Court Opinion

ID: 9494513
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:39:03.261438+00
Date Added: 2024-06-11T17:56:26.612296
License: Public Domain

*1356PAULINE NEWMAN, Circuit Judge,
dissenting.
This appeal is not about whether Mr. Tiburzi was “cocky” and/or drunk on the evening of June 28, 1999. Nor is it about whether his conduct warranted his being fired. It is about how the Merit Systems Protection Board and the agencies administer their obligations to federal employees. It is about the principles of settlement agreements, and the laws of contracting with the government. It is also about fundamental fairness in administrative adjudication.
Although the majority opinion states that “apparently” Mr. Tiburzi and his counsel did not sign the written settlement proposal, it is crystal clear that they did not. It was undisputed that Mr. Ti-burzi disclaimed the settlement almost immediately after the July 21 hearing, and that the agency was not bound until an authorized person agreed and signed the settlement agreement. Not until after September 20 did the agency tell the administrative judge that it would perform the oral obligations that the majority now rules were irrevocably binding on Mr. Ti-burzi on July 21. The agency had taken no steps whatsoever to implement the July 21 terms; instead the agency proffered different written terms, changing the date of Mr. Tiburzi’s enforced resignation to three months earlier than the date that was entered into the record on July 21. These events negate the majority’s theory that the July 21 oral events constituted an irrefutable and mutually binding contract.
Both parties must be bound, to make a contract. The agency made clear that it was not bound without a written agreement; the mutual intention of a written agreement was placed in the MSPB record. When the agency a week later sent its “proposed settlement agreement” with significantly changed terms, this was further demonstration that the agency did not deem itself bound by the oral terms. It is standard contract law that if the July 21 agreement did not bind the agency, it did not bind Mr. Tiburzi. This court’s retroactive creation of an “agreement” that did not exist at the time it purportedly was made is contrary to the law of contracts.
The document called a “proposed settlement agreement” by the agency, sent to Tiburzi’s then lawyer on July 27, contained twenty enumerated paragraphs. At least sixteen of these paragraphs contained terms that were not mentioned at the July 21 hearing. It was not signed on behalf of the agency. The covering letter from the agency attorney invited “questions, comments, etc.,” and stated that the agency’s attorney would obtain execution on behalf of the agency after it was signed by Mr. Tiburzi. Neither the proposed settlement agreement nor the covering letter mentioned the MSPB hearing or any purported prior oral contract. The proposed settlement agreement was by its terms the “full and complete agreement,” expressly negating any unwritten and unsigned promises or agreements, as set forth in the following clauses:
¶ 1. The parties do hereby agree to settle and compromise this action upon the terms indicated below.
¶ 15. This Agreement represents the full and complete agreement of the parties hereto. No other promises or agreements will be binding unless placed in writing and signed by both parties. ¶ 18. The parties agree that this settlement agreement will be filed with the MSPB, which will retain jurisdiction of the matter only for the purpose of enforcing the terms of this agreement.
¶ 20. This agreement will be deemed to be fully executed upon the date that the last of the parties, or parties’ representatives, affixes his/her signature hereto.
*1357The proposed settlement agreement included many provisions in addition to those recorded at the oral hearing. Some of these provisions could be viewed as details, as does the panel majority, but not all. It was a significant change that the proposed agreement set a resignation date of May 1, 2000, whereas a resignation date of July 21, 2000 was read into the record at the oral hearing. Almost three months’ employment is not an immaterial detail. Also, new provisions at ¶¶ 4, 5, 6, and 7 defined the agency’s obligations with respect to future employers, and ¶ 9 defined Mr. Tiburzi’s non-admission of culpable behavior.
On August 3, 2000 the agency’s counsel again wrote to Mr. Tiburzi’s counsel, inquiring as to the status of .the proposed settlement agreement. The letter stated that counsel had “received several phone calls from Administrative Judge Fishman regarding the status of the agreement and seeking a signed copy for the Board’s records as soon as possible.” The agency was continually informed that Mr. Tiburzi refused to sign the document, as was the administrative judge. Nonetheless, on August 23, 2000 the administrative judge dismissed the appeal as settled at the July 21 hearing, entering an order stating that “I have reviewed the terms of the settlement agreement and find it lawful and voluntarily entered into” and that “the parties desire to make the settlement agreement enforceable by the Board.” The administrative judge’s statements are not comprehensible, in view of his knowledge of Mr. Tiburzi’s total rejection of the settlement.
Perhaps cognizant of this irregularity, the agency continued to try to obtain Mr. Tiburzi’s signature. Mr. Tiburzi steadfastly refused to sign the document. The agency so wrote the administrative judge on September 18, 2000, and by letter dated September 21 the agency wrote the AJ that it “would immediately begin to fulfill our obligations” under the oral “settlement.” Even then, the agency did not implement the resignation date of July 21, the date recorded at the hearing.
Mr. Tiburzi appeals here pro se. In his pro se brief he acknowledges that he “agreed” to settle at the oral hearing. He also states that he did not “sign or accept the official written agreement” and that “[a]t the first opportunity after the settlement agreement, I contacted my attorney and expressed to him that I was coerced and I wanted to fight the agreement.” My colleagues take this as an “admission” that he was bound on July 21.
Mr. Tiburzi indeed stated on July 21 that he agreed to settle by resigning. He also agreed to a July 21 resignation date. He also agreed that the terms would be set forth in a written and signed agreement. The agency’s ensuing actions make clear that the agency did not deem itself bound by the oral terms; indeed, the written proposal explicitly negated any unwritten and unsigned promises or agreements.
Absent mutuality of obligation, a contract does not come into being. The majority’s heavy reliance on Mr. Tiburzi’s “admissions” in his pro se brief can not overcome this failure of mutuality. See Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) {pro se complaints are held “to less stringent standards than formal pleadings drafted by lawyers”); Roche v. United States Postal Serv., 828 F.2d 1555, 1558 (Fed.Cir.1987) {“Pro se petitioners are not expected to frame issues with the precision of a common law pleading.”).
Precedent requires the ruling that these oral MSPB proceedings did not constitute a binding mutual agreement. The case of Mahboob v. Department of Navy, 928 F.2d 1126 (Fed.Cir.1991), in which this court addressed the question of the finality of an oral settlement when the petitioner refused to sign a written agreement, is close *1358to this one on its facts, and its controlling principle of law can not be ignored. In Mahboob the petitioner and the petitioner’s attorney, the Navy’s attorney, and the MSPB administrative judge participated in a telephonic hearing. The petitioner’s attorney and the Navy’s attorney agreed to certain settlement terms, the petitioner apparently remaining silent. They agreed that a written contract would be prepared by the Navy’s attorney. The conversation was tape recorded and the, tape was entered into the record and transcribed. The petitioner then rejected the settlement and refused to sign the written contract. The Navy contended that the refusal to sign was irrelevant, and that the oral exchange constituted a final and enforceable contract.
The Federal Circuit disagreed. The court explained that “[t]he most convincing evidence that the telephone conference was not a final settlement of plaintiffs case, and that a written document signed by both parties was required, was the fact that ... the Navy’s attorney ... prepared such a written settlement agreement, signed it and sent it to the plaintiff for her consideration and signature.” Mahboob, 928 F.2d at 1129. Similar events occurred in Mr. Tiburzi’s case: the parties orally agreed to settle and a record was made by the administrative judge, stating that a writing and signing were intended; a written agreement was then prepared by the agency and rejected by the petitioner.
The rejected agreement in Mahboob, as for Mr. Tiburzi, stated that the writing “constitutes the complete agreement of the parties” and that no other agreements are binding unless in writing and signed. The Mahboob court held that this statement “effectively forecloses the Navy’s contention that the telephone oral conference was a final settlement of plaintiffs case.” Id. at 1129. This holding is fully applicable to Mr. Tiburzi. As also discussed in Mah-boob, a material change by the agency in the later written document from the terms orally discussed shows that the oral event was not viewed by the agency as a final and binding contract. Id.
The panel majority finds that this case is distinguishable from Mahboob because Mr. Tiburzi said on July 21 that he understood the settlement terms and voluntarily agreed to settle. This is not a distinction from Mahboob, for the Federal Circuit’s decision in Mahboob did not depend on whether the petitioner personally spoke for the record. In both cases, it was agreed and expected that a signed written agreement was necessary.
An oral “understanding” does not create a binding contract when the parties intend and explicitly state that the settlement will be placed in writing and signed. The submission of the proposed settlement agreement for Mr. Tiburzi’s approval confirms the mutual intention that a written and signed agreement was necessary to settle the case. The agency repeatedly described this document as a “settlement agreement draft” even during Mr. Tibur-zi’s appeal to the full Board. See attorney Declaration ¶ 11 (“I revised the parties’ settlement agreement draft to incorporate this sole requested change.... ”). The conclusion that the agency did not view the oral arrangement as binding is reinforced by the provisions of the proposed written agreement, which state that it is the “full and complete agreement” and that “no other promises or agreements will be binding unless placed in writing and signed by both parties.” The analogy to Mahboob is complete, and is binding precedent.
As a matter of contract law, an initial statement of general terms is not a final contract, but a statement of intention or prospect. In the words of the Restatement (Second) of Contracts § 27 (1981) comment b:
*1359[I]f either party knows or has reason to know that the other party regards the agreement as incomplete and intends that no obligation shall exist until other terms are assented to or until the whole has been reduced to another written form, the preliminary negotiations and agreements do not constitute a contract.
The panel majority’s multiple citations to treatises of contract law do not relate to contracts with the government, where even written agreements do not come into effect unless within the agency’s and the signer’s express authority; the DEA attorney expressly warned that she could not bind the agency. Although the majority opinion takes issue with the view that the agency counsel was not authorized to enter into a binding oral or indeed written settlement, the agency counsel herself was of this view. Note the answer to the administrative judge’s question “do you voluntarily enter into the settlement agreement?” She said: “Yes. To the extent I count as agency counsel, yes.” This qualified answer reflects the rule that an agency is not bound until an authorized official has accepted the contract. The proposed agreements that the attorney sent to Mr. Tiburzi’s attorney were not signed for the agency, and counsel made clear that they would be signed only after Mr. Tiburzi signed them. The changed terms of the written agreement are powerful evidence that the agency did not deem itself bound to the oral terms.
Professor Corbin’s discussion of “informal contracts” has no relevance to contracts with the United States. Indeed, authority not involving the United States as a contracting party is irrelevant, for it is a truism that written agreements signed by authorized persons are essential to settle litigation with agencies of the United States. See generally John Cibnic, Jr. & Ralph C. Nash, Jr., Formation of Government Contracts 80-83 (3d ed.1998). Unlike private agency law, enforceable government contracts require actual authority of the agent. The Supreme Court confirmed this principle in Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10 (1947):
Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority. The scope of this authority may be explicitly defined by Congress or be limited by delegated legislation, properly exercised through the rule-making power. And this is so even though, as here, the agent himself may have been unaware of the limitation upon his authority.
Id. at 383. In Mil-Spec Contractors, Inc. v. United States, 835 F.2d 865 (Fed.Cir.1987), this court confirmed that a valid oral settlement agreement with the government did not exist when the negotiator did not have the authority to bind the government to the settlement. Id. at 867. The majority’s rebanee on Chedd-Angier Prod. Co. v. Omni Publications Int’l, Ltd., 756 F.2d 930 (1st Cir.1985) and International Telemeter Corp. v. Teleprompter Corp., 592 F.2d 49 (2d Cir.1979) is inapposite because these cases do not involve contracts with the United States.
The other cases cited by the majority are also inapt. The citation of Singer v. United States, 215 Ct.Cl. 281, 568 F.2d 695 (1977) does not support the majority’s position, for in Singer the contractor sent a telegram stating its acceptance of the contract; surely that is a “signed acceptance,” not an “oral agreement” as the majority describes it. In Sargent v. Dep’t of Health & Human Services, 229 F.3d 1088 (Fed.Cir.2000), there was no intention to reduce a settlement agreement to writing for signature, as in this case. Nor was there any *1360evidence, as in this case, that the agency did not view the oral terms as binding. The panel majority also cites Goodwin v. Dep’t of Treasury, 983 F.2d 226 (Fed.Cir.1992), but the validity of an oral contract was not at issue; the issue was whether the agreement had been breached. These cases provide no support for the majority’s position, and do not override the direct and powerful precedential force of Mahboob.
Thus I must, respectfully, dissent. Mr. Tiburzi and the agency did not complete a settlement, and the MSPB violated its responsibility in dismissing the appeal.