Court Opinion

ID: 4513207
Source: CourtListenerOpinion
Date Created: 2020-03-05 19:00:24.415936+00
Date Added: 2024-06-11T09:40:52.036144
License: Public Domain

Case: 19-10537       Document: 00515333773        Page: 1    Date Filed: 03/05/2020

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT
                                                                           United States Court of Appeals
                                                                                    Fifth Circuit

                                      No. 19-10537
                                                                                  FILED
                                                                              March 5, 2020
                                                                             Lyle W. Cayce
JANA BOWERS,                                                                      Clerk

           Plaintiff–Appellee,

v.

ABUNDANT HOME HEALTH, L.L.C.,

           Defendant–Appellant.

                    Appeal from the United States District Court
                         for the Northern District of Texas
                              USDC No. 3:16-CV-1314

Before DENNIS, GRAVES, and WILLETT, Circuit Judges.
PER CURIAM:*
       Abundant Home Health, L.L.C. appeals the district court’s enforcement
of a settlement agreement putatively formed between Abundant and Jana
Bowers on December 15, 2017. Abundant claims it never consented to the
settlement agreement and asks us to reverse the district court’s judgment.
Because this appeal turns on an issue of fact—whether Abundant consented to
the settlement agreement—we reverse and remand to the district court for an
evidentiary hearing.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 19-10537      Document: 00515333773        Page: 2    Date Filed: 03/05/2020

                                    No. 19-10537
                                           I
      Bowers brought claims against three defendants, including Abundant,
for alleged violations of the Fair Labor Standards Act. Settlement negotiations
ensued, with the parties exchanging various redlines of the proposed
agreement until they seemingly reached consensus via email. Soon after,
Bowers executed the agreement (the “Original Agreement”) and her counsel
forwarded the signed document to defendants’ counsel. Two days later, on
December 15, defendants’ counsel emailed back, noting that he was attaching
defendants’ signature pages. Two documents were attached: the signature
page to the Original Agreement, executed by Abundant’s representative; and
a separate settlement agreement, signed by all three defendants, that
inconspicuously changed material terms of the Original Agreement. When
Abundant failed to fulfill the terms of the Original Agreement, arguing it was
invalid, Bowers sought enforcement from the district court. The district court
determined that Bowers and Abundant entered into a valid and enforceable
contract on December 15 and ordered that they be bound by the terms of the
Original Agreement. 1 Abundant now appeals.

                                           II
      Our review of a district court’s decision to enforce a settlement
agreement depends on whether material facts are in dispute regarding the
agreement’s validity. In re Deepwater Horizon, 786 F.3d 344, 354 (5th Cir.
2015). If material facts are not in dispute, a district court may summarily
enforce a settlement agreement, and we review only for an abuse of discretion.
Id. If material facts are in dispute, however, we ask whether, taking the

      1 The district court concluded that the Original Agreement applied only to Abundant
and Bowers. Proceedings related to the two remaining defendants are stayed pending this
appeal.
                                           2
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                                         No. 19-10537
appellant’s factual assertions as true, the agreement is valid as a matter of
law. Id. If it is not, we remand to the district court for an evidentiary hearing
on the disputed issues of validity. 2 Id.
                                               III
                                                A
       While Bowers argues that there are no factual disputes regarding the
Original Agreement’s validity, 3 Abundant claims the agreement is invalid
because it “must have been” executed in error. Specifically, Abundant’s counsel
provided an affidavit stating that he cannot explain how the Original
Agreement came to be signed or why he transmitted the signature page to
Bowers’s counsel. Because Abundant’s counsel does not recall asking
Abundant to sign the Original Agreement, he believes that both actions must
have been done by mistake.
       In federal contract law, 4 it is axiomatic that “one who signs or accepts a
written instrument will normally be bound in accordance with its written
terms,” regardless of whether he bothered to read the document before signing
it. Am. Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 538 (5th Cir. 2003)

       2 In In re Deepwater Horizon, we explained that review of the validity of a settlement
agreement is intentionally similar to summary judgment review because “[t]he stakes . . .
are roughly the same—both deprive a party of his right to be heard in the litigation.” 786
F.3d at 354 (quoting Tiernan v. Devoe, 923 F.2d 1024, 1031 (3d Cir. 1991)).
       3 In the alternative, Bowers argues that the parties had an enforceable settlement
agreement as early as November 6, 2017, and no later than November 28, because the details
of the settlement agreement had been finalized and agreed upon by counsel; the only
remaining step was to reduce the agreement to a formal writing. Without expressing any
views on the validity of those agreements, we note that our jurisdiction is limited to reviewing
the district court’s judgment: enforcement of the Original Agreement.
       4Bowers’s underlying claims concern alleged violations of the Fair Labor Standards
Act, a federal statute. Therefore—and despite Abundant’s assertion that Texas law
controls—we look to federal law to determine whether the settlement agreement is
enforceable or valid. See, e.g., Fisk Elec. Co. v. DQSI, L.L.C., 894 F.3d 645, 650 (5th Cir. 2018);
Mid-South Towing Co. v. Har-Win, Inc., 733 F.2d 386, 389 (5th Cir. 1984).
                                                3
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                                       No. 19-10537
(internal quotation omitted); see also Restatement (Second) of Contracts § 23
(1981). However, “ordinary contract principles require a ‘meeting of the minds’
between the parties in order for agreements to be valid.” Id. And if Abundant’s
representative did not knowingly and voluntarily sign the settlement
agreement, “he may not have consented to [it] and a meeting of the minds may
not have existed.” Id. Because such “consent . . . is the essence of every valid
contract,” French v. Shoemaker, 81 U.S. 314, 333 (1871), and the circumstances
surrounding Abundant’s execution of the Original Agreement are murky (at
best), we remand for an evidentiary hearing on the very limited issue of
whether Abundant’s representative knowingly and voluntarily executed the
Original Agreement.
                                              B
       It is worth noting what issues are not subject to the evidentiary hearing.
Abundant argues that it is not bound by the Original Agreement because it did
not accept the agreement but proposed counter-offers to it. For instance, the
email attaching Abundant’s executed signature page contained another
attachment: a revised settlement agreement signed by all of the defendants 5
that—unbeknownst to Bowers—changed material terms. 6 The text of the
email also noted that Abundant had run into a problem with funding and likely
would not be able to perform by the January 15 deadline set forth in the
Original Agreement. Abundant characterizes both the revised agreement and

       5 For the first time on appeal, Abundant argues that the Original Agreement cannot
be enforced against just one defendant. We reject this argument as forfeited. See Fuller v.
Phillips Petro. Co., 872 F.2d 655, 660 n.3 (5th Cir. 1989).
       6 Abundant’s transmittal email merely stated, “Here are the signature pages,” without
any reference to a revised settlement agreement; nor did the revised agreement include
redlines or any other indications that it had been altered. If this was intentional subterfuge,
the actions were, at best, inappropriate gamesmanship and, at worst, blatantly deceitful, and
we hasten to discourage attorneys and parties from employing such tactics in negotiations.
                                              4
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                                       No. 19-10537
the email’s text as counter-offers that expressly rejected the Original
Agreement. Abundant’s characterization is incorrect. There are no questions
of fact regarding whether Abundant made a counter-offer. It did not. 7 So this
issue is not the subject of our limited remand. 8
                                             IV
       More information is needed to ensure that Abundant’s representative
consented to the terms of the Original Agreement. We therefore REVERSE and
REMAND for an evidentiary hearing consistent with this opinion.

       7 Abundant in no way indicated that it was making a counter-offer, conditioning the
agreement on Bowers signing the newly provided document, or asking Bowers to agree to
something other than what was in the Original Agreement with respect to Abundant.
Instead, the Original Agreement’s signature page was delivered without modification. So
regardless of the additional attachment or whether it applies to the other defendants,
Abundant failed “[t]o transmogrify a purported acceptance into a counter[-]offer.” Hoyt R.
Matise Co. v. Zurn, 754 F.2d 560, 566 (5th Cir. 1985) (noting that a purported acceptance
only becomes a counter-offer if the acceptance materially differs from the offer). And the text
of the email regarding the payment deadline did not condition Abundant’s acceptance of the
Original Agreement upon Bowers acquiescing to modified terms. Rather, it was a sharing of
information about a potential roadblock to Abundant’s fulfillment of its contractual
obligations. Therefore, the text of the email did not amount to a counter-offer either. See
Restatement (Second) of Contracts § 61 (1981) (“An acceptance which requests a change or
addition to the terms of the offer is not thereby invalidated unless the acceptance is made to
depend on an assent to the changed or added terms.”).
       8 Whether Abundant’s email was a legally effective counteroffer is distinct from the
factual question of whether Abundant intended the email to be a counteroffer. We express no
opinion on the latter matter, which is closely intertwined with the question of whether
Abundant consented to the original settlement agreement.
                                              5