Court Opinion

ID: 3001950
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:22:56.685079+00
Date Added: 2024-06-11T15:03:19.663971
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 06-3140
ELANA M. NEWKIRK, et al.,
                                               Plaintiffs-Appellants,
                                  v.

VILLAGE OF STEGER, et al.,
                                               Defendants-Appellees,
and

CHARLES TIERI, et al.,
                                                 Plaintiffs-Appellees.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
             No. 02 C 9077—Rebecca R. Pallmeyer, Judge.
                          ____________
      ARGUED JANUARY 7, 2008—DECIDED AUGUST 6, 2008
                          ____________

  Before POSNER, ROVNER, and WOOD, Circuit Judges.
  WOOD, Circuit Judge. Eight employees of the Village
of Steger’s police department sued the Village under a
number of federal statutes, raising claims including race
discrimination, sex discrimination, disability discrim-
ination, and retaliation based on political affiliation. See
the Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 U.S.C. § 1962; the Americans with Disabilities
Act, 42 U.S.C. § 12131 et seq.; the Civil Rights Act, 42 U.S.C.
2                                               No. 06-3140

§§ 1981 and 1983; and Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000 et seq. The question before us is
whether the parties settled their litigation in August 2005,
when they agreed in open court to a settlement agreement
subject to the approval of the Village Council.
  At a status conference in September, one of the plaintiffs,
Scott Osantowski, became concerned about the wording
of the settlement to which he had agreed. Among other
things, the agreement said that he would be given a paid
leave of absence up to his retirement date. The problem
was that he was no longer sure whether he would be
allowed to retire at 20 years of service or with 20 years of
creditable service, according to the rules of his pension
plan. The magistrate judge, recognizing that this was an
important issue to Osantowski but not one explicitly
addressed in the settlement, asked the defendants to
come up with some assurance that Osantowski would
get credit for the paid leave of absence. The judge also
warned him that he would retire “at” 20 years and “he’ll
live with that.”
  Unfortunately, ascertaining what the settlement agree-
ment really meant turned out to be more difficult than
anyone anticipated. The pension board asked for an
opinion about Osantowski’s situation from the Illinois
Department of Financial and Professional Regulation
(IDFPR), which issued an opaque response that
simply reiterated the requirements for creditable time.
Rather than taking that as an answer, and in light of
several other issues that he felt needed to be ironed out,
Osantowski declared that he could not accept the August
settlement.
  In December 2005, another written version of the settle-
ment was presented to the magistrate judge. This version
promised Osantowski a new position instead of paid
No. 06-3140                                                  3

leave; the agreement was subject to his receipt of a letter
from the State of Illinois confirming that this new posi-
tion would count as creditable service. There were still
other open issues with regard to Osantowski, however,
and so no verification letter was sent.
  In April 2006, the defendants moved to enforce the
August settlement or, in the alternative, the December
agreement. A month later, four of the plaintiffs joined
this motion (Plaintiffs-Appellees in this court, or the
“Settling Plaintiffs”). The remaining plaintiffs (the appel-
lants in this court, to whom we refer as the “Objectors”),
including Osantowski, asserted that neither the August
nor the December arrangement amounted to an enforce-
able settlement agreement.
   On June 15, 2006, the district court concluded that the
August agreement was properly accepted by all parties
and that the relevant terms were all memorialized. It
therefore ordered the case dismissed with prejudice in
accordance with the settlement. Osantowski and the other
Objectors appeal from this decision, claiming first that no
agreement was reached in August because there was no
meeting of the minds, and, in the alternative, if the parties
did reach an agreement in August, the December agree-
ment operates as a novation and replaces the August
agreement. We find that the district court did not abuse
its discretion when it concluded that the parties reached
an enforceable agreement in August, and also that it
reasonably found that there was no novation in December
that would warrant superseding the earlier agreement.

                              I
  We review an order enforcing a settlement only for
an abuse of discretion. Dillard v. Starcon Int’l Inc., 483 F.3d
4                                                   No. 06-3140

502, 506 (7th Cir. 2007). The first question, however, is
whether there was any agreement at all among the
parties; that is an issue of law that we review de novo.
  A settlement agreement is a particular kind of contract,
and so contract law (here, the law of Illinois) governs. See
Laserage Technology Corp. v. Laserage Laboratories, Inc., 972
F.2d 799, 802 (7th Cir. 1992). Although federal law re-
quires that a settlement of a Title VII suit must be knowing
and voluntary, see Pierce v. Atchison, Topeka & Santa Fe Ry.
Co., 65 F.3d 562, 571 (7th Cir. 1995), in the absence of a
showing of fraud, duress, or other circumstances sug-
gesting that the settlement was not knowing or volun-
tary, the district court need not examine the circum-
stances surrounding the settlement, Baptist v. City of
Kankakee, 481 F.3d 485, 491 (7th Cir. 2007). Because that
showing has not been attempted here, we assume that
this settlement was knowing and voluntary and return
to Illinois law for the rest of the analysis.
  When a “meeting of the minds” question arises, Illinois
follows the objective theory of intent. See Village of
South Elgin v. Waste Mgt. of Ill., Inc., 810 N.E.2d 658, 670 (Ill.
App. Ct. 2004). An Illinois court would therefore look first
to the written records, not to mental processes. Laserage
Tech., 972 F.2d at 802 (citing East Richland Educ. Ass’n v. Ill.
Educ. Labor Rel. Bd., 528 N.E.2d 751, 768-69 (Ill. App. Ct.
1988)). “Secret hopes and wishes count for nothing. The
status of a document as a contract depends on what the
parties express to each other and to the world, not on
what they keep to themselves.” Skycom Corp. v. Telstar
Corp., 813 F.2d 810, 814-15 (7th Cir. 1987). Thus, regardless
of other expressions, this court must look first to the
written records of what took place to figure out what the
parties have done.
No. 06-3140                                                 5

                             II
  On August 15, 2005, the parties went before the magis-
trate judge and presented an agreement. There was a
“Settlement Checklist,” which was completely filled out.
In the “Effective Date” space, the parties had filled in “a
binding agreement today subject to Board Approval.” On
the checklist, a handwritten entry specified a “paid leave
of absence for Scott Osantowski, to 20 year anniversary
(approx. $180,000), date to be vested at 20 years;
Osantowski will retire at 20 years of service.” Counsel for
the plaintiffs read the agreement into the record, and
each plaintiff—including Osantowski—affirmed in open
court, on the record, that he or she agreed to the terms
of the settlement. No question whatsoever was raised
with regard to how to count the years of creditable service.
  This affirmation is “what the parties express[ed] to each
other and to the world . . . .” Skycom Corp., 813 F.2d at 814-
15. Under an objective view of intent, which Illinois law
follows, this is what we must look to, rather than any
hidden doubts or questions that “[the parties] keep to
themselves.” Id. At first blush, therefore, there is little
room to argue that the district court was wrong in
finding that the parties had at that moment reached a
binding agreement, much less a claim that it abused its
discretion in so finding.
  Nevertheless, Osantowski argues that the uncertainty
that remained after the August 15 status conference
proved that there was no meeting of the minds on
August 15. He asserts that an assurance that his time
would be properly credited was a condition precedent
to the conclusion of a final agreement, and that he only
realized this condition had not been met as a result of
later proceedings. This, however, is one of the hidden
6                                              No. 06-3140

doubts to which a court may not refer: on paper, the
only condition precedent to the conclusion of a final
settlement was agreement by the Village Council. All
parties agree that the Council properly gave its consent.
  At the time of the settlement it would not have been
reasonable for Osantowski to think that the defendants
could guarantee what his pension level would be. The
level of an officer’s pension is determined solely by the
pension board, which is independent from the police
department, see 40 ILCS 5/3-101, 3-108.3, 3-128, 3-131, and
3-133, and an accounting of creditable time cannot be
made before retirement. Osantowski was expecting, in
effect, that the IDFPR would make an exception in his
case and guarantee ex ante what his pension would be.
This was not a reasonable expectation. Instead, predict-
ably, the IDFPR did no such thing; it merely reiterated
what the definition of creditable time was. This was all
that Osantowski could have hoped for. It is unreasonable
to think that a promise of creditable service could be a
condition precedent to the August agreement (or any other
agreement); it should come as no surprise, then, that the
agreement—on paper and as expressed by the parties in
court—did not reflect such a promise.
  Based on the written documents before us, including
the transcripts of the open-court affirmation of the settle-
ment, the district court did not abuse its discretion in
ordering the enforcement of the August agreement.

                            III
  Osantowski’s alternative argument is that even if the
August agreement is valid, the December agreement
superseded it by novation. This argument was raised as a
No. 06-3140                                                    7

side-issue by the defendants in the district court pro-
ceedings: the Objectors, including Osantowski, did not
bring it up. Novation is an affirmative contract defense
in Illinois. Phillips & Arnold, Inc. v. Frederick J. Borgsmiller,
Inc., 462 N.E.2d 924, 929 (Ill. App. Ct. 1984). “Ordinary
civil practice does not allow a forfeited affirmative de-
fense whose underlying facts were not developed below
to be raised for the first time on appeal.” Day v.
McDonough, 547 U.S. 198, 217 (2006) (citing Weinberger
v. Salfi, 422 U.S. 749, 764 (1975); Metropolitan Housing
Development Corp. v. Arlington Heights, 558 F.2d 1283,
1287 (7th Cir. 1977)); see also FED. R. CIV. P. 8(c) (requiring
affirmative defenses to be pleaded). Because Osantowski,
the one who should have raised novation in the district
court, did not do so, we consider the argument forfeited.
Nothing in this record suggests that we should reach
out and address the merits.

                              IV
  Ironically, one month before issuing its order enforcing
the August agreement, the district court offered
Osantowski and the other Objectors the option of an
agreed order enforcing the December agreement; they
refused. A month later, after the district court found that
the August agreement was fully enforceable, Osantowski
and the Objectors changed their minds and wanted the
December agreement after all.
  Buyer’s remorse, however, cannot undo a contract to
which all parties have given their assent and for which all
of the conditions precedent have been fulfilled. We are
satisfied that the district court did not commit legal error in
finding that the parties reached a valid and binding
8                                           No. 06-3140

contract in August. Therefore the district court did not
abuse its discretion in dismissing this case with preju-
dice based on the settlement agreement.
                                              AFFIRMED

                  USCA-02-C-0072—8-6-08