Court Opinion

ID: 9492434
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:41:12.472349+00
Date Added: 2024-06-11T17:55:18.102730
License: Public Domain

OPINION OF THE COURT
SCIRICA, Circuit Judge.
This is a motion for an award of attorney’s fees and expenses arising from the settlement of an employment discrimination lawsuit by Edward D. Torres against Metropolitan Life Insurance Company (“MetLife”). For the reasons that follow, we will grant Torres’s motion but refer the matter to a Magistrate Judge for determination of the appropriate amount of fees.
I.
In March 1996, Edward Torres commenced a pro se employment discrimination suit against MetLife under Title VII of the CM Rights Act of 1964, 42 U.S.C.A. § 2000e to 2000e-17 (West Supp.1999). Torres alleged that MetLife unlawfully discriminated against him because he is Hispanic and terminated his participation in MetLife’s Pre-Appointment Training Program in retaliation for reporting the discrimination to several MetLife officers. The District Court granted Torres’s motion to proceed in forma pauperis. In September 1997, MetLife filed a motion for summary judgment, which the District Court granted on the basis that Torres lacked standing to sue under Title VII because he was not an “employee” of Met-Life while enrolled in the training program.
Torres filed a notice of appeal and moved for appointment of counsel. On March 17, 1998, a motions panel of this Court granted Torres’s motion and appointed attorneys Carl Oxholm III and Jerry L. Tanenbaum, both of the law firm Connolly, Epstein, Chicco, Foxman Ox-holm and Ewing (“Connolly Epstein”), as co-counsel to Torres. In an engagement letter signed by Torres and his new attorneys, Torres agreed that Connolly Epstein would represent him pro bono publico but assigned to Connolly Epstein all right and title to any legal fees that a court might require MetLife to pay.
Subsequently, Connolly Epstein prepared Torres’s appeal while attempting to negotiate a settlement with MetLife. On July 16, 1998, the parties orally agreed to settle their dispute and MetLife’s attorneys began drafting a settlement agreement. Shortly thereafter Torres and Met-Life executed an Agreement and Release in which MetLife agreed to pay Torres $45,000 in settlement of all claims. The settlement agreement does not contain any reference to attorneys’ fees. The parties also executed a Stipulation of Dismissal with Prejudice of the Pending Lawsuit and filed it with this Court.
Torres now moves for an order requiring MetLife to pay Connolly Epstein attorney’s fees and expenses in the amount of $30,427.14, representing the work done by Connolly Epstein in preparing Torres’s appeal and negotiating and executing the settlement, as well as the cost of preparing this motion.1 By order of this Court, Torres’s motion was referred to this merits panel for disposition.2
II.
A prevailing party is entitled to recover its reasonable attorney’s fees unless special circumstances would render such an award unjust. See 42 U.S.C.A. § 2000e-5(k) (West Supp.1999) (providing for recovery of fees in Title VII employment discrimination lawsuits); Independent Fed’n of Flight Attendants v. Zipes, *333491 U.S. 754, 761, 109 S.Ct. 2732, 105 L.Ed.2d 639 (1989); Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968). A “prevailing party” is one that “succeeded] on any significant issue in the litigation which achieves some of the benefit the parties sought in bringing the suit.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) (citation omitted). MetLife does not dispute that Torres qualifies as a prevailing party. Instead, MetLife argues Torres’s motion must be denied because the settlement agreement was a “global agreement” extinguishing all of Torres’s claims against MetLife, including a claim for attorney’s fees. In support, MetLife offers extrinsic evidence of the parties’ intent, including statements from Mr. Tanenbaum (who has since left Connolly Epstein) that he believed the agreement settled all of his client’s claims against MetLife, including a potential claim for attorney’s fees.
When the parties to a settlement agreement dispute whether the prevailing party waived its statutory right to attorney’s fees, “the burden is on the losing party to show that the settlement agreement clearly waived” such right. El Club Del Barrio, Inc. v. United Community Corps., 735 F.2d 98, 99 (3d Cir.1984). In El Club Del Barrio, which similarly involved a claim for recovery of attorneys fees in a Title VII suit, we expressly rejected a “silence equals waiver” rule and held that “extrinsic evidence such as the course of negotiations” is irrelevant. Id. at 100. A suit for recovery of attorney’s fees is foreclosed only upon express stipulation in the settlement agreement: “If the parties cannot agree on counsel fees and the losing party wishes to foreclose a suit ... for attorneys fees, it must insist that a stipulation to that effect be placed in the settlement agreement. We so hold.” Id. at 101.
The settlement agreement here contains no such stipulation. In fact, it does not mention attorney’s fees at all. MetLife cites the section of the agreement entitled “Plaintiffs Release And Waiver of Claims,” which states in part:
Without limitation, Plaintiff specifically releases all claims, charges, or demands asserted or assertable in the Pending Lawsuit, and all claims, charges, or demands arising from or relating to Plaintiffs relationship of any kind with the Released Parties, including without limitation any rights or claims Plaintiff may have under Title VII of the Civil Rights Act of 1964, as amended, and the Civil Rights Act of 1991.
This language, although broad, does not expressly stipulate that Torres’s claim for attorney’s fees is waived.3 As El Club Del Barrio makes clear, that is the end of the analysis. It is irrelevant whether Mr. Tanenbaum and the other attorneys believed the release extinguished a claim for fees, as MetLife contends. A settlement agreement that is silent as to attorney’s fees will not be deemed to constitute a waiver, regardless of the course of negotiations. See El Club Del Barrio, 735 F.2d at 100; Ashley v. Atlantic Richfield Co., 794 F.2d 128, 139 (3d Cir.1986) (“[W]here a defendant seeks to settle its total liability on a claim, it shall be incumbent upon the defendant to secure an express waiver of attorney’s fees. Silence will not suffice.”) (citation omitted). To hold otherwise would be to embrace the “silence equals waiver” rule that we have repeatedly rejected since El Club Del Barrio. If the parties to a settlement agreement wish to extinguish the prevailing party’s claim for attorney’s fees, they must do so specifieal*334ly and expressly in the terms of the agreement. Because the parties here did not do so, Torres’s claim for attorney’s fees was not waived.
MetLife relies on Conrad v. Bergen Community College, 1996 WL 903946 (D.N.J. Dec.12, 1996), in which the District Court denied the plaintiffs request for attorney’s fees even though the settlement agreement contained no express waiver. The District Court in Conrad based its ruling on the fact that during negotiations, plaintiffs counsel gave “the impression” that fees would not be requested and defense counsel therefore formed a reasonable expectation that all' attorney’s fees were encompassed within the agreement, regardless of the absence of an express waiver. Id at *4. To the extent that Conrad would authorize a court to consider extrinsic evidence of the course of negotiations or the expectations of the parties, we believe it was wrongly decided. The clear import of El Club Del Barrio and Ashley is that it does not matter whether the parties discussed the issue of attorney’s fees or believed the settlement agreement waived such a claim. All that matters is whether the agreement expressly stipulates that the prevailing party’s claim for fees is waived. If it does not, then the claim survives.4
Similarly, we believe the dissent’s reliance on Wakefield v. Mathews, 862 F.2d 482 (9th Cir.1988) is misplaced. In Wake-field, the release was not silent as to attorney’s fees, but expressly included “costs or expenses of any nature whatsoever.” Id. at 483. For precisely this reason, the Wakefield court understood its decision to be fully consistent with El Club Del Barrio and Ashley. See id. at 484 (“We are in full agreement with the Third Circuit’s resolution of both the El Club Del Barrio and Ashley cases. Waiver of attorney’s fees should not be presumed from a silent record.”).
The rule that claims for attorney’s fees survive unless expressly waived is strongly grounded in policy considerations. As we observed in El Club Del Barrio, “Requiring the district court to inquire into the circumstances of settlement negotiations and to determine who said what to whom when seems a pointless exercise where observance of a formality will suffice.” 736 F.2d at 100-01. We continue to believe that consideration of extrinsic evidence in these circumstances “unnecessarily complicates litigation” and that adherence to a clear rule of law is preferable. Id. at 100. A bright-line rule serves the additional virtue of promoting informed settlements, as the parties will know in advance whether their agreement truly forecloses a post-settlement petition for fees. See Ashley, 794 F.2d at 138.5 Also, such a rule is consistent with the Supreme Court’s determination that prevailing civil-rights plaintiffs are presumptively entitled to recover attorney’s fees. See El Club Del Barrio, 735 F.2d at 100 (rejecting a “silence equals waiver” rule because it “pays inadequate attention to the presumption established in Hensley and Piggie Park in favor of prevailing civil rights plaintiffs”).
Consequently, we reiterate the holding of El Club Del Barrio and Ashley. If parties wish to extinguish a claim for attorney’s fees, they must do so specifically and expressly within the terms of the set*335tlement agreement. Accordingly, we will grant Torres’s motion.
III.
The parties also dispute the reasonableness of the amount of fees requested. On this issue, we believe fact-finding is required. We will therefore refer the matter to a Magistrate Judge for a report and recommendation on the appropriate amount of fees.

. Initially, MetLife filed a cross-motion seeking attorney’s fees and Rule 11 sanctions against Torres, but MetLife subsequently withdrew the cross-motion.

. The District Court had subject matter jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291.

. The dissent argues the release “expressly extinguish[ed] all claims to attorney fees” and that the agreement “could not be made more plain.” We disagree. As we stated in El Club Del Banio, the release must “clearly” waive plaintiffs right to attorney’s fees. 735 F.2d at 99. The agreement here contains a general release that does not mention attorney’s fees. It could easily have been “made more plain” through a specific provision unambiguously stating whether Torres's claim for attorney’s fees was reserved.

. We express no opinion on whether a court may look beyond the four comers of the settlement agreement in evaluating a claim or defense based on fraud, duress, accident, or mistake.

. The rule we apply today will not leave "settlements and releases under the Act in chaos, stripped of any finality," as the dissent contends. On the contrary, we believe such an outcome could result from the dissent's invitation to consider whether the parties "viewed the waiver as inclusive of attorney’s lees,” thus raising questions of the parties’ intent and the course of negotiations. A bright-line rule directing parties to insert specific provisions covering attorney’s fees will clarify settlement agreements and promote finality.