Court Opinion

ID: 2979349
Source: CourtListenerOpinion
Date Created: 2015-09-22 18:47:56.843307+00
Date Added: 2024-06-11T15:41:43.626915
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 10a0712n.06

                                          No. 09-2077

                         UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT

                                                                                  FILED
MARY ANN GASCHO,                                )                               Nov 17, 2010
                                                )                        LEONARD GREEN, Clerk
       Plaintiff-Appellant,                     )
                                                )
v.                                              )   ON APPEAL FROM THE UNITED
                                                )   STATES DISTRICT COURT FOR THE
SCHEURER HOSPITAL,                              )   EASTERN DISTRICT OF MICHIGAN
                                                )
       Defendant-Appellee.                      )

       Before: MERRITT, ROGERS and SUTTON, Circuit Judges.

       SUTTON, Circuit Judge. Mary Ann Gascho signed an agreement releasing her Title VII

claims against Scheurer Hospital, her former employer. She now argues that the agreement is

unenforceable because she executed it under duress. The district court entered summary judgment

against her, and because she has not supported her claims with evidence from which a reasonable

jury could conclude that the agreement was invalid, we affirm.

                                               I.

       In 1972, Mary Ann Gascho began working as a registered nurse for Scheurer Hospital, near

the shoreline of Lake Huron and Saginaw Bay. For the last eighteen years of her employment at the

hospital, she was married to the hospital’s President and CEO, Dwight Gascho.
No. 09-2077
Gascho v. Scheurer Hosp.

       In the summer or autumn of 2006, Gascho suspected that her husband was having an affair

with Ms. Rabideau, a vice president at the hospital. At that same time, Mr. Gascho grew physically

violent with Gascho. In early November, he kicked her in bed because she was “snoring like a cow.”

R.44-3 at 52. Later, on the night of November 10, Mr. Gascho allegedly raped his wife after she

refused to have sex with him, an incident that caused her to suffer a split lip. The following day,

Gascho asked her husband whether he and Ms. Rabideau were having an affair, and he

acknowledged the infidelity.

       On January 17, 2007, after Mr. Gascho told his wife he was seeking a divorce, she went to

see Ms. Rabideau. Gascho sarcastically congratulated Ms. Rabideau, reported that her children

called Ms. Rabideau “the whore next door” and berated her in other ways. R.44-3 at 53–54. Mr.

Gascho, who witnessed the confrontation, asked Gascho to join him in his office. She refused and,

after further prodding, refused again. Mr. Gascho grabbed her around the shoulders and dragged her

into his office, causing bruises on her back and scratches on her back, arms and wrists.

       Once Mr. Gascho had pulled Gascho into his office, he fired her. Two days later, after

Gascho revealed her injuries to Lee Gascho, a hospital employee and relative of Dwight Gascho, as

well as to the hospital’s Human Resources Director Grey Foy, the hospital converted the discharge

into a three-day suspension. When the suspension ended, the hospital allowed Gascho to take mental

health leave under the Family and Medical Leave Act.

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Gascho v. Scheurer Hosp.

       In February 2007, the husband told Gascho that the hospital was going to offer her a

separation agreement. Foy and Lee Gascho drove to Gascho’s house to present her with the

agreement. The agreement gave her a year’s salary and other benefits in return for her voluntary

resignation and release of claims, including Title VII claims, against the hospital. Foy explained the

separation agreement to Gascho, summarizing its key provisions. Foy recommended that she hire

a labor-law attorney to review the document and told her that she would have twenty-one days to

sign the agreement and seven days to change her mind if she did sign it. Foy also told her to “sue

[Mr. Gascho] for everything he’s worth.” R.44-3 at 12.

       Neither her husband nor anyone from the hospital threatened physical harm to Gascho

between the day she was fired and the day she signed the agreement. Nor were there any other

incidents of physical violence during this time.

       During this time, however, Gascho had several conversations with Mr. Gascho and felt

intimidated by some of them. At one point, he warned her that, if she failed to sign the agreement,

“he would be the worst enemy [she] could ever imagine. The hospital has deep pockets and we

always win.” R.40-1 at 32. He promised to “destroy [her] life” if she did not sign it and told her that

he was “willing to ruin [other people’s] lives” if he lost his job over the incident. R.40-1 at 51. At

other times, apparently trying to coax her into signing the agreement, he said “you need to sign it,

at least it gives you insurance,” and the agreement was “only a retirement package and we do it all

the time.” R.44-3 at 29, 31, 48; R.40-1 at 26, 49. At still other times, he lashed out at her, calling

her “crazy” and “confused,” and insisting that “I am in control!” R.44-3 at 57; R.44-4 at 24–26.

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Gascho v. Scheurer Hosp.

       Gascho saw a psychiatrist and took antidepressants as well as Lunesta, Ambien, Benadryl and

Ultram, all to help her sleep. She experienced “mental anguish” at her husband’s “betray[al].” R.44-

3 at 19. While she had worked her way to a management position at Scheurer Hospital, she feared

she would be unable to obtain an equivalent position elsewhere. She had $11,000 in the bank and

worried about how long that would sustain her.

       Gascho sought advice from several sources about whether to sign the agreement. She

showed the agreement to her divorce lawyer, but the lawyer declined to review it because she was

not a labor attorney. She spoke with her three children about it, and they all told her to sign it. She

also talked with friends about the agreement.

       On February 28, 2007, she called her husband and told him that she was ready to sign the

agreement. He brought a copy of the agreement to her home, where they had a “civil” meeting and

she signed it. R.40-1 at 45.

       About a year later, Gascho filed this action in federal court seeking to rescind the settlement

agreement and seeking money damages against the hospital under Title VII and Michigan law. The

court dismissed her state law claims, a determination she does not appeal, then rejected her Title VII

claim as a matter of law, concluding that she had voluntarily and knowingly signed the settlement

agreement and thus could not rescind it on duress grounds.

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No. 09-2077
Gascho v. Scheurer Hosp.

                                                  II.

       Gascho presents two questions on appeal: May she rescind the settlement on the ground that

duress prevented her from voluntarily and knowingly signing it? And did the district court abuse its

discretion in denying her motion to compel discovery?

                                                  A.

       In addressing the duress ruling, we build from the ground floor. We give fresh review to the

district court’s summary judgment ruling and draw all factual inferences in favor of Gascho, the

party opposing summary judgment. Reese v. CNH Am. LLC, 574 F.3d 315, 321 (6th Cir. 2009); Fed.

R. Civ. P. 56(c)(2). The parties and the district court have assumed that an effort to rescind a

settlement agreement presents a question of fact for a jury, and so have we. “Federal law controls

the validity of a release of a federal cause of action.” Street v. J.C. Bradford & Co., 886 F.2d 1472,

1481 (6th Cir. 1990). And a “totality of the circumstances” test determines whether an employee

has “knowingly and voluntarily executed” a release of her Title VII claims and thus may not rescind

it on duress grounds. Adams v. Philip Morris, Inc., 67 F.3d 580, 583 (6th Cir. 1995). The test calls

on us to examine “(1) plaintiff’s experience, background, and education; (2) the amount of time the

plaintiff had to consider whether to sign the waiver, including whether the employee had an

opportunity to consult with a lawyer; (3) the clarity of the waiver; (4) consideration for the waiver;

as well as (5) the totality of the circumstances.” Id.

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Gascho v. Scheurer Hosp.

       Gascho’s experience, background and education. Nothing about Gascho’s history suggests

that the agreement was beyond her—that she did not have the capacity or background to grasp its

meaning. Even without a bachelor’s degree, she took post-graduate courses to become a registered

nurse, and she held her nursing job for more than thirty years, eventually entering the ranks of

management. It is fair to conclude that an experienced nurse, with her training and background,

could comprehend the meaning and effect of a settlement agreement.

       In considering this factor, Gascho urges us to consider “her history, marital status and

interaction with Dwight Gascho.” Gascho Br. at 13. But the inquiry regarding this factor goes not

to “experience” or “background” in the abstract but to the claimant’s “education and business

experience.” Riley v. Am. Family Mut. Ins. Co., 881 F.2d 368, 372 (7th Cir. 1989); see Bormann v.

AT&T Commc’ns, Inc., 875 F.2d 399, 403 (2d Cir. 1989); Coventry v. U.S. Steel Corp., 856 F.2d
514, 523 (3d Cir. 1988). Gascho’s marital history no doubt affects the ultimate analysis, but it does

not bear on this factor.

       Time to consider the waiver and opportunity to consult an attorney. The hospital gave

Gascho twenty-one days to review the agreement and seven days to change her mind after signing

it. These timelines gave her ample opportunity to consider the agreement and spared her the risk of

not having enough time to consider the pros and cons of signing it. Our cases say as much. See

Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 668 (6th Cir. 2003) (agreement enforceable

when employee had three days to withdraw her consent after signing it); Adams, 67 F.3d at 582

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Gascho v. Scheurer Hosp.

(agreement enforceable when employee had five days to consider whether to waive Title VII and

ADEA claims).

       A related federal statute suggests a similar conclusion. While Title VII does not contain a

waiver-of-claims provision, the Age Discrimination in Employment Act does. It says that, to

establish a knowing and voluntary waiver of claims under the Act, the individual must be “given a

period of at least 21 days within which to consider the agreement” and a seven-day revocation period

after signing it. 29 U.S.C. § 626(f)(1). This congressional policy in a related civil rights statute

bolsters the conclusion that a twenty-one-day consideration period and a seven-day reconsideration

period suffices to establish a legitimate waiver.

       These timelines also gave Gascho ample opportunities to seek an attorney’s advice. She did

just that, though for reasons of her own she chose only to ask a divorce attorney, not a labor-law

attorney, even after the hospital (through Greg Foy) recommended she consult a specialist in the area.

The question at any rate goes to the amount of time given to sign the agreement, not to whether the

claimant properly used the time to speak to the right kind of attorney.

       The clarity of the waiver. The terms of the agreement leave no room for doubt about its

meaning. It “releases and forever discharges [Scheurer] Hospital . . . from any and all claims of any

nature . . . based on any fact, circumstance or event occurring or existing at or before [Ms. Gascho’s]

execution of this Agreement. [It] includes all claims whatsoever . . . including . . . claims

under . . . Title VII of the Civil Rights Act of 1964.” R.26 Ex. 1 at 2–3. One does not need a law

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No. 09-2077
Gascho v. Scheurer Hosp.

degree to grasp the import of these terms. By signing the agreement and accepting the benefits

offered to her, Gascho would lose any Title VII claims she had against the hospital.

       Consideration for the waiver. In return for Gascho’s release of any claims against the

hospital, her voluntary resignation and her promises of confidentiality, the hospital offered: a

severance payment in the form of a year’s salary ($41,234.96), eighteen months of health insurance

premium payments (roughly $9,900), and payment for her accrued vacation ($151.47). Gascho does

not argue that this consideration was unfair or otherwise a disproportionate exchange of value and

indeed nowhere challenges the fairness of the benefits the hospital offered her.

       Other relevant circumstances. To the extent Gascho has any chance of success on this claim,

it does not come from the first four considerations, which all cut strongly against her. The knowing-

and-voluntary inquiry is a totality-of-circumstances test, however, and it allows claimants to invoke

other considerations, including the risk that the waiver was a product of duress and thus involuntary.

Adams, 67 F.3d at 583; see Bennett v. Coors Brewing Co., 189 F.3d 1221, 1229 (10th Cir. 1999)

(same rule for a release of ADEA claims). As a general matter, duress involves an unlawful or

“wrongful act or threat” that overcomes the free will of the victim. See Rissman v. Rissman, 213
F.3d 381, 386 (7th Cir. 2000); see also Happ v. Corning, Inc., 466 F.3d 41, 44 (1st Cir. 2006).

Gascho’s arguments on this score oscillate between two theories of duress: economic and physical.

       Her economic-duress claim falls short because there was no improper or illegal fiscal threat.

All bargaining, whether to buy a house, to take a job or to settle a dispute, comes with implicit

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Gascho v. Scheurer Hosp.

economic and psychological pressures—that if the one party does not take the offer, it may go to

someone else in the case of the perfect house or the ideal job or it may not happen at all in the case

of the money and other benefits accompanying a settlement offer. The better the offer, indeed, the

greater the implied fiscal threat, creating the possibility that a claim of duress grows stronger the

more generous the offer.

       Yet that is not how it works. As the Restatement reminds us, “[a]n ordinary offer to make

a contract commonly involves an implied threat by one party, the offeror, not to make the contract

unless his terms are accepted by the other party, the offeree.” Restatement (Second) of Contracts

§ 176 cmt. a (2010). That Gascho worried about having to file a lawsuit (and winning it) if she opted

not to accept the settlement offer is precisely the kind of pressure anyone (not independently

wealthy) would face in this context—the fear that if she chose to litigate her claims against the

hospital she might not get any financial compensation at all. She did not need her former husband’s

explicit warnings to appreciate this implied reality. “No legal system can accept an assertion that

‘this contract was signed under duress because my only alternative was a lawsuit.’ That would

eliminate settlement—and to a substantial degree the institution of contract itself.” Rissman, 213
F.3d at 386; see Happ, 466 F.3d at 44.

       Gascho’s belief “that [she] had no choice” in signing the agreement, in view of the economic

benefits offered and the risk of economic hardship if she declined the offer, does not by itself state

a claim, R.40-1 at 43, because this kind of threat is “an accepted part of the bargaining process.”

Restatement (Second) of Contracts § 176 cmt. a. That is particularly so here, given that she makes

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no argument that the settlement produced a disproportionate exchange of benefits. A contrary view,

moreover, “would invalidate most, if not all, releases of claims in agreements conferring severance

benefits on employees.” Dorn v. Gen. Motors Corp., 131 F. App’x 462, 468 (6th Cir. 2005); see

VKK Corp. v. Nat’l Football League, 244 F.3d 114, 123 (2d Cir. 2001) (“Because an element of

economic duress is thus present when many contracts are formed or releases given, the ability of a

party to disown his obligations under a contract or release on that basis is reserved for extreme and

extraordinary cases.”); Rissman, 213 F.3d at 386.

       That leaves the possibility that her husband’s physical abuse makes the agreement voidable.

If Gascho’s testimony is true, as we must assume in the context of reviewing a summary judgment

decision, her husband is far from an admirable individual. It also is no doubt the case that physical

and verbal threats during the bargaining process may rise to the level of coercion when they are

“improper” and when the threat “leaves the victim no reasonable alternative.” Restatement (Second)

of Contracts §§ 175–76; see Street, 886 F.2d at 1482 & n.27; Happ, 466 F.3d at 44.

       Viewed in a vacuum, the husband’s misconduct might suggest that the duress claim should

go to a jury. But three features of this case (along with the four other voluntariness inquiries)

confirm that the district court fairly held as a matter of law that her decision to enter the settlement

was voluntary.

       First, the key objective of the settlement, and the only part of it Gascho challenges here, is

the release of Gascho’s claims against the hospital, not the release of any claims Gascho had against

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Gascho v. Scheurer Hosp.

her husband. The hospital played no role in the husband’s physical misconduct, and of course had

no reason to know about the incidents at home. The proposed settlement did not even exist when

the husband abused Gascho, and indeed would not exist until a month later. By any standard,

moreover, the hospital took reasonable measures once it learned about the Gaschos’ problems

through the encounter at the office over the husband’s infidelity. When the husband precipitately

fired Gascho, the hospital quickly converted the discharge into a three-day suspension. When the

suspension ended, the hospital allowed Gascho to take mental-health leave under the Family Medical

Leave Act. Within a month of this incident and within a month of learning about the Gaschos’

fraying marriage, the hospital offered Gascho a settlement agreement that to this day she does not

claim was unfair. And in the course of discussing the settlement agreement with Gascho, one

hospital executive urged her to “sue [her husband] for everything he’s worth.” R.44-3 at 12. These

are not the kinds of actions that might coerce an employee into entering a settlement.

        Second, to the extent Gascho was abused by her husband, as opposed to the hospital, signing

a settlement with the hospital was not her only reasonable alternative. Gascho had the right (and still

may have the right) to file criminal charges against her husband, to sue him in tort, to extract a better

divorce settlement from him, to obtain a restraining order against him or, as one hospital executive

urged, to “sue [him] for everything he’s worth.” R.44-3 at 12. The parties have not told us the terms

of the Gaschos’ subsequent divorce agreement. So far as this record is concerned as a result, Gascho

still may have the right to vindicate some or all of these claims to this day, and if not that is

presumably because she was fairly compensated in the divorce proceeding. What she cannot do is

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vitiate the terms of a settlement agreement with the hospital—the terms of which she has yet to

challenge as unfair—on the ground that she had no reasonable choice in the matter in view of her

husband’s misconduct. A reasonable alternative will defeat a claim of duress, and she had just that

here: filing any or all of these actions against her husband. Restatement (Second) of Contracts § 175

cmt. b. While initiating litigation is not a reasonable alternative if the process “will not afford

effective relief to one in the victim’s circumstances,” id., that was not the case in this situation. The

only thing Gascho complains about in this case is the opportunity to sue the hospital under Title VII,

not forgone opportunities to sue her husband, who is plainly the key target of her complaint.

        Third, the circumstances after the hospital offered her this settlement confirm that Gascho’s

will was not overborne in signing this agreement. Over one month had passed since the last act of

physical violence. Neither the husband nor any other agent of the hospital voiced a threat of physical

violence during that time. Gascho had plenty of time to consider the agreement, plenty of time to

rescind the agreement after signature and plenty of time to consult a labor attorney, as one hospital

executive (Greg Foy) recommended she do. She spoke with several people before she signed the

agreement, including friends and trusted family members (e.g., her children), and none of them

advised her not to sign it. It is difficult to square these circumstances with the notion that Gascho’s

husband coerced her to sign the agreement. Gascho, indeed, offers not a single case or any other

authority suggesting otherwise.

        But this misses the point, Gascho insists, because she and her husband shared a fiduciary

relationship owing from “their marital relationship.” Gascho Br. at 14. “A threat,” she adds, “is

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Gascho v. Scheurer Hosp.

improper if it is in breach of a duty of good faith and fair dealing such as exists between fiduciaries.”

Street, 886 F.2d at 1482. But this again goes to show only that she may have had, or may still have,

compelling claims against her husband. Her husband, however, is no longer part of this case, and

she has not raised any complaints about the court’s dismissal of him from the case or any other

limitations in suing him.

                                                   B.

        Gascho independently argues that the district court jumped the gun in granting summary

judgment by failing to compel several of the hospital’s witnesses to answer certain questions at their

depositions. We disagree.

        In view of the threshold significance of the validity of the settlement agreement, the district

court “limited” the initial phase of discovery “to information regarding the enforceability of the

parties’ settlement agreement, as well as its terms.” R.14 at 2. During the depositions of five

witnesses, the hospital objected to several questions by Gascho’s counsel and ultimately instructed

the witnesses not to answer these questions on the ground that they exceeded the scope of the

discovery order.

        In response, Gascho moved to compel further depositions of these witnesses. In doing so,

however, she did not provide the district court with examples of the improper objections but instead

promised that “the transcripts at issue will be supplied so the Court can get a flavor for exactly what

went on.” R.33 at 2. Yet she never came through on the promise, as she failed to produce the

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Gascho v. Scheurer Hosp.

transcripts to the court within the required time and did not even file a reply brief attempting to rebut

the hospital’s take on the dispute. Having no way to get a “flavor for exactly what went on,” the

district court denied the motion. R.38. The court reasoned that Gascho failed to explain how this

discovery was “relevant to . . . her duress defense” and had not “explained . . . the nature of the

discovery which she sought.” R.38 at 4.

        The court did not abuse its discretion in reaching this conclusion. It was Gascho’s burden

to provide a factual and legal premise for her motion—the questions asked and the context in which

the deponents refused to answer—and she never did so.

        Gascho cannot sidestep this conclusion on the ground that the district court initially

scheduled a hearing, one at which she hoped to fill in these gaps, then cancelled it. The court’s local

rules reveal the peril of following this kind of strategy. “Oral hearings” on such motions, they said

at the relevant time, “will be held unless the judge at any time prior to the hearing orders their

submission and determination without oral hearing on the briefs filed as required by this rule.” E.D.

Mich.       L.R.     7.1(e)(2)        (approved           Dec.    1,    2005),       available        at

http://www.mied.uscourts.gov/Rules/RecentAmend/Docs/amendments_eff_110606.pdf (emphasis

added). That a district court sets a hearing date on a motion, often it should be noted as a matter of

course through the clerk’s office, by no means amounts to an unbreakable commitment to the parties

to hold the hearing, least of all when one of the parties has opted not to present anything worthy of

argument.

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       Nor may Gascho sidestep this conclusion on the ground that an untimely reply brief included

portions of the relevant depositions. District courts are entitled within reason to set their own

schedules for filing briefs and introducing evidence, and a court’s insistence on holding parties to

these schedules generally does not amount to reversible error. No abuse of discretion occurred.

                                                III

       For these reasons, we affirm.

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