Court Opinion

ID: 150275
Source: CourtListenerOpinion
Date Created: 2010-07-08 16:59:14+00
Date Added: 2024-06-11T17:24:08.826361
License: Public Domain

Not for Publication in West's Federal Reporter

          United States Court of Appeals
                        For the First Circuit

No. 10-1070

                              TIMOTHY MCGEE,

                         Plaintiff, Appellant,

                                      v.

   CARTOON NETWORK, INC. AND TURNER BROADCASTING SYSTEM, INC.,

                        Defendants, Appellees,
                         _____________________

              ANDRE BENJAMIN 3000; MOXIE TURTLE, INC.,

                               Defendants.
                          ____________________

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF MASSACHUSETTS

     [Hon. Edward F. Harrington, Senior U.S. District Judge]

                                   Before

                      Lipez, Howard and Thompson,
                            Circuit Judges.

     Timothy McGee on brief pro se.
     Gordon P. Katz, Benjamin M. McGovern and Holland & Knight
LLP, on brief for appellees.

                               July 8, 2010
            Per   Curiam.        Appellant-plaintiff          Timothy      McGee

appeals pro se from the district court's order summarily

granting defendant's motion to enforce an agreement to settle

an   action    claiming     that     defendants         misappropriated     and

infringed his copyrights and other intellectual property in

connection with their production and broadcast of an animated

television series.         The district court, following a non-

evidentiary hearing at which neither McGee nor his counsel

(whose motion to withdraw had been granted several weeks

earlier)    appeared,     determined       that    an   agreement    had   been

reached in an e-mail exchange between plaintiff's counsel and

defendants'     counsel    and     entered    an    order     enforcing     "the

following     three   essential     elements       of   the   June   10,    2009

settlement agreement: 1) payment of $12,000 to the plaintiff;

2) a general release of all of the defendants and their

affiliates; and 3) dismissal with prejudice of this action in

its entirety."

            On appeal, McGee disputes that a binding agreement

was ever reached on all material terms, conceding that he had

agreed to the dollar figure for settlement, but that non-

pecuniary terms of equal importance to him (concerning his

rights to royalties, credits, and continuing rights in his

copyrighted material) were never agreed upon.                     He further

disputes the court's finding that his attorney had actual or

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apparent authority to enter into any settlement agreement

evidenced by the exchange of e-mails between counsel on June

10, 2009.

            We need not resolve whether the June 10, 2009 e-mail

exchange relied upon by appellees evinces a final agreement on

all material terms because we conclude that the district court

erred in summarily determining that McGee's attorney had actual

or apparent authority to enter into that agreement.                Because a

genuinely disputed question of material fact existed regarding

such authority, the court erred in deciding the question

without an evidentiary hearing. See Fidelity and Guaranty Ins.

Co. v. Star Equipment Corp., 541 F.3d 1, 5 (1st Cir. 2008).

            The evidence before the district court did not compel

a finding that McGee's attorney had authority to enter a

binding settlement agreement on his behalf.                  See Malave v.

Carney Hospital, 170 F.3d 217, 221 (1st Cir. 1999).                         The

district court's reliance upon the fact that McGee's attorney

was the attorney-of-record on this matter is misplaced.                    "[A]

general     retainer,     standing      alone,    does     not    permit    an

unauthorized attorney to settle claims on his client's behalf."

Malave, 170 F.3d at 221.         That principle placed defendants on

notice that McGee's attorney's statements about his authority

"did not suffice, without more to bind [McGee] to a settlement

agreement."    Id.   at    221   n.6;      see   also    United   States     v.

                                     -3-
International Bhd. of Teamsters, 986 F.2d 15, 20 (2d Cir. 1993)

("customarily only the representation of the principal to the

third   party       can   create    apparent    authority,     not     the

representation of the agent alone").

             The district court relied upon McGee's attorney's

representation to the magistrate judge that he had actual

authority to settle the case on the terms communicated in the

June 10 e-mail exchange.           But, at the same hearing, McGee

represented that his attorney did not possess authority to

enter   a   final    settlement    agreement    on   those   terms.     He

maintained that "the only thing we had agreed on that's in that

email was a dollar amount of $12,000."          "We cannot conceive of

a more fundamental dispute concerning the existence vel non of

a settlement agreement than occurs when a litigant and her

lawyer wrangle over whether the former imbued the latter with

authority to settle." Malave, 170 F.3d at 221; see also Michaud

v. Michaud, 932 F.2d 77, 81 (1st Cir. 1991) ("In circumstances

where a former attorney and his client dispute the giving of

authority,     courts     generally   require    the    holding   of   an

evidentiary hearing on the question of authorization").

             The district court relied upon McGee's affidavit as

evidence that his attorney had actual authority to enter into

the settlement agreement. Specifically, it relied upon McGee's

statement that he was represented by his counsel, and that he

                                   -4-
had "had settlement discussions with [him] about settling the

case for twelve thousand dollars ($12,000)."                     As discussed

above, "the retainer alone does not suffice to vest a lawyer

with settlement authority." Malave, 170 F.3d at 221 n. 6.                   And

the fact that McGee and his attorney may have discussed and

agreed   upon   one    of   the   material   terms     of    a    preliminary

settlement offer is not sufficient to establish that McGee

authorized him to enter a final settlement agreement where

other material terms had not been agreed upon.

            Finally, in concluding that McGee's attorney had

apparent authority to enter the settlement agreement on June

10,   the   district   court      stated   that   it   was       adopting   the

reasoning in Bistany v. PNC Bank, NA, 585 F.Supp.2d 179, 183-84

(D Mass. 2008). Reliance upon that district court case appears

to be misplaced. Bistany refers to the following definition of

"apparent authority" under Massachusetts law:

            Apparent authority "results from conduct
            by the principal which causes a third
            person reasonably to believe that a
            particular person . . . has authority to
            enter    into   negotiations   or   make
            representations as his agent."

Id. at 182 (quoting Hudson v. Mass. Property Ins. Underwriting

Ass'n, 386 Mass. 450, 436 (1982)).                However, neither the

defendants, in their memorandum in support of their motion to

enforce settlement, nor the district court identified any

"conduct by the principal [McGee]" which caused the defendants

                                    -5-
to believe that his attorney had authority to enter a binding

settlement agreement on his client's behalf.

           The legal authority cited in Bistany is inapposite.

In In re the Petition of Mal de Mer Fisheries, Inc., 884

F.Supp. 635, 639 (D. Mass. 1995), the court specifically found

that the attorney acted with his client's authorization when he

informed defendant's counsel that his client accepted its offer

and that "this is not a case where a former attorney and client

dispute   the   giving    of   authority   thereby    necessitating   an

evidentiary hearing."      And in Petty v. Timken Corp., 849 F.2d

130, 132-33 (4th Cir. 1988) the court stated that it was

"undisputed that [the defendant] made an offer of settlement,

that the offer was communicated to [the plaintiff] by his

counsel, that [the plaintiff] agreed to accept the settlement

after conference with his attorney, and that [the plaintiff]

reaffirmed his acceptance in open court."            Therefore, Bistany

does not identify any legal support for the proposition that an

attorney's representation that (as an agent) he has authority

to settle a case on behalf of his client (the principal) is

alone sufficient to establish apparent authority.

           The evidence before the district court did not compel

the   conclusion   that    McGee's   attorney   possessed    actual   or

apparent authority to enter into a binding settlement agreement

with defendants on the terms that they now seek to enforce.

                                   -6-
Therefore, the district court erred in summarily granting the

motion to enforce the settlement agreement without taking

evidence and resolving the disputed issues of material fact.

See Malave, 170 F.3d at 222-223.

          The district court's judgment is vacated and the case

is remanded for proceedings consistent with this opinion.

Appellant's motion to file an appendix to his reply brief is

denied as moot.   His other pending motions are denied without

prejudice to his filing them in district court on remand.

          So ordered.

                              -7-