Boutwell he
could not get more than $150,000. The attorneys also discussed how to divide any settlement
proceeds: one check for back pay; one check for compensatory and punitive damages; and

one check for attorney’s fees.


ale li ae

II. CONCLUSIONS OF LAW

32. — This Court has jurisdiction because the parties have executed limited consents
to have this Court decide the motion to enforce settlement agreement. 28 U.S.C. § 636(c).

33. HLS has the burden of proving the existence of all of the elements of a
contract. Hyde Park Union Church v. Curry, 942 F.Supp. 360, 363 (N.D. Ill. 1996).

34. — Under Illinois law, a binding agreement requires a meeting of the minds or
mutual assent as to all material terms. Abbott Laboratories v. Alpha Therapeutic
Corporation, 164 F.3d 385, 388 (7th Cir. 1999).

35. The governing principles are set forth by the Illinois Supreme Court in Brewer
v. National Railroad Passenger Corporation, 165 Ill.2d 100, 105, 649 N.E.2d 1331, 1333-34
(1995):

The authority of an attorney to represent a client
in litigation is separate from and does not involve
the authority to compromise or settle the lawsuit.
An attorney who represents a client in litigation
has no authority to compromise, consent to a
judgment against the client, or give up or waive
any right of the client. Rather, the attorney must
receive the client’s express authorization to do so.
[citations omitted].

Where a settlement is made out of court and is not
made part of the judgment, the client will not be
bound by the agreement without proof of express
authority. This authority will not be presumed
and the burden of proof rests on the party alleging
authority to show that fact. (Danziger, 204 Ill. at
149, 68 N.E. 534). Further, in such a case,
opposing counsel is put on notice to ascertain the

8


». Minute Order Form (06/97)

United States District Court, Northern District of Illinois

N: f Assigned Judy i Sitting Judge if Othi
ir Magistrate Judge Elaine E, Bucklo than Assigned Judge Morton Denlow
CASE NUMBER 01 C 681 DATE 7/18/2002
CASE Asif H. Khan vs. Hospital Laundry Services, Inc.
TITLE

[in the following box (a) indicate the party filing the motion, «.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.]

MOTION:

DOCKET ENTRY:

(1) a Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) im} Answer brief to motion due___. Reply to answer brief due___.

(4) Q Ruling/Hearingon____setfor| ss at__—

(5) | Status hearing held

(6) Go Pretrial conference[held/continued to] [set for/re-set for]on__——ssetfor__— se at_

(7) oO Trial[set for/re-set for]on__— at

(8) a (Bench/Jury trial] [Hearing] held/continued to_ at

(9) 0 This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) General Rule 21 CFRCP41(a)(1) C1 FRCP41(a)(2).

go) =o [Other docket entry} | Enter Memorandum Opinion and Order. Defendant’s motion to enforce

settlement agreement [53-1, 56-1] is denied. Settlement conference set for 7/23/02 at 2:00 p.m.

(11)

[For further detail see order attached to the original minute order.]

No notices required, advised in open court

No notices required.
lo no required, umber of notices

VY | Notices mailed by judge’s staff.

L.! 9.2002

Notified counsel by telephone,

Docketing to mail notices.

Mail AO 450 form.

qugao docking deputy initials
v | Copy to judge/magistrate judge. iy 4
cone 772002
courtroom i:3 Hd Sl iar 2a date Ded gotice
DK deputy’s b
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importance of meeting face to face with Khan to review the proposed settlement and to
obtain his agreement. Such assent was not given and therefore no settlement was reached.
III. CONCLUSION

Clients are allowed to make up their own minds regarding a proposed settlement and
they must live with the consequences. Whether Khan’s decision to reject HLS’ generous
settlement offer proves to be wise only time will tell. Khan did not authorize his attorneys
to accept Defendant’s settlement offer. No settlement was reached. Because no settlement
was reached, Defendant’s Motion to enforce settlement agreement is denied.

SO ORDERED THIS 18th day of July, 2002.

Mort. Abdo)

MORTON DENLOW
United States Magistrate Judge

Copies delivered in open court or mailed to:

Charles Drake Boutwell James A. Burns, Jr.

3075 Plum Island Drive Amy Moor Gaylord

Northbrook, IL 60062 Katten Muchin Zavis Rosenman
525 West Monroe Street

John F, O’Meara Suite 1600

1737 North Wolcott Avenue Chicago, IL 60661-3693

Chicago, IL 60622-1350
Attorneys for Defendant

Attorneys for Plaintiff

10


Finally, this will confirm that Mr. O’Meara will contact Judge
Bucklo’s clerk today to report that the parties are very close to
settling, and fully expect to report to the Court within the next
day or two that they have done so. I understand that Mr.
O’Meara will be meeting with Mr. Khan later today and will call
me then.

Dx4.

27. The series of negotiations between counsel for the parties and Burns’ letter of
June 3 make clear that the attorneys recognized that a final meeting between Khan and his
attorneys was a necessary precondition to a final agreement. Because of the prior litigation
between the parties and Khan’s difficulties with the English language, the attorneys were
aware that a person to person meeting between Khan and his attorneys was necessary to
obtain authority for counsel to enter into a final agreement with Burns.

28. On June 3, O’Meara met with Khan and one of his daughters. Khan advised
his attorney he was no longer interested in the resignation alternative. He wanted to remain
an employee for a couple more years and was willing to accept a lesser settlement amount
to do that. At no time did Khan ever authorize his attorneys to settle the case for $160,000
in exchange for a resignation.

29. OnJune4, O’Meara advised Burns he would have to meet with Khan again and
would do so within a day or two.

30. OnJune 6, O’Meara called Burns to advise him Khan was not interested in the

resignation alternative. Burns accused O’Meara of reneging on a settlement.

31. On June 6, HLS filed this motion to enforce settlement.


oem

9. As part of her May 3, 2002 order, Judge Bucklo set a May 24, 2002 date for
the filing of the final pretrial order, a deadline of June 7, 2002 for the filing of responses to
any motions in limine, a pretrial conference date of June 26, 2002, and a trial date of August
12, 2002.

D. SETTLEMENT NEGOTIATIONS

10. Faced witha trial, the attorneys commenced work on the final pretrial order and
embarked upon serious settlement negotiations.

ll. Plaintiff was represented by two sole practitioners: John F. O’Meara
(“O’Meara”) with an office in Chicago and Charles D. Boutwell (“Boutwell”) with an office
in Northbrook. O’Meara testified at the evidentiary hearing on the motion to enforce
settlement. Boutwell appeared and conducted O’Meara’s examination.

12. Defendant was represented by James A. Burns, Jr. (“Burns”) of KMZ
Rosenman with offices in Chicago. Burns testified at the evidentiary hearing.

13. All three attorneys practiced law for a number of years and were experienced
in litigation.

14. OnMay 15, Burns and Boutwell spoke by telephone concerning two alternative
methods of settling the case: (1) payment of a lump sum from Defendant to Plaintiff in
exchange for Plaintiff's resignation and a full release; or (2) payment to Plaintiff of his back
pay claims, an agreement to pay Plaintiffa higher wage in his current cart repair position, and

an agreement to arbitrate, rather than litigate, any future claims. The attorneys also discussed


B. PRIOR LITIGATION BETWEEN THE PARTIES

2. In April 1998, the parties settled a national origin discrimination lawsuit (Case
No. 97 C 5164) filed by Plaintiff. (Am. Comp. Ex. A).

3. Under the settlement agreement, Plaintiff was transferred to the unionized
mechanic trainee program, credited with six months experience, and given an initial raise to
$8.50 per hour. (Am. Comp. Ex. A, {| 1a.) The settlement agreement also provided that
Plaintiff could be demoted to his previous cart repair position if he did not progress
adequately toward becoming a mechanic. (Am. Comp. Ex. A, le.)

4, In September 2000, Defendant demoted Khan to his cart repair position.

C. CURRENT LITIGATION BETWEEN THE PARTIES

5. On January 31, 2001, Plaintiff filed this action against Defendant alleging a
breach of the settlement agreement arising out of the prior litigation.

6. Thereafter, Plaintiff filed an amended complaint adding claims for age
discrimination and retaliation.

7. Following completion of discovery, Defendant filed a motion for summary
judgment.

8. On May 3, 2002, Judge Elaine E. Bucklo entered an order denying Defendant’s
motion for summary judgment as to the breach of contract claim (Count I) and the Title VII
retaliation claim (Count II). According to Judge Bucklo’s order, Plaintiff. abandoned his age

discrimination claim. (Count III).


Ged ee ca

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

ASIF H. KHAN, y
)

Plaintiff,  ) Case No. 01 C 0681
)

vs. ) Magistrate Judge Morton Denlow

)
HOSPITAL LAUNDRY SERVICES, )
INC,, }
)
Defendant. )

MEMORANDUM OPINION AND ORDER

This case comes before the Court on Defendant’s motion to enforce settlement
agreement. Defendant contends the parties reached a settlement agreement. Although
Plaintiff acknowledges serious settlement negotiations were underway, he denies an
agreement was reached. This Court conducted an evidentiary hearing on July 9, 2002. The
following constitute the Court’s findings of fact and conclusions of law.

I. FINDINGS OF FACT

A. THE PARTIES

1. Plaintiff, Asif H. Khan (“Plaintiff’ or “Khan”), is employed by Defendant
Hospital Laundry Services, Inc. (“HLS” or “Defendant’”). Khan is of foreign descent and is

not fluent in English. He testified at the hearing.